Q3 2019 Earnings Call
Thank you.
Good morning, ladies and gentlemen, and thank you for standing by [noise].
Welcome to the Genworth and my Canada, Inc. 2019 third quarter earnings Conference call.
At this time, all participants are in listen only mode.
Following management's prepared remarks, we will conduct a question and answer session and instructions will be provided at that time.
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I would like to remind everyone that this conference call is being recorded.
I'll now turn the conference call overturn Williams, Vice President Finance and Investor Relations Mr. Williams you May proceed.
Thank you good morning, everyone and thank you for joining Genworth, Canada third quarter 2019 earnings call.
Leading todays call our store loving, our president and Chief Executive Officer until it mirrors, our chief Financial Officer.
Start with our prepared remarks, followed by an open question answer session.
Our news release, including our management's discussion and analysis financial statement and financial supplement.
Released last night on are posted on our website at Www Dot Genworth dossier.
Linked to our live webcast and the slides for today's discussion are also posted on our website a.
A replay of this call will be available via the other number noted in the press release and will also be available on our website following today's presentation.
The call will be available online for approximately 45 days following today.
As a reminder, our presentation discussion today contain a disclaimer on forward looking statement and non high for us statements on disclosure.
Note that our actual results may differ from statement that we make which are forward looking.
We advise you to read the cautionary note regarding those forward looking statements.
As well some of the financial metrics presented on this call today, our non high for us measures and as such to not have a standardized meaning and are unlikely to be comparable to similar measures by other companies.
I would now like to turn the call over to Stewart's began his remarks Stuart.
Thanks, Eric Good morning, Thanks for joining our call.
This is had another strong quarter, particularly in terms of topline growth and capital redeployment.
We declared a special dividend of $1.45 cents for sure paid on October 11th and we're pleased to announce an increase of 6% and ordinary dividend, reflecting our ongoing focus on capital efficiency and the strong earnings profile of our business model.
Well the quota we delivered net operating income of $115 million down 5% over the prior period at 4% over the prior quarter.
This resulted in fully diluted operating earnings per share of $1.34 cents that Walker said over the prior period and 3% over the prior quarter. This was largely a reflection of the gradual normalization about loss ratio and consistent contribution from premiums earned an investment income.
Premiums earned have stabilized and we'll continue to benefited from strong topline momentum.
At 18% or loss ratio came in five points higher than the same period and the probably you're doing by ongoing pressure in Alberta, and the primaries and three points higher than the prior quarter largely due to an increase in new delinquencies net of cures in Quebec and the Atlantic regions.
This follows very low levels of losses in those regions during the prior quarter.
As noted on prior calls we still expect a loss ratio to gradually return the long run pricing levels of approximately 20% to 25% over the next few years as housing and labor markets return to more historical performance trends.
We expect our current loss performance to continue for the remainder of this year with an estimated full year loss ratio range of 15% to 25% and a strong bias towards the lower half of this range.
Net premiums written totaled $218 billion up 11% on a year over year basis.
As in the prior quarter. This increase was largely due to the momentum we've seen in the level of high ratio mortgage insurance applications during the year together with ongoing market share momentum.
Overall, we believe the fundamental supporting first time homebuyers remained very constructive.
We continue to see strong home by activity given an overview by renewed confidence low interest rates more rational housing market and a strong economic environment.
How did the economy does not slow significantly we expect this trend to continue into 2020, which should be positive topline and eventually earnings growth.
Regarding the housing market, we continue to see positive momentum in most major market. Following the initial impact other be 20 stress test in 2018.
Notable exception is Alberta, which remains a buyers market exacerbated by the weaker economy in that region.
The greater Vancouver region has begun to see increased sales volumes, which should provide support for house price stability, particularly in the higher end segment, which has felt the most pressure.
The greater Toronto market has seen growth in both sales volumes and house prices during the year.
Affordability for first time homebuyers remains a constraining factor in both these markets, particularly for single detached homes.
Well the federal first time home by incentive program has been active now for just under two months, it's difficult to draw any conclusions regarding its overall impact from the transactions observed thus far.
We ended the quarter with an estimated Mike at ratio of 172% seven points above the upper end about targeted operating range driven largely by higher lapse rates in the quarter.
As noted earlier redeployment of excess capital has been an active part about strategy. This year as we focus on capital efficiency. We continue to monitor market size expectation enforced portfolio lapse rates and business mix to inform our expectations around future capital needs.
