Q4 2023 James River Group Holdings Ltd Earnings Call
Operator: www.verbalink.com ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good morning, my name is Demi and I will be your conference operator today. At this time, I would like to welcome everyone to James River Group's fourth quarter, 2023 earnings call. All lines have been placed on mute to prevent any background noise.
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Brett Shirreffs: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press the star 1. I would now like to turn the conference over to Brett Shirreffs. Senior Vice President, please go ahead. Good morning everyone and welcome to the James River Group fourth quarter 2023 earnings conference call. During the call, we will be making forward-looking statements. These statements are based on current beliefs, intentions, expectations, and assumptions that are subject to various risks and uncertainties, which may cause actual results to differ materially. For a discussion of such risks and uncertainties, please see the cautionary language regarding forward-looking statements in yesterday's earnings release and the risk factors in our most recent Form 10-K and other reports and filings we have made with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.
Brett Shirreffs: In addition, during this presentation, we may reference non-GAAP financial measures such as adjusted net operating income, underwriting profit, tangible equity, tangible common equity, and adjusted net operating return on tangible common equity. Please refer to our earnings press release for a reconciliation of these numbers to GAAP, a copy of which can be found on our website at www.jrvrgroup.com. Lastly, unless otherwise specified, for the reasons described in our earnings press release, all underwriting performance ratios referred to are for our continuing operations and business that is not subject to retroactive reinsurance accounting for lost portfolio transactions. I will now turn the call over to Frank Dorazio, Chief Executive Officer of James River Group. Thank you for the introduction, Brett.
Frank N. DOrazio: Good morning, everyone, and welcome to our fourth quarter 2023 earnings call. I'm pleased to be joining you today to provide additional color on our fourth quarter and full year 2023 results, in addition to providing some commentary on market conditions and the future outlook for James River. Before we get into the results for both the full year 2023 as well as the fourth quarter, I would like to take a moment to briefly comment on the decision made by the James River Board of Directors last November to explore strategic alternatives. Over the last three years, we have made substantial progress repositioning James River around our core strengths while extinguishing legacy issues in our commercial auto and casualty reinsurance portfolios. The Board of Directors and the management team do not believe that this progress has been adequately reflected in the company's current valuation.
Danielle: Good morning, My name is Danielle and I will be going to change upgraded today at this time I would like to welcome everyone to change to a very good first <unk>.
Frank N. DOrazio: After thoughtful consideration, the Board, with the assistance of our advisors, has initiated an exploration of potential strategic alternatives, and that process is currently active and ongoing. To that end, the Board will consider a wide range of options for the company, including, among other things, a potential sale, merger, or other strategic transaction. However, there can be no assurance that this process will result in the company pursuing a particular transaction or other strategic outcome.
[noise] lines have been placed on you to prevent any background nice after just do you guys feel much there will be a question and answer session. If.
Danielle: If you would like to ask a question. During this time simply press chart, followed by the number one on your telephone keypad. If you would like to withdraw your question again breakfast started one.
Speaker Change: I would like to turn the conference over to Brad Shrek Senior.
Brad Shrek: Senior Vice President. Please go ahead.
Frank N. DOrazio: James River has not set a timetable for completion of this process, and it does not intend to disclose further development unless and until it determines that further disclosure is appropriate or necessary. Now, turning to our results. 2023 was a transformational year for James River, a year in which we executed on a number of meaningful strategic priorities to position the organization for future long-term success. I'd like to take a few moments to summarize a few of these key developments. First, following the sale of the renewal rights of our Individual Risk Workers' Compensation business to the Immensa Group, our specialty admitted segment is now prospectively focused purely on fronted programs. We also appointed a new President and CEO of our Specialty Admitted Segment, Bill Bowman, who has led our Fronted Programs business since 2019.
Brad Shrek: Good morning, everyone and welcome to the James River Group fourth quarter 2000, twenty-three earnings conference call.
Brad Shrek: During the call, we will be making forward looking statements.
Brad Shrek: Statements are based on current beliefs intentions expectations and assumptions that are subject to various risks and uncertainties, which may cause actual results to differ materially.
Brad Shrek: For a discussion of such such risks and uncertainties. Please see the cautionary language regarding forward looking statements and yesterday's earnings release.
Brad Shrek: Factors of our most recent Form 10-K and other reports of violence, we have made with the Securities and Exchange Commission.
Brad Shrek: We do not undertake any duty to update any forward looking statements.
Brad Shrek: In addition, during this presentation, we may reference non-GAAP financial measures such as adjusted net operating income.
Brad Shrek: Alrighty profit tangible equity tangible common equity and adjusted net operating return on tangible common equity.
Frank N. DOrazio: Bill is a seasoned executive in the programs and MGA space who is well positioned to lead the division and continue to find profitable growth opportunities for the segment. Second, we announced the sale of our Casualty Reinsurance Business and JRG Re, our Bermuda domiciled Reinsurance Company, to Fleming Holdings in November. We have now received all necessary regulatory approvals, and we expect the transaction to close in the first quarter. Moving forward, the transaction will allow us to focus exclusively on ENS and fronting.
Brad Shrek: Please refer to our earnings press release for a reconciliation of these numbers to get a copy of which can be found on our website at www Dot J R. V R groups Dot com.
Lastly, unless otherwise specified for the reasons described in our earnings press release, all underwriting performance ratios referred to our for our continuing operations and Davis that is not subject to retroactive reassurance accounting for last portfolio transfers.
Frank N. DOrazio: Two businesses where we have considerable scale and brand recognition to take advantage of market opportunities. The transaction also notably removes any further exposure to future reserve volatility from the legacy Cassidy Reinsurance business. Third, we expanded our product offering in our E&S segment with the introduction of our Management Liability Division, led by Todd Sutherland. While we plan to take a patient approach in building out this underwriting division, we're excited to continue to diversify our product offering, expanding our value proposition to our distribution partners. Lastly, we continue to attract very experienced talent to our executive team and board of directors, including the addition of Jim McCoy, who took over as chief actuary at the beginning of this year, and Dennis Langwell, who joined the board in April of 2023 after a very successful career, both as a former CFO and then segment leader of a large business unit at Liberty Mutual. Jim McCoy has more than 25 years of actuarial experience, with an extensive casualty background and prior chief actuary experience.
Speaker Change: I will now turn the call over to <unk>, Chief Executive Officer of James River Group.
Speaker Change: Thank you for the introduction bread good morning, everyone and welcome to our fourth quarter of 2023 earnings call.
Speaker Change: I'm pleased to be joining you today to provide additional color on our fourth quarter and full year 2000 twenty-three results.
