Q3 2021 CNA Financial Corp Earnings Call
Please standby were about to begin.
Good morning, and welcome to Cna's discussion of its 2021 third quarter financial results.
Yeah, Nice third quarter earnings release presentation, and financial supplement were released this morning and available via its website www Dot CNA dotcom.
Speaking today will be Dino Robusto, Cna's, Chairman and Chief Executive Officer, and Larry have nurse DNA as interim Chief Financial Officer.
Following their prepared remarks, we will open the line for questions.
Today's call May include forward looking statements and references to non-GAAP financial measures.
Any forward looking statements involve risks and uncertainties that may cause actual results to differ materially from the statements made during the call.
Information concerning those risks is contained in the earnings release and in Cna's. Most recent SEC filings.
In addition, the forward looking statements speak only of today Monday November 1st 2021.
CNA expressly disclaims any obligation to update or revise any forward looking statements made during this call.
Regarding non-GAAP measures reconciliations to the most comparable GAAP measures and other information have been provided in the financial supplement.
This call is being recorded and webcast.
During the next week, so called May be accessed on Cna's web site.
If you are reading a transcript of this call. Please note that the transcript may not be reviewed for accuracy. Thus it may contain transcript errors that could materially alter the intent or meaning of the statements.
With that I will turn the call over to Cna's, Chairman and CEO Dino Robusto.
Thank you Jennifer and good morning, everyone.
C N N performed extremely well in the third quarter with.
Core income up 23% year over year.
White the elevated catastrophe activity.
In the third quarter core income was 237 million or.
Or <unk> 87 per share driven by improved underlying underwriting performance and favorable life and group results.
Net income for the quarter was 256 million or <unk> 94 cents per share.
Gross written premium excluding our captive business grew by 10% this quarter fueled by excellent new business growth and continued strong price increases.
Importantly momentum continued to build throughout the quarter.
As we expected the transactional capability limitations that we mentioned last quarter. Following the cyber security incidents are now behind us.
Earned rate was 11% in the quarter.
And written rate was 8%, which remains well above loss cost trends in which we believe portends continued progress towards building margin.
The written premium earns in over a third renewal cycle in 2022.
Additionally, the tighter terms and conditions, we have been able to secure during the hard market persist with no early signs of pressure to relax that.
Well have more to say about production performance in a moment.
The all in combined ratio was 100% this quarter.
About a point lower than the third quarter of 2020, which included elevated catastrophes in both periods.
In the third quarter of 2021.
Pre tax catastrophe losses were 178 million or 9.2 points of the combined ratio.
Which included a 114 million for Hurricane Ida.
The P&C underlying combined ratio was 91, 1%.
1.5 point improvement over last year's third quarter result.
This is a record low for the third consecutive quarter.
After adjusting for the impacts of Covid in last year's third quarter the improvement in our underlying combined ratio is actually two one points.
The underlying loss ratio in the third quarter of 2021 was 62%.
Which is down <unk> three points compared to the third quarter of 2020.
Excluding the impacts of Covid in the prior year quarter.
And they're lying loss ratio improved by <unk> nine points.
And the decrease reflects our prudent acknowledgment of margin improvement.
As I've mentioned before we increased our loss cost trends about two points over the last couple of years in classes impacted by social inflation. This quarter, we increased our loss cost trends in property lines about two points because of the supply chain shortages, which have increased the cost of material and labor and don't look like they will.
Revert back lower anytime soon.
This changed pushed up our overall P&C loss cost trends marginally.
And they're now about 5%.
During the third quarter earned rates are running close to 11%. So earned rate is exceeding loss cost trend by about six points.
Applying that to a 60% loss ratio should portend about three points of improvement in the quarter.
We have reflected about a point of improvement in the underlying loss ratio in the third quarter.
In the first half of the year, we acknowledged slightly less than a half a point improvement in the underlying loss ratio.
We are going to continue to be prudent in terms of acknowledging margins. Since the courts are just starting to open up in the dockets are only starting to clear.
The underlying combined ratio for specialty was 89, 6%.
I appoint nine point improvement compared to last year.
Really from an improvement in the underlying loss ratio, while the expense ratio was comparable.
The third quarter of 2020.
The all in combined ratio was 88, 2%.
0.3 point improvement compared to the third quarter of 2020.
The all in combined ratio for commercial was 111.6, including 18.6 points of Cat.
Compared to 111.3 in last year's third quarter, including 17 points of Cat.
The underlying combined ratio for commercial was 92, 5%.
