Q4 2024 Cincinnati Financial Corp Earnings Call
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Speaker Change: Good morning, and welcome to the Cincinnati financial fourth quarter, and full year 2024 earnings conference call.
Speaker Change: All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Speaker Change: Please note this event is being recorded.
Speaker Change: I would now like to turn the conference over to Dennis Mcdaniel Investor Relations Officer. Please go ahead.
Speaker Change: Hello. This is Dennis Mcdaniel Cincinnati financial Thank you for joining us for our fourth quarter and full year 2024 earnings conference call.
Speaker Change: Late yesterday, we issued a news release on our results along with our supplemental financial package, including our year end investment portfolio.
Speaker Change: To find copies of any of these documents. Please visit our investor website investors <unk> com.
Speaker Change: The shortest route to the information is the quarterly results section near the middle of the Investor overview page.
Speaker Change: On this call you'll first hear from President and Chief Executive Officer, Steve Spray and then from Executive Vice President and Chief Financial Officer, Mike. So.
Speaker Change: After their prepared remarks investors participating on the call may ask questions.
Speaker Change: At that time, some responses may be made by others in the room with us.
Speaker Change: <unk> Executive Chairman, Steve Johnson.
Speaker Change: Chief Investment Officer, Steve, So lauria, and Cincinnati Insurance's, Chief claims officer, Mark Shambaugh, Senior Vice President of corporate Finance Theresa Hopper.
Speaker Change: Please note that some of the matters to be discussed today are forward looking.
Speaker Change: These forward looking statements involve certain risks and uncertainties.
Speaker Change: In respect to these risks and uncertainties, we direct your attention to our news release and to our various filings with the SEC.
Speaker Change: Also a reconciliation of non-GAAP measures was provided with the news release statutory.
Speaker Change: Our accounting data is prepared in accordance with statutory accounting rules and therefore is not reconciled to GAAP.
Steve: Now I'll turn it over to call to Steve.
Steve: Good morning, and thank you for joining us today to hear more about our results.
Our Hearts go out to those impacted by the law wildfires, you've lost homes treasured belongings, a sense of community and in the most devastating cases loved ones.
Steve: I also want to thank the first responders, who put their lives on the line.
Steve: Our agents for their support and partnership and of course, our claims associates, who are working tirelessly to help our policyholders with immediate needs and longer term plans.
Steve: Before I share more details about our current estimate for this catastrophe, let's dive into how we performed last year.
Steve: Operating performance for the fourth quarter was very strong in many key areas showed improvements.
Steve: We're also pleased with performance for full year 2024, thanks to the superb work of our associates, providing service to agents, who we consider to be the best in the insurance business.
Steve: Our fourth quarter results compared to the same period last year included a better combined ratio and excellent growth in premiums and investment income.
Steve: The result, boosted net income and we had double digit growth in operating income.
Steve: Net income was $405 million for the fourth quarter of 2024. It included recognition of a $107 million on an after tax basis for the decrease in fair value of equity Securities still held.
Steve: An unfavorable swing of $931 million from the same period a year ago.
Steve: Net income for the year rose 24%.
Steve: non-GAAP operating income for the quarter increased 38% to $497 million and rose 26% for full year 2024.
Steve: Our 84, 7% fourth quarter 2024 property casualty combined ratio was two eight percentage points better than a year ago.
Steve: It brought the full year combined ratio to an outstanding 93, 4%.
Steve: 1515 points better than 2023.
Steve: The full year improvement included a catastrophe loss ratio effect only 0.2 points lower.
Steve: Our 86, 5% accident year 2024, combined ratio before catastrophe losses improved by one nine percentage points compared with accident year 2023, including five points of improvement for the fourth quarter.
Steve: We reported another quarter of strong premium growth, we believe its profitable growth as our underwriters diligently used pricing precision tools to support their risk segmentation effort on a policy by policy basis.
Steve: Estimated average renewal price increases for the fourth quarter were similar to the third quarter of 2024.
Steve: Commercial lines move slightly lower in the high single digit percentage range and excess and surplus lines remained in the high single digit range.
Steve: Our personal lines segment was also similar similar to the third quarter with personal auto in the low double digit range and homeowner in the high single digit range.
Steve: New business growth produced by agencies, representing Cincinnati insurance continued at a nice pace nearly.
Steve: Nearly one third of the growth for the year was from agencies appointed since the beginning of 2023, reflecting our strategy of appointing additional agencies, where we identify appropriate expansion opportunities.
Steve: Policy retention rates in 2024 were similar to last year with our commercial line segment up slightly but still in the upper 80% range. Our personal lines segment remained in a similar position of the low to mid 90% range.
