Q4 2019 Earnings Call
Ladies and gentlemen, thank you for standing by welcome to the James River fourth quarter 2019 results call.
At this time all participants are in the listen only mode. After the speakers presentation, there will be a question and answer session.
Asking question during the session you will need to press star one on your telephone keypad. If you require any for assistance you can press star zero.
I would now like to hand, the conference over at your Speaker today, Kevin Copeland head of Investor Relations. Thank you. Please go ahead.
Thank you Carlos good morning, everyone and welcome to the James River Group fourth quarter 2019 earnings Conference call.
During the call, we'll be making forward looking statement.
These statements are based on current beliefs intentions expectations and assumptions that are subject to various risks and uncertainties, which may cause actual results to differ materially.
A discussion of such risks and uncertainties, we see the cautionary language regarding forward looking statements in yesterday's earnings release, and the risk factors sections of our most recent form 10-K form 10-Q's, and other reports and filings we make with the Securities and Exchange Commission.
We do not undertake any duty to update any forward looking statements.
I'll now turn the call over to Adam Abrams, Chairman and Chief Executive Officer of James River.
Thank you Kevin a welcome everybody to our earnings call I'm here with Sarah Doran, our CFO and Bob might run our president and COO.
When we look forward to taking your questions and just a minute.
First a few remarks about the most recent quarter, our past here and the markets that we are operating in.
We're coming off of a very good quarter with strong earnings significant growth in our most profitable core businesses attractive rates per unit of exposure and encouraging progress and Suddenlink claims arising from the large ride share account that we terminated late late last year.
Environment is quite positive.
We continue to see very strong submission growth in our core business and are able to write accounts at rates that we think are very attractive.
In the fourth quarter excess and surplus lines rates on renewal accounts were up 6.6% sets the 12 quarter in a row, we obtained rate increases.
We anticipate this growth in small accounts be average account size and rtms business. After almost a decade below 20000 dollar range well make up for a significant amount of the rideshare related premium we left behind last year.
The natural diversification in this business combined with the rate increases we are enjoying gives us confidence about the ultimate results to be realized from the business. We're writing today.
Our specialty admitted segment is growing and we expect that growth to also continue particularly.
In the fronting and program area, where we take modest risk and fee income.
We're seeing more opportunities there at that any previous time in our history.
We continue to struggle a bit with our reinsurance business, while profitable overall, our underwriting losses are disappointing to us Nonetheless.
Our presence in Bermuda continues to create value for our shareholders roughly one half of our assets are in Bermuda.
It goes without saying that the run off of the ride share account has our attention.
Absolutely absolutely open to a adverse development cover if the economic terms are reasonable and we can continue to manage claims.
The management of claims is very important bought my run along with our head of claims court newborn had been highly focused on this process with good results in just a few months, we have succeeded and lowering claims counts faster than we had anticipated.
Well, we are litigating, where claims when we think the claim is asking for more than owed under the contract or average cost of claims is going down materially.
In other words, our internal claims handling unimpeded by any market considerations, so other than our obligations under the policies.
Resulted in our significantly bending the claims curve <unk> cost curve in our favor.
We had to external reserve studies performed at year end and we could of course, our own internal work, we feel confident about our reserves and the progress we are making them the run off with the council account reinforces our view.
Our expectation for 2020 this to earn a low double digit return on tangible equity.
As always we anticipate making an underwriting profit as a group and in each of our segments.
It is worth noting that even after the charge we took in the third quarter of 2019 Rtms unit made an underwriting profit in 2019 and of course, our specialty admitted segment reported a combined ratio of hundred 90% for the 2019 year.
Combined group ratio came in just over 100%.
We usually.
At this point offer a bit of color.
Regarding where we found opportunities and where we saw potential pitfalls during the quarter I'll provide some color about which niches we are seeing the most activity.
There's good news to be reported in both our E N S and our specialty admitted segments.
The E.N.S. market is what is the more robust of the two right now and one of the Tailwinds. We have is that the market in the market is is that were being allowed to be more efficient meaning.
Our quotes for new and renewal business are more likely to be accepted.
In the current market conditions.
Our in that segment entertained 23% more submissions for business in 2019 than in 2018, and 20%, 7% more in the fourth quarter than in the prior fourth quarter.
Our quote ratio when new business remain basically constant during 2019, but the number of new Ns accounts written rose by 39%.
One reason for the increase in submissions. This that's some significant carriers are peering large parts of their books, where they've lost money in prior years.