Speaker Change: In addition to providing some commentary a market conditions in the future outlook for James River.
Speaker Change: Before we get into the results for both the full year 2023, as well as the fourth quarter.
Speaker Change: I would like to take a moment to briefly comment on the decision made by the James River Board of Directors last November to explore strategic alternatives.
Speaker Change: Over the last three years, we have made substantial progress repositioning James River around our core strengths.
Speaker Change: [noise] extinguishing legacy issues in our commercial auto and casualty reinsurance portfolios.
Speaker Change: Directors and the management team. However, do not believe that this progress has been adequately reflected in the company's current valuation.
Speaker Change: After thoughtful consideration the board with the assistance of our advisers has initiated an exploration of potential strategic alternatives and.
Speaker Change: And that process is currently active.
Speaker Change: Ongoing.
Speaker Change: To that end the bordwell considered a wide range of options for the company, including among other things a potential sale merger or other strategic transaction.
Frank N. DOrazio: He joined us in August as a Chief Actuary at our E&S segment to ensure a smooth transition process following the retirement of Dave Jeline. We've added considerably to the depth of our actuarial and enterprise risk resources over the last few years in an effort to further improve underwriting and performance monitoring, serving us well today and in the future. We are now three years into what has been a significant turnaround and repositioning of James River around its core strength.
Speaker Change: There can be no assurance that this process will result in the company pursuing a particular transaction or other strategic outcome.
Speaker Change: James River has not set a timetable for completion of this process.
Speaker Change: And it does not intend to disclose further developments unless and until it determines that further disclosure is appropriate or necessary.
Speaker Change: Now turning to our results 2000, twenty-three with a transformational year for James River, a year in which we executed on a number of meaningful strategic priorities to position the organization for future long term success.
Frank N. DOrazio: Market conditions have continued to provide tailwinds for our business as we have executed on these initiatives and gained scale across our platform. Before we dive into our performance for the quarter, I'd like to first share some financial highlights for the full year. Our flagship E&S division ended 2023 with greater than $1 billion of gross written premium growing by 9.4% over the prior year. This is a milestone we had set out to achieve at the beginning of the year, and we're excited to have met the goal.
Speaker Change: I'd like to take a few moments to summarize a few of these key developments.
Speaker Change: First following the sale of the renewal rights of our individual risk workers compensation business to the mentor groups are specialty admitted segment is now prospectively focus purely on fronted programs.
Speaker Change: We also appointed a new president and CEO of our specialty admitted segment Bill Bowman, who has led our fronted programs business since 2019.
Speaker Change: <unk>, a seasoned executive and the programs and MGA space, who is well positioned to lead the division and continue to find profitable growth opportunities for the segment.
Speaker Change: Second we announced the sale of our casualty reinsurance business and J R. G re R. Bermuda domiciled reinsurance company to Fleming Holdings in November.
Speaker Change: We have now received all necessary regulatory approvals and we expect the transaction to close in the first quarter.
Frank N. DOrazio: During the fourth quarter, the segment experienced its strongest submission growth since the first quarter of 2020, with both new and renewable submissions showing meaningful advances. Our E&S segment produced $54 million of underwriting profit and achieved a 91.1% combined ratio for 2023. We continue to see strong momentum in our E&S business and achieved rate increases of 10% for the full year. In our Specialty Admitted segment, fronting and program business increased 10% in 2023, excluding the impact of workers' compensation. Overall, we grew gross written premiums by 2.3% despite the significant repositioning of the portfolio. The combined ratio for the segment was 95.9% for the full year.
Speaker Change: Moving forward the transaction will allow us to focus exclusively on E N S and fronting.
Speaker Change: Two businesses, where we have considerable scale and brand recognition to take advantage of market opportunities.
The transaction also notably removes any further exposure to future reserve volatility from the legacy Cassidy reinsurance business.
Speaker Change: Third we expanded our product offering in our E&S segment with the introduction of our management liability Division led by Todd Sutherland.
Speaker Change: Plan to take a patient approach and building out this underwriting division.
Speaker Change: We're excited to continue diversify our product offering expanding our value proposition to our distribution partners.
Speaker Change: Lastly, we continue to attract very experienced talent to our executive team and board of directors, including the addition of Jim Mccoy, who took over as chief actuary at the beginning of this year.
Speaker Change: Dennis Langwell, who joined the board in April 2023, after a very successful career, both as a former CFO and then segment leader of a large business unit Liberty mutual.
Speaker Change: Jim Mccoy is more than 25 years of actuarial experience with an extensive casualty background and prior chief actuary experience he.
Frank N. DOrazio: Overall, gross written premium from continuing operations ended 2023 at $1.5 billion, an increase of 6.9% over the prior year. Net earned premium grew by 12.4%, reflecting changes in retention across our business as we produced a combined ratio of 96.5%. Lastly, our investment performance was strong in 2023, with the portfolio producing a total return of 7.1% and $84 million of net investment income from continuing operations. Investment income continues to show strong growth and contribute to the bottom line as we benefit from higher interest rates.
Speaker Change: He joined US in August as a chief actuary at our E&S segment to ensure a smooth transition process. Following the retirement of Dave Julie we've.
Speaker Change: We've added considerably to the depth of our actuarial an enterprise risk resources over the last few years in an effort to further improve underwriting and performance monitoring.
Speaker Change: Serving as well today and in the future.
Speaker Change: We are now three years into what has been a significant turnaround and repositioning of James River around its core strengths.
Speaker Change: Market conditions have continued to provide tailwinds for our business is we've executed on these initiatives and gain scale across our platform.
Speaker Change: Before we dive into our performance for the quarter.
Speaker Change: I'd like to first share some financial highlights for the full year.
Speaker Change: Our flagship E&S division and of 2023 with greater than $1 billion of gross written premium growing by 9.4% over the prior year.
Frank N. DOrazio: While we are proud of the strides we have made during 2023 to continue to advance the organization and position it for future success, we are certainly disappointed that we did not achieve our return expectations for the year. However, we believe the actions we have taken will produce more consistent returns going forward, and Sarah will speak to our outlook for 2024 in just a few minutes. Now turning to our fourth quarter results, we reported an adjusted net operating income of $12.4 million, or $0.33 per share.
Speaker Change: This is a milestone we had set out to achieve at the beginning of the year and we're excited to have met the goal.
Speaker Change: During the fourth quarter the segment experience, it's strongest submission growth since the first quarter of 2020.
Speaker Change: With both new and renewable submission showing meaningful advancement.
