Q1 2020 Earnings Call
Okay.
Good day, everyone welcome to selective choose group's first quarter 2020 earnings call at this time for opening remarks, and introductions I would like to turn nickel over to senior Vice President Investor Relations and Treasurer and pie.
Good morning, everyone involved.
Focusing on our website domestic dot com and the replay will be available until June 820 20.
Supplemental investor package, which provides GAAP reconciliations of any non-GAAP financial measures reference today also is available on the most of the page of our website.
Today, we will discuss our results in a business operations using.
GAAP financial measures. The ullswater included in our filings with the annual quarterly on current reports filed with the U.S. Securities and Exchange Commission.
Non-GAAP operating income, which we used to analyze Dresden operations as the lead it makes it easier for investors to evaluate our insurance business.
Non-GAAP operating income is net income excluding the after tax impact net realized gains or losses on investment.
Unrealized gains or losses on equity security and debt retirement costs related to our early redemption of debt securities in the first quarter 2019.
And statements and projections about our future performance. These forward looking statements under the private Securities Litigation Reform Act of 1995 are not guarantees of future performance and are subject to risk uncertainties.
For a detailed discussion of these risks and uncertainties. Please refer to our annual and quarterly reports filed with the U.S. Securities and Exchange Commission, which include supplemental disclosures related to the coldest 19 pandemic.
You should be aware that selective undertakes no obligation to update or revise any forward looking statements.
On today's call at the following members of selective executive management team, John Marchioni, President and Chief Executive Officer, and Mark low cost Chief Financial Officer, and now I'll turn the call over to John.
Thank you Ron and good morning, I'll make some introductory remarks and focus on some high level industry teams and the impact of the current environment, our performance and positioning.
Mark will then discuss our financial results and I'll return to highlight how we remain positioned for continued superior performance.
I'll be here with some thoughts on the corporate 19 pandemic the impact that has had on our business and our ability to serve our policyholders and distribution partners.
These are clearly unprecedented times with the operator covered lives need impacting wise of countless people across the world, resulting in displacement of the nation's workforce and significant volatility in the financial markets.
We are welcome gratitude for the first responders medical professionals and other a central employees, who work tirelessly. So that we can all be safer and get back on the road to recovery.
So what can enter this volatile environment in the strongest financial position in our 94 year history, and we remain well positioned to navigate through these turbulent times.
I could not be more proud of how our company and in particular, our employees responded to this crisis.
Turning to serve our policyholders and distribution partners with the exceptional level of service they have come to expect from us.
We utilize a field based model for over 25 years, including employees and underwriting agency management claims and safety management, enabling us to continue to effectively provide our distribution partners with highly responsive personalized service and support as they are dealing with disruption for their own operations.
Our entire company has been responding proactively to service, our policyholders and agents recognizing the challenges they face.
Since we have taken to Isa financial burden on our policyholders include helping our customers maintain coverage by offer an individualized payment flexibility and suspending policy cancellations late payment notices and late or reinstatement fees through at least May 30 Onest.
In some states and compliance with regulatory requirements, we provided a deferral payments without cancellation for a period of up to 90 days.
Also a program to credit 15% of multi premiums for April and May related to the personal and commercial automobile classes, which amounts to approximately $20 million.
This premium credit will be recorded as other insurance expense in the second quarter and should be offset by reductions in claim frequencies and lower loss costs due to various stay at home directors in place.
Finally, we are working with our customers and agents to make mid term policy adjustments rather than waiting until the end of the policy term to recognize reductions in order to both exposure basins, such as payrolls in sales and in some cases reclassify those exposures to lower risk classes.
From a financial standpoint for the first quarter of 2020.
Selective reported non-GAAP fully diluted operating earnings per share of 84 cents and an annualized operating Roe of 9.4%.
Underwriting results and investment income were both strong contributors to this result.
There are three Covance 19 related underwriting items I want to highlight first.
We recorded a 75 million dollar return audit and mid term endorsement premium accrual for policies in force as of March 30, Onest to reflect the anticipated decline in sales and payroll exposures on the workers compensation and general liability lines of business.
And our estimate of reduced exposures due to the significant economic slowdown.
Second we booked $10 million in property I'd be NR, reflecting the ultimate estimated net losses related to Covance 19 for a small portion of our enforced property policies, which has specific sublimit coverage for the extra expense associated with the government ordered cleaning of the insured location.
