Q1 2022 Rli Corp Earnings Call
Chief Financial Officer, and Jon Michael Chairman.
As usual Todd will lead off with a summary of our financial performance for the quarter.
Craig and Jen will offer additional comments on current market conditions relate.
Related to our product portfolio. We will then take your questions and Craig will close with some final thoughts Todd Thanks, Erin and good morning, everyone.
Yesterday, we reported first quarter operating earnings of $1 43 per share the quarter's results reflect strong underwriting performance and growth in investment income.
Underwriting income benefit benefited from benign weather related losses in our property segment.
Our modestly improved underlying loss ratio in our casualty segment.
And continued favorable benefits from prior year's loss reserves.
All three segments.
All in we posted a combined ratio of 77, 9% for the quarter and experienced continued topline growth, which was up 22% in the quarter.
Investment income advanced 9% as we realized elevated income on improved reinvestment rates and a larger asset base.
Realized gains were $6 million in the quarter, while unrealized losses on equity securities were $28 million as mentioned on prior calls large movements in equity prices between periods and have a significant impact on net earnings which you can see in the comparative quarterly results, Craig and Jim will talk more about <unk>.
In a minute, but at a high level all three segments experienced growth as we continued to benefit from favorable market conditions in most areas of our business.
From an underwriting income perspective in the quarter. The quarter's combined ratio was $77 nine compared to $86 nine a year ago.
Loss ratio declined six seven points.
Largely due to low catastrophe activity during the first quarter of 2022.
Storm losses added less than one point to this quarter's loss ratio compared to seven points of loss from winter storms last year.
So on prior year's reserves perspective, both quarters benefited from favorable development.
Similar to the comparable period last year casualty posted $28 million with favorable loss emergence across the majority of product lines and over multiple accident years.
Property experienced $13 million in favorable development a notable increase over last year. The largest benefit came from our marine business, which is shorter sales and losses on loans and develop more quickly.
Likewise contracted commercial surety were responsible for that segment $5 million in positive development during the quarter.
Our approach to reserving remains the same and the quarter's results are reflective of consistent process of evaluating reserve studies and actual versus expected losses for the current period.
Moving to expenses compared to last year, our quarterly expense ratio decreased two three points to $38 seven.
The decline reflects improved leverage our expense base as net premiums earned continued to grow.
Certain incentive related amounts that are influenced by growth in book value were also down.
The investment environment was a challenge in the quarter as interest rate increases weighed on bond prices and equities declined with heightened volatility.
Total return performance came in at a minus four 7% through March and as reflected in our other than our comprehensive loss of $67 7 million or $1 48 per share.
I'll emphasize that the majority of this decline is being reflected in the change in unrealized gains and losses on our balance sheet. We have a history of strong operating cash flow and investment approach that holds most physicians to maturity there.
There seems to be little reason to make these losses permanent by selling securities as we have discussed in the past we're happy to trade fixed income price declines for an opportunity to put money to work at higher yields.
Incorporating a full mentioning comprehensive loss and adjusting for dividends book value per share declined 5% in the quarter to $25 45.
Away from the traditional investment portfolio total invest the earnings increased $2 3 million compared to last year with Maui, Jim contributing $6 4 million in prime $2 8 million.
We also announced in the quarter, we have agreed to sell our minority stake in Maui, Jim and anticipate after tax proceeds will approximate $500 million.
Final proceeds will be subject to certain adjustments at closing, which we expect to occur in the second half of the year.
All in all of a very good operating quarter and strong start to the year.
And with that I'll turn the call over to Craig Craig. Thank.
Thank you Todd and good morning, everyone very nice beginning to 2022.
Over 20% topline growth on a sub 80 combined ratio.
We're realizing growth in premium and underwriting profits across almost every product in our portfolio.
Just one quarter played so far still way too early to cut down the nets. Instead, we will keep our head down and stay focused on the underwriting fundamentals that we practice every day.
In aggregate rate levels continued to be up enough to cover loss cost inflation expectations.
