Q3 2020 Donegal Group Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the Donegal Group Inc. Q3, 2020 earnings conference call at.
At this time all participants are in a listen only mode. After.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
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I would now like to hand, the conference over to your Speaker today, Jeff Miller Chief Financial Officer. Thank you. Please go ahead.
Thank you very much good morning, and welcome to the Donegal Group Conference call for the third quarter ended September Thirtyth 2020.
Yesterday afternoon, we issued a news release outlining our quarterly results for a copy of that release. Please visit the Investor Relations section of our website at Donegal Group Dot Com. In addition, we have made available a supplemental investor presentation on our website.
In today's call, Kevin Burke, President and Chief Executive Officer will provide a business update I'll follow Kevin's comments with highlights of our quarterly financial results.
At the conclusion of our prepared comments, we will open the line for any questions you might have.
Before we get started you should be aware that our commentary today include forward looking statements that involve a number of risks and uncertainties. We described forward looking statements in our news release and we provided further information about risk factors that could cause actual results to differ materially from those we projected in the forward looking statements in the report on form 10-K that we submitted.
To the SEC.
You can access our form 10-K for the investors section of our web site, we use certain non-GAAP financial measures to analyze our business results and refer you to the reconciliation of non-GAAP information included in the news release, we issued yesterday.
With that I'll turn it over to Kevin.
Thanks, Jeff and welcome everyone. We are pleased with our underwriting results during the third quarter in light of the severe weather activity throughout the country if.
If you look at the quarter in total the continued improvement in our results reflect the broad and comprehensive approach, we have taken to enhance shareholder value.
Even as Weve encountered challenges such as elevated storm activity in the ongoing effects of COVID-19 pandemic.
On our call last quarter I talked about our efforts to improve profit margins beyond going strategic shift.
Towards a higher concentration of commercial lines in our product mix and our focus on stabilizing our personal lines after taking aggressive steps to improve performance in that segment.
Over the past few years the impact of those actions is clearly benefiting our bottom line results.
Turning with underwriting profitability, the third quarter of 2020 combined ratio improved to a 98.3% compared to 100.6 in.
In the prior year third quarter. We also benefited from after tax net investment gains of $2.6 million or nine cents per diluted class a share as the market value of our equity security holdings continue to rebound during the quarter.
As of September Thirtyth, we recruit all the unrealized losses that resulted from substantial market decline at March 31.
Those factors contribute to net income of $11.8 million or 41 cents per diluted class a share for the third quarter, which we view as a solid achievement again, considering the severe weather events and slowly recovering economic conditions throughout many of our operating regions.
Moving to operations, we benefit from a diverse book of business that includes both commercial lines and personal lines of business.
Over the past several years, we have gradually shifted our mix of business to a larger percentage of commercial lines. While also taking decisive actions to improve our personal lines results.
Presently our book of business consists of 60% commercial lines, including multi peril automobile on workers compensation products.
While we write our fair share of medium size and larger accounts, which we define as $100000 to $1 million in total premium we specifically target smaller businesses like local artisan contractors and main street business owners, who played critical roles in serving their local communities.
We have continued to enjoy relative stability across our customer base. Despite the economic disruption caused by the pandemic.
With favorable trends of strong new business growth and steady commercial premium increases as the market appears to be showing some signs of hardening.
We expect commercial pricing trends to move upward as our industry deals with social inflation and other factors driving higher loss trends as well as facing the reality of lower for longer interest rates that will likely increase pressure on investment income for the next few years.
We did not receive a significant number of midterm endorsement request, which indicates a level of Brazil resilience among the businesses, we insure and while we anticipate some level of reduced exposure based premiums as we complete workers' compensation premium audits. Following the end of the policy terms during which the shelter in place orders were in effect.
We've not seen any evidence to suggest that those premium reductions will have a material impact on us we.
We currently expect that any impact will be delayed until sometime in the first half of 2021, when we will be completing audits for policy during terms, which the pandemic had a broader impact.
As a reminder, we insured businesses across 20 states in the economic disruption in those states has varied considerably.
Moving to personal lines, we did see an increase in personal auto claims frequency in the third quarter as compared to the second quarter. When there was widespread shelter in place orders that limited travel.
While there was clearly more driving activity as many of the restrictions were lifted we experienced lower auto claims frequency than the prior year third quarter.
We along with some of our peer companies and other industry observers attribute the lower frequency to lower traffic density.
Although miles driven has returned closer to pre coded levels. The driving activity appears to be less compressed into those rush hour time frames as many people continue to work from their homes we.
