Q4 2021 Kemper Corp Earnings Call
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Speaker 2: you
Speaker 3: Good afternoon, ladies and gentlemen, and welcome to the Kempers fourth quarter 2021 earnings conference call. My name is Tania and I will be your operator for today's call.
Good afternoon, ladies and gentlemen, and welcome to the <unk> fourth quarter 2021 earnings Conference call. My name is Jimmy and I will be your operator for today's call.
Speaker 3: At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded for replay purposes. I would now like to introduce your host for today's call, Karen Gira, Tempere's Vice President of Investor Relations. Ms. Gira, you may begin.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time as a reminder, this conference call is being recorded for replay purposes I would now like to introduce your host for today's call Karen Gerah Kemper's, Vice President of Investor Relations Ms. <unk> you may begin.
Speaker 3: Thank you, operator. Good afternoon, everyone, and welcome to Kemper's discussion of our fourth quarter and full year 2021 results. This afternoon, we'll hear from Joe Lockers, Kemper's president, chief executive officer and chairman, Jim McKinney, Kemper's executive vice president and chief financial officer, Dwayne Sanders, Kemper's executive vice president and the property and casualty division president.
Thank you operator, good afternoon, everyone and welcome to Kemper's discussion of our fourth quarter and full year 2021 results. This afternoon, you'll hear from Joe Lacher, Kemper's, President and Chief Executive Officer, and Chairman, Jim Mckinney, Kemper's Executive Vice President and Chief financial.
The officer, Duane Sanders, Kemper's Executive Vice President and the property <unk> Casualty Division President will make a few opening remarks to provide context around our fourth quarter results and then open the call for a Q&A session. During the interactive portion of our call our presenters will be joined by John <unk>.
Speaker 3: We'll make a few opening remarks to provide context around our fourth quarter results and then open the call for a Q&A session.
Speaker 3: During the interactive portion of our call, our presenters will be joined by John Buscelli, Kemper's Executive Vice President and Chief Investment Officer. Eric Sternberg, Kemper's Executive Vice President and Life and Health Division President.
Kemper's Executive Vice President and Chief Investment Officer, Erich Sternberg, Kemper's Executive Vice President and life and Health Division President after the market close today, we issued our earnings release and published our earnings presentation and financial supplement we intend to file our Form 10-K with the SEC.
Speaker 3: After the markets closed today, we issued our earnings release and published our earnings presentation and financial supplement. We intend to file our Form 10-K with the SEC on or about February 10.
On or about February Ken our discussion today may contain forward looking statements within the meaning of the safe Harbor provisions of the private Securities Litigation Reform Act of $19 95. These statements include but are not limited to the company's outlook and it's <unk>.
Speaker 3: Our discussions today may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Security Siltigation Reform Act of 1995. These statements include that are not limited to the company's outlook and its future results of operations and financial conditions.
Results of operations and financial condition.
Speaker 3: Our actual future results in financial condition may differ materially from these statements. These statements may also be impacted by the COVID-19 pandemic. For information on additional risks and may impact these forward-looking statements, please refer to our 2020 Form 10K, as well as our fourth quarter earnings release. This afternoon's discussion also includes non- GAAP financial measures. We believe are meaningful to invest.
Our actual future results and financial condition may differ materially from these statements. These statements may also be impacted by the COVID-19 pandemic for information on additional risks that may impact. These forward looking statements. Please refer to our 2020 Form 10-K as well as our fourth quarter earnings release. This afternoon.
Discussion also includes non-GAAP financial measures, we believe are meaningful to investors in our financial supplement earnings presentation and earnings release, we have defined and reconciled all the non-GAAP financial measures to GAAP, where required in accordance with SEC rules you can find these documents on the <unk>.
Speaker 3: In our financial supplement earnings presentation and earnings release, we have defined and reconciled all the non-GAAP financial measures to GAAP where required in accordance with FCC rules. You can find these documents on the investors section of our website, Kemper.com. All comparative references will be to the corresponding 2020 period unless otherwise stated. I will now turn the call over to Joe.
Investors section of our website <unk> dot com all comparative references will be to the corresponding 2020 period, unless otherwise stated I will now turn the call over to Joe.
Speaker 4: Thank you, Karen. Good afternoon, everyone, and thank you for joining us. Earlier today, we reported our fourth quarter and full-year results. Goes without saying, we were disappointed with our profitability. The pandemic driven environmental challenges we've discussed in the last couple of quarters not only remain, but have intensified. These challenges have impacted each of our businesses.
Thank you Karen and good afternoon, everyone and thank you for joining us.
Earlier today, we reported our fourth quarter and full year results goes without saying we were disappointed with our profitability.
Pandemic driven environmental challenges we've discussed in the last couple of quarters not only remains what it is.
Intensified.
These challenges have impacted each of our businesses.
Speaker 4: In PNC, last quarter we discussed the relationship between earned rate and loss severity. We talked about the fact that loss inflation is immediately incurred and negatively impacts results.
In P&C last quarter, we discussed the relationship between earned rate and loss severity we.
We talked about the fact that loss inflation is immediately incurred and negatively impacted results.
Speaker 4: Raid increases are subject to regulatory approvals, roll on to policies that renewal, and are earned over the life of the policy.
Rate increases are subject to regulatory approvals roll onto policies at renewal and are earned over the life of the policy.
Speaker 4: The benefit of those increases is therefore delayed. The suspension of rate increases during the pandemic and the inflation surge that came with reopening the economy has created an historic mismatch between policy costs and pricing.
The benefit of those increases is therefore delayed the.
The suspension of rate increases during the pandemic and the inflation surge that came with reopening the economy has created an historic mismatch between policy costs and pricing.
In the fourth quarter, we continued to see increases in inflation driven loss severity labor rates auto body repair and rental car rates all continue to rise due to inflationary trends related to supply chain issues and labor shortage.
Speaker 4: In the fourth quarter, we continue to see increases in inflation driven loss severity. Labor rates, auto body repairs and rental car rates, all continue to rise due to inflationary trends related to supply chain issues and labor shortage.
Speaker 4: As an example, in 2021, used car prices were up 51% from 2019 and 37% over 2020. In the last quarter alone, they were up 9%.
As an example in 2021 used car prices were up 61% from 2019 and 37% over 2020.
In the last quarter alone they were up 9%.
Speaker 4: These increases in cost have a direct and immediate impact on our margins and did not moderate.
These increases in costs have a direct and immediate impact on our margins and did not moderate.
To respond to this environment during the quarter, we made significant progress on both rate and non rate profit improvement.