We remain cautious in regards to inflation, both core and social and we continue to manage our volatility with quality reinsurance partners, who believe in our ownership culture and business model.
Turn it over to Jen for some more color by segment. Thank.
Thank you Craig as Tom mentioned, both premium and underwriting profit increased in all three segments as momentum continued into the first quarter supported by a focus on service and investments in people and technology.
Typically in casualty premium was up 14% on an 84 combined ratio.
<unk> increased 5%, which is down slightly from last quarter growth was driven by personal umbrella DNS primary and excess liability and our professional services and small commercial group.
We are monitoring the growth all of these groups are experiencing positive rate change on stable loss ration and each one contributed significantly to this quarter's profitability.
One of the few products or the decrease in premiums. This quarter was the executive products group, which is our D&O portfolio. We have exited some minor products in this group over the last year and competition has returned to the space.
<unk> still increased 8% in the quarter, which was a lower increase in prior quarters, but still a positive result, after three consecutive year, another 20% rate increases.
Another area, where competition has rebounded within the transportation market. Despite this premium grew 36% driven by a return of exposure at our public auto group with bus activity now back to pre pandemic level.
New business has been difficult to win and MGA markets with new backing have returned aggressively to the market.
We were able to achieve a 9% rate increase for transportation renewable.
Even in an increasingly competitive environment, our <unk> and transportation products remain profitable we continue to see a lot of opportunities in the broader casualty segment.
Moving onto the property segment premium increased 47% on a 67 combined ratio.
Alex had double digit premium growth.
Yes, it'd be a different quarterly results is the significantly reduced catastrophe activity compared to last year's historic cold weather and later settlement.
Property rates are up 7% overall, driven by hurricane rates, which were up 17%.
Premium growth was driven by our E&S property portfolio renew business submissions are up 22%.
Pricing in the Hurricane space are accelerating and Florida, specifically is it a very hard market.
Tightening up our underwriting guidelines each month as we continue to be more selective increase in deductible lowering the limits, we offer raising rates and increasing minimum premiums we are actively managing our aggregate and finding opportunities to support.
While market conditions remain attractive it is worth mentioning marine also had a solid quarter with premium up 19% along with a significant contribution to the bottom line.
Last but not least surety premium grew 7% on a sub 70 combined ratio. This was led by contract surety were rising and volatile material costs have led to both increased premiums and increased risk.
The ability to estimate to complete projects on time and at cost is becoming more difficult.
Continue to demonstrate our cautious risk based approach to underwriting the coke monitoring and we see the collateral where needed.
No.
<unk> business also grew and our continuing focus on marketing and ease of doing business.
Large commercial business was down slightly due to some nonrecurring opportunities last year.
Still plenty of competition in this space with new markets entering due to underwrite or turnover, but we are holding our own.
Overall, we believe our product portfolio very helpful, which gives us the confidence to execute on opportunities. We have a lot of positive momentum driven by the efforts of all of our employee owners to take care of our customers.
This quarter's results reflect their outstanding efforts I'll turn the call back over to Craig.
Thanks Jen.
As Jim commented, we feel our portfolio is in good order, we believe the quality of our risk management is differentiating selecting the best risk retrenching, where pricing is rational quickly addressing problems in managing downside risk.
This approach mitigates the need for wild swings in our rate levels.
Roy is known as a stable consistent and committed carrier in our chosen markets. We remain focused on providing our customers with exceptional service and proven expertise in exchange for a fair premium that permits us to make an underwriting profit.
Our portfolio is broad and diversified and our underwriters are narrow and deep.
This gives us the benefit of finding opportunities in all market cycles, while allowing our experts to slow down the game be very selective as needed, but also run the fast break when we since an advantage.
We have realized good momentum in our portfolio of products and we will continue to work to realize our full potential.
I want to thank the entire higher ROI family for delivering and putting in all the hard work needed to achieve success.
I ask all of our associate owners keep being different because being different works I'll now turn it back to the moderator to open it up for questions.