Which is the lowest on record and its 1.2 points lower.
The last year.
In 2.3 points lower excluding the COVID-19 frequency impacts that reduced the loss ratio in 2020.
The underlying loss ratio improved by <unk> four points, excluding the COVID-19 frequency impacts last year.
While the expense ratio improved by two points.
Incidentally compared to the second quarter of 2021, the underlying loss ratio is higher.
Simply because of the resulting mix change between property and casualty net earned premium due to the new property quota share Treaty we purchased in June.
In seating and annual estimate of property earned premium to the reinsurers in June.
It all through the underlying loss ratio with a higher casualty mix going forward.
The underlying combined ratio for international improved by four four full points to a record low of 91%.
This reflects a two eight point improvement in the expense ratio and a 1.2 point improvement in the underlying loss ratio.
Which was 58, 9% in the quarter.
Importantly, as our re underwriting has largely been completed in international we've continued to see that benefit in the underlying loss ratio.
As well as a more modest catastrophe ratio from the meaningful reduction in our P&L exposures.
The all in combined ratio of 95, 5% compared to 98, 1% in the third quarter of 2020.
Reflects the success of our re underwriting strategy.
Now turning back to the production statistics.
As indicated earlier, our PNC operations at 10% growth in gross written premiums ex captive.
It was two points above what we achieved in the first half of 2021 and one point above full year 2020.
Our growth in the quarter was fueled by strong new business growth of 24%.
Written rate of 8%, while retention was stable at 81%.
Net written premium growth for PNC was plus five for the quarter.
Up four points over the first half of the year.
Our specialty gross written premium growth ex captives was plus 10% driven by excellent new business growth of 40% concentrated in affinity programs and management liability and continued strong rate of 9%.
This is our fifth consecutive quarter of double digit growth in specialty notwithstanding that our retention in the third quarter was down about five points to 80% in the quarter. We continued our re underwriting of the health care portfolio and we non renewed a portion of our hospital medical malpractice business.
Because we could not achieve our required returns even after the rate increases we secured to date.
Non renewing this segment also lowered the rate increase for specialty this quarter because it was the segment achieving some of our highest rate increases in recent quarters.
But improving our profitability as always our first priority and walking away from this business was the right action to take.
In commercial our gross written premiums ex captives grew 10% in the quarter.
Representing an eight point improvement over the second quarter's growth.
As we mentioned last quarter commercial was disproportionately impacted by the cyber incident as the majority of the underwriters in the branches are in the commercial business unit and so we expected to see the biggest rebound in commercial now that it's behind us.
And we did indeed see that this quarter.
Commercial new business growth.
Grew by 21% in the quarter with all segments contributing and retention increased three points to 83% compared to the last quarter and rates increased 6%.
Although rates moderated in certain segments like national accounts, where rate increases were lower by three points.
We still achieved a very strong 13% increase in the quarter, which is well above loss cost trends.
Our middle market rates were lower by one point this quarter.
But we had a seven point increase in retention to 84%.
We also achieved two points of exposure increase in commercial in the quarter from higher payroll and sales compared to the third quarter of 2020.
Our international gross written premium growth was 16% for the quarter.
Or 11% excluding currency fluctuation.
As we mentioned with the re underwriting actions behind US we are focusing on growing the portfolio.
We continue to achieve strong rate in international at 13%.
With the second quarter Retentions have improved each quarter this year and stand at 79% in the quarter.
From 77% last quarter and 74% in the first quarter.
For P&C overall prior period development was favorable by 0.3 points on.
The combined ratio.
Turning to life and group, we conducted our annual gross premium valuation or G. P. V analysis on our active life reserves as well as they claim reserve review on our disabled life reserves.
There was no result in unlocking of assumptions, which we believe is due to our continued prudent management of this run off book and we now have $72 million of GAAP margin on the active life reserves.
The claim reserve review resulted in favorable development of $40 million on a pretax basis.
Larry will have more detail on the life and group was reserve analysis, and our PNC prior period development.
Before I turn it over to Larry for his remarks, just a few comments on Larry and our CFO search.
Larry of course is no stranger to CNA.
He retired as Cna's chief Actuary in August of last year after serving over a decade as CNA as chief Actuary during which time he worked hand in hand with the finance function.
Larry's willingness to come out of retirement has afforded us the time to accomplish a thorough search for this vital role.
Which is going well and we expect to complete it soon.
Larry will also help facilitate a smooth transition with the incoming CFO and with that I'll turn it over to Larry.