Much of this businesses in classes, where we have expertise, but have restrained our appetite for risk until now when we have an opportunity to reprice these risks and more favorable rates.
Some of the lines, we are seeing more opportunities to quote in our small casualty counts and professional liability lines of course as we indicated in our press release organic growth has been across all across the board.
Simply making the point now that we believe the current momentum will continue across a wide spectrum of casualty risk.
Similarly, our Ns renewal book prove stickier than it has been with almost 65% of our policies. Renewing. This is a few points above the renewal hit ratio we had in the past two years.
Each of our Tms divisions other than Allied health through in 2019.
In our core book of DNS, which we define as all of our DNS other than commercial auto we wrote 55% more premium in 2019 than we did in 2018.
This well price growth is welcome.
And we're very addressing the opportunity with an eye toward maintaining good control over our book.
We've increased our Ns underwriting and support staff in our claim staff is handling the same claims load per adjuster as we have maintained since 2013.
Of course, we're deploying more sophisticated technology to assist in setting up submissions for review by our growing underwriting staff.
Our specialty admitted segment saw more modest growth in our Ns Division, but we believe we laid the foundation within specialty admitted for more substantial growth in the 2020 year.
Our individual risk workers compensation business grew by 15.1% as we expanded territories slightly and also distribution.
We continue to see strengthen our individual risk workers compensation reserves.
We're taking a cautious approach to our individual risk workers comp business during the coming year, while loss costs do seem to be benign.
Rates are declining and we panel we plan to manage the cycle very carefully.
Our fronting business other than our single largest account in California grew by 51%.
We expect this part of our business will continue to expand this we are adding deals many of which are just beginning to generate premium for us.
In collaboration with the producer.
We purposefully contracted the account in California, because of market conditions and premiums in that program were down 27% in the quarter.
Reduction in this account somewhat masked the momentum we have in our fronting business and all the specialty admitted segment grew by 3%, 3.6%. However, during the year, we added four new programs and anticipate 2020, we'll see more growth.
I would remind everyone that we typically retained only 5% to 10% of the risks when these accounts and earn fees from fronting.
I mentioned earlier that our reinsurance segment had a tough underwriting year, we wrote $160.8 million in premium there and anticipate remaining flat to maybe down in 2020.
The majority of our business there was third party quota share CNS accounts, and we impaired it backed by 50% over the last two years shifting the mix of business away from lines and structures. We previously roads, such as non standard auto in excess of loss.
While it grew at that compared to the prior year quarter. This is due the growth is due to the growth of the underlying N.S. treaties, we are a party too and similar to audit premium.
The account goes up and we go up with it.
With that.
With that caller I'd like to turn to Sarah and ask her to add her thoughts and insights about the quarter end the year past.
Thanks, Adam.
Let me highlight a few of the financial points for the quarter.
Last night, we reported fourth quarter operating earnings of 76 cents per share it increased 35% over the prior year quarter.
The result reflects very attractive growth hit our core MNS business and benign loss activity across our insurance businesses.
Net earned premium grew over 16% in our excess and surplus line segment this quarter and about 40% in our core DNS business alone.
The segment represented over 76% of our total group net earned premium.
From an underwriting perspective, this quarter, we posted a loss ratio of 77.4% and accident year loss ratio of 73.4%, which was consistent for the full year.
In 2019, our continued high accident year loss ratio reflects our cautious approach to reserving as well as the higher relative loss pick of the commercial auto book, which was 36% of net earned premium for 2019 following the cancellation of our largest account in October.
We did not experience any material reserve development in our commercial auto line. The run off of what was formerly our largest account is performing within our expectations as Adam mentioned earlier.
Our calendar quarter reported loss ratio was considerably lower than that of the fourth quarter of 20.
While we continue to reserve receive new claims since we are off risk as of December 30, Onest 2019, and number of reported claims has slowed and we're actively working to close claims for fair value.
At year end 2019 open claims for all years of the account represented 5.2% of reported claims for the same period.
At the same time last year open claims for all years of the account represented 7.2%. So we're closing claims quickly.
Of our appropriately of our approximately 1.4 billion of total group fried net loss reserves at the year ended the year approximately 400 million of that supported our commercial auto book of business.
And that split that is split roughly 50 50 between case and incurred but not reported reserves.
We added first loss development of about $9.8 million in our casualty reinsurance book, which is disappointing to us, but it's worth mentioning that about half of this was offset by sliding scale Commission adjustment, which come through in the expense ratio.