Due to the operating over communicable disease.
Third our expense ratio includes a 10.5 million dollar increase in our allowance for uncollectable cringe receivable, reflecting the previously mentioned suspension of policy cancellation for nonpayment of premium.
The after tax net impact of these three underwriting related items was approximately $19 million or 32 cents per share and increased our underlying combined ratio by three and a half points.
On the investment side, we report alternative investment income on a one quarter lag. So our second quarter results will include the negative performance from the first quarter.
Our current estimate is for an after tax loss of $10 million to $15 million for alternative investments for 2020.
In addition, we recorded $25 million an after tax net other than temporary impairment in the first quarter of 2020 split evenly between securities we intend to sell and those we impaired for credit losses under the new credit loss accounting standard or seasonal.
From a capital and liquidity perspective, we took a number of steps in March at of an abundance of caution to strengthen our balance sheet and liquidity position.
This consisted of short term borrowings of $302 million, including a $50 million drawn down on a line of credit and 252 million of borrowings from the federal home loan bank facilities, we fully expect to repay them in coming quarters or as markets normalize and the regulatory and economic uncertainty declines.
In terms of the broader outlook for our business. There are four main themes I want to touch on.
First is the outlook for topline growth as we look out through the remainder of 2020 and into next year.
These are undoubtedly challenging times for our economy and small to midsize businesses are particularly vulnerable.
We continue to work with our policyholders and distribution partners on a case by case basis to assess changes at our exposure and business conditions and determine how to best help them through premium returns waving nonpaid cancellations and other leads measures.
Reflecting the decline in the overall economy, we expect pressure on premium growth for the next few quarters manifested in the aforementioned return audit premium adjustment and lower average policy size for new business.
We do expect retention rates, however to remain strong and likely improve.
Second with respect to pricing select this first quarter commercial lines renewal pure pricing was 4% continuing an upward trajectory since early last year.
For April which reflects a first full month of economic strength commercial lines renewal pure price increases averaged 4% and overall premium growth remained strong at 7%.
It remains early days in a crisis at a still evolving and we will continue to closely monitor business trends.
Our approach to pricing remains the same additive as it has always been.
The leverage our sophisticated modeling and underwriting tools to assess risk I am extremely granular basis and administer the appropriate price for the exposure. We are assuming we remain committed to maintaining underwriting discipline, even as we work with our policyholders and agents to navigate this challenging economic environment.
Third there has made considerable discussion and focus on the potential for industry losses arising from from Cobas 19.
All of our standard commercial lines property and business owner policies require direct physical loss of or damage to property by covered cause of loss the trigger coverage.
While these potential plan will be adjustment on its unique facts and based on the terms and conditions of the specific policies covert 19 related contamination the existence of a pandemic and order, resulting preventative government shutdown orders generally are not insured under the standard commercial property business owner policies.
Our standard commercial property in business on our policies also specifically exclude all loss or damage caused by our resulting from a box virus or bacteria.
We believe this exclusion will apply to preclude coverage for losses related to cover the cobot 19 buyers.
Approximately 6% of our policyholders purchase a sub limited extra expense coverage that provides up to $25000 and limit for the extra expense associated with cleaning the property when order by order of health after an outbreak of a communicable disease at the insured premises.
For our DNS for our property forms contain the same language as standard commercial requiring direct physical loss or damage the property, but do not contain a specific viral vector exclusion.
Property accounts for approximately 30% of our DNS business and of that amount only about a quarter of our property policies include business interruption coverage, combining both standard commercial and DNS, 90%, 95% of our property policies includes virus or bacteria exclusions.
The impact of Coca 19 on other lines of business will vary.
For example, the exposure reductions in workers' compensation and general liability in the form of lower payrolls or sales will likely be offset by a commensurate reduction in claims incurred.
However, we could see some increased workers compensation frequency from employees in high risk roles at essential businesses, who contracted covance 19 in the workplace.
We are experiencing decreases in claim frequencies for personal auto and to a slightly lower extend commercial auto due to lower lower miles driven and have already announced programs to return premiums for these classes, which are traditionally not subject to audit.
For commercial property lower economic activity will generally result in less claim frequency, but the longer the downturn persist the risk of frequency rises.
Finally, the sharp decline in equity markets during the first quarter and what appears to be a clearly prolonged low interest rate environment continue to put downward pressure on industry wide investment portfolio returns.