We've continued to closely monitor our underlying claims experience and we will file rate adjustments that reflect our loss experience, including the COVID-19 impact through the normal course of our annual rating process.
We are pleased to report that we continue to make progress on the development of our new auto and homeowners products that are on track for deployment in the July 2021 timeframe.
The new products will give us the ability to segment, our pricing with greater precision through the expanded use of external data and predictive analytical models, which will improve our ability to effectively compete in our personal lines markets.
We will deploy the new products in a few states at a time to ensure our product launch that is smooth and.
And we look forward to completing the full rollout within all 11 states as we offer these new personal lines products.
On a related note we were pleased with our progress during the quarter on the next release of our ongoing systems modernization project that is primarily focused on the new personal lines products as well as numerous operational modernization initiatives that are progressing in parallel with the larger systems initiatives.
Despite the remote working environment, we are well positioned as we complete the year and as we move into 2021.
Before I turn the call over to Jeff for a detailed review of our quarterly results I want to highlight the fact that our book value has reached a record high of $16.96 at September Thirtyth 2020.
The third quarter of 2020 represented our seventh straight quarter of book value appreciation as we were able to increase book value per share by 21% since year end 2018 that increase included 8% growth during the 2020 year to date, which is notable considering the events of the unprecedented channel.
Because we are all facing.
We were also pleased to declare a regularly quarterly cash dividend of 15 cents per share of our class a common stock and 13 in the quarter cents per share of our class B common stock payable on November 16, 2020 to stockholders of record as of the close of business on November 2nd 2020.
As a reminder, we have gradually increased our cash dividend each year for the past 18 years.
With that I'll turn it over to Jeff to go over more details about our third quarter operating results.
Thanks, Kevin as usual I'll highlight a few of the operational and financial metrics for the third quarter and we'll be glad to address any questions later in the call.
I'll start with top line premium revenues, which declined modestly during the quarter. We continued to achieve solid commercial lines growth through new business and moderate premium pricing increases the.
The commercial growth was more than offset by a decline in personal lines premiums and that decline reflects a continuation of pricing discipline that led to natural attrition in premiums that exceeded our relatively limited new business writings in personal lines.
In total net premiums written decreased 1.7% to 100 $180.8 million and net premiums earned decreased 2.6% to $184.9 million for the third quarter of 2020 compared to the prior year third quarter.
Commercial premiums grew by 4.3% during the quarter and accounted for approximately 54.5% of our net premiums written during the third quarter of 2020 compared to 51.4% for the third quarter 2019 pre.
Premium rate increases accounted for 3.4% growth during the quarter or approximately 5% excluding workers compensation.
On a line by line basis for the third quarter of 2020 compared to the third quarter of 2019 commercial auto premiums increased by the largest percentage at 8.6%.
Which was entirely attributable to premium rate increases as new business was offset by planned attrition during the period.
We continue to expend substantial efforts to improve the performance of our commercial auto line of business implementing double digit rate increases and actively reducing exposures in under four underperforming regions.
Commercial multi peril grew by 4.6% during the third quarter, including low single digit premium rate increases due to ongoing competitive competitiveness for small business accounts across our regions.
Workers compensation premiums decreased by 1.6% with solid new business submissions offset by premium rates that declined 2.9% on average.
That rate decline was the smallest we've experienced since 2018 as we saw a moderation of rate decrease impact in several regions during the quarter.
From an underwriting performance perspective commercial lines generated a statutory combined ratio of 102.4% for the third quarter of 2020, which was elevated compared to the 97.9% combined ratio for the prior year third quarter.
The impact of several unusually severe weather events in August including tornado damaged during tropical stormy seas and damages from 100 mile an hour plus miles.
Wins during a devastating to Rachel event in the Midwest States occur.
Accounted for the bulk of the 2.3 percentage point increase in the weather related loss ratio for the commercial lines segment in total and six percentage points of the increase in the loss ratio for the commercial multi peril line of business when compared to the prior year third quarter loss ratios.
Moving to personal lines, we have intentionally slowed new business growth as we await introduction of our new personal auto and home products.
That as Kevin mentioned will provide greater pricing precision when they're deployed beginning in the second half of next year.
We moderated our rate increases during 2020 to stabilize our book of business and the decline in our personal lines premium writings. Therefore, primarily reflects natural attrition in this segment.
Overall personal lines net premiums written declined by approximately 8% during the quarter.