A meaningful amount of this loss due to one loss from the 2010 treaty year with the balance due to higher than average claims volumes related to several accident years, we are off risk in the majority of these accounts.
We also had a million dollar take kind of reserves from our individual risk workers compensation.
Moving onto expenses amounts accrued 100 bonus and compensation expenses were significantly less this quarter as we reduce bonus pools for senior management given our overall performance. This year. This had an effect on the expense ratio in every segment and of course degree planned expense ratio for the year.
The quarter in year.
Turning back to cash flow, we continue to enjoy strong cash flow from our businesses is operating cash flow was $76 million this quarter and about $290 million year to date.
We earned $20.8 million and net investment income this quarter, an increase of 34% from the prior year quarter.
The increase largely resulted from the October 2019 addition of approximately $1.2 billion.
Restricted cash that was previously held in a collateral trusts off balance sheet posted by a former insured.
These funds are invested in short term government securities and we hold them on our balance sheet as restricted cash with the corresponding funds held liability.
The agreements we have in place with our former insured provide that the required collateral increase or decrease depending upon loss development.
We currently expect that they required collateral balances will decline over the next two to three years, given we are no longer writing new risks on this account.
Since January 1st to 2020, we've already returned about $70 million of collateral to the former insured and therefore, we expect it to the continued to decline over the course of the year.
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We increased tangible equity over 14% for the full year, despite paying almost $40 million from dividends.
Our balance sheet capital position are well able to support the attractive growth. We continue to see in our core GNS business and additional opportunities for growth. We are realizing in the specialty admitted segment.
As Adam mentioned, we expect to earn a double digit operating return on tangible book value per share during 2020.
Opportunities to put capital to work at attractive returns for our shareholders are plentiful.
Our top line will likely be down modestly in 2020 from where we ended 2019.
We expect at our expense ratio will be higher in 2020 without the large account concentration, but our core Ns business has typically produced a lower developed loss combined ratio then has our commercial auto book building a case for a compelling group bride loss in combined ratio.
We are in will actively and carefully manage expenses over the next few quarters as we continue our work to run off the commercial auto book.
With that turn the call back to Adam.
Thank you Sarah and we're happy to take questions.
At this time I would like to remind everyone in order to ask your question. Nick It seems you press star one and your telephone keypad NSR. Once you first question.
First question is from Matt Carletti of JMP go ahead. Your question. Please.
Thanks, Good morning.
Good morning, Matt.
From a few questions actually wanted to start with the casualty re segments and I'm, sorry, you mentioned that kind of a big piece of the nine and changed million adverse in the quarter was from a 2010.
D. that pop what what sort of risk was that.
That was a casualty risk the large account casualty rate.
Okay. Okay, and then and then Adam you mentioned in your comments about the growth there that you expected to be flat, possibly down a little I was hoping you could give a little bit of color how that might shape over the year, because I know you mentioned kind of the Ns.
No what the right term is let's call it kind of audit premiums.
Grows it flows through to you I'd imagine there's still some potential for that.
I believe you also have a new fronted relationship there.
I don't know Thats kind of all in apples to apples at this point or or if that is still going to impact. The early quarters at 2020, So little help and kind of how that might shape over the year would be helpful.
Yeah, I'll I'll take that Matt I think on on the on the new relationships. We started that last quarter and we expect that continue to run over the course of next year.
But I'm not sure. If there was an earlier question there were certainly managing the growth or the lack thereof. I mean, we did we had the underlying industries have grown and that's what you saw this quarter, specifically with regard to the the growth versus the fourth quarter.
I guess I guess you've got.
Yes, so you're exactly right I mean were the book is now 81% small town.
Yes, and that is obviously area, we're seeing growth in our primary operations and therefore, we would certainly expect to see we know that the underlying cedents are getting rate increases and they're obviously getting exposure or increases in a lot more opportunities as well. So I think we've got to do all careful job managing the profitability there.
Are there theres, obviously, a relatively simple contractual way to manage the growth there so to speak by putting premium caps in the underlying interest in arent sure reinsurance treaties right. So to the extent that they're writing a lot more business than they originally anticipated or were sort of expecting from a budgeting perspective.
You can manage that through a premium cap and then you can make a decision to.
Raise that are not along the way.
So I think and.
The extent you do.