Thank you for that Dino I must say it has been both our professional and personal pleasure working with the CNA executive team. Once again these past two months.
Everyone.
It's Dino highlighted the 23% increase in core income for the third quarter produced a core ROE of seven 7%.
Before providing more information on the financials I will first discuss life and group.
As you know each quarter into each year in the third quarter, we complete our annual reserve reviews for life and group. These reviews include our long term care active life reserves, which we refer to as gross premium valuation or G. P V as well as our long term care and structured settlements claim reserves.
Before going over the results of these reviews I will point you to slides 12 through 14 of our earnings presentation.
Slide 12 contains key demographic information about both our individual and group long term care blocks.
As a reminder, both blocks are closed with no new policies issued for individual since 2004 and no new groups certificates since 2016.
As a result, the average attained age for the individual block is 80 years old and the group block is 67.
While the group block is less mature and age you can see from the table in the top right of slide 12 that the benefit features on average for the group block or less rich.
As we have discussed on past calls, we have proactively reduced risk in both blocks, while obtaining meaningful rate increases and using a prudent approach to setting assumptions in our reserve analysis with for active life and claim reserves.
One clear result of our efforts is the 35% reduction in policy count since 2015, which is shown on the bottom left graph on slide 12.
As we continue to push for needed rate. We also offer benefit reduction options to our policyholders as a means to avoid or mitigate rate increases. This reduces the cost of future claims, while providing a viable option for our policyholders.
Also worth noting on slide 12, our claim counts are down significantly over the past two years as can be seen in the graph on the bottom right.
Starting with the G. P V analysis the results of which are shown on slide 13, our efforts involved a thorough review of all of our reserving assumptions, including critical factors related to morbidity persistency rate increases and discount rate. The key result is that we did not have an unlocking event we now.
Margin in our GAAP carried reserves of $72 million.
Starting with the discount rates recall that last year, we moved meaningfully on our assumption by lower lowering the normative risk free rate to $2 75 per cent and increasing the grade in period for the risk free rate to rise to that level to 10 years for the first three years of that 10 year period as you might recall from last year's analysis.
As we use the forward curve, we followed the same approach this year and the current forward curve is interest rates that are higher than the assumptions, we locked in last year, creating margin.
Given the higher rate interest rate environment. We also reviewed our estimates around the cost of care assumptions and determined the small increase was warranted which decreased margin.
Taken together the changes result in creating this $65 million of margin disclosed in the table.
Turning next to morbidity.
We refined our claim severity assumptions, specifically those related to utilization rates and our group block expected recovery rates and claim situs mix, which together drove margin improvement of $205 million.
Importantly, we did not include a favorable experience in 2020 due to COVID-19.
As part of the datasets that are analyzed to update the long term assumptions not including the 2020 experience is further evidence of the prudent approach, we take with our reserving assumptions.
With respect to persistency the key assumption change was a decrease and healthy life mortality.
While this result may seem counterintuitive as the pandemic caused elevated mortality, we excluded the impacts from the pandemic when setting our long term G. P V assumptions as we do not believe this recent elevated mortality will persist over the duration of our liabilities rather the assumption change is from a periodic review of past policy terminations.
To better determine their attribution between mortality and lapse for this year's review, we used external data sources, obtaining that at a more granular level to examine the terminations over multiple past years. The result of that effort was a slightly lower level of mortality than we had used in the 2020 assumptions.
Of course, even a slight change in mortality rate applied against the entire the tail of the portfolio will have a leveraged effect and these assumption changes resulted in margin deterioration of $233 million.
We will continue to monitor active life mortality relative to our revised assumptions to see how our approach plays out.
Regarding future premium rate increases or actual rate achievement over the past year exceeded our assumption and last year's analysis contributing $27 million to the favorable margin increase.
As you May recall, our prudent approach is to include rate increases that have been approved filed but not yet approved or that we plan to file as part of a current rate increase program.
As a result, the weighted average duration of future rate increase approvals assumed in our reserves is less than two years.
As you can see on slide 13, the cumulative impact of these changes, including a slight margin improvement of $8 million from lower operating expenses resulted in a reserve margin of $72 million and our carried reserves, while continuing to use a prudent set of reserve assumptions as a result, there's no need to have an unlocking.
And we feel good about the reserves.
In addition to the G. P V. We concluded our annual long term care claims Reserve review, which is a review of the sufficiency of our reserves for credit claims.
The impact from this review was favorable driven by lower than expected claims severity specifically.