Speaker 4: to respond to this environment. During the quarter, we made significant progress on both rate and non-rate profit improvement.
Speaker 4: Overall, we exceeded our targets for the number of rate filing submitted, the percentage of our book impacted, and the level of rate increases approved. These actions will favorably impact future results.
Overall, we exceeded our targets for the number of rate filings submitted the percentage of our book impacted on the level of rate increases approved.
These actions will favorably impact future results.
Speaker 4: We see this aggregate inflation rate imbalance continuing in the short term. Due to the actions we have taken and will continue to take, we believe the situation will stabilize and ultimately restore margins to appropriate levels.
We see this aggregate inflation rate imbalance continuing in the short term.
Due to the actions we have taken and will continue to take we believe the situation will stabilize and ultimately restore margins to appropriate levels.
Speaker 4: Progress will initially be gradual, then more rapid as earned rate benefits are fully realized.
The address will initially be gradual than more rapid as earned rate benefits are fully realized.
The life and health segment continues to be negatively impacted by the pandemic and.
Speaker 4: The life and health segment continues to be negatively impacted by the pandemic. In the quarter, the business continued to incur excess mortality. Throughout the initial waves, then the Delta variant and now Omicron, our excess mortality rates are remained largely in line with national trends.
In the quarter the business continued to incur excess mortality.
Throughout the initial waves than the Delta variant and now omicron, our excess mortality rates have remained largely in line with national trends.
Speaker 4: In summary, we close the year making significant progress that will become increasingly visible in our results. We are actively taking rate and non-rate actions to restore our margins and are working to accelerate this process every way possible. Duane will discuss more shortly. Unfortunately, the most significant improvement levers will take time. It's a little like planting tomatoes after the winter. You can't start until after it warms up and it's going to take 80 days before you can eat the fruit. There's no way to get the fruit fast.
In summary, we closed the year, making significant progress that will become increasingly visible in our results. We are actively taking rate and non rate actions to restore our margins and are working to accelerate this process every way possible Duane will discuss more shortly.
Unfortunately, the most significant improvement levers will take time, and it's a little like planting tomatoes after the winter.
You can't start until after it warms up.
It's going to take 80 days before you can eat the fruit there is no way to get the fruit faster.
Speaker 4: We couldn't take rate until frequency rebounded from the lockdown and one-spiled rate takes time to bear fruit. There isn't a way to...
We couldnt take rate until frequency rebounded from the Lockdown once filed right takes time to bear fruit.
There isn't a way to meaningfully accelerate it.
Speaker 4: Though it will take time, we are confident our actions will be successful and position us for growth.
It will take time, we are confident our actions will be successful and position us for growth.
Speaker 4: I'll now turn the call over to Jim to discuss our operating results in more detail. Thank you, Kell.
I'll now turn the call over to Jim to discuss our operating results in more detail.
Thank you Carol.
Let's turn to page four.
Speaker 4: For the quarter, we generated a net loss of $106 million or $1.66 per share as reported and $101 million or $1.59 per share as adjusted for acquisition.
For the quarter, we generated a net loss of $106 million or $1 66 per share as reported and $101 million or $1 59 per share as adjusted for acquisitions. You also produced an adjusted consolidated net operating loss of $131 million or $2 <unk> per share as reported $126 million or $1 98.
Speaker 4: He also produced an adjusted consolidated net operating loss of $131 million or $2.5 per share as reported at $126 million or $1.98 per share as a just-
<unk> per share as adjusted.
Speaker 4: Murn premium increased 12% on a reported basis, and 5% after adjusting for the AAC acquisition. And that loss for the quarter, which primarily driven by environmental headlands, that impacted loss costs throughout our P and C business.
Earned premium increased 12% on a reported basis and 5% after adjusting for the AAC acquisition.
Net loss for the quarter was primarily driven by environmental headwinds that impacted bos cost throughout our P&C businesses. Our focus has been and will remain on restoring copper to target profitability during the third and fourth quarter combined the P&C teens file for approximately 11 points of rate of 56% of our personal auto books.
Speaker 4: Our focus has been and will remain on restoring comfort to target profitability. During the third and fourth quarter combined, the PNC teens filed for approximately 11 points of rate on 56% of our personal auto book.
Speaker 4: Further, the team executed a number of underwriting and non-rate actions to improve margins. Dwayne will provide greater detail on this topic later.
The team executed a number of underwriting and non rate actions to improve margins Duane will provide greater detail on this topic later.
Turning to page five.
Speaker 4: Return on tangible equity, excluding unrealized gains, was negative 4.9%. This is below our targeted long run return.
Turn on tangible equity, excluding unrealized gains was negative four 9%.
This is below our targeted long run return, excluding unrealized gains tangible book value per share declined $7 21 compared to last December .
Speaker 4: Excluding unrealized gains, tangible book value per share declined $7.21 compared to last December . Of this change, $3.11 is related to the acquisition of American access and the corresponding goodwill the transaction created. The corrective actions we have taken and are taking in response to higher loss cost trends will over time enable us to achieve our historical value creation level.
This change.
11 incentives related to the acquisition of American access and the corresponding goodwill the transaction created.
The corrective actions, we have taken and are taking in response to higher loss cost trends will over time enable us to achieve our historical value creation levels.
On page six we highlight our view of operating income that continued to be negatively impacted by environmental challenges.
Speaker 4: On page 6, we highlight our view of operating income that continue to be negatively impacted by environmental challenges.
Speaker 4: As mentioned earlier, this quarter we witness higher severity leading to our special PPMC segment reporting and as adjusted underlying combinerational of 119 percent. In addition, in our life and health segment, we continue to experience elevated life benefit costs due to access COVID-related mortality and increased persistence.
Mentioned earlier this quarter, we witnessed higher severity, leading to our specialty P&C segment reporting as adjusted underlying combined ratio of 119% and.
In addition in our life and health segment, we continued to experience elevated life benefit costs due to excess COVID-19 related mortality and increased persistency.
Speaker 4: On page 7, we review some of the key capital metrics we use to track our performance, including growth in tangible book value per share and tangible return on equity. For the last few quarters, we have been below target. We believe these challenges to be short-term in nature and do not expect them to impact our long-run target.
On page seven we review some of the key capital metrics, we use to track our performance, including growth in tangible book value per share and tangible return on equity for the last few quarters. We have been below target. We believe these challenges to be short term in nature and do not expect them to impact our long run targets.
Speaker 4: Recent performance is a direct result of the environmental challenges impacting the industry.