Maybe there is a good reason to do it because of the type of business, they're producing and the expectation profitability or or maybe you don't or maybe there's a small concession, but you can extract by raising it so.
That is it's not as though just couldn't will necessarily happen to us as a result of premium adjustments and we won't have control over it.
Matt This is Adam you probably are.
You almost certainly know this but 80% of that book.
I think Bob mentioned those already is DNS casualties small account and that's a good time to be Reinsuring goes accounts, so yes positive.
Almost three quarters little less than three quarters, so that account of the accounts and our reinsurance group have sliding scale.
Commissions, which protect us.
And.
You know over 95% of its proportional.
So.
We I think we can manage ship within a small band, but there is some there has to be a little bit of the elasticity.
There, but we have other protections that are substantial and we're in a market.
And our clients are in a market, which is currently pretty positive.
But we don't you know we don't plan for this to be a large.
It's we're going to take our CNS play on the primary side for the most part.
Yeah, and I was just in suggests to just finished addressing your specific question on the pop it was eight.
General casualty count, but it is a larger account that would be no longer our focus in the buff Matt.
And I think I said, it or Adam said in his prepared remarks today, roughly 70% of the adverse development. This case this quarter came from accounts that we no longer right.
So I think thats, an important part of the way that we've shifted this book over the last two years.
That's really helpful color and I'm just there are one numbers question if I could.
For full year 2019, I guess.
Can you provide us with just to help us really for modeling going forward in the N.S. segment, what what was the accident year loss pick for the year for those 12 core DNS line.
Yeah. It you know it was.
I would say lately in the.
Trying to avoid specific number but right around 70%.
Okay, that's really helpful.
You very much for the color and that's what going forward.
Thank you Matt.
Our next question is from Mark Hughes of Suntrust. Your line is open go ahead. Please.
Yes. Thank you good morning.
Morning, Mark there morning out there when we think about Oh, yeah investment income what's a good the bogey for Q1, the up extra funds getting him, but I think in October.
Obviously the yield on those are a little lower you started to see the run off at least the kind of what's what's the Q1 marker and then we can.
Currently the the tapering from there.
Yes, it's a great question I think the where we came out all things being equal we are off a little bit in the private in the fourth quarter and the investments that the additional billion to that we've got on balance sheet now came in into the quarter I think that 20 million dollar number it is not an unreasonable number.
For the quarter Mark So it's a decent run rate in the fourth quarter going forward.
And then in the I Love this is to to close them, but when we look at the.
Core E N a worrying that's on a go forward basis, excluding the large account.
What do we think about the ceded premium ratio that has the kind of bounce around a little bit and a little bit higher lately, but clearly that has been the influenced by your strategy with the commercial auto. So when we think about 2020 any sense of what the.
With that number ought to be.
Yeah.
We depend on the growth in the excess casualty line, because that's where we cede a fair amount and we had a lot of growth in that line.
It's run over the last four or five quarters, but at a high level I think of anywhere from you know, we see anywhere from 20% to 30% of that but overall the core Buck arc.
Okay very good thank you.
And then in the specialty admitted and I'm, sorry, I thought I.
Another picked up.
From your earlier conversation, but when you take into account the moving parts the business outside of that large account.
Step down.
Well here lately.
What does the specialty admitted the top line look like because that I think it's been mid single digits lately the get the.
A better from here all all things.
Considered.
No I think that the big impact over the course of this year is that that large accounts shrunk by about 25%.
And we don't we're not anticipating that it's going to shrink by another 25%. We think it would be sitting good level now we've taken the rate decreases. We've we've made the moves that we wanted to on that count and Adam I don't want to jump over you I'm sorry, I was just continuing from before but yeah. We would expect there would be good growth.
Opportunities now moving forward because at the end of the day were basically flat from last year, despite taking out leg down in a large accounts. So I think that shows what Adam was saying really good momentum and the rest of fronting business exactly and we've already added some programs that are just beginning to I'm a little produce a premium and we think based on the Congress.
Patients.
Our being had in that segment by segment leader there.
We see more business being added during the year that will.
Come on in the second third and fourth quarters of this year. So we are two things. One. This we think we will grow but we think we're also setting the stage for additional growth.
Even further down the road so we'll grow this year and then.
The states should be said for continued growth and remember.
This is the line and I know you know this mark but this is a segment, where we tend to take less underwriting risk and to be very focused on the fee income, which has a high IR for our OTI for us.
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And then just one final question I'd be curious any thoughts or any.
General.