Speaker Change: Our <unk> segment produced $54 million of underwriting profit and achieved to 91.1% combined ratio for 2023.
Speaker Change: We continue to see strong momentum and our E&S business and achieved rate increases of 10% for the full year.
Speaker Change: And our specialty admitted segment fronting and program business increased 10% in 2000 twenty-three excluding the impact of workers compensation. Overall, we grew gross written premiums by 2.3%. Despite the significant repositioning of the portfolio that.
Frank N. DOrazio: Our operating return on tangible common equity, XAOCI, was 10.2% for the quarter. In our E&S segment, gross written premiums increased 12.1%, with most of our underwriting divisions reporting solid growth. Our Manufacturers and Contractors, General Casualty, Excess Casualty, and Energy Divisions led the segment in this category for the quarter. Submission activity remained robust and continued to accelerate from recent quarters. As previously highlighted earlier, submissions increased 14% over the prior year quarter, an encouraging sign for both our new and renewal business. Several of our divisions, such as General Casualty, Manufacturers and Contractors, Sports and Entertainment, and Excess Casualty, experienced the strongest submission growth rate we have seen in the last four to five years, reflecting the strong set of opportunities that we're seeing in the market. Pricing conditions also remain firm as we experienced renewal rate increases of 11% in the fourth quarter. Pricing across our casualty divisions was up 10.5% in the period as casualty rates have continued to strengthen throughout the year.
Speaker Change: Combined ratio for the segment was 95.9% for the full year.
Speaker Change: Overall gross written premium from continuing operations ended 2023 at $1.5 billion, an increase of 6.9% over the prior year network premium grew by 12.4%, reflecting changes and retention across our business is reproduced combined ratio of 90.
Speaker Change: 6.5%.
Lastly, our investment performance was strong of 2023 with a portfolio of producing a total return of 7.1%.
Speaker Change: 84, and $84 million of net investment income from continuing operations.
Speaker Change: Investment income continues to show strong growth and contributions to the bottom line is we benefit from higher interest rates.
Speaker Change: While we are proud of the strides we've made during 2023 to continue to advance your organization and positioning for future success. We are certainly disappointed that we did not achieve a return expectations for the year.
Speaker Change: We believe the actions we have taken will produce more consistent returns going forward and Sarah will speak to our outlook for 2024, and just a few minutes.
Sarah: Now turning to our fourth quarter results.
Sarah: We reported adjusted net operating income of $12.4 million or 33 cents per share.
Frank N. DOrazio: Rate increases remain broad-based, with the majority of our underwriting divisions achieving mid-single-digit to low-double-digit increases during both the quarter and the full year, with no sign of weakening. Most importantly, rate increases have continued to come in significantly better than the assumptions in our loss picks and our view of the expected loss trend. Turning to underwriting performance, the E&S combined ratio was 94.2% during the fourth quarter, and underwriting profit totaled $8.9 million. Results for the quarter included $25 million of adverse reserve development related to accident years 2015-2020 in the general casualty line.
Sarah: Are operating return on tangible common equity Xa OCI was 10.2% for the quarter.
Sarah: In our E&S segment gross written premiums increased 12.1% with most of our underwriting divisions reporting solid growth.
Sarah: Our manufacturers and contractors general casualty.
Sarah: <unk> casually and energy divisions led the segment in this category for the quarter.
Sarah: Submission activity remain robust and continue to accelerate from recent quarters.
Sarah: As previously highlighted earlier submissions increased 14% over the prior year quarter, an encouraging sign for both our new and renewable business.
Sarah: Several of our divisions, such as general Cassidy manufacturers and contractors sports and entertainment and excess casually experienced the strongest submission growth rate, we have seen in the last four to five years.
Sarah: Reflecting the strong set of opportunities that we're seeing in the market.
Frank N. DOrazio: This is an area where we have recently observed some increased severity, like much of the rest of the industry, and determined that it was prudent to add to our reserve base in those years. I would also like to take a few moments to provide additional detail on the reserving actions that we have taken this quarter, as well as the pricing and underwriting actions that we have implemented over the last few years. From 2020 to 2023, we achieved annual rate increases of 10% or better, compounding to more than 55% over this period, certainly ahead of our view of lost cost trends, which we have believed to be in the mid to high single digits over the period. In 2023, the effective rate change we recorded was several hundred basis points over the rate assumption we built into our business plan for the year.
Sarah: Pricing conditions also remained firm as we experienced renewal rate increases of 11% in the fourth quarter.
Sarah: Pricing across our casualty divisions was up 10.5% in the period is casualty rates have continued to strengthen throughout the year.
Sarah: Rate increases remain broadbased with a majority of our underwriting divisions, achieving mid single digit to low double digit increases during both the quarter and the full year with no sign of weakening <unk>.
Sarah: Most importantly <unk>.
Sarah: Rate increases have continued to come in significantly better than the assumptions and our last pics and our view of expected loss trend.
Sarah: Turning to underwriting performance BNS combined ratio was 94.2% during the fourth quarter and underwriting profit totaled $8.9 million <unk>.
Sarah: Results for the quarter included $25 million of adverse reserved development related to accident years 2015 to 2020 and the general casually line.
Sarah: This is an area, where we have recently observed some increased severity like much of the rest of the industry and determined that it was prudent to add to a reserve base in those years.
Frank N. DOrazio: We believe that our conservative loss pick assumption allowed us to build additional reserve strength into our 2023 results. While 2024 is just getting started, so far, the renewal rate recorded in January was comfortably in the double-digit range. We have also made meaningful underwriting changes throughout the portfolio over the last three years, especially in general casualty. We have non-renewed our fraternity and sorority portfolio, significantly reduced our restaurant and hotel motel books, introduced meaningful sublimits to assault and battery exposed risks, as well as firearm exclusions in our General Casualty Book, and raised rates substantially in certain parts of the U.S., including the Southeast.
I would also like to take a few moments to provide additional detail on the reserving actions that we've taken this quarter as well as the pricing and underwriting actions, we have implemented over the last few years.
Sarah: From 2020, 2023, we achieved annual rate increases of 10% or better cause.
Sarah: Compounding to more than 55% over this period.
Sarah: Certainly ahead of our view of lost cost trends, which we are believed to be in the mid to high single digits over the period.
Sarah: In 2023.
Sarah: Right change, we recorded with several hundred basis points over the rate assumption, we built into our business plan for the year.
Sarah: We believe that our conservative loss pick assumption allowed us to build additional reserve strength into our 2000 twenty-three results.
Sarah: While 2024 is just getting started so far renewal rate recorded in January was comfortably in the double digit range.