Thank you the question and answer session will begin at this time, if youre using a speakerphone. Please pick up the handset before pressing any numbers should you have a question. Please press star one on your telephone.
Wish to withdraw your question. Please press star look like to your question will be taken in the order Thats just received please standby for your first question.
Our first question today comes from Matt <unk> from JMP. Your line is open. Please go ahead.
Hey, Thanks, good morning.
Good morning, Good morning, hoping to ask you a question on the not so much about the quarter, but the recent news on the sale of Maui, Jim Obviously your guys of ownership there.
Yes.
Is it.
Just a question about kind of what you might do with the proceeds and is it is it logical to think that absent.
Some.
Strong growth opportunities.
Dividend might make sense or what are you guys talking about.
Matt This is Craig.
Apprised going the question actually.
I'm just joking I was expecting this is going to be.
Question for Paul.
And I'll just review, but from probably mode.
I mean.
Obviously I didn't.
Yes, I knew you would so that's all right.
We always take a very thoughtful approach to our capital position as you guys know I mean, it's not really any different.
A lot of time between now and we expect to close this transaction.
Preference has always been to invest in our own products.
Ones that we know.
With disciplined underwriters and they will share our values and our culture and.
And you can see.
I think we're doing a pretty good job of that right now is putting that capital award EMEA announcement, we make use of proceeds swaps would come after the close of the transaction.
And after a full evaluation of usage of our own portfolio and considering all other opportunities that makes sense.
I would remind you that we.
We do treat this as shareholder money this is not our money.
As management, so we're going to take good care of it will assure you that we are going to be consistent take a consistent and disciplined approach just as we always have in regards to our capital position. So that's pretty much all I can say about the transaction but.
Sure.
I don't know if that answered your question completely perfect.
Very very helpful.
And then one other if I can actually back to kind of the quarterly results.
And I think the comment on a little bit I was hoping that you could peel back the onion, a little bit on the growth and property in the quarter and just maybe a little bit more what youre seeing there whether it's.
Specific lines or geographies or so forth.
It was obviously a pretty strong result.
Sure Matt This is Jim.
Our plan on that.
The market really it's focused on the E&S property space and particularly in Florida. So after the one one renewals we expected.
More capacity to enter that market given its been somewhat attractive after some of the events, particularly in Louisiana and in the last couple of years and so we expected some competition and really the competition hasn't arrived and in fact, the MGH and we compete against and other carriers have seen the pull back their limits quite a bit.
It's almost like very small number looking to see where do these people go I mean, some of it probably is lloyd, but it's a little bit of speculation as to who will allow but generally speaking people are putting up less capacity than they used to so for you to have a.
Building that might be worth $30 million now that's layered with multiple insurance policy is adding up to $30 million versus one policy previously so that creates a lot of opportunity.
One reason our submissions are up so much.
And essentially there's just not enough capacity to be covering all of our brokers continue to call. It back can we get more limits.
What else can you do for us and Thats, a very active and busy market.
That's difficult.
To answer all of those phone calls so we don't see anything of size that is going to end. This this opportunity at the moment. So we expect though for new capacity entering given the where the rates are at.
So for the time being we're going to take advantage of it while we can and see where it goes.
In the meantime for our book and as I mentioned, we are being more selective in raising rates deductibles and things of that nature to make sure that we're taking advantage of the market with the best terms and conditions Mccann.
Great.
Super helpful color.
Thank you congrats on a nice start to the year.
Thanks, Matt Thank you Matt.
The next question comes from Colin Johnson of <unk> Securities. Please go ahead.
Hey, good morning, Thanks for taking my questions.
Wondering kind of given just the change in the interest rate environment I'm curious, if you're seeing maybe the risk reward change in your investment portfolio in favor of either higher fixed income allocation or maybe there's some individual pockets within that allocation that seem more attractive basically just wondering how do you adjust your portfolio if at all as you start.
To see these changes in rates.
Hey, Colin.
Erin <unk>.
Good question.
If.