The overall result was consolidated property casualty net written premiums growth of growing 17% for the quarter, including 15% growth in agency renewal premiums and 23% and new business premiums.
Steve: Next is a brief review of performance by insurance segment for full year 2024, compared with 2023.
Steve: Most most metrics also improved on a four quarter basis.
Steve: Commercial lines grew net written premiums, 8% with an excellent combined ratio that improved by three percentage points to 93, 2%.
Steve: Personal lines grew net written premiums 30%.
Steve: Prove the combined ratio by two nine percentage points to 97, 5%.
Steve: Excess and surplus lines grew net written premiums, 15% with a 94.0% combined ratio.
Steve: Although that was three four percentage points higher than last year, it's still quite profitable.
Steve: Both Cincinnati re and Cincinnati Global we're also very profitable.
Steve: <unk> grew net written premium 7% with an 85.0% combined ratio, while Cincinnati Global's growth was 8% with a 73, 6% combined ratio.
Steve: Our life insurance subsidiary also improved its results with a 21% increase in 2024 net income and term life insurance earned premium growth of 3%.
Steve: Yeah.
Steve: These strong results combined to bring our value creation ratio and above our target of 10% to 13% on a five year average basis.
Steve: Our fourth quarter VCR was one 8% and.
Steve: And we reached 19, 8% on a full year basis.
Steve: Net income before investment gains or losses for the year contributed nine 9%.
Steve: Higher overall valuation of our investment portfolio and other items contributed the other half.
Mike: Before I turn the call over to Mike <unk>.
Mike: I will provide our current estimates of financial effects related to the recent California wildfires and an update on our 2025 reinsurance program.
Mike: We estimate first quarter 2025, pre tax catastrophe losses of approximately $450 million to $525 million net of reinsurance recoveries.
Mike: That includes approximately 73% for our personal lines insurance segment, 24% for Cincinnati re and 3% for Cincinnati Global.
Mike: We reinstated the applicable layers of our primary property catastrophe reinsurance treaty coverage and will seek additional premiums to our reinsurers.
Mike: Cincinnati re will receive additional premiums from treaties reinstated.
Mike: The estimated net effect of first quarter premium revenue is a decrease of $50 million to $60 million.
Mike: Yes.
Mike: To keep this event and perspective.
Mike: The wildfire effect occurred in 2024, we believe we would still have earned a modest underwriting profit.
Yeah.
Mike: On January one of this year, we again renewed each of our primary property casualty treaties that transfer part of our risk to reinsurers.
Mike: For our per risk treaties, we increased our retention for the property treaty to $15 million, while retention for the casualty treaty remained at $10 million.
Mike: Other terms and conditions for 2025 are fairly similar to 2024.
Mike: The primary objective for our property catastrophe treaty is to protect our balance sheet. The treaties main change. This year is adding another $300 million of coverage increasing the top of the program from one two to $1 5 billion.
Mike: We again retain all of the first $200 million.
Mike: Then retained 56% of the next $100 million.
Mike: 25% of the next $100 million and approximately 14% of the next $1 1 billion.
Speaker Change: Now, let me turn the call over to Chief Financial Officer, Mike Sewell for additional highlights of our financial performance.
Mike Sewell: Thank you, Steve and thanks to all of you for joining us today.
Mike Sewell: Investment income reached $1 billion for the year and significantly contributed to our improved operating performance. It grew 17% for the fourth quarter and 15% for the full year 2024, compared with the same periods of last year.
Mike Sewell: Dividend income was down 4% in the fourth quarter, driven by third quarter sales of equity securities from previously disclosed rebalancing of our investment portfolio.
Mike Sewell: Bond interest income grew 28% for the fourth quarter of this year.
Mike Sewell: Purchases of fixed maturity securities totaled $1 $1 billion for the quarter and $2 $5 billion for the year.
Mike Sewell: The fourth quarter pretax average yield of 493% for the fixed maturity portfolio was up 45 basis points compared with last year.
Mike Sewell: Average pre tax yield for the total of purchased taxable and tax exempt bonds. During 2024 was 566%.
Mike Sewell: Valuation changes in aggregate for the fourth quarter were unfavorable for both our equity portfolio and our bond portfolio.
Mike Sewell: Before tax effects, the net loss was $136 million for the equity portfolio and $350 million for the bond portfolio.
Mike Sewell: At the end of the fourth quarter. The total investment portfolio net appreciated value was approximately $6 $7 billion.
Mike Sewell: The equity portfolio was in a net gain position of $7 2 billion, while the fixed maturity portfolio was in a net loss position of $553 million.
