Q3 2020 Old Republic International Corp Earnings Call
Good day and welcome to the Old Republic International third quarter 2020 earnings Conference call. This conference is being recorded at this time I would like to turn the conference over to Joe calibration, which I'm a W.W.P.R. Please go ahead.
Thank you.
Good afternoon, everyone.
Thank you for joining us for the only public conference call to discuss third quarter 2020 results.
It's doing well distributed a copy the press release and posted a support to get people talking about which means.
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Both documents are available at old Republic's website, www Dot old Republic Sockol.
Keith you bought it.
This call May involve forward looking statements as discussed in the press release and statistical supplement says it up to the 22nd 20 Twond.
Richard associated with these statements can be found in the company's latest actually see problems.
This afternoons conference call will be like.
<unk>, President and CEO of Old Republic International Corporation, and several other senior executive members this points to this meeting.
At this time I would like to turn the call loved the crisis.
Please go ahead Sir.
Thank you Joe well good afternoon, everyone and welcome again to old republics third quarter earnings call.
With me today, we have our CFO, Carl Miller, and Carolyn Meraux, the president of our title insurance group.
So we're obviously very pleased with the results we posted for this quarter, especially the record performance. We saw in the title insurance group along with the improvement in the underwriting profit in the general insurance group.
Overall, a very strong quarter with 62 cents of operating income per share and a consolidated combined ratio of 92%.
Although gross and net written premiums return to our general insurance group this quarter.
Endemic has made it difficult to grow general insurances net earned premiums. This year. However, our title insurance for set yet another production record this quarter and year to date.
So we continue to see the benefits of our strategy to focus on the PNC and title market.
Delivering a diverse portfolio of specialty products combined with.
And exceptional customer service record in each of these markets.
As demonstrated in our results. This strategy continues to contribute to our track record of more consistent growth and profitability when we combine the two.
So at this point I'll turn the discussion over to Carl to review, our overall consolidated financial results.
Ah then he'll turn things back to me to cover the General insurance Group [noise].
Followed by Caroline who will discuss the title insurance group.
Then we open up to you anyway.
So with that Carl Hi, good. Thank you and good afternoon, everyone.
This morning, we announced third quarter net income, excluding all investment gains and losses of 62 cents per.
Diluted share, which is an increase of 21.6% from the third quarter a year ago.
For the first nine months of 2029.
Net income again, excluding investment gains and losses was $1.50 per diluted share.
Which was up 10.3% from 2019.
Consolidated net premiums and fees earned grew by roughly 6.5% during the third quarter and 6% for the first nine months of the or.
This growth was primarily fueled by our title operation as it reported strong 17% growth for both this year's third quarter as well as on a year to date basis.
Net premiums earned for the General insurance group were relatively flat in the 2020 compared to the same crazy year ago, posting an approximate 1% decline in both 2020 periods.
The rough mortgage business earned premiums continued to decrease in line with our expectations.
This segment of the business is predictably, becoming even less significant to that.
To the consolidated totals.
[noise] that investment income decreased by 5.6% for the quarter and 2.5%.
Year to date.
Yeah that and that's largely attributable to lower yields that more than offset the growth in the invested asset base and that growth results from the investment of the significant positive operating cash flows that we recorded.
Looking then to underwriting results. This quarter's consolidated combined ratio declined to 92%.
Compared to 94.4% registered last year.
For this year's first nine months, the combined ratio improved to 94.2%.
For last year's 95.2%.
The improvement was driven by greater.
Underwriting results in both the general insurance as well as the title groups.
As Craig and Carolyn will discuss momentarily.
All three segments recorded favorable development of claim reserves in the quarter and for the year to date.
On a consolidated basis. This reduced the reported claim ratios for the current quarter and year to date periods by one and a half and 0.9 percentage points respectively.
The allocation of investment.
Investment portfolio at the end of September remained realm.
Relatively unchanged with earlier 2020 and 2019 periods.
Approximately three quarters of the portfolio is invested in bonds and short term investments remaining.
The remaining 25% is allocated to equity securities.
Similarly, large cap companies that have a long history of paying and steadily increasing dividends.
We don't currently anticipate any material changes to our investment strategy.
Further improvement in the financial markets resulted in a third quarter rise in the valuation of our equity portfolio by roughly $79 million at September Thirtyth the equity portfolio.