<unk> performance is a direct result of the environmental challenges impacting the industry.
Speaker 4: While this is disappointing, we've instituted and will continue to institute corrective measures to restore the business to target profitability.
While this is disappointing we have instituted and we will continue to institute corrective measures to restore the business to target profitability.
Speaker 4: On page 8, we highlight the strength of our balance sheet. Our substantial capital and liquidity positions enable us to navigate and optimize within the current environment.
On page eight.
Highlight the strength of our balance sheet, our substantial capital and liquidity position enable us to navigate and optimize within the current environment.
Speaker 4: we continue to produce strong cash flow, generating over $350 million for the year. This has enabled us to continue to make investments in our business and optimize our geographic footprint for the long-term profitable growth.
We continue to produce strong cash flow generating over $350 million for the year. This has enabled us to continue to make investments in our business and optimize our geographic footprint for the long term profitable growth.
Speaker 4: Our insurance entities are well capitalized. Liquidity remains strong, and our debt-to-capital ratio of 21.9% remains within our target range. Moving...
Insurance entities are well capitalized liquidity remained strong and our debt to capital ratio of 21, 9% remains within our target range.
Moving to page nine.
We provide an overview of the highlights to our multiyear excess of loss reinsurance and our annual aggregate catastrophe programs. Each year, we review our programs to align with our risk appetite and to minimize our cost of capital for 2022.
Speaker 4: We provide an overview of the highlights to our multiyear excess of loss re-insurance and our annual aggregate catastrophe programs. Each year, we review our programs to align with our risk appetite and to minimize our cost of capital. For 2022, we purchased an additional $75 million in limits in our excess of loss program due to our specialty auto growth.
Just an additional $75 million of limits in our excess of loss program to grow our specialty auto growth.
Speaker 4: Our program will cover losses at 95% of $300 million and excess of $50 million.
Our program will cover losses at 95% of $300 million in excess of $50 million in.
Speaker 4: In addition, we renewed our catastrophe aggregate program with a $5 million increase in the retention level. This program is intended to reduce earnings volatility from high-frequency, low-severity events.
In addition, we renewed our catastrophe aggregate program with a $5 million increase in the retention level. This program is intended to reduce earnings volatility from high frequency low severity events increased limits and the corresponding costs were offset by savings on the Cat AG program.
Speaker 4: Increased limits and the corresponding costs were offset by savings on the CAT-AG program. Thus, there was minimal impact to our year-over-year costs.
Thus there was minimal impact to our year over year costs.
Turning to page 10.
Speaker 4: That investment income for the quarter was $108 million. Our portfolio construction is designed to match liabilities and provide stable income through various cycles.
Net investment income for the quarter was $108 million.
Portfolio construction is designed to match liabilities and provide stable income through various cycles. This quarter, we generated a pretax equivalent yield of four 6%.
Speaker 4: This quarter, we generated a pre-tax equivalent yield of 4.6%.
Speaker 4: In closing, the company's quarterly financial performance continues to be pressured by various environmental factors. We are confident that the corrective actions we have taken and are taking will, over time, return us to our financial targets. With that, I'll now turn the call over to Duane, who will provide... Good afternoon, everyone.
In closing the Companys quarterly financial performance continues to be pressured by various environmental factors.
Confident that the corrective actions, we have taken and are taking will overtime return us to our financial targets with that I'll now turn the call over to Duane who will provide and good afternoon everyone.
Speaker 4: Let's turn to page 11. Last quarter, we introduced this slide.
Let's turn to page 11 last quarter, we introduced this slide.
Thomas we are navigating.
At the onset of the pandemic miles driven and accident frequency, where historically low dairy.
Speaker 4: At the onset of the pandemic, miles driven and accident frequency were historically low.
Speaker 4: In this time Kemper has effectively no rate increases and additionally along with most major carriers deliver premium rebates to customers.
And this time camber had effectively no rate increases and additionally, along with most major carriers deliver premium rebates to customers.
Speaker 5: As we emerged from lockdowns, we saw a lost trend shoot up against pre-pandemic unchanged rates. These dynamics will continue to earn great later in the year.
As we emerge from Lockdowns, we saw loss trends shoot up against pre pandemic unchanged right.
These dynamics.
To earn rate later in the.
It is intended to bring clarity and cost.
Okay.
Restoration journey.
Speaker 4: As the diagram highlights, the inflationary and rate curse create several potential paths and timelines to get there.
As the diagram highlights the inflationary and rate curve create several potential path and timeline to get there.
Moving to page 12.
Speaker 4: Moving to page 12, we'll begin with the specialty P&C. Against the challenging backdrop of inflationary trends related to labor shortages and supply chain issues, along with frequency reaching pre-pandemic levels, the segment experienced an underlying combined loss ratio year-over-year increase of 28 points, a sequential quarter increase of 11.
We will begin with the specialty P&C.
Against the challenging backdrop of inflationary trends related to labor shortages and supply chain issues, along with frequency, reaching pre pandemic levels.
Segment experienced an underlying combined loss ratio year over year increase of 28 points of sequential quarter increase of 11 points.
Speaker 4: Despite this quarter's loss and temporary rate imbalance, our view of long-term profitability of the business remains highly favorable. The chart on the upper right shows the progress made in obtaining rates throughout the year, including an approximate timeline on how actions will earn through our business.
Despite this quarter's losses and temporary rate and balance our view of long term profitability of the business remains highly favorable.
Chart on the upper right shows the progress made in obtaining rates throughout the year, including an approximate timeline on how actions will earn through our business.
Speaker 4: For example, during the fourth quarter, we filed for approximately 8% rate on roughly 57% of our book, with much of the 2021 rate already affected.
For example, during the fourth quarter, we filed for approximately 8% rate on roughly 57% of our book with much of the 2021 rate already effective.
Speaker 4: We're in the process of filing for an additional 7% on 60% of our specialty books in the first quarter.
We're in the process of filing for an additional 7% on 60% of our specialty book in the first quarter.
Speaker 4: Understandably, it takes time for filed and effective rate to be written and earned to our results. We expect a majority of
Understandably. It takes time for filed an effective rate can be written and earned into our results. We expect the majority of it.
Yes, the filed rates in 2021 to be earned in 2022 with the most significant earned impact in the second half of the year.
Speaker 5: of the filed rates in 2021 to be earned in 2022 with the most significant earned impact in the second half of the year.