Frank N. DOrazio: We have done this by adding substantial performance monitoring and underwriting oversight across our business while being quick to take action. However, despite making these significant changes to our underwriting appetite, we had not reflected the benefit of taking such actions in our expected loss ratios for 2023, building further reserve strength in the accident year. And in spite of these changes, we've continued to grow prudently and profitably with meaningful rates. Under the leadership of our outgoing Chief Factory, Dave Jeline, and that of our data-driven actuarial group, we undertook a deep and comprehensive actuarial review late in the year at the same time that our internationally recognized third-party actuarial consultants' reviews were being completed. Our actuarial study added additional frequency and severity methods that directly considered loss trends, and in many instances, we used the company's own experience in determining these trend factors. In our analysis, we investigated the presence of social inflation using methodologies from published actuarial research papers and have incorporated the findings in our assumption.
Sarah: We have also made meaningful underwriting changes throughout the portfolio over the last three years, especially in general casually we.
Sarah: We have nonrenewed, our fraternity and sorority portfolio significantly reduced our restaurant and hotel motel books.
Sarah: Introduce meaningful sublimits to assault and battery expose risks as well as firearm exclusions in our general casually book.
Sarah: And raised rates substantially in certain parts of the U S, including the southeast.
Sarah: We have done this by adding substantial performance monitoring and underwriting oversight across our business.
Sarah: Being quick to take action.
Sarah: Despite making these significant changes to our underwriting appetite, we had not reflected the benefit of taking such actions and are expected loss ratios for 2000 twenty-three bill.
Sarah: Building further reserve strength in the accident year.
Sarah: And in spite of these changes we've continued to grow prudently and profitably with meaningful right.
Sarah: Under the leadership of our outgoing Chief Actuary, Dave Jolene.
Sarah: And that of our data driven actuarial group, we undertook a deep and comprehensive actuarial review late.
Sarah: Late in the year at the same time that are internationally recognised third party actuarial consultants reviews were being completed.
Sarah: Our actuarial study added additional frequency and severity methods that directly considered loss trends and in many instances we use the company's own experience in determining these trend factors.
Frank N. DOrazio: As part of the review, we found that in our E&S segment, our general casualty reserves in the largely soft market years of 2015 to 2020 were not as robust as we thought they should be due to an increased frequency of severity. However, at the same time, both our internal actuaries and our independent third-party actuaries had similar favorable views of our recent accident years as we continue to book higher loss picks while attaining rates in excess of loss trends. The results of these years have been encouraging, as our 2023 accident-year loss ratio of 61.9% is higher than both our internal actuarial indications as well as our third-party independent actuarial consultants' view. Overall, we believe that the changes we have made to the portfolio, both in terms of rate and targeted underwriting actions, have created a more profitable book going forward and left us confident in our overall reserve adequacy.
Sarah: In our analysis, we investigated for the presence of social inflation using methodologies from publish actuarial research papers and have incorporated the findings in our assumptions.
Sarah: As part of the review.
Sarah: We found that in our E&S segment, our general casually reserves and the largely soft market years of 2015 to 2020 were not as robust as we thought they should be due to increased frequency of severity.
Sarah: However at the same time, both our internal actuaries and are independent third party actuaries had similar favorable views of a recent accident years as we continue to book higher loss picks while attaining rate in excess of loss trend.
Sarah: The results of these years have been encouraging as our 2000 twenty-three accident ear loss ratio of 61.9 per cent.
Is higher than both our internal actuarial indications as well as our third party independent actuarial as consultants view.
Sarah: Overall, we believe that the changes we have made to the portfolio. Both in terms of rate and targeted underwriting actions have created a more profitable book going forward and leave as confident in our overall reserve adequacy.
Frank N. DOrazio: As I mentioned before, E&S marking additions remain attractive, characterized by strong rate increases in excess of expected loss trends, meaningful new and renewal submission growth, and rational competition. We believe 2024 will continue to provide robust opportunities for profitable growth. Turning to our Specialty Admitted Segment, During the fourth quarter, we grew fronting and program gross premiums by 12.5%, excluding the impact of workers' compensation. Overall, gross premiums for the segment declined 1.7% due to lower workers' compensation premiums compared to the prior year quarter.
Sarah: As I mentioned before DNS market conditions remain attractive characterized by strong rate increases in excess of expected loss trend meaning.
Sarah: Meaningful new and renewal submission growth and rational competition.
Sarah: We believe 2024 will continue to provide robust opportunities for profitable growth.
Sarah: Turning to our specialty admitted segment.
Sarah: During the fourth quarter, we grew fronting and program gross premiums by 12.5% <unk>.
Sarah: Excluding the impact of workers compensation.
Sarah: Overall gross premiums for the segment declined 1.7 per cent due to lower workers compensation premiums compared to the prior year quarter.
Frank N. DOrazio: Our new and existing programs continue to gain scale and benefit from positive rate changes in the market. Underwriting profit for the 4th quarter was $2.2 million with a combined ratio of 92.2%. To summarize, 2023 was a year of executing on our strategic priorities and Positioning the Organization for the Future. I'm pleased with the progress we continue to achieve, which could not be possible without the dedicated employees of James River. We remain focused on our core strengths and are well positioned to take advantage of attractive market conditions throughout 2024. As a bottom-line focused organization, we will continue to deploy our capital and resources where we can achieve consistent and attractive returns for shareholders. And with that, I'll turn the call over to Sarah Doran. Thanks very much, Frank, and good morning everyone, and thank you for joining us.
Sarah: Our new and existing programs continue to gain scale and benefit from <unk> from positive rate change in the market.
Sarah: Underwriting profit for the fourth quarter was $2.2 million was a combined ratio of $92 2%.
Sarah: To summarize 2000 twenty-three was of your of executing on our strategic priorities and.
Sarah: And positioning the organization for the future I'm.
Sarah: I'm pleased with the progress we continue to achieve.
Which could not be possible without the dedicated employees of James River.
Sarah: We remain focused on our core strengths.
Sarah: And are well positioned to take advantage of attractive market conditions throughout 2024.
Sarah: The bottom line focused organization, we will continue to deploy our capital and resources, where we can achieve consistent and attractive returns for shareholders.
Sarah: And with that I'll turn the call over to Sarah door.
Sarah: Thanks, very much Frank.
Sarah: Morning, everyone and thank you for joining us this morning.
Sarah Casey Doran: Our accounting and presentation generally are a bit different this quarter given that we are reporting our former casualty reinsurance segment as discontinued operations and held for sale. As Frank mentioned, all regulatory approvals for the sale are in hand, and we expect to close the sale of the JRG Re entity which supported the segment shortly. As part of that, all income and loss from this segment, including investment income, flows through discontinued operations for all periods presented.