The only wafer insurers to compensate for lower expected investment returns is to continue to strive for improved underwriting performance.
We are well positioned with our sophisticated underwriting and pricing tools strong market position and appropriately priced inforce book of business to continue to generate profitable underwriting results now I'll turn the call the market to review the results for the quarter.
Thank you John and good morning, I will start with some more detail on the coded 19 related items goes for our results and finish with an overview of our updated outlook for 2020 for the quarter. If we reported 84 cents of non-GAAP operating earnings per share and we generated a non-GAAP annualized return on equity of 9.4%.
The three coded 19 underwriting related items reduced operating income by 19.3 million or 32 cents per share and reduced our annualized operating return on equity by 3.6 percentage points. In addition, these items reduced on net premiums written by 11% and increased our underlying combined ratio by 3.5 points.
Overall, despite operating ROE users being below our target and reflects a solid result, particularly in light at the proactive steps we took in the quarter to robustly modeled quantified and reflects the negative financial impact of coated 19.
The $75 billion return boarded a mid seven it also premium accrual to John highlighted reduced our first quarter net premiums written by 75 million, resulting in a 4% decline to net premiums written for the quarter.
Absent this accrual underlying premium growth was solid at 7%.
The accrual represents our estimate of the full impact of the economic shutdown and the gradual reopening of the economy Enfolds workers compensation and general liability commercial lines policies actual audit and mid term in dose from premium adjustments will be reported to us over the coming quarters and these will be taken against this accrual.
In addition, we will adjust this accrual up or down during the course of the yen as the depth and duration of the economic slowdown and its impact on exposures becomes fully known.
The pretax impact for this accrual of the considering premium earnings and reduce losses and underwriting expenses was 4 million.
This increase our combined ratio by 0.5 percentage points and reduced earnings by five cents per share.
The estimated pretax impact this accrual for the remainder of the yen is an $11 million reduction and underwriting income.
Given this accrual is owed in proportion to the runoff of in post policies. The remaining impact will be more heavily weighted to the second quarter and then we expect that to reduce in the third and fourth quarters.
The 10 million property in all of which negatively impacted earnings by 13 cents per share that increased our combined ratio by 1.5 percentage points reflects the ultimatum. The ultimate estimated net losses related to cope with 19 with a small portion about policies. They included $25000 sub limited coverage specified ex the cleanup.
<unk> expenses.
While coven 19 is clearly catastrophe with a wide range of industry loss estimates around the cat for external reporting we follow the disclosure practices only name Tcs events are included in our cat loss ratio and thus far off Tcf has not yet designated come in 19 at the catastrophe.
For these losses are reflected in our underlying combined ratio.
Third the 10.5 million increase in the allowance from collectible premiums receivable increased expense ratio by 1.6 percentage points online to samples and doubles 18 million to put that into perspective, what we can vary we typically averaged around 4 million a year of uncollectible premium.
Today, we have not yet seen a significant uptake in posture accounts or meaningful decline in daily printing collections. However, given the fact that not been on cancellation and Billy billion lenient fees, we provided our customers extend well into the second quarter, we expect our exposure to uncollectable premiums to increase as.
The coated 19 related items on net premiums written growth would have been just over 7% operating EPS would have been $1.16 and operated army would have been 13% and our combined ratio, 93.2%, all reflecting strong underlying performance in the quarter.
Turning back to our results consolidated combined ratio of 96.7% was two point higher than the comparative quarter. This increase reflects that coated 19, underwrote writing related items and elevated catastrophe losses.
Cat losses added 5.1 points for the combined ratio and was driven by 23 million of net losses from the early most tornadoes and subsequent hail in and around Nashville, Tennessee.
The high level of Cat losses continued into April and on second quarter results will include $35 million and pretax catastrophe losses from too severe storms, which impacted our footprint in April.
We continue to see favorable claims divergence in the quarter Workers' compensation line business and this resulted in 10 million of favorable prior year Casualty reserve development. The favorable development benefited the combined ratio by 1.5 points.
Non cat property losses came in below expectations and 16.6 points on the combined ratio. Despite the inclusion of 10 million of equipment 19 property.
In this line item.
The underlying combined ratio of 93.1% was in line with comparative quarter.
However, as noted the underlying combined ratio includes 3.5 points of coated 19 charges at some of these charges the underlying combined ratio would have been 89.6%.