In terms of personal lines underwriting performance, our favorable third quarter of 2020 results reflect the benefits of various underwriting actions, we implemented within the last two years as well as lower personal auto claim frequency that again, we attribute in part to lower traffic density during the period, even as driving activity and claim free.
Equity return closer to pre COVID-19 levels.
Our exit from the personal lines markets in several weather prone states proved to be beneficial to our homeowners results as we avoided the potential for significant weather related losses from third quarter severe weather events in the states.
For the personal lines segment in total we experienced greatly improved underwriting results as evidenced by the 91.9% statutory combined ratio for the third quarter 2020, compared with one of the 3.9% for the prior year third quarter.
Combining our commercial lines and personal lines segments, we achieved a 65.4% loss ratio for the third quarter of 2020, which compared favorably to the 68.9% loss ratio for the third quarter of 2019.
While the $16.9 million of weather related losses impact.
Impacted the third quarter of 2022.
To an elevated basis compared with a lower than average impact for the prior year third quarter. The weather impact of 9.1 percentage points to the quarterly loss ratio was in line with our previous five year average loss ratio weather impact for the third quarter.
Large fire losses, which we define as individual fire losses in excess of $50000 decreased to $3.9 million or 2.1 percentage points of the loss ratio for the third quarter of 2020 down from $7.8 million or 4.1 percentage points on the loss ratio for the third quarter of 2009.
I mean.
The decrease was primarily in the homeowners line of business.
Net development of reserves for losses incurred in prior accident years did not have a material impact on the loss ratios or either the third quarter of 2020 or 2019.
Our insurance subsidiaries experienced favorable development and their workers compensation and personal auto lines of business for the third quarter of 2020 offset by unfavorable development in our commercial multi peril line of business that resulted from reserve increases for a handful of unusual liability claims that exceeded our actuarial expectations for quarter.
The loss emergence.
For the first nine months of 2020, our insurance subsidiaries experienced favorable development of $10.3 million, primarily in workers compensation and personal auto.
There was virtually no reserve development in the commercial multi peril line apparel line of business for the first nine months of 2020.
The expense ratio was 31.9% for the third quarter of 2022 compared to 30.5% for the prior year third quarter, but it was down sequentially from the 34.3% in the second quarter of 2020.
Relative to the prior year quarter, the increase in the expense ratio reflected higher technology systems related expenses as we began to implement new systems earlier this year as part of our multiyear systems modernization project.
It also was impacted by higher commercial growth incentive costs for our agents and increased underwriting based incentive costs for our agents and employees.
Overall, our combined ratio was 98.3% for the third quarter of 2020, comparing favorably to the 100.6% combined ratio for the prior year quarter.
Moving briefly to investments we continue to maintain a large percentage of quality fixed income investments in our portfolio, representing 93.7% of our $1.2 billion in invested assets at September Thirtyth 2020.
Net investment income of $7.4 million for the third quarter 2020 was comparable to the net investment income for the third quarter of 2019 as an increase in average invested assets offset a modest decrease in the average investment yield.
We project that our investment income will remain relatively constant as we expect to invest additional funds from positive operating cash flows, but also expect offsetting gradual reductions in the average investment yield we will earn over the next year.
Kevin highlighted our net investment gains, which were $3.3 million on a pre tax basis for the third quarter of 2020.
They were primarily related to unrealized gains in the fair value of equity Securities held at September Thirtyth, 2020 that amount compared to net investment losses of approximately $369000 for the third quarter of 2019.
And finally net income for the third quarter of 2020 increased 128% to $11.8 million or 41 cents per diluted class a share compared to $5.2 million or 18 cents per diluted class a share for the third quarter of 2019.
With the increase primarily due to improvement in the loss ratio and net investment gains.
With that let me turn it back to Kevin for closing comments.
Thanks, Jeff before we open the lines for questions I do want to take a minute to provide an update on the impact of the COVID-19 pandemic and our ongoing response after.
After the successful rentals relatively seamless transition to the vast majority of our employees working remotely in late March we have worked diligently to maintain excellent service levels to our agents and our policyholders, we've maintain regular communication with our employees and independent agents to keep them apprised of our plans and progress on strategic initiatives.
While we have hoped to return a larger percentage of our employees to the offices, we are placing the upmost importance on the safety of our employees agents customers and their families.
As a result, 90% of our employees continue to work remotely we will likely do so into sometime into 2021.
Ultimately, we will emerge stronger having persevere through these times and we express our appreciation to our employees and agents for their ongoing dedication commitment and resilience as we move forward and accomplish our goals together with that we'll ask the operator to open the lines for any questions that you may have thank you.