Ideas you might share when you talk about the you're pleased with some of the settlement activity in commercial auto I know one of the challenges has been the the social inflation and hire a higher damage awards and it sounds like you're getting a making some progress on that anything more.
Are you could say on the on that front that give us some context.
Yes, I mean, I think and Bob wants to chime in here I would invite them to do it but let me to start by saying that.
We are aware of course of much of the commentary that we're hearing in the industry about.
Social inflation, and we are looking very hard and assiduously for it in our book and burn to be honest about it we're not seeing.
We're not seeing you had in our reported claims development, we're not seeing that in frequency.
And we're not seeing and in average claims resolution costs and we are.
We're not seeing it in the commercial auto runoff book that Bob has been really.
Very constructively focused on it it has had great success, having Bob you want to add anything to that.
I wouldn't that a lot more I guess I would just agree with Adam's comments I think that.
You know our.
The nature of that accompanying run off and then in run off and then with respect to the rest of the book of business I mean with the small account casualty.
The type of business, we just really not seeing social inflation Pervasively, we had a very good quarter from a loss emergence perspective overall when you look at the group in terms of reported loss ratios.
We've looked into some of the details around this around you know precise claims that are in a litigation and the like and we're just not seeing a trend.
In our book of business and so.
I think it's tough for us to say that I would I would attribute it to more medium and larger size on the size accounts I think all told you know bigger limits and we're just not we don't have a tremendous amount of exposure to more traditional commercial auto where I think a lot of people is too so.
All at all I think where we're seeing pretty benign loss trends and not dog.
Not terribly concerned about social inflation, but I think it would be remiss of us to not be very focused on.
On the looking out for that and you know, we and I are are staying very close contact with our claims group in this regard.
Thank you.
Thank you. Our next question is from Randy Binner of B. Riley go ahead. Please.
Good morning, Thanks, I Wonder just ask some questions about claims because it seems like in your opening comments.
We attributed some of the.
Kind of benign or flat rigorous.
Reserves in the commercial auto run off to that so.
Outline what some of your process changes have been there you have more adjusters and.
Can you quantify that fusion close or who is your rate that was mentioned in the opening comments.
Randy you know this is.
We want to be respectful.
Of.
All of our clients and and we just really avoid getting into conversations where we would be revealing things that are central to customers.
Business. That's you know that's part of our promise and relationship with them. So I really don't want to go.
We've begun to any single account.
I will say I will say this the.
We've got a runoff book we've got.
A tremendous amount of focus on getting accurate information about each claim to valuing evaluating first and then valuing each claim quickly to rapidly paying and closing.
Amounts that are owed and and being assertive under the in the context of the policy terms and conditions pop out sticking with the policy terms than I think that.
The total claims count we were moving through claims well the total claims count I think.
Outstanding claims was lower today than I, if it had expected it to be at this point and our development.
We are it is true that more of these claims are going to arbitration and litigation.
Been previously, but you know previously that was a very rare event and now it's just consistent with the standard practice in our company and across many companies in terms of the percentage claims that are you know, where we have to get someone who whereas rose.
To determine what's the right amount.
Vote or if any amount is owed.
So.
This is this book this now being handled.
Very customary way and two really good effect.
Okay, and then I'm sorry, one on program I guess.
<unk>, you're adding program.
Okay program.
Yes.
You're talking about the market dynamics around.
The demand.
For fronting arrangements in light of what's.
So off.
Workers comp pricing environment.
Dealer, but.
Kind of Uh huh.
I'm with soft gradually one price environment overall.
It's Bob buyer and I'll go first.
I think all of or nearly all of the new opportunities that we're seeing or not really in the cost area and I say that the.
The demand for this product so to speak and the way, we do it which is.
We.
Have a lot of involvement and in both underwriting processes as well as claims on both in terms of stabling guidelines as well as oversight.
And that's important to the reinsurers in this space No question and that's the that's our key value proposition in this area and so I think the demand the demand for that as high there was recognized value in doing that and then I would just say more generally and qualitative.
You know Terry Mccafferty, who's running that segment for us is getting.
As a as a robust pipeline and he is getting a awful lot of overtures in that space for.
I really sort of existing deals that are in force that could potentially move to us.
Relatively meaningful size, it's much less about when we first got into this business eight years ago sort of startup programs and the like so that gives us there's a lot of optimism there too and you know in terms of the opportunity terrorist seeing.