Moving to expenses our expense ratio was elevated at 35.2% for the quarter due to $10.5 billion Cobot 19 related bad debt expense and lower net premiums earned for the first quarter and impact of that $75 million audit premium accrual. The combination of the two coded 19 related items added two point.
One percentage points the expense ratio.
Absent coated 19 expense ratio was 33.1%, which was a bit better than expected.
Premium volume this year will likely come under some pressure from lower exposure to some pressure on new business growth pressure on the topline combined with the allowance on collectible price receivable and the approximately $20 million of premium Kreditanstalt personal and commercial auto customers that we expect to book in the second quarters underwriting expenses pools will result in.
I will put pressure on the expense ratio this year.
We've instituted at expense management program for the remainder of the yen, which will provide some offsets. These factors have been reflected in our updated outlook, which I'll touch on just a minute.
Over the longer sale, we believe we can continue to improve operational efficiency and drive down our expense ratio, while also still making significant investments and developing on people improving our underwriting capabilities enhancing the customer experience continued product development and other investments that are part of our long term strategic plan.
Corporate expenses expenses, which are principally comprised of holding company costs alone come stock compensation totaled 5.8 billion outs attacks in the quarter compared with eight nine a year ago. The decrease was principally driven by a decline in upstart parts in the first quarter.
Turning truck segment standard commercial lines reported a 5% decline in net premiums written reflected in 75 million return premium accrual absoluteness accruals printing growth would have been 9%.
New business growth was solid at 6% retention was strong at 85% of renewal pure price increase to pull percentage this quarter.
The combined ratio was 96.7% and the underlying combined ratio was 94.6%.
Catastrophe losses accounted for full points, a net favorable prior year casualty reserve development in workers' compensation helped by 1.9 points.
The coated 19 charges negatively impacted the segments combined ratio by 3.9 points.
Our personal line segment reported a 2% decline in net premiums written mostly reflecting the bulk competitive market conditions proposal to.
Renewal pure price increases averaged 3.7% retention remains solid at 83% that new business was down 4%.
The segment produced a combined ratio of 99.5%, which included an elevated level of catastrophe losses at 15.7 percentage points driven by the early months, Tennessee tornado in subsequent sale.
There was no casualty crime accident year reserve development, the underlying combined ratio was 83.8% and the coded 19 charges negatively impact the postal line segment combined ratio by 2.2 points.
Segment generated 8% net premiums written growth renewal pure price increases averaged 3.9% over the past fee is targeted price increases the sysmex changes and exiting specific underperforming classes of business have contributed to improved combined ratio performance in this segment.
Segment generated 93.5 to 10 combined ratio and included light catastrophe losses of 0.8 points that no casualty prior accident year Reserve development.
The underlying combined ratio was 92.7% that code 19 charges negatively impacted the segments combined ratio by two points.
Turning to investments we came into the severe economic conditions appear to have extreme volatility with a conservatively positioned investment portfolio, 92% of our portfolio has invested in core fixed income securities in short term investments with an average credit rating of double a mining minus including a high yield allocation.
And effective duration of 3.3 is at a high degree of liquidity.
Gross asset to currently underway and represent around 8% of the portfolio.
Given lower valuations, we expect a modestly increase our allocations risk assets this year subject to market conditions.
Our risk asset allocation includes just over 4% outpatient high yield three potential alternative investments and under a sense of public equities.
We have to stress tested our core fixed income portfolio using the old ones Otis rate on the 2008 periods of which time that with significant downwards ratings migrations and credit losses for the market is the whole IL portfolio holds up well in the stress scenarios and ratings migration risks and potential credit losses of very very manageable.
After tax net investment income of 45 billion was up 10% from the comparative quarter improvement was driven by alternative investment portfolio, which reports on a one quarter lag partially offset by lower interest rate environment that continues to put pressure on new money pushes yields.
We recorded 25 million it off the tax net other than temporary impairments in the quarter, which were evenly split between those securities the which we intend to sell to optimize our investment portfolio and those securities for which we reported credit impairment, but at the new Cecil accounted for the chip.
The overall office tax yield on the fixed income portfolio, including high yield was 2.7% for the quarter. The average new money yields on the $320 million a fixed income purchases during the quarter was 2.5% up the tax.
Our capital position remains extremely strong with $2.1 billion GAAP equity down 4.5 concern from year end with the decline driven by month to market losses in our fixed income portfolio.