Now, let's turn to page 13, the preferred P&C segment continues to face similar challenges looking at the chart on the upper right. We filed for approximately 12% rate on roughly 23% of our preferred auto book during the fourth quarter. We are in the process of filing for an additional 10% on 17% of our book in the first.
Speaker 5: Now, let's turn to page 13. The preferred P&C segment continues to face similar challenges. Looking at the chart on the upper right, we filed for approximately 12% rate on roughly 23% of our preferred auto book during the fourth quarter. We're in the process of filing for an additional 10% on 17% of our book in the first quarter. In summary, the organization is focused on the most important levers to restoring profitability. I'll now turn the call back
Quarter in summary, the organization is focused on the most important levers to restoring profitability I will now turn the call back to Joe.
Speaker 4: Thank you, Duane. If we turn to our life and health segment on page 14, we highlight that life earned premium increased 5% due to persistency improvement.
Thank you Duane.
If we turn to our life and health segment on page 14, we highlight that life earned premiums increased 5% due to persistency improvement.
Speaker 6: The face value of enforced policies continues to increase, driven by higher persistency in new business sales.
Face value of in force policies continues to increase driven by higher persistency and new business sales.
Speaker 6: we also observed and are encouraged by strong consumer demand for our products.
We also observed and are encouraged by strong consumer demand for our products.
Speaker 6: Lastly, our mortality results remain in line with countrywide trends. As the mortality impacts of COVID subside, life mortality and benefit costs should revert to more normalized levels.
Lastly, our mortality results remain in line with countrywide trend is the mortality impacts of Covid subside life mortality and benefit costs should revert to more normalized levels.
Speaker 6: in closing, although we're disappointed in this quarter's financial results. I couldn't be prouder of our team and how our organization has responded to the circumstances and challenges of the last couple of years. We remain focused on managing through these circumstances, returning to target profitability, and expanding on our long-term competitive advantages. I'll now turn the call over to the operator for questions.
In closing, although we are disappointed in this quarter's financial results I couldnt be prouder of our team and how our organization has responded to the circumstances and challenges over the last couple of years, we remain focused on managing through these circumstances, returning to target profitability and expanding on our long term competitive advantages I will now turn the call over.
To the operator for questions.
Speaker 3: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speaker phone, please remember to pick up your hands up if we're asking your question. We will pause here briefly as questions are registered.
Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad.
Any regions or by to remove that question. Please press star followed by two again to ask a question Press Star one as a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking your question, we will pause briefly ask questions. They register.
The first question is from the line of Greg Peters with Raymond James Your line is open.
Speaker 3: The first question is from the line of Greg Peters with Raymond James. Your line is open.
Speaker 7: Good afternoon everyone. I'd like to just focus on the information you provided in slides 11, 12, and 13.
Good afternoon, everyone.
Hi.
I'd like to just focus on.
The information you provided in slides 11, 12 and 13.
And.
Speaker 7: And on 12 and 13 particularly of interest was.
12, and 13, particularly of interest was.
Speaker 7: Where you give us a chart in the upper right-hand corner Defining how much rate
Where you give US a chart in the upper right hand corner defining how much right.
Speaker 7: has been filed for and how much should be impacting the first quarter results in 22.
Has been filed for and how much should be.
Impacting the first quarter results in 'twenty two.
Speaker 7: And then, you know, if you look at the both for specialty and preferred, you see that the amount of rate impact is going to be less than what the deterioration has been. And so I guess I'm looking for a reconciliation of that as we think about first quarter, second quarter, third quarter. And then the other piece of this is there's more than just rate that you can do to improve your results. And you know this.
And then when you look.
Look at the both for specialty and preferred do you see that the <unk>.
On a rate impact is going to be less than what the deterioration has been so I guess im looking for a reconciliation of that as we think about first quarter second quarter third quarter and then the other.
Piece of this is there is more than just rate that you can do to improve your results and you know this you can.
Speaker 7: uh... cancel agents you cannot you know you can't be more strict on new business so i'm curious what's going on in that on that side of the underwriting house
Cancel agents you cannot you can be more strict on new business. So I'm curious what's going on in that on that side of the underwriting house possible.
Speaker 6: Sure. This is Joe. I'll take a shot at it and I've been.
Sure.
Joe I'll take a shot at it.
Speaker 6: uh... let let me walk you through the top right corner twelve and thirteen a little bit to make sure
First let me walk you through the top right corner of 12, and 13, a little bit to make sure.
And it isn't.
Speaker 6: and it is in the third quarter of 21.
In the third quarter of 'twenty one.
34% of our premium.
Speaker 6: 34 percent of our our premium and it's weighted average was 3 percent. That also happened to be effective in that quarter.
It's weighted average was 3% that also happened to be effective in that quarter.
Youre getting a written impact in the quarter.
Speaker 6: You're getting a written impact in the quarter of 1.8% of rate and 0.1% earned. Those are not just from the third quarter. Those from our.
One 8% of rate and 1% earned.
Those are not just from the third quarter those.
That occurred during the pandemic.
Right.
What you see when you drop to the fourth quarter.
Speaker 4: What you see when you drop to the fourth quarter is we filed for rates.
We filed for rates.
Speaker 6: that had 57% of our premium impacted, and for 8% rate, only 37% of that would be the overall impact of 3 1.5 written and point.
That that had 57% of our premium impacted.
And four 8% rate only 37% of that the overall impact of three three and a half written in <unk>.
Some combination of what occurred in the second and third.
Speaker 6: We're trying to help you see how each of these works their way through. It's not intended to be a perfect. Can't quite see it without providing a massive set of tables to work those things across.
So we're trying to help you.
See how each of these works their way through it's not intended to be a perfect.
Can't quite see it without providing them.
Massive set of tables.
To work those things across ultimately we.
And that will come over time as you work it from.
Speaker 6: Now, we are clearly doing a variety of non-rate action.
Now we are clearly doing a variety of non rate actions.
A variety of non rate actions, we are canceling agents we have.
Speaker 6: a variety of non-rate action. We are canfully in agents. We have
Adjusted New business.
Speaker 6: underwriting, tiering. We are working with commissions. We are doing a whole bunch of
Your writing tearing we are working with commissions we are doing.
From a non non rate perspective, we're changing billing plans.
Speaker 6: From a non-rate perspective, we're changing billing plans.
Of adjusting what risks we write all of them.
Speaker 6: of of adjusting what risks we write all of the family uh... across our book of business in those do you have a tendency to penny
Across our book of business and those do have a tendency to pending.
Quantify.
In this kind of chart.
Speaker 7: And is that great, is that helping? Yeah, that that does, that was a great explanation of the
Greg is that helping.