We are encouraged by the momentum, we see enough topline and supporting growth in our coal business has always been our primary focus for capital deployment.
Based on current market trends and new insurance written run rates, we are revising our estimated range of full year redeploy that capital to $400 million to $450 million, including the $228 million already would turn here today.
We ended the quarter with a book value of $46.37 per share up 3% over the prior period, reflecting ongoing profitability share repurchases and the special dividends declared during the second and third quarter. This year with that I'll turn it over to fill for a deeper looked at our financial results.
Thanks, Stuart and good morning.
Overall business before the third quarter with strong with reported net operating income of $115 million a loss ratio of 18% in a growing top line.
We're encouraged by the year over year growth in both premiums written and premiums earned this quarter.
Premiums earned a $171 million were higher by 2 million sequentially, reflecting the positive contribution for the 7% growth in our year to date premiums written.
Losses in claims increased by 5 million quarter over quarter to $31 million.
This increase was primarily due to a higher number of new delinquencies net of cures and a moderately higher average reserve for doing to see true by seasonal increase in the provision for incurred but not reported delinquency.
The number you doing these net of cures totaled 373 in the quarter, representing an increase of 92 sequentially.
This increase is mostly attributable to the come back and Atlantic regions, where net doing sees rose moderately from the relatively low level in the second quarter.
Overall, the majority of our losses and claims continue to come from elsewhere to where home prices have been flat on modestly declined in the recent here.
As a result, thesecond loan to value ratios have generally remained above 80% for the transactional books of business written since 2014, that's contributing to the elevated level of losses in Alberta.
Our expense ratio of 20% on $33 million of expenses without the high end of were 18% to 20% target range, while the am I see share price increased significantly during the quarter. There was only a 1 million dollar increase their share based compensation expense due to the favorable impact from the related hedging program.
In total underwriting income was $106 million with operating investment income and for the $57 million worth strong profitability.
Operating investment income was essentially flat quarter over quarter on a relatively stable portfolio yield.
Overall net operating income of $115 million translating into a fully diluted operating EPS of $1.34 cents.
Our combined ratio was sequentially higher at 38%. This quarter. This was three point higher quarter over quarter as the loss ratio increased to 18%.
Looking forward to the fourth quarter underwriting income should benefit for relatively stable premiums earned loss ratio and expense ratio as compared to this quarter. In particular, we expect that the loss ratio range should remain as a lower half of where 2000 Nike range of 15, 25%, which should contribute to a continued trend of strong underwriting income.
With respect to a 6.7 billion dollar investment portfolio, it's mix by asset class is generally unchanged and we're focused on optimizing portfolio yield while maintaining its high credit quality.
The portfolio duration is relatively short at 3.6 years, yeah. The pre tax equivalent yield was stable at 3.2% at the end of the quarter.
New money. He also generally decline over the course of 2019, but their impact has been largely offset by capital redeployment linked to the maturities in the portfolio and a slight increase their allocation to preferred shares in collateralized loan obligations.
Overall, the that result should be relatively stable operating investment income in the fourth quarter.
We continue to actively managed care capital base and declares a 125 million special dividends in September .
As we disclosed that the started the year. The company is generating capital access where desired my cat operating range of 161 is 65% some ongoing profitability in the age of 2016 or prior book.
My Cat race is estimated at 172% at September Thirtyth. After the declaration of special dividend, while holding company cash and liquid investments totaled $226 million before the payment that was a special dividend and October 11th.
It's Jordan noted lapse rates were higher quarter over quarter and favorably impacted the estimated my count ratio.
With this years growth from new insurance written as Stuart noted, we have narrowed the range for capital redeployment to $400 million to $450 million for the full year.
This equates to a fourth quarter capital redeployment F 175 to 225 million that said the trend of new insurance written will be a key factor that determination of the ultimate level of capital redeployment.
We have a 10 year track record of annually, increasing or quarterly dividend that we announced the 6% increase the quarterly dividends to 54 cents per share payable to shareholders of record on November Eightth.
Overall, our financial flexibility remained strong with a 300 million dollar undrawn credit facility and a little leverage of 10% in conclusion, we have a proven business model remains focused on creating shareholder value.
I'll now turn the call back to store it to conclude our prepared remarks Stuart.
Thanks, Phil I'd like to take an opportunity to provide a brief update on the proposed acquisition or Genworth financial's, 57% stake in our business by Brookfield business partners as announced on August 13 2019.