Sarah: Our accounting and presentation generally is isn't different this quarter given that we are reporting our former casually reinsurance segment is discontinued operations and held for sale.
Frank mentioned, all regulatory approvals for the Sandler and hand, and we expect to close the sale of the J a G rated entity, which supported the segment shortly.
Sarah: As part of that all income and loss from this segment, including investment income flows through discontinued operations for all periods presented.
Sarah Casey Doran: More importantly, as we move the organization forward, income from continuing operations is representative of the ENS and specialty-admitted insurance businesses, which remain. For the fourth quarter, we're reporting adjusted net operating income of $0.33 per share compared to $0.44 per share in the prior year quarter. Tangible book value per common share was $9.05 at year end, and adjusted for dividends has decreased about 2.7% from the start of the year.
Sarah: More importantly, as we move the organization forward income from continuing operations is representative of the N S and specialty.
Sarah: Businesses, which remain.
Sarah: For the fourth quarter were reporting adjusted net operating income of 33 cents per share compared to 44 cents per share in the prior year quarter.
Sarah: Tangible book value per common share was $9.05 at year end and adjusted for dividends has decreased about 2.7% from the start of the year.
Sarah Casey Doran: The decline is entirely due to the loss on sale and loss from discontinued operations, which included a $53.2 million loss, reclassifying the Fixed Maturity Security on the JRG rebalance sheet as held for sale. We believe we took a decisive move in addressing our general casualty reserves. As Frank highlighted, we've made significant underwriting changes to the book since 2020 and have added 37% rate compounded since 2021, meaningfully in excess of our plan and trend. Our business is small and medium account focused and without meaningful concentration, and we believe our E&S current accident or loss ratio for 2023 of 61.9% is a healthy loss pick that may not fully reflect the level of rate increases we accomplished in 2023, and Access to our Pricing Our Group Combined Ratio was 98.1% for the quarter and 96.5% for the year.
Sarah: The client is entirely due to the loss on sale in Las Frumkin discontinued operations.
Sarah: Which included at 53.2 million dollar loss to reclassify a fixed maturity securities on the <unk> balance sheet as held for sale.
Sarah: We believe we took a decisive move in addressing our general casualty reserves as Frank highlighted we've made significant underwriting change it to the book since 2020 and have added 37% rate compounded of 2021 meaningfully in excess of our plan and trends.
Sarah: Business of small and medium account focused and without meaningful concentrations.
Sarah: R E N S current accident or loss ratio for 2023, 61.9% is a healthy loss Peck.
Sarah: Not fully reflect the level of rate increases we accomplished in 2023.
Sarah: In excess of our pricing assumptions and as Frank mentioned.
Sarah: Darn all third party actuarial views support disbelief.
Sarah: Our group combined ratio with 98.1% for the quarter and $96 five per cent for the year.
Sarah Casey Doran: While not what we set out to accomplish return-wise and well below our expectations for the year ahead, our business is well positioned. Strong Growth Amid Portfolio Management, supported by RACE, scale, and an efficient reinsurance structure. Our Consolidated Loss Ratio increased 7.5 points quarter over quarter, the majority or 5.5 points due to the adverse development in E&S and the balance due to the $4.1 million of reinstatement premiums we experienced during the fourth quarter. Our expense ratio across the group for the 4th quarter was an efficient 24.2%, an increase of 2.2 points over the prior year quarter but an improvement of 2.2 points over the 3rd quarter of 2018. For the full year, our expense ratio was 26.6% compared to 23.6% for the full year 2020.
Sarah: Not what we set out to accomplish return wise and well below our expectations for the year ahead, our business as well positioned.
Sarah: We've seen strong growth in that portfolio management supported by rate scale and inefficient reinsurance structure.
Sarah: Our consolidated loss ratio increased seven and a half points corner over corner, the majority or five and a half points.
Sarah: Adverse development Indian S and the balance due to the 4.1 million of reinstatement premiums we experienced during the fourth quarter.
Sarah: Our expense ratio across the group for the fourth quarter with an efficient 24.2 per cent.
Sarah: An increase of 2.2 points over the prior year quarter, but an improvement up to two points over the third quarter of 2023 for.
Sarah: For the full year, our expense ratio is $26, 6% compared to 23.6% for the full year 2022.
Sarah Casey Doran: The increase over the prior year is partially due to increased compensation at ENS, where we added staffing to support growth, and also due to the change in our reinsurance treaty structure at ENS. At our mid-summer 2023 E&S reinsurance renewal, we changed our structure to better mitigate volatility and also to remove the reinstatement premium feature going forward. We purchased a quota share across most of the ENS divisions, as well as retained our excess of loss structure.
Sarah: Increase over prior year is partially due to increased compensation that E. N S, where we added staffing to support growth and also due to the change in our reinsurance treaties structure at E N S.
Sarah: At our mid summer 2000, twenty-three E&S reinsurance renewal, we changed our structure to better mitigate volatility and also to remove the reinstatement premium feature going forward.
Sarah: Purchased a quota share across most of the E&S divisions as well as retain our access it lost structure.
Sarah: This is pushed down our attention and E&S to 58.5% for the year and $53, 3% for the quarter.
Sarah Casey Doran: This has pushed down our retention in E&S to 58.5% for the year and 53.3% for the quarter. Backing out the reinstatement premium for the year and quarter, E&S retention would be 60.1% and 54.8% respectively. For the last six months of 2023, subsequent to the mid-year changes in our reinsurance structure, our net retention for E&S was 54.8% or 55.6%, including the impact of the reinstatement premium in the fourth quarter. Most importantly, we believe that a net retention rate in this 55-60% range is a reasonable run rate going forward. Regarding investments, we recorded record net investment income of $25.6 million from continuing operations during the fourth quarter. NII grew 67% from the prior quarter and 17.4% from the sequential quarter.
Sarah: Backing out the reinstatement premium for the year and a quarter.
Sarah: N S retention would be 61%.
Sarah: 54.8% respectively.
Sarah: For the last six months of 2023 subsequent to the mid year changes in our reinsurance structure, our net for attention for E&S is 54.8% or 55.6%, including the impact the reinstatement premiums in the fourth quarter.
Sarah: Most importantly, we believe that a net retention rate and S. 55% to 60% range is a reasonable run rate going forward.
Sarah: Regarding investments, we recorded record net investment income of $25 $6 million from continuing operations during the fourth quarter.
Sarah: And I I grew 67% from the prior year quarter and $17 four per cent from the sequential quarter.