If you look back over the last couple of years with equity prices being pretty robust on the upside we have focused most of our operating cash flow.
Toward fixed income.
Even even in lower rate environment, then and today, we're certainly pleased to have a better opportunity to put money to work today at higher rates than we've had over the last couple of years and really I would say the opportunity is broad based and fixed income spreads that are.
Modestly wider across a number of sectors, including high quality municipals and.
In corporate Securities.
The yield curve is pretty flat. So you don't necessarily have to cast.
The next marginal dollar of operating cash flow out the yield curve you can pick your spots along the curve as well so.
I would just characterize it as a broad based opportunity to put operating cash flow to work.
And fixed income.
Got it. Thank you that's helpful and then.
Next question I think you all mentioned that premium rate was up 8% across the board in the quarter, so lower than last quarter, but still in excess of loss cost.
I apologize if I missed it but do you have an estimate of what loss cost was in the quarter.
I mean, it really is.
As Todd.
From a reserving perspective right.
Brian I mean, I think the actuaries are going to take a longer term approach and I think they'll react where necessary.
To loss cost trend.
Up in a particular product so.
I think probably in the five to seven range probably from total it all in.
So just just a bit below.
It's various things.
Got it.
Right.
Yes.
Particularly by the services because gross trend I just want to verify.
To.
Reiterate there are there is some benefit to exposure underlying exposure trends going on to kind of nets out so.
Net of that exposure trend I'd say, it's probably closer to 46.
Okay that makes sense. Thank you.
The next question comes from Casey Alexander of Compass point. Please go ahead.
Yes.
Hi, good morning.
One question.
Given the.
Extraordinarily low loss ratio for the quarter oftentimes.
The company has a little bump up in expenses for bonus accruals for profitable underwriting, but it didn't seem to be the case this quarter or is that just because it's a little early in the year and you wait to see how the year develops or or or am I just off on that.
Yes.
As Todd Yes, I think you have components that are you're right from a from a combined ratio in <unk>.
Roy and Bill.
<unk> value growth was all play in.
Youre right from the standpoint of it if it's based on salary right and a lot of that is.
The later in the year it can be a little bit higher certainly, but the book value component and just look at what equity right minus $30 million versus plus 30 year ago, So was $60 million swing there. So.
So that will impact things that I think our retirement is probably up about $1 million, but if you go all the way through all of that.
It's probably about a point less in the first quarter on a combined ratio relative to last year, but is that book value growth components ways in there.
Mhm, Okay alright.
Alright, great. Thank you.
Secondly.
There was astounded blocked it out did you say that you expect the Bally Jim to close in the second quarter or the second half.
Second half.
Second half.
I think to me that when the original announcement was made it was kind of lined up for the second quarter is it delayed a little bit.
No.
The original announcement, our release said second half as well.
Okay alright, thank you.
Okay. That's all my questions. Thank you.
The next question comes from Mark Dwelle from RBC capital markets Mark Your line is open.
Yes, good morning.
Great I wont be very original I'm going to go back to some of the questions that have already been asked.
But let me start with a numbers kind of question you had gone through on the 13 points of the $13 million rather favorable development on property could you just talk through that again I couldnt write fast enough.
Sure, Yes on the property side, the $13 million that we talked about certainly is higher than what it was the larger portion of that is our marine book.
So that.
Really everything and that is shorter tail right from the property standpoint, but if you look at marine Thats, probably the most noticeable it was it was around $8 million favorable of that of that 13, and you're really going to get 19% to 21.
Those accident years with the higher amount of that in the most recent.
Accident year, so marine marine is going to develop pretty quickly.
As the actuary to review the study looked at case reserves paid losses in that type of thing.
Okay. Thank you that's helpful on that.
Going back to the Maui, Jim topic.
It.
Is it.
I know most investors are focused on capital return.
But woods.
Identifying and alternative.
Non insurance asset as a replacement.
Something thats on the table is it something youre examining at all and there is a meaningful income stream associated with Maui, Jim that.
We will obviously go away when the transaction closes.