He's doing an awful lot of traveling but will have very little of this is this is a is a sort of outward marketing. This is a lot of stuff that saw inbound to him and then he's.
Going out at seeing people in trying to evaluate these deals so the shingle, it's not really been Dom.
Sort of hung out in terms of trying to go out and pulled the payments drum up business, it's just naturally coming to us and a fair amount of this business.
Fortunately is coming to us from our reinsurance partners, who are seeking to get a little closer to the primary risk position, but value.
Our contribution in terms of overwriting oversight claims administration.
Etcetera and so these are in many cases, what we're looking at now are established programs brought to us spot.
Can jump in partnership by both the MGH Andr and existing reinsurers on that book.
We really like that combination is we provide a service that is valued all the way around and they're bringing business, but we think is.
Yes, attractive and sustainable and has a long history and also has enough scale.
Really the larger scale there is very attractive.
Each from you know these larger programs.
All right.
Helpful. Thank you.
Thank you.
I just thought I'd like to remind everyone to ask your question you will need to press star one your telephone keypad. Our next question is from Meyer Shields KBW go ahead. Please.
Thanks, Good morning, I wouldn't look Big picture question I know, there's a lot of depending on the insurance company in question and love commentary about whether that is there is not as traditional hard market, but in the core enough market or sorry, the corina segment. It looks like we're seeing really the state the very typical impact of rates and maybe some data.
<unk> company.
Pulling out so I want to sort of drawing your expertise Adam say is in those product line. So this seems like askari markets is there any major difference.
I'm you faded out for just one second but I think your question is does this seemed like a hard market.
Ah, yes, traditional hard market and.
It does it's beginning to have that warm.
Feeling of a have a market where capacity is challenged and.
There's a lot of business that that's in the market. This though looking for a home and has been thrown out you know someplace else and is going to get repriced in a significant.
With with significant increases and so and changes in terms and conditions in some cases so.
Yes in the answer to your question it feels to.
Me like were.
We're in a very positive.
Positive.
Strong.
Market.
Position and we're seeing it in terms of the submissions.
That are coming to us we're seeing it in terms of our hit ratio and worse and that is when new submissions and we're seeing it in terms of our renewal ratio on our existing business.
So all of those and rate so all of those things are positive they all point to.
A lack of couple lack of capacity in the market and then an ability on our part of the service that market and.
To get good rates and good terms.
Okay.
The second.
Question.
With regard to the ceded reinsurance.
Is placing where that changing in any significantly.
And this is our third party business there just to be clear no.
The real.
Yes.
No it hasn't our treaties renewed throughout the year, but we still are less significant renewal there was a it's more so in the mid year process and we've seen very consistent a rate increase rate rates stability. There. We haven't had material increases I think we really had increases and we havent materially change.
Structures at all.
Our business has performed well so I think our counterparties have performed well with us. So we don't anticipate anything there and we haven't seen that yet.
Yeah, and so this is Bob Myron and Bob with the.
With the expire the of the a commercial auto account that reinsurance that ceded reinsurance how to BNS is almost entirely X is entirely excess of loss. Yes. There is no proportional business I agree with Sarah you know that's it that's in July as of June or July June and July renewals, and we have not me.
I saw a very reasonable.
Renewal rates back then and yes, we've had the reinsurance of a good good loss experience I'm just repeating what she said as you know so that's definitely part of it.
No. That's very helpful. And then final question, sorry, I know there. So many moving parts are going from 2019 2020 are going to give any rough guidance on a normalized tax rate for 2020.
Yes, that's it that's a great question, because obviously, there's a lot of that noise to our tax rate over the course of this year there, but I you know given to I think Adam said that roughly half of our assets are invested assets remain in Bermuda with the casualty reinsurance business and other kind of intercompany structures. We have I would think about a tax rate and then.
18, so a decent savings from that from the U.S. rate, but I would that's ticked up a little bit over the last two years as we have more assets onshore, but we continue to have a good balanced on the island. So mid teens is where we come out.
Okay perfect. Thanks, so much.
Thank you we no longer has a question in queue I would now like to hand, the call backs are for sensors.
Thank you operator, and thank you everybody who has participated in the fall it's a.
By asking questions are listening we appreciate your following our company. We appreciate your interest in it and we hope to see you our shareholders out on the road.
Over the course in the next many months and.
We will be reporting in next quarter and look forward to that as well.
Thank you.
This concludes today's conference call. Thank you all four ascending may now disconnect.
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