Yes that was great explanation of that.
Charts.
Speaker 7: And, you know, I guess, Joe, everyone's, you know, listening in on this call, just wondering when that inflection point, you know, you look at the chart on page 11.
I guess, Joe everyone's listening in on this call just wondering when that inflection point you look at the chart on page 11.
And right meeting.
Speaker 7: and rate meeting and exceeding loss trend is the holy grail that everyone wants you to get to. The Ford starts.
And exceeding loss trend is the Holy Grail that everyone wants you to get to.
Before it starts to stabilize and improve.
Speaker 7: or is this as bad as it's going to get? And the timing, when we get to that holy grail.
Or.
As this is as bad as it's going to get.
And the timing when one.
And when we get to that Holy Grail.
Yes, and those are exactly the right questions.
Yes.
Speaker 6: And I'm literally going to go back to a couple of comments I made and we
<unk>.
Literally going to go back to a couple of quick comments I made.
The complexity of slide 11 is what is loss trend going to be going forward and for how long and.
Speaker 6: The complexity of Fight 11 is what is lost trend going to be going forward for how long, and how fast duties and move those relatively briskly. Um, I don't think,
And how fast duties and move those relatively briskly.
I don't think.
Thank you if we back up a quarter.
Speaker 6: or two quarters, you know, we were in early view that inflation was gonna start rising. And I think most folks thought we...
Or two quarters, we were an early view that inflation was going to start rising.
And I think most folks thought we.
We were.
Speaker 6: We were, you know, we were, we were pessimistic and weren't predicting what was coming. I think most of the industry...
We were we were pessimistic and Werent predicting what was coming I think most of the industry.
Speaker 6: with coming. I'm not 100% sure where that's going to be over the next couple of quarter. Nice and the uniqueness of this space.
Projection of what's coming I'm, not 100% sure where that's going to be over the next couple of quarters and the uniqueness of this space.
Speaker 6: not everyone but i you know we've had great success in say a florida in a texas uh... filing multiple making multiple rate filing
Not everyone, but we've had great success in say, a Florida and Texas.
Filing multiple maybe multiple rate filings.
Speaker 6: for significant amounts of rate moving us along that path. That's...
For significant amounts of rate move.
Moving us along that path.
Yeah.
Speaker 6: That in fact is the $24,000 question that we're dealing with. Our sense is the fourth quarter tends to be a seasonally
That in fact is the.
24000 dollar question that we're dealing with.
Our sense is the fourth quarter tends to be a seasonally.
Speaker 6: the worst quarter and the first quarter tends to be a seasonally better quarter. That might be, you know, several points, two, three, four points even that are a plus. And you wouldn't have seen a lot of the non-rate impact in the third quarter. You'll see a little in the fourth and you'll see more coming in the first and second.
The worst quarter in the first quarter tends to be a seasonally better quarter that might be several points 234 points even.
There are plus and you wouldn't have seen a lot of the non rate impact.
In the third quarter Youll see a little in the fourth and you'll see more coming in the first and second.
Got it.
Speaker 7: I guess, you know, the other, the big state is California. And I know if you go over a certain advocate involved, et cetera.
I guess.
The other.
The big State of California.
And I know if you go over a certain.
Advocate involved et cetera.
Speaker 7: Can you give us an update on how your dengoations are progressing with the state of California?
Can you give us an update on how you're doing.
Negotiations are progressing with the state of California.
Sure at this point.
California.
Speaker 6: California. All four programs have had a rate filing introduced to the department close to the 6.9 just under 7 percent threshold that you just described. I have been accepted and moved.
All four programs.
<unk> had a rate filing introduce to that apart.
Close to the $6 nine just under 7%.
Threshold that you just described have had been accepted and move.
Speaker 6: moved into analysts. Several of them are relatively recent in terms of when we got them.
Moved into analyst.
Several of them are relatively recent in terms of when we got the.
Not during the fourth.
Speaker 6: I believe our rate filing was one of the first, I think it was the first.
I believe Steve.
Our rate filing was was that one of the FERC.
I think it was the first.
To move from sort of that.
To be viewed by and worked on by an analyst. So we felt good about that.
Speaker 6: to be viewed by and worked on by an analyst. So we felt good about that. And we're working through the process with the insurance department. I have a.
We're working through the process with the insurance Department.
Ah.
A reasonable degree of confidence that the insurance Commissioner in the department are thoughtful.
Speaker 6: a reasonable degree of confidence that the insurance commissioner and the department are thoughtful about all of the issues that are going on. They recognize.
About all of the issues that are going on they recognize.
Speaker 6: like other insurance departments around the country that loss inflation is running high. It's a historic issue that we're dealing with from an industry perspective. And it really is important to them to keep vibrant, via open markets.
Like other insurance departments around the country that loss inflation is running high.
It is historic.
Issue that we're dealing with from an industry perspective, and it really is important to them to keep vibrant via open markets.
Speaker 6: in terms of what they're doing and I think they're going to recognize that moving on.
In terms of what they're doing and I think theyre going to going to recognize that moving on.
Speaker 6: It's critical to the health of the industry and health of the market overall. And I'm
It's critical to the health of the industry and health of the market overall.
Im optimistic.
Optimists.
Speaker 7: Got it. I guess the last question I know there's others that want to ask questions. So I'll this will be my last one. Prior your development. Can you comment on both the prior development and the specialty auto and the other parts of your business, please?
Got it I guess the last question I know, there's others, who want to ask questions. So this will be my last one.
Prior year development can you comment on both the prior development in the specialty auto AD. The other parts of your business. Please.
Yes sure so.
And specialty relatively marginal favorable development.
Speaker 4: specialty, relatively marginal, favorable, you know, developed. It's come.
Come through on some of the coverages like BR.
Not.
Speaker 4: I wouldn't highlight, you know, a larger broad trend other than I would indicate. You know, we continue to try to make sure we're making a...
Wouldn't highlight a larger broad trend other than I would indicate.
We continue to try to make sure we're making.
Our reserve selections.
You just saw a little bit of favorability relative to that.
Speaker 4: in terms of, you know, the PI book, what I would suggest.
Terms of the.
Pi book, what I would suggest.
And what we've seen a little bit coming in from that front is.
Speaker 4: And what we've seen a little bit, you know, coming in from that front is some increase.
Some increase.
Speaker 4: crossed associated with litigation inside New York with some of our policy holders and some of the other traditional trends are seeing nothing here really from a
Costs associated with litigation inside.