Reflected in unrealized gain of $412 million and is.
And as of yesterday's close.
The portfolio had rebounded by an additional 100 million.
The retention of earnings in excess of dividends paid in combination with increases in the fair value of investments.
During the quarter contributed to the book value per share.
Reaching $20.39 at the end of the quarter.
Matt inclusive of dividends paid is a a 4.7% increase from June.
So now let me take a moment or two to make a few comments regarding our run off mortgage insurance segment.
One positive development is that the business has returned to operating profitability, which totaled four and a half million for the third quarter and 8 million on a year to date basis.
We continue to closely monitor the impact of unemployment levels as well as the effects of gas.
Government loan forbearance programs on reported delinquencies.
During the third quarter delinquencies declined by 4.4%.
In another positive note is that the proportion of Ah delinquent loans in forbearance increased to 47% of the total up from 41%.
June.
Our experience and expectation is that these loans will have a lower ultimate claim rate and therefore, we continue to segregate.
And reserve for this population of loans separately.
From a capital perspective, the mortgage company statutory capital at the end of September.
Total roughly 424 million.
And after dialog with our state regulators, we expect to resume the payment of extraordinary dividends from the mortgage companies.
Starting again in 2021.
So overall as Craig mentioned earlier, we believe the results this quarter were very favorable.
And with that overview I'm going to now turn it back to Craig for discussion the General insurance group.
All right. Thanks Carl.
So as Carl and I both.
Much down compared to 2019 third quarter and year to date. The general insurance group net premiums earned remained relatively flat, mostly as a result of the pandemic. While net premiums written began to increase once again in the third quarter.
Compared to 2019 third quarter and year to date pre tax operating income rose by almost 21% in the quarter and by almost 7% year to date and of course. This is resulting primarily from improved claim ratios the over.
The overall combined ratio improved from 97.7% to 95.5% in the quarter and improved from 97.1% to 96.5% year to date.
The claim ratios, we reported were inclusive of prior year favorable development of 0.8 percentage points in the quarter and 0.5 percentage points.
Year to date.
Oh again compared to the 2019 third quarter net premiums earned and commercial auto grew by a one.
1%, while net premiums written grew by 6%.
To reflect some restoration of the exposure base in the third quarter, along with the positive effect of rate increases, which for this line of coverage now continue in the low teens.
Our third quarter.
Commercial auto play.
Claim ratio improved to 80.4% compared to 85.6% in the same period of 2019.
And that we think this reflects the work that we have been doing you're running your add on this line of coverage as we continue of course with rate increases and as we continue to perfect. Our stricter risk selection criteria to bring that ratio back in line with our target in the low.
Seventies.
Claim frequency I'll touch on here too.
For this line rose from the lows, we saw in the second quarter, but it's still not at the pre pandemic levels and.
And as far as severity that began all the way back in 2013, we.
I think it still continues due to higher speeds and of course, the so called social inflation influences on settlements.
Turning now workers compensation.
Compared to the 2019 third quarter workers comp net premiums earned in Britain, both fell 11%, reflecting a reduced exposure base as payrolls have not rebounded.
Certainly not to the extent.
To the extent that we saw with commercial auto exposures.
Additionally, a of course.
Of course, we're we've been faced with rate decreases in the market place on this line over the last few years and although there is still some rate decrease were approaching flat.
That rate the rate in this line.
The workers compensation.
Great show came in at 54.1% compared to 55.4% in the third quarter of 2019.
Here on a aside from COVID-19 related claims claim frequency here to roll.
Rose from the lows that we saw in the second quarter, but frequency is still not back to the pre pandemic level for this line either.
Just to touch on COVID-19 workers compensation claims here as well.
They continue to behave.
As we discussed following the first and second quarters.
With 95% of our COVID-19 workers compensation claims coming from loss sensitive business such as large deductibles.
And then so.
Separately, 95% of the the COVID-19 claims continue to be very mild in nature with very low claim payments with less than 1% of the claims so.
Severe or fatal.
So we continue to be comfortable with our current accident year loss ratio selection for for workers comp taking.
Taking into consideration the lower frequencies the loss sensitive nature of our business and the high proportion of mild cases for for COVID-19 claims.