Mike Sewell: Cash flow in addition to higher bond yields continued to benefit investment income growth.
Mike Sewell: Cash flow from operating activities for full year 2024 was $2 6 billion up.
Mike Sewell: Up 29% from last year.
Mike Sewell: Regarding expense management, our objective is to balance spending control efforts with investing strategically in our business.
Mike Sewell: Our 29, 9% full year 2024 property casualty underwriting expense ratio was in line with 2023 in total and for each major expense category.
Mike Sewell: The fourth quarter ratio was one four percentage points lower than last year.
Mike Sewell: Primarily due to lower accruals for agency profit sharing commissions. In addition to premium growth outpacing the increase in employee related expenses.
Mike Sewell: My next topic is loss reserves, where our approach remains consistent and aim for net amounts in the upper half of the Actuarially estimated range of net loss and loss expense reserves as.
Mike Sewell: As we do each quarter, we consider new information such as paid losses in case reserves.
Mike Sewell: Then we updated estimated ultimate losses and loss expenses by accident year and line of business.
Mike Sewell: During 2024, our net addition to property casualty loss and loss expense reserves was $1 $1 billion, including $998 million for the <unk> portion.
Mike Sewell: We experienced $236 million of property casualty net favorable reserve development on prior accident years that benefited the combined ratio by two seven percentage points during 2024.
Mike Sewell: For our commercial casualty line of business. There was no material reserve development for any prior accident year during the fourth quarter.
Mike Sewell: On an all lines basis by accident year net reserve development. During 2024 included a favorable $369 million for 'twenty, three favorable $63 million for 'twenty, two favorable $5 million for 'twenty, one and an unfavorable to.
Mike Sewell: And $1 million in aggregate for accident years prior to 'twenty one.
Mike Sewell: My final comments highlight our capital management activities.
Mike Sewell: For full year 2024, we returned capital to shareholders through $490 million of dividends paid in addition to share repurchases.
Mike Sewell: Shares repurchased totaled $1 1 million shares at an average price of approximately $113 per share, including an immaterial amount during the fourth quarter.
Mike Sewell: We believe our financial flexibility and our financial strength are both in excellent position.
Mike Sewell: Company cash and marketable securities at year end totaled $5 $2 billion.
Mike Sewell: <unk> to total capital remained under 10%.
Mike Sewell: And our quarter end book value was at a record high $89 11 per share with.
Steve: With nearly $14 billion of GAAP consolidated shareholders' equity, providing plenty of capacity for profitable growth for all of our insurance operations now I will turn the call back over to Steve.
Speaker Change: Thanks, Mike.
2025 marks the 70 <unk> anniversary of the Cincinnati Insurance company.
Speaker Change: That time, we've come to understand the importance of stability consistency and financial strength.
Speaker Change: We understand that we are in the business of accepting risk we plan for it we price for it we spend considerable time and effort focused on appropriately balancing growth and profitability through geographic and product diversification pricing sophistication and enterprise risk management.
Speaker Change: No one expects to experience a catastrophic loss such as those built by the people who found themselves in the pads of Hurricanes, Helene and Milton or the California wildfires.
Speaker Change: However, it is in the aftermath of these events that Cincinnati insurance can shine.
Speaker Change: And our financial strength, our claims associates can focus on delivering fast fair.
And empathetic service.
Speaker Change: At the same time, we are ready to build value for shareholders.
Speaker Change: The board recently reinforced their confidence in our strategy by declaring a 7% dividend increase payable in April and paving the way to extend our streak of increasing dividends to <unk> 65 years.
Speaker Change: As a reminder, with Mike and me today are Steve Johnston, Steve So lauria, Mark Shambo and Theresa Hoffer.
Speaker Change: <unk>. Please open the call for questions.
Speaker Change: We will now begin the question and answer session.
Speaker Change: To ask a question you May press Star then one on your telephone keypad.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Speaker Change: Our first question today comes from Michael Phillips with Oppenheimer. Please go ahead.
Michael Phillips: Thank you and good morning, everybody.
Speaker Change: I just want to start off I guess, Steve want to hear your perspective on higher level question on the outlook for the reinsurance sector in the aftermath of California, I guess, how do you see capacity as the year progresses, how do you expect <unk> to respond and then maybe how should that translate into kind of premium for 2025 for that segment.
Michael Phillips: Thanks.
Michael Phillips: Yes, Mike.
Mike Sewell: Are you talking specifically on Cincinnati re or ceded re well first of all.
Mike Sewell: Just your thoughts yes, just your thoughts on the market in general broadly for the industry how it responds.
Mike Sewell: And then kind of drill down to how do you guys. It looks it's going to be some opportunities how you guys would respond.