Okay.
Yes.
Yes.
Mark.
So we consider all options I mean, we look at all the things.
But we're always looking for opportunities new revenue streams, whether they be insurance related or non insurance related if they are good business decisions and they fit within.
What we think adds value to our shareholders and it is in line with disciplined approach.
Yes.
It's just a hard.
Businesses are hard to find whether insurance youre not insurance businesses. So that are a good fit.
We're always looking though.
Hey, thanks.
Understood I Didnt figure you're going to go for a big reveal here to start for my question.
Yes, I guess I just wanted to I wanted to.
[laughter] I got my guys.
Not to be.
We did have an opportunity to buy the hotel that sits across the street from us and I think we've ruled that out.
Yes.
I don't know its premier since I stayed there, it's probably split pretty nice.
Okay.
Yes.
Anyway.
I just wanted to reiterate again I'd ask you.
To reiterate thank you.
You had mentioned that when the sale closes youll make some comment at that point as to what Youre, what youre thinking.
Or just.
Just want to make sure I heard that correctly.
I mean, that's our expectation after the close yes.
So.
Still a little daylight between here and there.
Good.
Got it.
Alright, thanks for that and then.
One also go back related to a couple of questions on.
The property book.
The growth there was obviously kind of found another gear after running twentyish percent last year to get up to 40%.
Most of that apparently was not.
Our rate driven so I guess I wanted to ask just to kind of.
Was the growth primarily new business was at organic growth by people, just having higher limits because property values have accelerated can you just maybe break down a little bit more of how you get from 7% pricing to 46% overall growth in the quarter.
Yes, so the overall property segment rate change was 7% within that part of the growth was from our hurricane exposure, which was a 17% rate increase and that's accelerating each month.
So thats a blended amount for the quarter.
Just some new exposure there, but a lot of that too is an increase in the value of the locations that we're ensuring so we don't count that as rate change that's pure exposure growth that is the location. We had last year. We havent again this year, but this year, it's worth maybe a $1 million more than it was last year. So that's driving some of that premium growth as well and that's true across the board with our.
Various property products, so whether it be E&S property division or marine or Hawaii, both each of those products.
Trying to value their location with care and considering legislation is doing to analyze exposure. So that's a chunk of the growth is exposure driven from the same building a last year perspective.
And then a portion is the rate and so like within marine we hope to be a positive rate changes we've been getting for about five or six years now ROE, which is great to see and also some exposure growth in Hawaii, as well, which I Didnt mentioned, because it's not moving the needle at a time, but we continue to be so focused on service that we're able to win more business each year, so really a combo.
So those three products.
Some exposure growth in terms of similar buildings and some new business.
But a lot of that.
Is right as well.
Are there any components of the property market that arent seen right.
Oh, I would say from the parts that we participate in and I would say no we were getting rate pretty much everywhere.
There could be property markets, we don't participate in that sort of thing.
Okay.
Thanks for the additional color and.
And good luck for the upcoming quarter.
Thank you. Thank you.
Yes.
The next question comes from Jamie Inglis from Philo Smith, Okay. Jamie. Please go ahead.
Thank you.
Hi, guys great quarter excellent job.
You have to have touch a couple of times on the results in the Marine book.
Good growth.
Good profitability.
Development sort of et cetera, what's going on within that book of business, particularly.
Talking about it so much right now I mean is it.
What's happening and where are you writing and what are you running thats, making et cetera.
Your line right now.
While the marine market is complicated.
<unk> had several years of some disruption a lot of that was driven by Lloyds pulling back with their prior results that were a bit challenging and so initially a couple of years ago that created an opportunity.
The marine industry overall.
<unk> struggled with sustaining profitability, but at RLI.
We require that our product groups focus on making underwriting profits that were around to pay claims later and be there for our brokers and so we really do the business a little bit different than the overall marketplace in terms of discipline and making sure that we.
Keep our rates moving in the right direction, we have a couple of products within that portfolio. So we have a large inland marine operational and also promotion.