Turning to general liability our claim ratios, they're showing an increase in the third quarter relative to the 19 2019 third quarter, but added we typically point out. This is a smaller line of coverage for us and and therefore, there's less stability in the claim ratio.
Quarter to quarter.
And recall, we typically provide this coverage along with workers comp in commercial auto coverages.
So for the three of those coverages combined that the commercial auto workers comp and general liability.
Third quarter claim ratio came in at 72% as compared to 73% in last years third quarter.
The remainder of our other lineup coverage claim ratios all showed improvement relative to the third quarter of 2019.
So we think our strategy that includes providing large PMC client loss sensitive programs.
Continues to contribute to greater consistency in our profitability and while it will be difficult for general insurance to achieve our topline growth goals for this year, we will continue to seek the appropriate price for our products and we'll continue to focus on improving our underwriting profit.
Stability.
So with that I'll now turn the discussion over to Carolyn for her.
For her comments on the title insurance group, who by the way along with her team continue to execute at an extremely high level, providing outstanding customer service and.
Karen one with that I'll turn it to you.
Oh, Thank you Craig as reported this morning, the title group posted stellar third quarter and year to date results for 2020, our title employees kitchen only to press on effectively serving the needs of agency customers to what continues to be very challenging times, I am grateful and honored to be assays.
It was such a dedicated and hard working group of individuals.
All time third quarter and year to date highs reset for both underwriting revenue and operating profit.
Carl reported earlier total premium and fee revenue was up approximately 72% for both the quarter and year to date our.
Pre tax operating income of $103 million for the quarter compared to 73 million in last year's third quarter, an increase of $30 million or 41.5%.
Year to date pre tax operating income of 212 million compares to 154 million in the prior year to date period, an increase of 58 million or 37.9% year to date 2020, our combined ratio.
91.2% compares favorably to the 92.9% reported for the comparable 2019 period.
Technology continues to be an important focus for our industry and for our company. We continue to make notable inroads with the coupon. So our digital closing platform to meet the growing need an expanded use of remote signing as a result of shell turn place orders.
We expect this growth in adoption the digital closing model to continue due to the ease and flexibility.
Being experienced in the marketplace accelerating its usage and acceptance within the title group, we implemented a robotic process automation platform and experience early success with the initial bought and are moving forward with deployments across all areas of our business to display today.
Benefits of this technology.
Most notably we expect to realize improved accuracy and compliance benefits of scale ability increase speed and productivity, which plays to our strengths in technology and customer service.
The robust growth seen so far in 2020 reflects the continued strength in the U.S. mortgage origination market in particular refinances as.
As we enter the fourth quarter order counts remain strong mortgage rates are projected to remain favorable and homeowners with a renewed focus on their living space should all contribute to an expected strong finish to the year I can't.
I can't say it enough my gratitude goes out to all of our employees as they remain focused on positive as they all deal with the increase daily challenges both professionally and personally during these difficult times. The same goes for a title agents where are focused on service differentiates old Republic.
In the market, but accomplishments are achieved with the unwavering commitment of our employees and the support of our agents.
As with past challenges, we will rely on the same guiding principles of integrity managing for the long run financial strength protection of our policyholders and the well being of our employees and customers that has served us well for over the last 10, plus years and with that I will turn the call back over to Chris.
All right Caroline. Thank you very much congratulations on a great quarter and year to date results.
So again, we're very pleased with this quarter's operating results both in the title.
Title Insurance group and the General insurance group, our strategic diversification between general insurance and title insurance continues to produce superior more consistent results and.
And we will continue on with our focus on underwriting excellence and profitability of course.
Customer service so.
That concludes our prepared remarks, and we'll now open up the discussion to Q1 EPS.
Thank you.
Analysts and investors who are participating in this call under interactions line. Please signal back missing the Starkey followed by the digit one on your telephone keypad to ask a question if you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
So if you press star one earlier during todays call. Please press star one again I'm sure our equipment has captured your signal we will.
We'll pause for just a moment to walk everyone and appreciate to signal for questions.
And our first question comes from Greg Peters with Raymond James. Please go ahead.
Good afternoon, Tim all the public I guess I have a question that focuses on a line item and each of the.
ER segments operating results and that's around the paid loss ratio.
And I'd like to just zero in on the year to date numbers.
On the year to date and the general insurance business is running apparently allowed 52.
Which compares favorably from year ago, and you know if I look at the annual.