Sarah Casey Doran: Reinvestment rates in our core fixed income portfolio have come down since the 4th quarter but remain attractive in the mid to low 5% range. We expect to continue to have the opportunity to invest operating and portfolio cash flow at yields in excess of our average book yield for the fourth quarter, which was 4.5%. We saw significant unrealized gains across asset classes during the fourth quarter, which contributed to a total return of 5.3% for the portfolio. As Frank mentioned, for the full year, we achieved a total return of 7.1%.
Sarah: Reinvestment rates and our core fixed income portfolio have come down since the fourth quarter, but remain attractive in the mid to low five per cent range.
We expect to continue to have the opportunity to invest operating in portfolio cash flow at yields in excess of our average book yield for the fourth quarter, which was 4.5%.
Sarah: We saw significant unrealized gains across asset classes during the fourth quarter, which contributed to a total return five 3% for the portfolio.
Sarah: Frank mentioned for the full year, we achieved a total return of 7.1% a strong results in a volatile market.
Operator: Strong Results in a Volatile Market. A few comments about our outlook for 2024. We believe that we are very well positioned for a high team return on Tangible Common Equity and expect to continue to benefit from robust E&S conditions, in particular as we have over the last few years. We believe following the strategic actions of 2023 that we are much better positioned strategically with our focus on two attractive scaled insurance. I believe our balance sheet is well positioned to support continued attractive growth, and with our continued portfolio management, strong rate environment, and submission growth Regarding our group expense ratio, we expect it to be closer to the 26.6% we delivered in 2023 due to our business mix and our Changes in Retention Strategy.
Sarah: A few comments about our outlook for 2024.
Sarah: We believe that we're very well positioned for high teen return on tangible common equity.
Sarah: We expect to continue to benefit from robust S conditions in particular as we have over the last few years. We believe following the strategic absent actions of 2023 that we are much better positioned strategically with our focus on too attractive scaled insurance businesses.
Sarah: Leave our balance sheet is well positioned to support continued attractive growth and.
Sarah: And with our continued portfolio management.
Sarah: Strong right environment and submission growth that we will continue to build strength.
Sarah: And regarding our group expense ratio, we expect it to be closer to the $26, 6%. We delivered in 2023 due to our business mix and our changes and retention strategy as mentioned.
Operator: And lastly, I just wanted to confirm, as written in the press release, that we have fully remedied the material weakness and internal controls that we reported last quarter, and I could not be more grateful to our finance team and all the work that they've done over the last many months to get us to today. With that, I'll turn the call back over to the operator to open the line. The floor is now open for your questions. To ask a question this time, please press star, then the number 1 on your telephone. We'll pause for just a moment to compile the QNA roster, and your first question comes from the line of Mark Hodges with Truist.
Sarah: And lastly, I just wanted to confirm as written in the press release that we are fully remediated the material weakness in internal controls that we reported last quarter and I could not be more grateful to our finance team and all the work that they've done over the last many months to get us today.
With that we'll turn the call back over to the operator to open the line for questions.
Sarah: That's not it's now thanks for your questions to ask a question. This time, please press sorry, <unk>, California.
Sarah: Plus I, just a moment to compare decade, and a U S T.
Sarah: Yeah first question comes from the <unk> <unk> <unk> <unk>.
Mark Douglas Hughes: Your line is open. Yeah, thank you. Good morning.
Speaker Change: Yeah. Thank you good morning.
Sarah Casey Doran: Chair, could you talk about the capital situation, kind of what is the right... leverage for the business, or you're, you know, the kind of deal that you would underwrite at and you know, what sort of growth you can still generate from here with your current balance. Sure, good question. We don't feel restrained on growth having delivered this kind of low double-digit growth number for the last few years. Mark, I would say with our business and the little exposure that we have to property on the one hand, as well as the significant amount of third-party reinsurance business that we buy and have bought for many years, we're very comfortable at an operating leverage number around one and a half, even slightly higher than that.
Speaker Change: Could you talk about the capital situation to kind of <unk>.
Speaker Change: Leverage for the business or.
Speaker Change: You you know kind of.
Speaker Change: Feeling that you would underwrite and.
Speaker Change: What sort of growth you can still generated from here with your current balance sheet.
Speaker Change: Sure Uhm. Good question you know, we we don't feel restraint on growth having delivered in this kind of low double digit growth number for the last few years, Mark I would say you know with with our business and the little exposure that we have to property on one hand as well as the significant amount of third party reinsurance.
Speaker Change: <unk> that we buy and and have bought for many years, we're very comfortable at an operating leverage number around one and a half even slightly higher than that and we certainly expect to continue to build capital more rapidly over the course of the next few quarters through retained earnings obviously, having shed volatile.
Sarah Casey Doran: And we certainly expect to continue to build capital more rapidly over the course of the next few quarters through retained earnings, obviously having shed the volatility that the capital, the casualty reinsurance business, was adding and the significant capital support that was required due to the reserves and that. And then any latest thoughts on tax rates? Yeah, great question. We would expect we will still have the Bermuda Holding Company post the close of J.R.G. Reid, so there'll be a little bit of tax friction there, but I would expect our tax rate over the course of the year to largely approximate the U.S. statutory rate.
Speaker Change: <unk>.
Speaker Change: Capital.
Speaker Change: Casually reinsurance business was it was adding and the significant capital support that was required due to the reserves in that business.
Speaker Change: Yeah, and then it'd be a little spots on tax rate.
Speaker Change: Yeah. Great question, we we would expect we will still have them Bermuda holding company and post to close up territory. So there'll be a little bit of tax friction there, but I would expect our tax rate over the course of the year or two to largely approximate the U S statutory rape.
Sarah Casey Doran: Understandable. In the 21 to 23 acts in a year, it sounds like you, pricing is well ahead of cost. Have you seen any kind of change in the trend, though? Maybe in looking at some of your peers' details, you do see some.
Speaker Change: Mmm statement in the 21 to 23 at two years sounds like you.
Speaker Change: You're probably green as well ahead of of course, we have you seen any kind of change in the trend.
Speaker Change:
Speaker Change: Maybe I'm looking to pay any of your peers.
Speaker Change: Details you do system.