Well the parties continue to work with a Canadian regulator on obtaining the necessary approvals, we've been focused on developing plans to transition in various services historically outsource to Genworth financial.
Under existing agreements, we have rights to continue receiving these services for an adequate period of time after the closing of the contemplate the transaction and are confident that we can make the transition in an orderly manner that avoids any disruption to our business operations or customers.
It's also important to note that well Jim as financial currently provides a number of support services <unk> HR and accounting functions. Our Canadian portfolio data is both logically and physically is separate from any genworth financial data and protected by strong security measures and controls.
The mall, we operate our business with our own independently developed insurance underwriting and claims management applications and models.
We expect it will be some incremental onetime transition related expenses during the course of 2020.
In addition, we may incur modestly higher operating costs as a result of having a standalone Canadian I'd infrastructure.
That said, we believe our expense ratio should trend back towards the 18% to 20% range in the medium term as we leverage technology driven efficiencies to offset any cost increases.
Throughout the transition we will continue to focus on our key strategic priorities, including prudent growth risk management capital efficiency and investing in technology to drive improvements in our customer service experience. Thanks for listening that concludes our prepared remarks, I'll now turn the call back to the operator to commence with QNX.
Thank you ladies and gentlemen, we will now conducting question and answer session. As a reminder of the conference is being recorded for replay purposes. We ask that you refrain from using cell phones speaker phones or headsets strain the Cuban a portion of the call do you have a question. Please press star followed by one on your.
Touchtone phone.
We'll hear a tone acknowledging your request your questions will be pulled in the order they are received.
One moment. Please for your first question.
Great.
And your first question comes from Jeff Kwan with RBC capital markets. Please go ahead.
Hi, Good morning. So you mentioned on the return of capital 400 to 450 million to plan for this year, you've done roughly about 230 million. He's he's the plants you announced by year end around what you. How you plan to return the rest of it or is it do you actually plan to return it.
By year end, and then second part of that is easy as the Brookfield transaction kind of having any sort of impact as to how you're thinking about a capital returns for the remainder of the year.
Jeff Good morning, unsecured here and it to your first part of your question. Our goal is to have a capital efficient basis as you know and so you know I've got where between now and I prefer to return within the quarter, but that will be a function of just timing around that you know I don't think or you would you would.
To conclude any any impact from the Brookfield transaction Oh, it doesn't really weigh in on how we think about either the timing a little form of the return of capital a I'll go as we said has been to to try have as a fish in the capital base as possible and that's why we we declared that much excess capital on what we need to do is to return that X.
Just to get to that capital efficiency base and Jeff It's filling if I might add I think the bigger determinant in terms of the timing and amount of capital will be in terms of what we see in terms of new insurance written in the month of October and November I don't want to make sure that we have like good picture of the my count Roshe at the end of the air and typically we're disciplined and wait another.
Well the end of November before assessment.
The final amount of capital that we believe it could be redeployed.
Hi, guys salaried into that so when they get an update so when you guys having investor Day. Then second question I had was on the prior year development. Sam you guys flag. It is being slightly less positive year over year tell just wondering if there's anything comments you have in terms of latest trends on where that's going whether or not it's just.
The overall book or.
It was within specific segments.
Jeff its Phil I think you know we saw tremendous improvement in come back year over year. It's certainly saw that through the first half. Those he noted then usually see that obscure did sort of normalized <unk> relatively low levels and come back. So I would say that we're seeing less favorable development comes out to come back, but overall development continues to be favorable we feel.
We're very well deserved.
Okay and then just one last question is just on Q4, obviously were maybe only just kind of a month into it but the broader trends we've seen has been.
You know gradual improvement in housing activity in home prices generally speaking across Canada or a is that your general view as to what you're seeing right now into Q4 in is there anything specific that you're seeing in any of the markets are sub markets and that you think it's interesting in terms of what's going on.
Yeah, Jeff its you know, it's as you said and as we said the the mouth. The housing markets overall definitely on solid footing now and looks to be continue that way into 2020. The notable exception is and as I mentioned in my comments is Alberta, and the priorities, where there's still a lot of pressure on on the economy, but also on the housing market. So that does.
Contribute in the in a significant way to overall loss performance right now, but beyond that I think where were very I'm optimistic about the outlook for the rest of the country and certainly you know Vancouver, which has been a bit of a laggard in terms of price stability.