Comparisons of show, Sean Your statistical supplement its running lower than.
Now the preceding couple of years, you identified same with the title insurance at 1.8% versus I think 2.9% in the year ago and then finally, we see this also in their runoff business settled and paid loss ratio running well below last year.
That's strange results itself.
I'm getting all three segments, but it does appear like Youre building.
Deserves and I thought maybe you could comment on those numbers in each of the segments.
Well, Greg This is Carlos let me.
We're trying to address your question.
Relative to the run off mortgage operation that just.
Makes complete sense that there's been a slowdown in pay.
Paid claims because of the.
You know foreclosure moratoriums and forbearance programs basically a two.
Delinquencies are frozen in place and and.
And payments have gone down substantially as we've noted in the release same thing or.
I think applies largely to to the title insurance business.
And then as far as a general insurance is concerned I'm not aware of any on.
Unusual trends that would cause.
Cause the a three.
The ratio to decline, but but certainly it does result in the reserve balance on the balance sheet, increasing as I think we've shown.
In the release so.
Nothing nothing changed in terms of claims settlement process from from internal process perspective.
Okay.
Well, then pivoting to the general insurance business.
You know Oh, yeah.
Your your Ah, Yes consolidated results is still tracking.
I guess, a little bit above that your your 10 year average what your target is but.
It certainly seems like this quarter reflects progress being made to getting back to the low seventys if not below.
Below the low seventys.
And I know you commented a little bit about it anyway.
Strike, but maybe you could add some color as we think about I saw the balance of this year, but as you think about 21 and 22.
Sure Greg.
Well you know as we pointed.
Pointed out in the release it.
It's a very apparent to everyone that.
The income from our investment portfolio.
It is under pressure the the reinvestment yield is.
Has it has come down and therefore.
Therefore, we have a.
Ah taken it up on ourselves to reinforce with.
With everyone in our organization.
That's it.
It is now more important than ever that.
That we achieve the goals, we have set out for ourselves as far as underwriting profitability its concern and and therefore.
Therefore.
We have an underwriting excellence initiative across all of our general insurance group.
Companies in which.
We are all focused on reducing that that claim ratio down to levels that we that we want to see it at and as I say, it's all underscored by you know what.
What the future holds for investment income so we have to and we are focusing more than ever on profitability and it's coming frankly through a lot of hard work and we would expect to continue to see improvement until we.
Hit the numbers that we state in our release that we are targeting.
Got it I guess the final.
Sorry, I'd like you to comment on and I guess this would be fall into the category as a softball question, but.
You know the property business, it's a small segment for you.
But so many of your peers will report from quarter to quarter.
Chapter two losses, and Dell exclude them from the operating results and you guys are principally a casualty oriented company, but if you.
But if you look at the.
Claim they show on your property business it improved this quarter relative to year ago and.
And it against a backdrop, where there's been a tremendous along amount of catastrophe activity in the United States. So could you give us some.
Some additional color about that book of business and why you're able to produce the results, which compares quite favorably with most of your peers.
Sure be happy too to Greg a first out off its important to note that.
As I think I mentioned on previous calls in previous quarters when we.
We're talking.
Our business interruption exposure in particular.
It's important to note that a good amount of that property is inland marine coverage that is sold in conjunction with other lines of business and that coverage is not necessarily exposed to the volatility of catastrophic losses.
On the other hand.
We are we do see opportunities in the marketplace and property right now and rates are robust and.
Where we can add property onto our suite of offerings to our agents and brokers and in insured.
We're doing that and one of the things that I think is very different about us is we have a very strong relationships with our reinsurance partners.
On this line of business, where our retention as an organization on catastrophic losses, we have re.
Reinsurance that protect all of our companies on a combined basis with a a very low retention so that in the event of catastrophes.
Our reinsurance partners are taking out the volatility for us and were still able to produce a reserve.
Result that is again doesn't have the volatility that you referenced that some of our peers have so ill.
Although that rolled up together.
I think kind of explains where we're at on property.
Got it I'll, let others ask questions. Thank you for your answers.
Once again, please signal that pressing the star key followed by the digit one on your telephone keypad to ask a question.
It will take again a question from Ben Peters with Raymond James. Please go ahead.
Well I re queue, because I anticipated there should ask questions, but certainly enjoyed the opportunity to do that.