New York with some of our policyholders and some of the other traditional trends youre seeing nothing here really from a new.
What will the new trend perspective, but.
Speaker 4: a new trend perspective, but you know...
An item that has kind of been working through relative to the just the way that.
Speaker 4: an item that has, you know, kind of been working through relative to the way that acting in some of the behavior changes that...
Acting in some of the behavior changes that.
As a result of the pandemic.
Speaker 4: And so with that, we saw a couple of those data points and then reacted to them this quarter just to make sure that we're in the right spot.
So with that we saw a couple of those data points and then reacted to them.
This quarter just to make sure that we're in the right spot.
Got it.
Thanks for your answers.
Thank you Mr. Peter.
Speaker 3: The next question is from the line of Paul Musin with Piper Sandline. Your line is open.
The next question is from the line of Paul Newsome with Piper Sandler Your line is open.
Speaker 8: Good afternoon, thanks for the call. Always have a tough adults, but I know you guys are working as far as you can to write the ship. The first question, this is simple one, that roughly the 40% that's not going to rate, or not should not, that hasn't got to be intact rate in special. Did that, should you think of that as basically the California floor, or is that just too simple?
Good afternoon, thanks for the call.
Okay.
The test results, but I know you guys are working I'm just wondering as you can.
The ship.
First question just a simple one.
The 40% that's not getting rate.
Got it.
In fact right.
Is that should we think of that as basically the California book has had just was.
Two simple we look at it.
Yes, it's a good question, Paul and maybe the charged causing us a challenge.
Speaker 6: yeah it's a good question Paul maybe the the charge cause and the challenge that's not a cumulative set it's not that there was 34% in the third quarter then another 23 got in
Accumulative said its not that there was 34% in the third quarter than another 23 got it.
Speaker 6: That is 34% of the premium got it and an additional 57% and an additional 60% will get it in the first. So in some cases what you've got is some are getting their second or third helping.
That is 34% of the premium got it and an additional 57% and an additional 60% we'll get it in the first so in some cases, what you've got is some are getting their second or third helping.
So.
Speaker 6: Included in the 57 and the 60 is all of our California books. Some of them were in the 57, some of them were in the 60. Every book we have in California and specialty auto has received an increase.
Included in the 57% in the 60.
Is all of our California books some of them were in the 57 some of them were in the <unk> every book, we have in California in specialty auto has received an increase.
Speaker 6: In some cases, as an example, I believe Florida was in the 34 and Florida was also in the 57.
In some cases and as an example, I believe Florida was in the 34 in Florida was also in the <unk> 57.
Speaker 6: And again, where you can pull the race filings in individual states and you can see them, we were trying to get...
So.
And again, where you can pull the rate filings in individual states and you can see them, we were trying to get.
Speaker 6: in a way that let us see the total overall in this process.
In a way that let us see the total overall in this process.
Speaker 4: Okay, great. I mean, the information is definitely helpful. The biggest point where there is kind of a delay between the effective and then eventually the arm, to your point, yes. A bigger chunk of that is kelp.
Okay, Great I mean, the information has definitely helped the biggest points, where there is kind of the delay between the effective.
And then eventually the earn.
Your point, yes, a bigger chunk of that is <unk> at.
At this stage.
And again, you can track timing of approval of the same as us with online filings it will be delayed and then there'll be an implementation date.
Speaker 4: again, well, you can track timing of approval of the same as us with online fileings. It will be delayed and then there'll be an implementation.
Speaker 4: probably 45 days out from whatever that approval comes in.
Probably 45 days out from wherever that approval comes in so.
Speaker 4: that is what it is and we'll continue to update the tables and hopefully what you've seen is a good distance to hear with these. We're trying to provide as much insight here as possible.
That is what it is and will continue to update the tables and hopefully what you've seen is a good consistency here with these.
We're trying to provide as much insight as possible.
To try to enable that.
No not the data is definitely very helpful.
Speaker 8: You're not, the pain is definitely very helpful. We've already touched on this.
We've already touched on this.
Speaker 8: you know that normally the fourth quarter for you guys is a little bit of a worse quarter from a seasonally, seasonally projected, in a couple points. Anything beyond that, uh, you know, given the unusual nature of today's environment that would sort of change that seasonality if we, uh, could sort of pull that off?
Normally the fourth group you guys can talk a little bit of a worse quarter from <unk>.
Placebo.
A couple of points.
Thank beyond that.
Given the unusual nature of today's environment.
So change that.
Seasonality.
And sort of pull that off.
While the pandemic stuff.
Not that we know I think the big item and I think.
Joe highlighted this in some of his comments on that.
Speaker 4: When you see inflationary trends and we're giving it purely in the example side here, for example, use car prices. You know.
When you see inflationary trends and giving a purely in the example side here for example used car prices.
Quarter sequential quarter over quarter growth that tells you is that's not really slowed down yet.
Speaker 4: quarter sequential quarter of a quarter of growth that tells you is that's not really slowed down yet. Can you sense the economy slows down a little bit or people's behavior chance that they're not going to go up for forever? It is a
To the extent the economy slows down a little bit or people's behavior like Theyre not going to go up for forever.
Speaker 4: an element that does depreciate. There's probably an elongation to some degree of the utility in that depreciation curve.
An element that does depreciate theres, probably an elongation to some degree of the utility and that depreciation curve.
Speaker 4: some extent that will take a while kind of given just what the supply demand imbalance is. But until we see some moderation or stability in those things, I think it's gonna be a little bit more volatile than what we would normally like. But I think that that pressure potentially, you know, it's a little bit more of these things because once you do it,
Some extent that will take a while kind of given just what.
The supply demand imbalance is.
But until we see some moderation or <unk>.
<unk> ability and those things I think it's going to be.
A little bit.
More volatile than what we would normally like but I think that that pressure potentially.
So these things because once you do have.
Of the right supply you do have some of these new <unk>.
Speaker 9: you know, again, this is a depreciating asset that has a, it has
Again this is a depreciating asset that has a.
Yes.
As a <unk>.
Speaker 4: as a limited value and a limited life to it. So it will go to zero at some point in time. But we're just not seeing that at this stage.
Limited value in a limited life to it so it will go to zero at some point in time.
But we're just not seeing that at this stage.
Yes.
Speaker 8: It's a capital like and it looks like overall capital is fine, but I know it's the other two can ratio in the P.O. two business.
Great capital it looks like overall capital is fine, but I noticed the RBC.
Ratio in the P&C business.
Yes.
Speaker 8: 21. But at the same time, you are going to that we should business. Suggest that you might be pushing
In 'twenty one.