Net premiums written to surplus ratio is below the low end about target range to 1.4 to 1.6 tons.
We have $337 million on cash and investments at our holding company, which represents over full full for to be able to full full years of estimated cash flow needs.
As stated earlier over the coming quarters, we plan to repay the 302 million of both short term borrowings $50 million, which was done at the holding company level and this will bring our debt to capital ratio back in line with where we ended 2009 and well below the upfront about target range.
Turning to our 2020 guidance after completing the ground up and robust ex rail and financial modeling exercise to take into effect. The estimated full year impact of folks 19, our financial results. We're revising our full year 2020 guidance as follows a GAAP combined ratio excluding catastrophe losses of between 92.
Percent in the 93%. This represents an increase from our prior guidance of 91.5% is primarily due to pressure on the expense ratio.
It's also assumes no additional prior accident year reserve development catastrophe losses of 4.5 points of the combined ratio, reflecting higher than expected cat losses for April combined with the lower than expected and premium because coated 19 has not been decimated the PCX event, such losses and not included in this ratio.
After tax net investment income of approximately 160 million down from our prior guidance of 185 million principally due to an expected change in our full year after tax net investment income from loan from alternatives.
Although there there was uncertainty around this estimate we now expect a range of between $10 million $15 million, an after tax that investment losses from alternatives for the year compared to our prior estimates of a $14 million gate.
But overall effective tax rate of approximately 18.5%, which includes an effective tax rate of 18.5, but net investment income, reflecting a tax rate of 540% for tax advantage finished municipal bonds at a tax rate of 21% for all other items and weighted average shares of $60.5 billion on a diluted basis.
There is a high degree of uncertainty than usual around our full year guidance given the ultimate impact of coated 19 remains fluid.
And with that I'll turn the call back over to John for closing comments.
Thanks, Mark while we continue to navigate a generational economic events, along with our policyholders and distribution partners. We are extremely confident in the strength and positioning of the company. We've consistently maintained a disciplined underwriting appetite and effectively manage renewal pure price increases in line with expected loss trend for a decade.
Our field based model superior distribution relationships and customer experience focus a strength in any environment are only enhancing the current ones.
Our core competitive advantages have positioned us as a market of choice for our agency partners and our ability to continue to deliver for them and our mutual customers. Throughout this crisis has further solidify that position.
We are cognizant of the economic in health related hardships that so many people in our country are dealing with and we salute all the essential employees and supposedly go to working state. So that we can all be safer and still have the basic necessities of life.
That said, we will not with the pandemic market volatility or challenging economic conditions. The tourists from pursuing our objective of being an industry leader one that is viewed as best in class in terms of product offerings and customer service, while also generating superior returns for our shareholders over time.
With that we will open the call up for questions operator.
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Your first question from Mike savings Key Credit Suisse. Mike Your line is open.
Morning.
Hi, guys. This is actually Charlie on for Mike Good morning.
Germ line.
Good morning.
First question is how are you thinking about workers comp profitability being impacted due to the virus other than topline pressure.
Yes.
Clearly that we've seen our reduction a newly reported claims with the shelter in place orders and a lot of non essential business is being closed that has a holistically reduce claim frequency, but as we've talked about in the prepared commentary, we would expect to see some compensable clay.
James and predominantly from first responders and per medical professionals that are working routinely in connection or in contact with Covance 19 positive patients patients. So.
That has not materialized as of yet in our portfolio and our portfolio remember from a workers comp perspective, we do have a heavy contractor portfolio. So about 40% of our overall premium and actually just under half of our workers comp premium is in the contractor segment, which you wouldn't expect to see a lot of Covance 19.
And claims frequency from that group, but overall, we would expect to see some some loss activity coming through.
Comp is aligned that if you've looked at us over the last couple of years, you've seen a flat to slightly declining topline because of the pricing pressures that have been coming through that line. We've obviously benefited in terms of significant improvement in underlying loss ratios and Thats continued.
But with that pricing pressure and the reduction in exposures that are coming through and that is a big driver of the audit premium adjustments that we maybe in the first quarter that will have an impact on profitability going forward.
Got it thanks.
Then my second question is.
For the instances where were you guys are having to deny business interruption claims to you is it reasonable for us to kind of expect.
Legal defense reserves to come out of that and then.
If business in our energy losses aren't as widespread.
The industry as add some may have initially not.
And we're seeing contractions in business activity commercial PNC pricing really continued.