To get some more and.
Said workers comp.
The the premiums down 11% or so in the quarter I, you said pricing.
Probably leveling out.
One of the things that happens and workers comp as you know Craig is that you'd there's always sees treat yearend premium audits that can lead to additional.
Additional fluctuation in the topline can you talk to us a little bit about that process and if it's going to have any effect on the fourth quarter results or have you been sort of in this call that environment, making adjustments as we go through the year.
Right, Greg I understand your question and.
I would tell you that.
Indeed, we have been making adjustments as the year has progressed.
We internally here, we've referred to it as an accelerated premium.
Premium audit, which in effect.
Which in effect is what it is and.
When insured can it can demonstrate that their payrolls are less than what was originally.
Estimated and what the original premium was based on then we will make adjustments.
At the end of the second quarter, we had made premium adjustment of about $30 million.
And that number increased in the fourth quarter or excuse me in the in the third quarter by another 15 million.
[noise] to about 45 million.
So.
In our view.
We have been addressing it as we've gone along and we would not expect to see any kind of a big surprise in the in the fourth quarter.
When it comes to the premium amounts that are.
What were seeing for workers compensation.
Got it out the final question I might have for you would be just around account retention customer retention I know.
You called this out in previous quarters since being a somewhat challenged in that context.
Rate increases that you and the rest of the market are looking for strategic particularly in commercial auto.
Can you give us an update on on and get some additional color around retention, especially as it relates to the three Big Street coverages that you you focus on.
Sure.
Customer retention remains very strong.
Greg.
The.
In commercial auto.
It is above 80%.
And.
Mid Eightys is is where that has consistently.
Consistently been the marketplace is supportive of.
Supportive of the rate increases that that were achieving which is helpful of course.
In other periods, where perhaps we.
We saw things a bit early and might have been looking for more rate than the marketplace was was looking for those.
Those are more challenging times, but I would say right now the marketplace.
Is a supportive on commercial auto frankly, the marketplaces supportive on all lines of business.
Right now and work.
Workers compensation as I mentioned in my earlier comments is.
Is.
Coming very close to flat and our.
Our customer retention there.
If he if you measure it by policy number.
He is very strong and but it's just the exposures are down for a lot of those customers. So.
On general liability, it's a bit of a mixed bag.
We are we have tightened our risk selection criteria on that line and the combination of tighter tighter underwriting standards on general liability along with exposures are down there substantially.
As well as as a result of Cove it.
But generally our it's a small line as you know and our retention ratios are we're very comfortable with where they're at.
Rate increases others on the other lines.
I kind of alluded to property that we think rates are very good.
Very good in the marketplace right now.
Our aviation business, our professional liability business, our thing extremely robust rate increases that the market is again supporting so.
So it's all good.
I think.
We're learning from this call that when we're hitting on all cylinders I get there.
There's just less question.
So that's OK that's it that's the reason.
[laughter] judging from your stock price performance I think you'd walk everyone speechless, which is unusual for an old Republic investor call. So anyways congratulations on the quarter talk to you next quarter.
Thank you Greg.
And we will take our next question from Anthony Middle East West dialing and partners. Please go ahead.
Hi, its actually John Heck do with those partners do you have a one question on on workers compensation could.
Could you talk maybe about the nature of your business being more loss sensitive high deductible died.
In terms of being having more.
Having more stability in the underlying performance of it versus some of the market trends, while you pick it could be.
It could potentially friend at a consistent level with where it's been and not see not.
Not experience as much underlying pressures, perhaps the market may going forward.
Sure John I. Appreciate the question you know I think.
The the example that I gave a when I talked about Cove at 19.
And what's going on there with comp you know I know I mentioned in our other quarters that.
We really don't have a lot of the exposures to COVID-19 other than the economic impact that a lot of our peers might have.
At except for comp and that's why I in my opening comment you know.
I I talked about comp and it's just a perfect example of where when you have a.
The business that is focused loss sensitive clients.
And when there are losses.
They're sharing in those so you know it brings us back to my comments that.
For while only say, 60% of our I shouldn't say only I should say.
More than 60% of our premium is loss sensitive and work comp, which we feel very good about but then when it when it comes to the cobot losses.
95% of the claims that are coming in on.
Our loss sensitive business. So again I think it demonstrates that when things do go.