Sarah Casey Doran: Signs of inflation, even in some of these recent acts. I wonder if you have any observations about whether you've seen some change in trend or what you spotted or concluded when you did this deeper dive on your older acts a year ago. Hi Mark, so we have typically relied on ISO-based industry loss trends for the actuarial assumptions around trend, and as we mentioned, in previous quarters, we made some specific increases to our view of the lost cost trend closer to a high single-digit viewpoint for 2023, and that at the time certainly felt prudent just given the uncertainty in the inflationary environment and the nature of our portfolio. We went through a similar process in the fourth quarter of 2023 Again, relying heavily on the ISO-based industry loss trends, which do reflect some moderation in inflation. The changes, though, really vary by line. Some lines of business will have increases between 2023 to 2024, like a line like Commercial Auto. Some may be slightly lower, like some of the kinds of smaller business lines, for instance.
Speaker Change: Signs of inflation, even and send you. These recent activity you're going to if you have any observations about whether the.
Speaker Change: You've seen changing cleaned or would he was spotted <unk> concluded when you did the deeper dog and your your old or accident years.
Speaker Change: Hi, Mark So we have typically relied on.
Speaker Change: By so based industry lost transfer the actuarial assumptions around Trent and <unk>.
Speaker Change: As we mentioned.
Speaker Change: In previous scores, we made some specific increases to our view of Los <unk> closer to a high single digit viewpoint for 2000 twenty-three and that at the time certainly felt prudent just given the uncertainty and the inflationary environment.
Speaker Change: And the nature of our portfolio.
Speaker Change: We went through a similar process in the fourth quarter of twenty-three relative to how we thought about 24 again.
Speaker Change: Relying heavily on the ISO based industry loss trends, which do reflect some moderation and inflation. The changes are really very by lines. So.
Speaker Change: Some lines of business will have increases between 2023 to 2024 like a line like commercial auto <unk>.
Speaker Change: Some may be slightly lower some of the smaller business lines. For instance, overall are los trained assumptions changed by less than a point across the segment, but we also then refreshed our view of exposure trend as well and that changed also buy less.
Sarah Casey Doran: Overall, our loss trend assumptions changed by less than a point across the segment, but we also refreshed our view of the exposure trend as well, and that changed also by less than a point. I know you know they've got a bit of an offsetting relationship between exposure trend and loss trend, but the net sum of the change relative to the view that we have is that the trend for 2024 is moving less than half a point, in total. Very good Thanks. Our next question comes from the line of Brian Meredith with UBS. Your line is open. I'm just curious, was there any consideration or thoughts about buying an adverse development cover just to kind of try to put some of the prior year reserving stuff to bed? Hi Brian. So let me start by saying that, you know, we are booked now in excess of our own internal actuaries' view of the reserves and right in line with our third-party actuaries. We're also...
Speaker Change: Then a point and I I know you know they've got a bit of an offsetting relationship between exposure trend and lost shrimp, but the the net some of the change relative to the view that we have is that trend for 24 is moving lesson lesson a half a point.
Speaker Change: In total.
Speaker Change: Very good thank you.
Speaker Change: Our next question comes from the line, that's Bryan Mad with the U B S.
Speaker Change: Okay.
Bryan Mad: I'm just curious was there any consideration or thoughts about buying an adverse development cover just to kind of try to put some of the prior you're reserving stuff too bad.
Bryan Mad: Oh, Hi, Brian So let me start by saying that.
Bryan Mad: You know we are booked now in excess of our own internal actuaries view of the reserves and right in line with our third party opining actuaries, we're all.
Sarah Casey Doran: I think the company has, over its history, shown that it's been open to exploring those types of transactions, but at this point, like I said, we're pretty comfortable with this, with a reserved position. And then, Frank, I'm just curious about the growth pretty strong in the E&S segment in the quarter. I guess given what's going on in my experience is that, you know, when you get stuff like a strategic review going on, those types of things, companies can be subject to adverse selection issues. How, how are you preventing that?
Speaker Change: I think the company is over its history has shown that it's been open to exploring those types of transactions, but at this point like I said, we're we're pretty comfortable with.
Speaker Change: With the reserve position.
Speaker Change: Gotcha, and then if I could just curious uhm growth pretty strong in the next segment a quarter.
Speaker Change: I guess, given what's going on in my experience is that you know when <unk> when you get stuck with like a strategic review going on those types of things you know companies can be subject to adverse selection issues, how how you're preventing that you know how you're kind of ensuring that does not happen.
Frank N. DOrazio: You know, how are you kind of ensuring that that's not happening? Yeah, no. I appreciate the question, Brian. I would say I think it's highly unlikely, and I'll tell you why.
Speaker Change: Yeah, I know, it's I I appreciate the question Brian.
Speaker Change: I would say I think it's highly unlikely and I'll tell you why.
Frank N. DOrazio: First off, our premium renewal retention for the quarter was 69.8% versus 67.1% for the full year, so we actually retained a higher percentage of our renewal clients in Q4. That's business that we know that has been with us for at least a year and, in most instances, several years just by the nature of renewal business. So we know the business and the underlying exposures very well, and by definition, renewal business would have been introduced to James River certainly before we announced the Strategic Review, but I would say, just as importantly, we've had stewardship discussions with all of our major trading partners. I've participated in many of them, firms that we've been trading with for 20 years, and they have all confirmed that we're still a very key and important market for Nothing has changed, and just to give you some further context here. We don't get new producers approaching us kind of off the street; you need to have an appointment with James River.
Speaker Change: First off.
Speaker Change: Our premium renewal retention for the quarter.
Speaker Change: Was 69.8% versus.
Speaker Change: 67.1% for the full year, so we actually retained a higher percentage of our renewal clients in queue for that.
Speaker Change: <unk> business that we know that has been with us.
Speaker Change: At least a year and in most instances several years just by the nature of renewal business. So we know the business and then annoying exposures very well and by definition renewal business would have been introduced the James River certainly before we announced.
Speaker Change: The strategic review, but I would say just as importantly, we've had stewardship discussions with all of our major trading partners I've participated in many of them.
Speaker Change: Firms that we've been trading with for 20 years and they have all confirm that we're still a very key and important market for them nothing has changed in just to give you. Some some further context here.
Speaker Change:
Speaker Change: We don't get new.
Speaker Change: Producers approaching is kind of wall Street, you need to have an appointment with James River. So again, it kind of speaks to the fact that we've been trading with the people that are providing these submissions to us for many years and I I guess I would say the last point I'd make is.
Frank N. DOrazio: So again, it kind of speaks to the fact that we've been trading with the people that are providing these submissions to us for many years. And I guess I would say the last point I'd make is that we still control our underwriting decisions and certainly haven't relaxed any type of underwriting guidelines or authority just because of the review that we've announced. So I appreciate the thought process, certainly, but I think we're well protected against that. And that's my last question. I mean, the other thing too, when stuff like this is going on, you know, it can have an effect on employees. What are you doing and what's happening with respect to the kind of retention of, you know, kind of key employees and, and, you know, what is your employee retention rate? Yeah, a good question, Brian.