At this time I would like to remind everyone in order to ask a question you will need to press star one on your telephone.
Withdraw your question press, the pound or hash key please stand by what we compile the kunene roster.
And your first question comes from Sean written back from KBW.
Good morning.
I was wondering how did auto frequency progress through the quarter I know you mentioned thats almost back to pre covert levels, but it doesnt seem like there might be kind of like a cap on how close that number is going to get for the guests considerable future.
I think that that's that's really contingent upon.
The virus in terms of the impact in peoples ability to get out and travel and whatnot. I mean, it's it's a question that we continue to get asked that although frequency is up claims are down and it really does.
Highlight the fact that there is more mobility out there, but they're traveling at different times and so.
So the question really is in six months and nine months, depending upon how the.
The virus is handled hopefully.
Hopefully it starts to subside, you'll have more regular patterns of driving patterns that may start to show some increased claims activity.
The other aspect to this is you've got to think post co bid.
There are a lot of companies, including Donna goal that is looking at things differently.
You learn some things through this process that we may not need to have.
Everyone back in the office and a lot of organizations are looking at how do we gain efficiencies that will have an impact in terms of motor vehicle.
Accidents frequency of accidents, and so there's I think that a lot of it hinges on the next three to six months.
What we see in terms of the virus and the travel patterns of employees in what employers are looking to do in terms of restructuring how employees come to work or are they working more remotely.
And kind of related on that point as the decrease in large fire losses.
Is that normal volatility or is there any evidence that's from people like greater loss mitigation from people being in their homes work for more people working from home able to stop those things before they become large fire losses.
John This is this is Jeff I'll take a shot at that its certainly an excellent question and what we've asked internally. It's as you can imagine more difficult to determine wide losses do not occur then to determine why they do occur. So it's difficult to say that the state the fact and more.
People are staying at home has reduced homeowners fire losses, but it certainly is a plausible explanation that many many home fires occur when someone is not in the home. So that's certainly a plausible explanation for it.
But it's difficult to determine.
Certainly it was a welcome decline in fire losses on the homeowners side for the quarter, when Jeff and I receive updates on what we consider to be large large fires anything over 50000, you know the majority of those reports that Jeff and I get for homes that are vacant started electrical fire or something.
Our occurred when the policy holders were not at home so.
There is some speculation there that just having folks working from home has helped to reduce that.
Okay. Thank you and then one final one we're hearing more evidence about possible rate and collections and 2021 and workers comp and obviously, we certainly hope the economy recovers and maybe some upward exposure units. How do you see that all playing into the expected kind of growth in 2021 for workers comp.
We have been successful in growing our workers comp book throughout 2020, we expect that to continue into 2021 in terms of the rate environment outside of the reduced frequencies related to covance.
Because of businesses not being as active for not having as many employees work.
Working during during lease during the time when the economies were largely shut down.
Well it remains to be seen how that flows through the rating bureaus.
Estimates and the.
Potential rate impact on that in 2021 absent that we would expect to see that the rates start to bottom out and hopefully even start to increase in certain regions. We started to see some signs of that in the third quarter.
Too early to make a call from our experience as to where that may be headed but certainly we've heard others talking about rates potentially bottoming out in 2021 and.
We would we would welcome that.
All right. Thank you that's all I have.
Thanks, John Thank you.
Your next question comes from Doug from DCM.
Good morning, Kevin and Jeff.
Morning, Doug.
I want to complement you on the team on two issues.
First in addition to the seven straight quarters of book value increases that Kevin you had mentioned it also has not gone unnoticed.
Third quarter represented the seventh consecutive quarter of stable loss reserves, so very well done by you and the team.
Second the Investor presentation that was filed in the 8-K yesterday and one of which was very helpful and comprehensive and really drives home the point of how undervalued. The company is relative to its PNC peers.
And at least from my first question.
How can the company get the word out more broadly so that investors take notice of the successes we are having.
The gap between Domical trading at I think 0.85 times book value, while the read out the peers are trading at an average of about one 1.1.
Borders on you know in my opinion, incredulous net calling Saturday that considering the strong execution. The company has had for quite some time now and.
And then my second question is around Mountain States.
Our bookings performance in our the loss ratio still trending favorably and how much premium we can expect will move into the public company domain and in 2021.
Well, Doug this is Kevin and all I'll start and also asked for Jeffs comments as well as particularly as we start looking at the Investor Relations piece, we number one we appreciate the complement we are working diligently to.