Salary thanks.
Thank you very good questions clearly and you already starting to see there is some litigation relative to business interruption coverage. Our sense is much of that litigation is focused on policies that do not contain a virus exclusion and as we've mentioned in his prepared comments on all reinforce again in the.
95% of our policies across both commerce standard commercial and DNS do include a virus exclusion I think thats, even less subject to litigation challenge to end the physical damage to property requirement, which in our view is also a solid policy form, but I wouldn't expect the we'll see.
Some increase litigation and that will impact loss adjustment expenses, but again you want to remember that this is all in the context of the economic downturn impacting frequencies down pretty pretty holistically. So I think that's point number one relative to the pricing environment and we did give you in the prepared commentary.
Our April pricing, which at 4% and very strong retention in the month of April a suggest that pricing at a reasonable level and again, we've we've really made this point over the last several years with a with the embedded profitability in our book and our ability over 10 years now to continue to manage eight.
Reasonable level of pricing relative to expected loss trends that we've been able to maintain very strong retentions and we think thats still reasonable going forward in April which was the first real full month of of the economics training that we've seen for pricing to remain at that level, We think thats a positive also overall.
Profitability before this crisis started for the industry still needed to improve and as we said earlier with the continued low for longer investment return environment, It's only going to put more pressure on underwriting results. So the underwriting results for the industry needed to approve whereas in a beneficial position because our core profitability is so.
Strong, but we can't lose sight of though of the loss trends the normal loss trends, which have been fact pickup ugly and in our estimation would continue to run around three between three and 4% in a more normal environment and I think that needs to be.
Kept track of actually as we move throughout this crisis. So we would expect pricing to remain on the trajectory that it's been on for the last several quarters.
Got it. Thank you that's helpful.
Well guys.
Thank you Charlie.
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Speakers, we have a next question from Sean right in back of KBW. Your line is open say.
Hi, I just had a good morning out a follow up on the workers comp.
Issue, which is within I think more people who are opposed to build rightfully. So the virus excluded legislation on virus exclusion such but the reaction to presumption of compares ability to more front line essential workers beyond healthcare has been more mix can you give your thoughts on that.
Yes, sure. So I think as you said, we would certainly not in opposition to legislation that would expand presumptions to first responders under healthcare professionals that are close contact recovered nicely patients quite honestly with or without a presumption those are going to tell.
Oftentimes be viewed as compensable injuries now we also need to remember that for the most part the frequency of these will be low in terms of the inventory amongst working populations and the average severity on both the medical and the indemnity side will also be level. So I think it's important to keep that in mind I do think.
And again, our philosophy in comp and overall is that the unique facts and circumstances presented in every individual claim are going to guide the outcome of that claim and if you have an employee who was told when everybody else was told to shelter at home that they need to come to work in order to provide an essential service.
And that essential service requires them to interact with the public on a regular basis and that individual test positive for cobot 19, those facts are more than likely going to result in a decision that thats, a compensable injury and that's that applies with or without a legislative presumption that we do take it's dangerous for.
Are these presumptions to just opened up to all essential employees, because I think the fact that the individual with Richard grocery store worker or individual working at an assisted living facility and it's important that the essential employee also had to interact with the public.
In order to create that exposure, whereas all essential employees, many of which we're actually working from home shouldnt gain the benefit of that presumption that I think those handful of states that have pursued a very broad presumption would create much more problematic situation for the industry holistically, but narrow presumptions.
We think are reasonable expectations for essential employees, who interact with the public.
Thank you and then could you guys just comparing contrast, what you've seen in your commercial auto versus your personal auto book for frequency and severity trends.
So severity trends are just way too early to talk about coming we've got several weeks of beta and Thats a line, where your actual severity trends are going to develop over a much longer period, but I think from our frequency perspective, we have seen reductions in both personal and commercial auto I would say it and we use this reference in our prepared commentary English.
Slightly less of a reduction for commercial and that was for personal which would make sense. Because you still have a lot of contractors and a lot of other business vehicles on the road miles driven might not be to bet. The best way to look at commercial auto frequency indicators, because miles driven might be relatively flat for certain business owners, but Lisa.
Amount on traffic congestion on the road is likely to that impact frequency on a favorable basis, so I'm not going to get overly specific about the reduction in actual claim frequencies for let's just say commercial auto was down but down a little bit less than we saw on personal auto.
Okay. Thank you very much.
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