Specifically, we observed higher claim closure rates, most notably driven by mortality.
The favorability, which flows through to our bottom line was a pretax benefit of 41 of $40 million or <unk> $31 million on an after tax basis.
Turning to slide 14, our overall life and group segment produced core income of $41 million in the third quarter, which compares to a third quarter 2020 loss of $35 million.
In addition to the 31 million favorable impact from the annual long term seat long term care claims review that I just discussed activity.
Activity in the quarter contributed another $10 million to core income as we had strong net investment income performance predominantly from our alternative investments portfolio.
Returning now to financial results, our third quarter 2021 pretax underlying underwriting profit increased 28% on a year over year basis, driven by the 6% growth in net earned premium and the record low underlying combined ratio.
Key component of the combined ratio improvement is the expense ratio.
Third quarter 2021 expense ratio of 37% was one one points lower than last year's third quarter.
Marshall and international segments drove the overall improvement as commercial improved one nine points to 34% and international improved two eight points to 32, 1%.
Our focus on expense discipline as we grow the company has driven meaningful expense improvement.
And this quarter's result reinforces the success of our strategy of course as we have mentioned before the improvement will not be a straight line down because we continue to make investments in talent technology and analytics, which in any one period could materially vary as this quarters expense ratio reflected somewhat less investment.
We believe a more appropriate expectation on run rate is 31%.
For the third quarter overall P&C net prior period development impact on the combined ratio was 0.3 points favorable compared to 0.4 points of favorable in the prior year quarter favorable development was driven by surety in the specialty segment somewhat offset by amortization of workers' comp tabular reserves in the commercial segment.
In terms of our Covid reserves, we made no changes to our Covid catastrophe loss estimate following an in depth review during the quarter and our loss estimate is still virtually all in IV NR.
Turning to investments total pre tax net investment income was $513 million in the third quarter compared with $517 million in the prior year quarter. The results included income of $77 million from our limited partnership and common stock portfolios as compared to $71 million on these.
Investments from the prior year quarter.
The strong LP returns for the quarter Cross, both P&C and life and group segments were significantly driven by private equity investments and reflected the lag reporting results from the second quarter.
As a reminder, our private equity funds, primarily report results on a three month lag basis, whereas our hedge funds primarily report results on a real time basis.
Our fixed income portfolio continues to provide consistent net investment income stable relative to the last few quarters and modest modestly down relative to the prior year quarter.
Year over year decrease reflects lower reinvestment yields due to the ongoing low interest rate environment with pretax effective yield on our fixed income holdings of four 3% during the third quarter of 2021 compared to four 5% during the third quarter of 2020. However, our strong operating cash flows have fueled the higher investment.
With a book value of the fixed income portfolio growing by $1.5 billion over the past year.
From a balance sheet perspective, the unrealized gain position of our fixed income portfolio was four $8 billion at quarter end down from $5 $1 billion at the end of the second quarter, reflecting the slightly higher interest rate environment.
Fixed income invested assets that support our P&C liabilities and life and group liabilities had effective durations of five one years and $9 three years, respectively at quarter end.
Slide Slide 17, and 18 and our earnings presentation provide you with additional details of the composition of our investment portfolio and our investment results.
Our balance sheet continues to be very solid at quarter end shareholders' equity was $12 $7 billion of $46 67 per share shareholders' equity excluding accumulated other comprehensive income was $12 $3 billion of $45.39 per share and <unk>.
Kris of 8% from year end 2020 adjusting for dividends.
We have a conservative capital structure with a leverage ratio of 18% and continue to maintain capital above target levels in support of our ratings.
In the third quarter operating cash flow was strong once again at $669 million in our P&C segments. The paid to incurred ratio was <unk> 75, consistent with the last two quarters contributors to this include our growth, which increases the incurred losses, while paid losses lag, especially for casualty lines.
As well as the ongoing impact of slow court dockets.
Certainly the occurrence of catastrophe events in a given quarter and to pay out over subsequent quarters impact this ratio as well.
In addition to strong operating cash flow, we continue to bang liquidity in the form of cash and short term investments and together they provide ample liquidity to meet obligations and withstand significant business variability.
Finally, we are pleased to announce our regular quarterly dividend of 38 cents per share.
Before turning it back to Dino I wanted to let you know that our 2021 virtual Investor day presentation is posted on the CNA Investor Relations website.
The strategic discussion that accompanies the presentation is hosted by Dino and myself, we invite you to view the presentation and hope that you find it informative with that I will turn it back to Dino.