To provide shareholder value and we're very focused on that.
Your question is very timely as it relates to how do we get the word out.
Because we obviously think that there is a real good investment opportunity and Jeff and I have embarked upon 2021, we are looking at a.
An approach that dug very similar to your organization is being able to go out and really pinpoint specific.
Potential institutional investors that we'd be able to look at donlin gold and understand.
The positive aspects of having a mid size regional company and the real opportunities that are there.
As we are tied to that independent agency system in the commercial marketplace. We think that we are positioned perfectly to move forward and really take advantage of that marketplace.
It is candidly at times, a little frustrating because we continue to we.
We think achieve good solid consistent results.
We are foregoing top in gross to ensure that we've got profitability in a very stable platform in which to move from and we've spent the better part of two years doing that and I think that we are in that position now as we move forward to start to look for some additional top end growth keeping our eye on a very.
Live underwriting approach that Weve had and the reserve aspect again fewer reflect back in 2018 that was a tough year, but it was a year that we knew we needed to make some very aggressive changes and that has turned out to be the right decision. So.
You can look forward to some targeted approach on the Investor relations side for 2021.
Jeff Miller myself, Tony Biagi, Who's the head of our investment.
Investments here theres going to be a collaborative effort.
To approach that Jeff any additional comments on that I think you've covered well yields I think you'll see more visibility on our part for example in a few weeks, we'll be presenting at the the CFA, New New York Conference.
And so we're going to be taking advantage of opportunities to tell the story and hopefully get.
Broader exposure.
Moving to your Mountain States question I can address that one we are planning to bring the mountain states.
Business into the pooling agreement beginning with policies effective in January of 2021.
We expect the mountain States will.
Generate about $50 million in premiums next year and by bringing that into the pool, 80% of those premiums will.
Become part of the Donegal group revenue stream throughout the year, so about $40 million plus.
Impact to the top line revenues of the Donegal Group Bank, because we're going to do it on the effective date basis. It will it will happen gradually throughout the year.
And the earned premium impact will pick up towards the end of the year and then into 2022.
But the the book continues to perform relatively well and we continue to.
Right quality small to midsized commercial accounts in the four states where mountain states is active and.
In New Mexico, Colorado, Utah on Texas.
We have a solid agency distribution.
Group there in those four states they are motivated to grow with us.
As you may or May not know mountain states before our acquisition had a sizable book of oil and gas related accounts.
That were.
In in various classes that were really deem to be the more profitable classes related to oil and gas business.
But it's just not fair.
Focus area for us or a risk that we want to undertake so we are gradually removing ourselves from that market and directionally ahead of schedule expect to be pretty much.
Withdrawn from the oil and gas risks by sometime next year, so that will not have a material impact going forward.
We are replacing that business with the more traditional products. The Donegal has offered in other regions. So we expect that growth to start to.
Hit the revenue stream of Donegal group beginning in 2021.
Okay sounds very exciting well keep up the great work both of you and the entire team.
Thank you. Thank you.
As a reminder to ask a question press Star one. The next question comes from Bob Farnam from Boenning and Scattergood. Please go ahead.
Yes, hi, there and good morning.
Two questions. One is on personal lines. Kevin you mentioned, you know the rollout of new products I am curious.
When pursuing what do you expect personal lines premium this start to show some growth I know he is doing a lot of re underwriting and repricing and whatnot, but debt.
So the premium still going down, but you have an.
And idea of when that might turnarounds.
Yes, Bob I believe it's a.
2022 of probably end of first quarter or beginning of second quarter of 2022, where we are rolling out this product in the July August timeframe, we're going to group it in states of three.
Of this product is very much.
Priced refined and so we're going to be able to go out there and compete in the personal lines market space, but the reality is in order for those agents to get fully engaged new product. We've got a proud of that product launch scheduled you're really going to start to see the lifted that from a new business perspective.
Beginning in 2022.
Great net lot lot more specific that actually expected to be able to offer it so thats good okay.
In terms of total bid.
No you Didnt really mention much in terms of Kobin claims Ace I suspect you probably havent had much change, but my question is actually I think you probably have a lot of discipline Trups and type claims that you denied.
How much in terms of legal expense do you expect to have to incur to defend yourself.
Sure Bob This is Jeff it's a very good question.
We have.
Somewhere over 11 hundreds of claims business interruption claims that were presented the majority of those were presented to us in the second quarter.
Very small number were added to that number in the third quarter of 2020 and as we.
Announced last quarter that we had put up some some reserves for legal expenses as we expect that we will have some level of litigation relay.