South and and there are challenges.
That loss sensitive nature of our business model helps us.
Control that that bottom line volatility and it's a perfect case and point of why it works and.
Whenever you have financial alignment between us and the customer.
The customer is focused on risk control, they're focused on claims outcome.
And that always bodes well for us.
As opposed to risk transfer client that so to speak has hand, it back over to the insurer and and you know on a guaranteed cost basis that and walk away.
We think it if they it's a better business model and that's why.
More than 60% of our business is focused on that area and where we where we don't have lot.
Sensitive business, we're usually selling the guaranteed cost business in conjunction with other line in support of other line. So for instance, our aviation business isn't necessarily a lot sensitive we're confident in our trucking is is.
For the majority of our trucking is is is not loss sensitive either but we're writing the other lines of business. So when we you could I think it it.
Bodes well for us if we're writing the other lines of business, if we're going to do it on a guaranteed cost basis.
Since the law sensitive nature help retention at all in terms of just.
Just the headache, it might be to move collateral from one carrier to another as you change the program.
Four miles of tomorrow.
[music].
Yeah, absolutely has the.
Just the response to that no doubt about it and that's another reason I didnt give but is another reason, we really like it if it's what we call sticky and now it.
When you work with the client and and you work with them on setting up claims handling procedures for the claims that they're handling in their retention and and when you work with them on setting up collateral and and other men.
Other mechanism.
It's quite an extensive process. So indeed it is much stickier much less commoditized.
Then guaranteed cost.
First dollar kind of coverages.
Very good so so last question, but just out of those core lines of business, you mentioned properties and area. We're looking to grow you you've had some other lines or organ trying to.
Where do you see the opportunities for or a in general insurance growth outside of your core commercial auto workers comp in GL.
Into the 21 or even 22.
Yeah.
So oh property is an area that as we said we will.
Given the market favorable market conditions, given our ability to control the volatility on that line of business by partnering with reinsurance partners.
As you know a lot of E.N.S. business is is property business. So.
So we will.
We will look at opportunities in the Ethernet space in the property space.
That arise.
Other other lines of business as well as I think you might have said, we don't want to disproportionately grow.
So our workers compensation or auto liability book were already very heavy in those lines of business will if theres an opportunity that comes along with commercial auto and workers comp, but it has other line.
You know, we will we will look at that but.
Right now our focus is remains on specialty niches.
And as long as as.
We can focus on a specialty class a specialty niche business.
We will we will look at those line.
We'll do that both organically internally. So for instance in our professional liability area in the last several years, we have primarily been a DNL writer, we have bolted on to that our lawyers professional business.
Private Deanna, though other fiduciary lines lines of business and have grown one added numerous products to our offering there. So we'll continue to do that where we have a footprint already we look at bolt.
Don adjacent fees, and where we might not have footprint. We are you know, we'll look at perhaps starting something up or if other opportunities present themselves.
Got it so it's fair to say when you talk about growth and which one of these in any any other line of business its really look again.
Your existing distribution partners and channels and identifying what products that can be added to what you have out there versus say.
Making a bigger play to create a new distribution channel to property, let's say or something of that nature.
So it's very much targeted on a certain sub class of business with them or subgroup within property or financial lines.
Whatever what.
Whatever it may be.
Well you know that is it organically through bolting on where we already have footprint it has been.
A focus but we've also entered into new segments.
New segments, you know recently Weve added.
Added our residual market.
Business for workers compensation.
Where whereby we service pools for.
For workers compensation out of a new Minneapolis operation we also.
A four or five years ago set up old Republic specialty insurance underwriters, which was focused on a program managers and and with a different.
With a different distribution. So it really is both John what we'll do both if if an offer if an opportunity comes along.
And it you know it's a it's a different distribution model.
But it is the key is that specialty focused if it specialty focus where we think we can perform better than the general that that are out there we will go after it.
Appreciate the color Oh my God.
Thank you.
At this time in the moment you have no further questions I would like to turn the call back to management for any closing remarks.
Okay well.
As we have said, we feel like we were hitting on all cylinders this quarter and and we.
We appreciate all your interest and and thank you for the questions.
And we'll look forward to seeing you and talking to you again next quarter. So thank you very much.
This concludes today's call. Thank you for your participation you may now disconnect.
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