Should start to see that with with recovery in the sales volumes there now.
Okay. Thank you.
Your next question comes from Paul Holden with C.I.B.C. Please go ahead.
Thank you good morning.
Question, I guess and the change in trend for both Atlantic, Canada and come back you refer to normalization a number of times now.
Is it simply that or is there any kind of change and economic or housing conditions. Do you think that led to that change in delinquency trend in either one of those regions.
Poets ready a bounce back to more normal trends in those two markets for the quarter. You know we saw extremely low levels, particularly in Quebec in the second quarter. So I don't I would not say that there would be in any trend changes in those markets. I think it was really just you know if you will and normalization back to their normal run rate you know we.
Expect those markets to continue much the same.
You know into next year, the the one market that I'm looking for some improvement of eventually use Alberta and that will help our loss ratio to normalize as it off say if some of the a gradual build and losses you'd expect out of Ontario, and B C. As those housing markets any economies returned to more.
Historic trends.
Got it. Thank you [laughter] and then any kind of thoughts you can share on the outcome of the federal election and platforms, they're swaps with platform those Liberals ran on and potential impact Oh, no on housing market and your business as a result.
We would say, there's probably no real impact on on our business or the market as a whole I mean, obviously you know they there was a fair bit of narrative around affordability and a lot of a the party that promise a measures to trying to address that you know given the outcome I think it's fair to say that the first time homebuyer incentive.
And we'll continue and it remains to be seen if there will be enhancements to that program as announced on the campaign trail, but you know as we've said before you know, it's probably too early to even really make any meaningful conclusions on on what that program will do for the market. So on balance I would say really no impact to our market while businesses.
Our expectation coming out of that election.
Okay Fair.
And then third question would be related to potential trend for premiums earned [laughter] you seem much more positive on the potential growth rate for premiums written.
And given what we saw for premiums earned in the latest quarter and with that view is it fair to say that premiums earned maybe has.
Troughed and is more likely to follow a positive trajectory now going forward.
Yeah, absolutely I mean, it really is as you said a function of the topline and I think our strong topline a this year is very positive for the future earn premiums and out you know add that our goal is to continue to see that topline growth into the next year. Obviously, it's a function of both the market size and our market share, but we feel positive on both.
<unk>, so that will support earned premium growth as we go forwards.
Great. Thank you [laughter] and last question then on the redeployment of capital [laughter] as your way your decision I guess between more special dividends and share buybacks is there.
Anything that Shane <unk> in that decision making process versus.
How you thought about tee up to two alternatives earlier this year.
No. There's no change in our approach you know, it's still an evaluation of the best alternative to redeploy capital.
I think it is more a function of timing as Phil mentioned as I noted earlier, just being sitting around al final volume of 12, and I'd W. for this quarter and also just the trends and the lapse rates et cetera. So the process for evaluating the means of return is the same.
You know given where we're trading obviously, we lean more towards the special but that is something we will make a final decision on near the end of a of November .
Alright, Thank you I felt like <unk>.
And your next question will come from Graham writing with TD Securities. Please go ahead.
Hi, good morning.
Maybe I can just follow on on the the commentary in Alberta delinquencies are you expecting delinquencies to continue to trend higher and is there anything.
Related to perhaps you know delinquencies from specific vintages that gives you any insight into where you see things, perhaps 20 next year, if we make the assumption that macro conditions are similar to what they are now.
Yeah Graham if the conditions are similar to what they are now our expectation is that things don't get worse in Alberta, a they probably just don't get much better either anytime soon you know I think that you know when you look at the level of house price pressure they've seen our effective loan to values are higher there as you would imagine and that doesn't mean.
You know along the consistency of the claim cycle I'm, particularly when you go back even into the 2015 in 14 book. Your so our expectation is that you know things hold there. If you look at the general economic consensus for that province, It does get more positive next year, but it'll take time for that to translate into job growth and into a improve.
But in our delinquency profile there.
Okay, great and the.
The expense ratio there was some commentary there you know when looking past sort of maybe was onetime expense expenses that you may face, but a if your overall.
Expense ratio moves higher as you as you shift away from Sharon services with Genworth financial.
Is that a 2020 dynamic or 2021, and and what is reasonable relative to your your historical 18% to 20% range. How much higher are you a are you thinking this could trend.