Related to those.
To those claims all of them have had been denied at this point and we do have a handful of lawsuits that were filed.
Based on those denials, we put up $800000 of legal reserves in the second quarter, we did not add to that number in the third quarter to to date, our expenses have been fairly minimal.
We do have coordinating council that is.
Really monitoring all of the lawsuits M&A, ensuring that we have a consistent response in a consensus consistent defense strategy.
There hasn't been much activity in those claims to date and those losses to date in fact of the nine three have been withdrawn without present prejudice or they could be reinstated at some point, but they were withdrawn. So as we had six that are active.
And we're closely monitoring that so our expectation is that we won't see a significant.
Increase in litigation activity, unless there are more decisions throughout the country, where that would potentially see.
Suggest that there is coverage and to date, there really hasn't been.
Many that.
There's only one that I am aware of decision that has been pro and pro customer as opposed to.
Pro ensure so for them the majority of the decisions and.
Preliminary legal actions that we've we've seen.
The lack of physical loss or physical damage has been apparent and.
On the ongoing think visa litigation has reached the the second line of defense, which is of the exclusions of course, we have in place on our policy. So at this point, we are not anticipating a significant increase in those costs, but certainly something we're monitoring closely.
Okay. So basically youve put an $800000 in the reserve for reserves and that hasn't really changed.
Is.
It's like we're seeing in the third quarter Okay.
So.
Just go ahead.
Vince costs not for potential we don't expect any payment of losses for the defense costs right.
Right got it.
The expense ratio using it ticked up a bit this quarter, you had submitted some technology costs and the incentives for regions under.
Underwriters should we expect.
More technology costs coming down the Pike as you put these new products that mean that I'm trying to think about how the expense ratio might react over the next next 12 to 18 months.
Sure, Jeff again, I'll take a shot at that.
We did have an increase in technology costs in 2020 about 2 million $2.1 million year to date about 700000 per quarter.
And we do expect that that will continue through the second half of next year, So that same.
<unk> expense.
Expense pace would would be applicable through the second quarter next year.
When we do start to go live with the next release of the software that will result in some additional expenses being recognized so the second half of the year.
We will have some additional expenses that.
We will be added to the expense ratio I don't know the exact number of that at this point, but I would think it's fairly comparable to the the impact that you're seeing this year.
Being added again to the costs that we're currently incurring.
So the cost will over the next several years gradually have an impact of the expense ratio, our projections where that at the peak. It was one one and a half percentage points impact to the expense ratio.
We're currently at 0.4% so it will ramp up over the next.
Two years until we hit that that peak and then it will start to subside.
The bigger impact on our expense ratio is the impact of the incentive costs profit sharing for our agents growth incentives for commercial lines and then the.
Incentive costs for our employees that are all underwriting basis to the extent that our loss ratio ticked up in the current quarter that resulted in lower expense ratio compared to the second quarter of 2020.
But higher than that in the third quarter of 2019.
Okay.
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And I guess last question I'd be remiss, if we don't ask about CNET specific reserve development information by line, if you have that handy.
Sure I do have that handy.
As we.
Mentioned that workers comp and personal auto both had favorable development workers comp was right around $2 million of favorable development and.
For personal auto it was $1.5 million of favorable development.
Was offset by two and a half $2.6 million.
Unfavorable development in CMP.
As we mentioned that was primarily due to a handful of kind of unusual liability claims that were either reported to us during the third quarter or we had additional information that caused us to increase the case reserves.
We believe that is more of a timing anomaly than anything else. There was no no connection to those claims no trend.
Trend or pattern that we saw there.
Other lines were fairly.
Commercial auto had about 900000 of unfavorable development that's.
Very much in line with the third quarter 2019.
Which is we view that as a modest levels of development in commercial auto the other lines were up and down but pretty much in that out so hopefully.
Hopefully that gives you a sense of that yes, yes and to your point toward the commercial or the CMP and sorry to say that the commercial multi peril is the fact that over the for the for the full nine months of the year for statements of the year that's.
Thats been relatively flat so you've had some adverse this quarter, but it's.
First first half year was favorable in the CMP line.
Correct together the reserves of the development is virtually zero for the nine months for CMP.
Okay, great. Thank you.
Well I do.
And that was our last question I will turn the call back over to Jeff Miller for closing comments.
Well. Thank you to all of you for joining the call today. We appreciate your participation in the excellent questions.
Look forward to speaking to you again after reporting our year end results. Thank you very much. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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So.