Thanks, Larry before opening the call to the Q&A session I'd like to offer a few comments about how we see the marketplace that we compete in evolving.
Most importantly, we see the market remained very favorable throughout 2022.
We continue to build momentum and new business growth and retention and rate increases should remain above long run loss cost trends for most of 2022 in light of the headwinds of social inflation.
Weighted cat activity low interest rates and the additional headwind.
Of economic inflation emanating from the protracted supply chain dynamics.
Although rates have moderated from the high watermark of the fourth quarter of last year.
It is premature to assume it'll continue down on a straight line due to the uncertainty of the strength of the headwinds.
In the third quarter, we saw pricing inflections as a response to pressure on those headwinds as an example.
Momentum on cat exposed property pricing picked up immediately after hurricane Ida.
And the supply chain issues, creating higher cost of labor and materials are partially offsetting the benefit.
Of the price increases leading to a greater awareness that additional rate is required and property for a longer period of time.
Similarly notices of seemingly outsized jury awards in the industry reminds us that social inflation was merely obfuscated during the pandemic and by no means extinguished.
Which should allow continued strong pricing in most casualty lines.
Deed, we are seeing similar strength in our price increases early in the fourth quarter.
Bottom line, we believe rate increases will persist above loss cost trends in 2022, leading to earned rates above loss cost trends for a third year in a row, which portends well for margin build all else equal and.
And we remain very bullish about our ability to increasingly take advantage of the opportunities.
This continuing favorable marketplace affords us and with that we'd be happy to take your questions.
Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad.
You are using a speaker phone. Please make sure. Your mute function is turned off to a virus like military charter equipment. Once again that star one to ask a question, we'll pause for just a moment to allow everyone an opportunity to signal for questions.
Yeah.
And we'll go first to Josh Shanker with Bank of America.
Yeah. Thank you for taking my question.
I was curious about the hospitalization and medical business.
Nonrenewed given the pricing.
Feels like you've been taking huge rate increases on that and finally in Q.
Sorry did it wasn't worth it anymore.
Does that mean for the business you wrote last quarter and the last few years.
Yeah, Josh I. Thank you for the question since Dino look we.
You've been at this a game of medical malpractice for a couple of decades and over the last few years with the impact of a particular social inflation and we talked about how it increased our loss cost trends, we started up our process of getting rate increases well before anyone else did and we've been making.
Some excellent headway.
Our AR in the quarter.
There was a portion of hospital portfolio in excess.
Uh huh liability a portion that we just didn't see an ability to be able to get to the required return as well as some of the others. We've seen a marked improvement in areas like our aging services and.
And we did an in depth and a good portion of it because of how how it's written came up in the quarter and we just decided.
That we were going to non renew it but but but in general Josh look we remain committed to.
The medical malpractice and clearly with all the activity we've taken not only in the pricing, but terms and conditions and a re underwriting it is getting better.
But we're gonna make the decisions we need to make on portions of the portfolio like we just did in the third quarter and it's really isolated to that.
And does that mean, a three quarter four drag as well because not all renews in the third quarter or is this one shrunk.
Written in the third quarter.
Yeah, Josh this is Larry there will be some additional in future quarters, but the significant portion of it was occurred in the third quarter July dates.
Okay.
Then a question on the discount rate on the LTC reserves clearly your formula is your formula.
Do you think about philosophically, what GAAP advisors, what do you think internally when it comes through bonds.
Take a barn law, you market to market, but when that bond recovers you amortize the gain overtime and don't take it upfront given your view of being very conservative about good news, how does that factor into your thoughts on the discount rate in the in the long term care book.
Well, Josh it's it certainly goes back to the approach that we take and you know as we've discussed we do you look at the forward rate for the first three years compared to the normative rate going forward and how it rises up to that and if you think about what's happened over the past year I mean last year at the time they the.
The forward rates were below 1% significantly below 1%.
And in the assumptions that we put in and we locked in last year, our or we did not assume that the Ford rates would get above 1% until 2023.
Currently running about one 5% so that that difference is what drives the improvement in the margin that we have in terms of bonds and when we're looking at investing longer term and the returns. So we were buying to hold and we're looking towards that as part of our investment decisions.
And and so every third quarter, we should expect mark to market on the discount rate whether favorable or adverse.
Well you know longer term, obviously, the long duration accounting will change that but that's not until 2023 by third quarter next year will be the next time that we look take a look at that yes.
Okay. Thank you and one more quick one.