Were certainly thinking it's a beginning on 2020 story because it depends on how quickly we make that transition you know at this point, we're still evaluating our options as far as vendors et cetera, I can't give you a good estimate now and what that cost increase will be but I will say that we don't expect it to be significant I think at the same time you know with.
The Brookfield ownership, we fully expect to leverage any relationship they have to help that keep pricing pressure on any vendors that we engage with so ultimately we're just acknowledging the fact that you know when you do go to a standalone structure you should expect some increase in costs, but as I mentioned, we are absolutely optimistic that we can bring.
Back in line with <unk>, 18% to 20% through both pricing pressure at the top of the house and also just our own focus on technology efficiencies.
Okay, Great and maybe if I could just sneak in one more 10% growth in your Ah transactional previous year over year or how much would you attribute that to market share versus just the overall market expanding.
It's probably the lion share as market size expansion I'm you know, we do feel good about our market share and I would say, we're probably in that 34% range right now, but ultimately the market has expanded this year nicely.
I think you see it with you know our lender partners as well and that's definitely something that will will continue into 2020, assuming similar economic conditions and all of you.
That's it for me thank you.
Your next question comes from Tom Mackinnon with BMO capital. Please go ahead.
Yeah. Thanks, very much I think Stuart you talked about a loss ratio of 2020, 20% to 25% in a long run but each can you talk about the fourth quarter being in the lower half of the 15% to 25% range. So what's different about the fourth quarter. Then along then over the long run or what is in the fourth quarter, that's different in New York.
Assumptions for the yeah, 20% to 25% long run loss ratio.
Well well, Tom what I was saying is that we expect our current loss ratio trends to continue. So you know we printed on 18% loss ratio for the third quarter. So what we're saying is you know things won't change dramatically between now and into the Euro. So expect similar levels of loss ratio, but that's still you know puts us for the full year in our lower half of our guidance range as I mentioned.
The long run 20 to 25, you know that isn't necessarily a 2020 event that is a a an ultimate expectation.
Once we see employment and housing market return to those long run historic trends, which is certainly you know a higher employment level now what we're seeing right now in the country higher unemployment level.
Yeah.
Yeah, sorry, your unemployment level and you know housing market up probably arguably already normalized house price appreciation now fairly modest I think it's the unemployment that needs to change as you know that's always been the biggest driver of our losses, but at 5.65, 0.7%. That's certainly not the long run all noise, that's sustainable in our view and so as that gradually.
The returns to you know quoted perhaps full employment at six and a half somewhere around there you should expect to see eventually our loss ratio reflect that in that a return to you know 20% to 25% range.
Okay. Thanks for that.
<unk>.
And your next question will come from Jamie going with National Bank Financial. Please go ahead.
Yeah. Thanks, good morning.
First question is related to the the asset portfolio in the mix currently a very conservative portfolio just want to get your comments around potential opportunities with the relationship with Brookfield, and a and opportunities to enhance that yield true through some of their investments.
Yeah team, it's Phil a we always continue to look at investment opportunities I think the thing that we're always very mindful of is bouncing quality.
With the yield.
We view preferred shares the being very attractive who will continue to evaluate whether we're comfortable increasing the allocation. There I'm clearly, we're also very mindful potential sort of slowed down in the economy or downturn sitting here. You know we expect will continue to be very focused on high credit quality asset, but you know as we go through the.
Exercise you know, we will continue to assess their relative contribution of other asset classes relative to our appetite for risk and the other thing to remember is.
Lower rated securities carry higher regulatory capital weight and so while we evaluate income opportunities. We're looking at what we refer to as the capital adjusted yield because you want to make sure that it's efficient both from an income perspective, but also you Fisher from a capital perspective.
Right and then make specific material changes I think it's more I would say.
Changes on the margin rather than wholesale changes.
Fair enough and forgive me next question just a him you might have touched on this of any opening comments just a any any early.
Results. So you can share from the first time homebuyers programming and the impacts of that.
Yeah, James Stewart here, you know not really its being up and running now just under two months and I would say, it's still too early to ready to drill any meaningful conclusions from that I think you know what we do know is that as as I suppose probably talked about a lot before the announcement you know it hasn't been a very sort of strong.
Take up in the Toronto, Vancouver markets, but beyond that I think it will be important to see a bit more a set of time under the belt. If you will have to get a more meaningful in <unk> impression of what there's probably more means that overall market.