Speaker Change: We still control our underwriting decisions and certainly haven't relax any type of underwriting guidelines, where authorities just because of.
Speaker Change: The review that we've announced so I appreciate the thought process, certainly, but I think we're we're well protected against that.
Speaker Change: Gotcha and then my last question I mean, the other thing too.
Speaker Change: Stuff like this is going on you know we can have an effect on the employees.
Speaker Change: What are you doing and what's happening with respect to kind of retention of of you know kind of key employees and and you know what is your replayed retention look like.
Speaker Change: Yeah. Good question Bryan So right now we just tried to increase certainly communication with the overall staff were watching retention very closely trying to be flexible just relative to our work environment and making sure people understand what's going on with the strategic review what it means.
Frank N. DOrazio: So right now, we've just tried to increase communication with the overall staff. We're watching retention very closely, trying to be flexible, just relative to our work environment, and making sure people understand what's going on with the strategic review, what it means, and what it doesn't mean. So I look at it on a monthly basis and monitor it very closely. I think the company has done a good job of putting retentions in place, not just in the last couple of months per se, since the events of Q3, but over the last couple of years as well, to really kind of identify the next wave of leadership at James River and make sure they know how the organization feels about them. So it's definitely a point that we speak about a lot as a management team and with our board.
Bryan Mad: And what does it mean, so I look at it on a monthly basis and monitor it very closely I think the company has done a good job of putting retention and place not just in the last couple of months per se since the events of Q3, but over the last couple of years as well to really kind of identify.
Bryan Mad: The next wave of leadership at James River, and make sure. They know how the organization feels about them. So it's definitely a point that we speak about a lot as a management team and with our board.
Speaker Change: Great. Thank you.
Frank N. DOrazio: Thank you. Thanks. Our last question comes from the line of Meyer Shields with KBW. Your line is open. Great, thanks, and good morning. Just a couple of questions.
Speaker Change: Thanks, Brian.
Oh My last question comes from the <unk> <unk> <unk> <unk>.
Speaker Change: Great. Thanks, and good morning, just a couple of questions first I guess for Frank when you talk about the various underwriting changes that have been made in the book I understand that those with lower.
Meyer Shields: First, Frank, when you talk about the various underwriting changes that have been made in the book, I understand that those would lower loss exposure. What's the impact on the loss trend for the business that you're still writing compared to the loss trend on the old book? The impact on Lostram for the business that we're still writing. In the last trend of post, these changes were lower than the preceding ones. So again, we look at the lost trend on an annual basis, stay very close to it, and... have just finished our analysis relative to our view for 2024. I would say there's nominal change on the portfolio overall.
Speaker Change: Locked exposure, what's the impact on loss trend for the business that you're still writing compared to <unk> on hold the line.
Speaker Change: The impact on last time for the business that we're still writing.
Frank: Right you might get a loft trend put these changes lower than the preceding book.
Frank: So again, we we we look at last trend on an annual basis stay very close to it and.
Frank: I have just finished our analysis relative to our view for 24.
Frank: I would say, there's there's nominal change on the portfolio overall, you know like I said the the the net some of.
Frank N. DOrazio: Like I said, the net sum of our change in view from 2023 to 2024 for both loss trend as well as exposure trend is less than a half a point, and that would certainly include the product lines that you're talking about. Okay, this is a little bit of an impatient question before we get to 10k, but I was hoping to get the updated ENF accident year loss ratio for 2020, as it looks right now. The mayor just wants to make sure. We're answering your question correctly, the updated version. Thank you very much. Lost Fisher for 2020
Frank: Or change in view from 23 to 24 for both.
Frank: Loss trend as well as exposure trend is less than a half a point that would certainly include the product lines that.
Frank: That you're talking about.
Frank: Okay.
Speaker Change: A little bit impatient question before we get the 10-K, but I'm, hoping you'll get the updated Ina activate your loss ratio for 2020 help with right now.
Speaker Change: The mayor I, just want to make sure.
Speaker Change: We're answering your question correctly the updated.
Speaker Change: <unk> would you talk about the cumulative rate impact and it was wondering what the number that and I'll get some 60 194022.
Frank N. DOrazio: In other words, you talk about the cumulative rate impact, and I'm just wondering what the number is that's analogous to 61.9 for 2022. For 2020, the updated loss ratio is 60.4%. And then, on the Outlook side, so I guess, Sarah. What should we think about the net-to-gross ratio in specialty admitted in 2025?
Speaker Change: For 2020, the updated loss ratio is.
Speaker Change: 64%.
Speaker Change: Okay, Perfect and then last question.
Speaker Change: On the outlook side, so yes Sarah.
Speaker Change: Good.
Speaker Change: How should we think about the net to grocery C O and specialty admitted in 2024.
Meyer Shields: Yeah, that's a good question. Mayor, I think it would be, you know, we've talked about this business a lot. Obviously, it's fairly lumpy in terms of what's on the come, etc.
Sarah: Yeah. That's a good question <unk> I think it would be.
We've talked about this business a lot obviously, it's fairly lumpy in terms of what's on a common Sarah I think it's the fourth quarter retention is is a very solid place to start when I think about what we have in the pipeline and what the plan is for 2024.
Sarah Casey Doran: I think fourth-quarter retention is a very solid place to start when I think about what we have in the pipeline and what the plan is for 2024. Okay, perfect. Thanks so much. Thank you for the question. Again, if you would like to ask a question, press the star 1, then number 1 on your telephone keypad. There are no further questions at this time. Mr. Frank DOrazio, I turn the call back over to you. Thank you. I want to thank everyone for their time today and for the questions we received this morning. We look forward to speaking with you all again in a matter of a few weeks to discuss our first quarter results. Thank you, and enjoy the rest of your day. This concludes today's conference call. You may now disconnect.
Sarah: Okay perfect. Thanks, so much.
Speaker Change: Thanks for the questions.
Speaker Change: Again, if you would like to ask a question.
Speaker Change: Then number like on your telephone keypad.
Speaker Change: Yeah, I'll find you a question <unk> <unk>.
Speaker Change: Call back Alrighty.
Speaker Change: Thank you I Wanna, Thank everyone for their time today and for the questions. We received this morning, we look forward to speaking with you all again in a matter of a few weeks to discuss our first quarter results.
Speaker Change: Thank you and enjoy the rest of your day.
Speaker Change: You can teach Denise conference.
Speaker Change: Disconnect.
Speaker Change: [music].