The same time you are growing.
Key business.
Does that.
I suggest that you might be pushing cash.
Two business over the next year.
It's very possible that we would I mean, what we highlighted it's a holdco is here to service.
Speaker 9: It's very possible that we would, I mean what we highlighted is that the whole co is here to service.
Thanks.
Speaker 4: for our insurance entities and our businesses, to the extent that
For insurance entities in our businesses.
To the extent that.
We're not where we would want to be from in terms of our risk appetite or other elements in terms of prudent.
Wood.
We would make injections appropriately we have plenty of.
Capital and liquidity available at the Holdco to do that without creating.
But.
Yes.
Environment, very thoughtfully and we're going to make.
Sure that our entities remained strong.
Strong and really.
<unk>.
Policyholders and others would look at us they can they're going to know that Kemper.
<unk> more than able to stand behind our promises.
And we're also going to know.
And that we're able to.
What I can make any rash or.
Decisions rather than report.
Thanks for the help guys.
Thanks, Paul.
Mr Nielsen.
Question is from the line of Gary Ransom with Dowling <unk> partners. Your line is open yes, good evening.
You may have already sort of asked.
Should this on the fourth quarter loss ratio, where the seasonality, but was there any.
That night of run through the numbers.
Fourth quarter.
So there is roughly about two points.
In the.
Hey, Brooks I think most folks on this floating through.
It's relative largely focused on the third quarter.
You are seeing is some increased inflation severity trends not necessarily in our patient every environment is going to be on our collision.
Okay coverages, so that's there.
Inflation, especially in used cars continues to run hotter, even hotter than our.
Yes.
Higher projections than most.
You also saw.
The Pi front, just again not necessarily in the page up until that point in time, but we're looking at.
Looking at differences as it relates to.
Behavior changes, whether it would be an attorney rep rates or other elements.
And so we reacted a little bit to that.
From an early.
Perspective to make sure that we've got that accounted for on a go forward basis.
We'll see how that kind of comes together, but there is about two points in summary that is inside there.
Was there anything from the Florida, Pip issue or to those estimates.
Let's hold from last quarter.
No those estimates of health.
No further uptake of held okay.
Great. Thank you.
Then I also wanted to ask about frequency.
I think last quarter, you more or less talked about frequency coming back to 2019.
The levels more or less within our point is that still generally the case.
That is still the case no change from that front at this.
Okay.
I mean, I guess, that's it for me thank you very much.
The frequency.
I think what you're really trying to add at this frequency and severity of them right now based on our reviews and when we pull back.
Covers in every which way direction, what we come out with.
I'll be interested once we get other schedule piece in that because I think they will provide some.
Additional comparison points.
But we're seeing this as a severity.
Nothing from an underwriting perspective.
These large changes we just continue.
The cost associated with items increasing.
And we're trying to react to that the best that we can but the industry structurally isn't really set up for 50% kind of a two year type changes or other now we'll work through it it's not.
It just takes time to get to these is not weather.
It's not an if it's just a word and we're working that as fast as we can at this stage.
And it's principally in metal metal coverages.
So its charity issued frequency and it's predominantly inside of the metal coverages.
Thank you very much.
Thanks, Gary.
Thank you Mr Hanson.
Next question is from the line of Brian Meredith with UBS. Your line is open.
Yes. Thanks, a couple questions here for you first just a clarification I just want to understand that getting this chart on page 12, if I look at the overall impact on a written basis. So I think what you are saying is that these are individual by quarter with the written impact so the cumulative impact but ended the first quarter should be something north of 11% am I getting that right.
What you should do is say that five eight that's the cumulative impact on on written.
Of all of those and what it means for it.
<unk> written that policy had to either have been new or renewed.
So as an example, right.
Third quarter.
'twenty one number if it had been approved.
In August .
It might not be an effective.
Will not hit some of those policies.
On renewal.
It will hit some in September and October summit won't hit until March.
For April .
That 37% that became effective in the fourth quarter. Some of that was let's say in November or December . So the first policy that actually gets the impact of that would be a January .
And if it looks like suddenly you get one quarter of it in the year, but with six month policies you could have in the first quarter.
So that is intended on the right side of the dotted line to show you the cumulative impact.
Normally this would be a really hard chart to read there wasn't a lot of rate that was running.
So it is intended to give accumulative.
And again I don't.
Most folks have out there I think we're just trying to put it in a way that you can.
You sort of illustrative, we see it working its way and it will accelerate.
Hey rapidly as you get into the second and third quarters.
Because of everything you see if you just do the math on what you see running through the fourth and the first.
That surge comes through.
Okay, Great. That's helpful. And then just just quickly just a clarification.
Your policies are six month policies right. So so could I would just like some people are just little surprised that the earned impact was as low as it was.
We've got a mixture of policies.
Effectively we have more six month policies I think the most preferred standard carriers, but.
More than 50% of the book is going to be 12 month policies that are coming through there.
Well, we've been even in your specialty segment, yes.
Even in our specialty segment is again were careful to say inside of specialty.
Specialty not just non standard.
The non standard part of it is predominantly six month policies, but there are pieces of this where we very specifically might look at it and say it's a it's.
Another specialty of the Hispanic customer segment. There are pieces of this that are non standard and there is piece of it that are closer to standard.
Gotcha. Okay helpful. Thank you difference in underwriting profile that that's deliberate on our.
Okay that makes sense.
And then I'm, just curious going back to the non rate actions, maybe you can give us some perspective, how much of an impact would you expect that to have as far as getting back to your profitability as a quarter of it or half of it because if I just take a look at where you all right now with your loss ratios I mean, it looks like you need assuming.
Loss trend is zero, 20% to 25% cumulative rate to get back to your kind of normalized margins now that assuming non rate actions. So how much will that contribute.
Yes.
I'm trying to figure out how to get to exactly the answer you want Brian and I understand it and I'm going to give you an answer and then we'll talk about it a little bit and you'll understand that.
It ultimately probably comes in.
To somewhere around.
A third to a half.
And now I'm going to get to be a little bit of an insurance wonk and mechanic.
We could adjust condition.
Point or two.
We did it that would affect.
And have sort of an immediate earned impact that gets you to something.
We have in a lot of our programs underwriting tiers.
That there is an ability inside of the same rate level to move you to a higher.
All of those are slotted that doesn't change the renewable book, but that does change the new business coming in so that sort of has an immediate impact on what's running through new.
We could eliminate and agency will that might stop new business.
At.