Right, Okay, and last question or maybe more for Phil just looking at the capital required a amounted declined 3.3% or this quarter.
And that's a you know that's kind of driven by the by the roll off in the mortgages and what we've been talking to a now and why there's excess capital in the in the business.
I guess the you know the question is is that a is that a typical quarterly run rate based on where new insurance written is you know the phase out of other benefits and things like that is that what we should come to expect from.
Capital requirements for the business.
Well, Jeff will sorry came what I would say there is that we did see higher lapse this quarter.
At the beginning here, we sort of message that we see lower lapse rate as interest rates began to increase and we actually saw where the third quarter a much higher lapse rate than we on the first and second quarters, it's premature to say that that's a trend that will continue the we would caution that is the level of reduction in the capital required. So you saw a quarter over quarter.
It may not repeat as we go into the fourth quarter, because I think that.
Back to sort of explain about affordability the impact the mortgage rate stressed that you know they all have had an impact on lapse rate and we're not sure that this one quarter is representative of what we might expect to the future it'll take a couple more quarters before we can conclude whether you know what the normalized run rate will be.
Okay, maybe yeah, just to dig in a little bit here on this lapse rates that would they have been the at a normalized level in Q3 or was it is it still sort of creeping back to that.
I would say Q3 was higher than what we would expect a long run on lapse rate to be.
I would say with higher than what we would would otherwise have it expected.
Okay.
And just in terms of ER, maybe asking us a little bit differently than how much growth in a in new insurance written would you require to add to offset the.
I normalize period of of lapse rates and amortization.
I would say because we're running off much larger bucks from 2016 and prior.
It would take a materially higher level of new insurance written to get to the point, where you don't see a reduction in the capital required a what we would expect is you know what we characterize is that.
Significant decline relative to prior quarters, we would expect something more similar to what you saw in the first and second quarter in future quarters. If you want to really quantify James Okay. Great. Thank you.
Ladies and gentlemen, if there any additional questions at this time. Please press the star followed by one as a reminder, if you're using a speaker phone. Please lift the handset before pressing the keys.
Your next question will come from Geoffrey Dunn with Dowling and partners. Please go ahead.
Thanks, Good morning, I wanted to follow up on the last question.
You know, it's difficult to see exactly the impact of lapse and new business growth.
On your excess capital abilities quarter to quarter, I think but as we think about your four to 450 or specifically the 175 to two in a quarter for fourth quarter can you try to frame.
How that could be affected by buying I W. And cancellation levels is it you know instead of 5% and I W. growth, it's 10% that could put you at the lowering of the range. It's a point or two on lapse rate or is it just seems that the capital management plan. It just strikes me as a bit overly sensitive to those those near term trends I wanted to get a better.
Anyway to frame up the prospects.
Good point.
The way I would sort of frame it would be that.
The last rate we saw this quarter was probably.
50% to 60% higher than what we thought it preceding quarter is that equated to.
<unk> impact on the my cat ratio of about three to four point.
And that gives you that level of sensitivity that one might see in lapse rate.
The increase if on the third quarter with substantially the rate you felt was substantially higher than what we saw in the first and second quarter as I noted and as we look to the for 40, if the last rates were to return to what we saw in the first quarter, we would be at the higher and.
The range so it would take a material deterioration over and above what we saw in the first half of the year before we'd be at the bottom part of the range the bigger.
The reason we have the range is more for the mark to market impact on the investment portfolio, because the mark to market in the investment portfolio.
Oh available in that Didnt item that is all that might it have to raise to also provide for potential impact if rates were to go higher the mark to market. The portfolio team down that is going to have an impact on capital available and hence the amount available for redeployment so our.
Really reflects those two items.
Third item would be new insurance written or we had a very strong core to the third quarter, we see signs that that part of that may carry over to the fourth quarter and also the potential for portfolio reinsurance transactions or the four quarters. The other.
Adam that we serve fracturing when we give the range that we have given so Jeff those are all the factors.
That impact capital hopefully that's helpful.
I appreciate that thank you.
Since there are no further questions I will turn the call back to Mr. Liggins.
Thank you I'd like to take this opportunity to also remind you about a upcoming investor day scheduled from 10 to 11 30 I am on Thursday December 5th please take a moment to register if you'd like to attend thanks again for joining yesterday. We do appreciate your time and that concludes our third quarter 2019 earnings call.
And once again that does conclude the call for today. Thank you for your participation you may now disconnect.