Marine business as well.
Inland, we've really grown through some addition of underwriters that are focused on sub components of the inland.
Marketplace.
And each of them has a.
Quality book of business tight relationships with some producers.
Are very transparent as Rio will come up for example that I'll talk in advance with our producers to make sure that.
<unk> are set with regard to how that renewal is going to go there's a loss activity. If there seems to be more ray or evaluation questions. We'll go ahead and address that in advance of the renewal.
On the Ocean side similar story, we've had a little bit of loss activity on that side more so than the inland.
Address that through <unk>.
Changes in underwriting and in that book is looking more attractive now as well. So I don't know that Youll hear the same rate change and other marine operation limit our operations are all different.
All about what mix.
Type of product, we're focusing on what our mix of us versus others. For example, we all participate in offshore energy at the very challenging part of that marketplace.
So for US, it's just business as usual.
Doing what we do which is selecting risks and making sure we're charging enough to cover the exposure.
Okay, great. Thanks.
Got it.
Think about the last.
Few years rates have been up materially in many lines of business I am trying to get a sense of if you could speak to.
To what extent does that provide opportunities for you guys to write any of the new markets and lines of business whatever.
First is the obvious corollary, which is the competitors are seeing the same thing in there. They are seeing in our growing quickly how do you.
Navigate your way through that to the opportunity versus the competitive environment.
Well, we started off regardless, because we tend to have maybe a higher bar for results than our competitors.
So I would say, we navigated through really individual risk selection, we're focused on.
Really underwriting which is different than some other places where our underwriters are looking at the individual risks and understanding exposure and asking more questions sometimes than our peers and then knowing what rate we need to challenge and so our rate change doesn't always reflect what other people get because we're looking at it from what we need to have.
To be adequate for that particular exposure and that tends to add up to something.
But when rates are going up.
Life Science people are fixing their book.
Yes on the brokers start to shop business, and we get back to and look at some new business and we will look at that just like we do our renewals I think we need to make sure we understand the exposure on the charter right now.
Increasing rate environment and that indicates issues with other carriers that maybe we can take advantage of and you've probably seen some of that in our growth in the last year or two.
Are you looking at more opportunities in terms of new areas that you wanted to be in now than you were a year ago two years ago three years ago.
So this is Craig I mean, we're always looking for talented people individuals' teams.
That have underwriting expertise as I mentioned narrow and deep.
And also share our values and would thrive in our culture. That's the type of people we look forward.
We're not for everyone.
But we do constantly look.
For new teams of people that bring new expertise in those markets.
And we also try to push our own teams to look at Adjacencies I think to your point.
Are there other opportunities in those spaces, we push our folks to look at it I think.
At this point is just to be very careful don't get caught up in rate change.
Obviously, it could be a hesitation of business right now and if that's all we did habitation cyber liability we'd be reporting to you 100% rate increases right now.
Of course, if I was you.
I would always step back I'd say.
They needed a 100% how good were they before now.
Now sometimes that answer is because they don't have the capacity to do it and there is new in the past in the market, but a lot of times, they're doing it because they need the right. So you don't see typically large swings like that for us because we try to be more disciplined and walk away from places where.
There is no longer an opportunity.
I would be remiss not to mention that.
I mean, I think we're our underwriters bringing.
Something to bear probably better than average certainly in our industry is selection rate it's about selection.
I mean, we can't drive a market rate, we're not big enough like any company and insurance bases really big enough, even though they might say they can.
Ultimately, it's about selection is having good underwriters that know the business really well and know the risks really well and they can look at it.
New rates are down here, but this risk is still priced adequately for me to be able to make money on this account.
Offer the quality service and.
Our professional experience and risk management to the equation for the cost with the price that theyre going to pay so at the end of the day, it's about selection and all markets.
And our folks to stay pretty close to home, it's hard to push them into adjacencies, but.
So we're always looking for new teams.
We think we're a great home for people that are focused on underwriting profit theres any of them out there listening were taken applications.
No.