If I may.
It would seem that in the.
You called out some frequency benefits in the loss ratio from three Q1, two which you're not alone in doing that.
We think about 2020, one or their frequency benefits in the underlying numbers that we should be thinking about as we forecast our loss ratio expectations for the next couple of quarters.
Okay.
Yes.
Really the biggest impact was the second quarter of last year in the third quarter, a little bit, but really incidental and the fourth quarter and forward. So.
Thank you very much for all the new harvest.
Okay.
Right.
We'll go next to Meyer shields with K B W.
Thank you a couple of quick questions. If I can one I think Dino you mentioned higher property loss trends in the third quarter is that just for the quarter or does that also apply to prior quarters in 2021 prior year's reserves for a property.
Yeah, you know we made the change.
Meyer This is Larry we made the change.
In terms of our long term long run loss cost trend assumptions, so we incorporate that into our pricing and our reserving. Obviously this property. So it's relatively short tailed from a reserving perspective, but we have incorporated those higher cost assumptions going forward.
Okay.
And then I'm going to get the details wrong, but I think you talked about lower medical costs than anticipated within long term care.
Broadly speaking are you seeing any signs of accelerating medical contemplation in terms of actual claim payments and Thats lumpier care and medical cost in the P&C book.
Yeah, I'll start with the long term care piece Theres, a couple of things going on that we've seen we are beginning to see a little bit of evidence of higher cost in particularly up facility care. However, there's a countervailing that is the impact of people being more with.
To take care of people at home. So in in home care is becoming more prominent and that's significantly lower than our facility care. So while we've seen some evidence of higher cost in facilities in particular and a little bit home care. The shift is actually been a favorable for us overall and then.
Healthcare are in.
<unk> costs book, we had that was a book of business parts of it that were impacted by social inflation, we have incorporated our assumptions into that we've talked about that in the past and we've made no revision, we're not seeing that accelerate really to this.
In the quarter.
Okay perfect. Thank you so much.
And once again, if you'd like to ask a question on today's call that is star one on your telephone keypad.
We'll go next to Tom Gallagher with Evercore ISI.
Good morning, I'm, just just a follow up on long term care I heard your comment Larry about the shift away from facility care to home health care and that that being a positive.
Can you comment on how big of a change that's been made maybe you have numbers around.
Proportion of total claims that.
In the past where home health care and what they are now like how big is that.
A change in trend then.
Yes, Tom I wouldn't say, it's dramatic but you know, we're probably seeing somewhere in the 5% to 10% kind of shifts in those.
Isn't that mix, which is which as I've mentioned is helping us overall and in severity.
Okay Gotcha and then.
Are you, where you guys considering risk transfer on this block in it and if so.
What are your overall thoughts for what you were seeing in the market.
Yes.
The market is still not conducive, we don't believe to doing a transaction and clearly we'd want to do something that that we could be comfortable with that didn't come back to us. So our focus has been.
Managing this business extremely well, which we think we do reducing risk wherever we can we think that's the right thing to do in managing the book of business and obviously that will help with any potential buyer in the future. So we look we're a P&C company. That's our focus going forward. So we do look in the market to see but we feel.
Comfortable with how we're managing the book, we feel comfortable with the reserves. So we'll see what happens is as market conditions change Dino anything you'd add to that no. I think you captured it perfectly are derisking at the policy level is having a meaningful impact.
Yeah, and I guess just.
One final follow up if I could your your reserving claim counts declined pretty meaningfully in 2021 down six 5% and I and I know you mentioned that.
Covid, driven where I believe you said that's Covid driven are you is your book old enough, where we should.
How would you see that playing out if COVID-19 Covid normalizes would you expect that to go back up or are based on the age of your block at some point I presume that is going to decline.
Yeah, and Tom I don't think I said, specifically, but we do prescribe our believe that Covid has had an impact on the reduction in the claim counts because we would not have expected that degree of decline in the individual book, where we're coming in close to peak claimed time period are you know within a year or so so we.
Would expect that that have been flattening out.
On the group book, obviously, that's that's a younger book of business and so we would expect those to.
Once we're through Covid.
That that would start to climb a little bit again, but that is the smaller portion of the book.
Okay. Thank you.
And at this time there are no further questions I will turn the call back to Dino Robusto for any closing additional or closing remarks.
That's great. Thank you very much Jennifer and thank you all for your questions and we look forward to chatting with you again in a quarter. Thank you.
Yeah.
This does conclude today's conference we thank you for your participation.
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