For that agency.
But it doesn't immediately cause their new business. So the renewable to go away. So.
So there are pieces of this that go in.
Immediately across the whole book.
You only or might have.
So we're working all of those.
At this point I mean, there's some stuff we can do just on general expenses underneath we're working all of those.
The.
First third of the non rate actions get felt fastest.
In the back.
Half or two thirds get go a little slower.
And I'm trying to get you the precision you on because I know what you want to do is what exactly what I would want to do is put it into.
That helps you project the loss ratio and combined ratio improvement.
And I'm not sure how to how to capture it and precisely the way that I think.
You were looking for it.
Okay.
That's helpful that it helps a lot and then maybe we can focus a little bit just on top line and kind of what are your expectations over the next 12.
Sure.
18 months as you fix this problem, what's going to happen with respect to Pip counts.
In your specialty business and maybe a little bit on how you manage your handle your distribution in periods like we are right now.
Yes.
We are.
Pushing pretty hard on the underwriting restrictions.
Some of this is going to be a function of what competitively done in the market.
Would be happy or very comfortable if it was down a little more than that in.
In the near term.
There.
The more underwriting disruption one company provides the more.
The more everybody is doing that there's less of a place for it to land.
So so you can you can more quickly impact new business.
But sometimes you actually see a little uptick in retention.
It's harder for those customers to move.
And they.
Deal with the underwriting or pricing things that are happening to them. So it's not completely clear the pace with which the market is also moving.
I would expect that we'll be closer to flat or down some.
Inside of specialty and we'd be comfortable with it was down a bit more near term.
Okay, and then I guess my last question.
Got it.
But just to be careful to split this between <unk> and.
And kind of written and earned and so.
Right.
I would suggest that the written earned will likely exceed and continue to grow.
As a result of both the pricing and the underwriting actions that we're taking so probably some slight dip.
Deterioration, maybe on the <unk> side, but I would hold again, a lot of market components associated with that and how things will move.
So we will see but definitely I think youre going to see.
Continued strong probably earned and written growth as both the rate and underwriting actions continue to earn it.
Congratulations what my comments were related.
Yes, definitely with the rate activity.
I would expect the written and earned to go up.
Got you and then last question for you.
Let's let's think out 12 to 18 months from now and what potential opportunities are I mean, I would think that if you all are seeing in these types of issues from some of your larger competitors are the small to mid sized players did you.
Compete a lot with them, that's where you're really targeting must be having a really difficult time right. Now do you see opportunities kind of both inorganically and organically kind of really grab share call. It once profitability gets to where you need to be.
Yes.
Yes.
So two pieces of it one we are we are 100% focused right now.
On focusing on.
Restoring our underlying profitability.
But I would be shocked if we don't find a large chunk of the competition. We have in this space that is slower and is behind.
The bigger issues I don't think there is financially strong I don't think they've spotted the issues as quick and I don't think theyre ability.
So I do expect.
There's going to be a little messy for a couple of quarters cleaning it up and I think it's going to be worse for that and it's going to take them longer.
And I think ultimately that will will present an opportunity.
Great and thank you.
I will enjoy that opportunity a lot more than we're enjoying right now.
Hi, Beth.
Thank you Mr. Meredith.
Ask a question press star one.
There are no additional questions excuse me. The next question is from Greg Peters with Raymond James Your line is open.
Okay.
Allowing me to ask a follow up.
With the focus.
For most of the presentation.
And talk about.
The life business too.
That really spin.
Headwinds because of Covid related issues.
How are you thinking about that business.
Sure.
This year for fiscal year, 'twenty, two and for fiscal year 'twenty three.
No great question.
I think it's a great business first overall.
And to really get a full view of the economics I think it's important to actually take a look through statutory returns, which again will have.
Some of the additional return elements of investment elements in terms of hedging.
Youll see it made roughly.
40 million Bucks, if youre tracking through the year when you put this in.
Not great not bad, but about a 10% return rate on the surplus that's inside that it again down from historical though.
Target.
I highlight that because I still think you're going to see much more of a return to kind of the pandemic.
That's what all of our models things of that nature would indicate.
I would tell you that the pandemic continues to take turns that are unanticipated at certain points or maybe anticipate but.
It's lasted a lot longer originally you thought that vaccines and they they are having a market impact.
But if you even look at now while you have.
Omicron component of this and you look at and you sit here and say well, yes, it might be less.
I have less of a severity impact in certain components, just because of the speed with which it has spread you are now actually seeing mortality rates right that are in excess of what they were during the second peak associated so.
Hopefully we will get through this period, both as a country.
And more broadly speaking and things will return to more of those pre pandemic norms, but.
And when I say short term I think within the next year to two years.
At each stage I think we've gotten better at responding when I say, we I think from a country medicine, many things have gotten better on that front, but at that same point in time.
There could be continued.
Utility from expectations of those base case expectation, but hopefully once we're through there what youll see is more of a return to that.
Long term earnings pattern that we've had there.
I can tell you from an underlying from persistency in some of the economic elements underneath that.
But if I were to think about it from a value enforced or other perspective.
It's increasing in value in terms of where we're going.
Would suggest those trends, but it also is saying hey, the pandemic is not going to continue to go on for Robert.
But I think about it.
The nations are 30, plus kind of your cash flow decisions that you're making okay. So we got a year or two years.
Thanks Bill.
But not what we've historically had.
Hopefully thats just a minor blip in terms of what ends up being a very strong.
Yes.
Period again.
Kind of hopefully revert back to more normal and we work our way through this.
Got it and just I can't help myself on slide nine of your presentation, you provide us the detail around your.
The <unk> program.
For the 2021 program here for the Cat aggregate program did you use all of your $50 million in excess of 60%.
Or.
You did.
For the 2021 like I think Youre, asking specifically do we have enough.
Cat events above the 500000 from the inside the property business to hit our retention levels.
In our pension plan in 2021.
And you didn't know you did not exceed that.
We did exceed that.
We didn't get any recovery.
So we not only do we not use the 50, we didn't start using the <unk>.
Interesting alright, great. Thanks for the answers.
Thank you Mr Peters.
I will now turn the conference over to the presenters for any closing remarks.
Well.
Thank you everybody for joining the call. We appreciate you.
A lot of work cut out for us here, which I think we've described.
Excited to get after it in for Brian where you suggested we will be hopefully a few quarters out.
Thanks, everybody.
Yeah.
That concludes the <unk> fourth quarter 2021 earnings conference call. Thank you for your participation you may now disconnect your lines.
Right.