And that's what we're going to continue to do so.
Are there more of those guys.
Alright.
Are there more of those people available now than there were three years ago, you could make an argument that underwriting results today are as good as they've been in quite a long time for lots of companies not just you guys and if you were an underwriter or wherever and you had a good book of business now would be it wouldn't be at that time to move you could maintain the book of business.
I mean, you can make amit.
Better opportunities now that you've had in the past is that true or is that not necessarily true.
I mean, I think it's very individualized where the opportunities are I mean, a lot of it comes with disruption.
In the space it could be disruption in regards to who their new bosses as opposed to.
How the market is performing.
I mean, we're constantly looking and were constantly interviewing and talking to people.
But we have a high bar.
For for folks and sometimes.
I want to participate in that and sometimes they don't because theyre going to live or die based on their own results with how we compensate them.
And sometimes that's attractive to people, sometimes it's not.
Sometimes I'd rather go through more more money upfront so.
Im not going to pretend it's easy it's not easy to find people that are that are good fits but we do find them.
Don't happen every day, but they do happen and we constantly have a list of people that we're talking to a couple we're talking to right now so.
Okay.
Alright, Thanks, a lot good luck.
Thank you. Thank you.
As a reminder, Thats star one to ask a question.
Our next question comes from Meyer Shields with <unk>. Please go ahead.
Okay.
Great. Thanks.
Couple of very quick questions.
On property.
If we.
The catastrophe losses appropriately it seems like there's a little bit of underlying loss ratio increase on a year over year basis does that mix does that took place that we're seeing in home repair.
Alright, sorry building okay.
I think.
Little bit we had some later reported losses in the quarter. So I think its timing on some of that stuff in there I mean, I don't think theres any sort of trend that we have you're right from a materials perspective, I think even when we go back to last year that we talked about that either extended.
Or increase inflation on the material front that is affecting.
Losses, certainly that Jim talked about right to the increased values that are that are <unk>.
<unk> factored in and helps on the revenue side, but I don't think theres anything really underlying.
Push that up.
A few points.
Okay perfect is there any way.
Yes.
Ballpark King a P&L given the growth in Florida that you've talked about today.
Well I can tell you that.
David on January 1st buy more reinsurance so we've got a 100 million more limits.
<unk>.
Power, which covers both hurricane and earthquake exposure so the PMO.
Basis, we haven't moved the needle too much and.
And in fact, we continue to look for additional support as we continue to grow in that space. So.
While the gross numbers that are a bit the net number is fairly fairly constant.
I mean, I think we always we always try to make sure.
Thank you.
Okay.
Alright.
Go ahead.
No no no.
Craig I think what he was talking about.
The containment strategy for reinsurance.
Let me just always buy to make sure. We're covered the 250 ml or more so let me just say no.
I think that we disclosed that before but that's what we try to make sure. We're always contained obviously thats rating the rating agency implications if you don't anyway. So.
Okay. Okay, perfect and then just final question.
So the equity in earnings from Prime was down on a year over year basis, and I was hoping you could talk to that.
Yes. This is Todd I think there was a little decline on the underwriting income front this quarter.
So I mean, I think we're monitoring that there still is revenue growth occurring but you can get a little change in any given quarter to quarter comparison, so we're keeping an eye on that.
Okay perfect. Thanks, so much.
Yes.
You bet.
So there are no further questions I will now turn the conference over to Mr. Craig Kliethermes for some closing remarks.
Well, thanks, everyone for your questions and interest in ROI. This quarter's results reflect.
Customer focused hallmark underwriting discipline and exceptional risk management.
We will continue to invest in product strategies, where we can add value to our customers and our shareholders.
Thats what owners do.
Talk to you all next quarter. Thank you.
Ladies and gentlemen, if you wish to access the replay for this call you may do so by dialing one 806 813 non for series three with an OID of 2616.
Those numbers again are 1866, <unk> 393 with access code 261640.
Our conference for today, Thank you for participating and have a nice day all parties may now disconnect.
Okay.