Mike Sewell: That means for Cincinnati re.
Mike Sewell: Yes, maybe I'll start with just the reinsurance market to your question Mike first is sure.
Mike Sewell: I think the reinsurers appropriately the last couple of years I think of.
Mike Sewell: Sean just the industry itself has shown an underwriting profit I think that's good that's healthy we all need that.
Mike Sewell: I'll speak specifically for Cincinnati insurance, we've just got such long term relationships and partnerships with our our seeded partners our reinsurers.
Mike Sewell: And talk to them on a regular basis obviously.
Mike Sewell: Okay.
Mike Sewell: We expect to pay all of our loss is ground up plus the reinsurers margin overtime, we need them healthy.
Mike Sewell: They know that we've traded with them that way over time and that won't change so that would probably be my remarks, there Cincinnati re theyre going to stay the course, you heard we had.
Mike Sewell: Extremely.
Mike Sewell: Profitable 2024 inception to date with Cincinnati re.
Speaker Change: <unk> is very profitable as well they plan for cat, that's what they do.
Speaker Change: Third losses on specifically on the California wildfires within expectation and.
Speaker Change: Although they will proceed throughout the year with their with their 2025 plan no change.
Steve: Okay. Thanks, Steve.
Speaker Change: Next question is.
Steve: I.
Speaker Change: I wouldn't classify your umbrella exposure in general for your company is.
Speaker Change: As Tony but its only that outsized, but a question related to sort of umbrella.
Speaker Change: In personal lines I think this quarter it didn't.
Speaker Change: For personal lines umbrella I didn't see a lot of change in claim connectivity in that 2% to five layer.
Speaker Change: But dollar amount did move up.
Speaker Change: So some.
Speaker Change: Some things there.
Speaker Change: 25% to five Monday was a loss of about 2% to five layer any color you can add on anything in a quarter specifically.
Speaker Change: Help justify that extra amount of dollars in that layer and just more broadly after the quarter anything youre seeing and umbrella excess layers that would cause anything here. Thank you.
Mike Sewell: Thanks, Mike.
Mike Sewell: I appreciate the question now looking at our quarter for umbrella, whether it be commercial or personal I think it's going to it's going to kind of mislead you a little bit I think you've got to pull back to more of an annual number theres just.
Mike Sewell: The frequency with umbrella.
Mike Sewell: <unk> is obviously very low it's a severity line.
Mike Sewell: There is inherent volatility in it. So we look at every single large loss. We have in every single line of business, we have and look for trends whether it be by state by agency by class of business.
Mike Sewell: Obviously I'm speaking to commercial we do the same thing for personal lines as well so we don't see anything.
Mike Sewell: In that commercial book or excuse me in that personal lines umbrella book that causes us.
Mike Sewell: Any concern.
Mike Sewell: Yeah.
Mike Sewell: Okay. Okay. Thank you and congrats on the quarter appreciate it.
Mike Sewell: Yes, thanks, so much Mike I appreciate it.
The next question is from Gregory Peters with Raymond James. Please go ahead.
Gregory Peters: Good morning.
Gregory Peters: I wanted to go back to the comments on the fire loss.
Gregory Peters: Could you provide some perspective on.
Speaker Change: I think you said $50 million to $60 million of reinstatement costs, but the gross loss might be or what you are pegging for using for your gross loss number and I'm just trying to figure out how far up the tower you want.
Greg: Yes, Thanks, Greg.
Greg: And as you can imagine this is an active still.
Greg: An active cat and for right now.
Greg: Our range our net range that we're providing you is our best estimate of ultimate loss and we're going to just stick with that net range of the 450 to $5 25.
Greg: Okay.
Greg: There is.
Speaker Change: So many moving parts right now, Greg just providing a gross number.
Greg: We're not.
Greg: Ready to go and can maybe pivot away from that then just.
Speaker Change: I know the.
Greg: There was a call recently with.
Greg: Insurance regulator, and the governor and the bunch of insurance companies and.
Greg: It feels like.
Greg: There is some movement to making allowing more rate activity in.
Greg: In homeowners to compensate for the fire risk can you can you talk about what your perspective is that market looking forward.
Greg: Once we get through paying all the losses et cetera.
Greg: Yes, sure one thing I'd point out for the Cincinnati book is 77% of our homeowner premiums in California today are on a non admitted basis.
Greg: On the admitted side.
Greg: I think it's pretty well document I don't think its any secret that California is a challenging market.
Greg: We've got great agents, and policyholders and we want to support them.
Greg: As you can imagine also after.
Greg: As just mentioned any individual single large loss.
Greg: And also after any cat.
Greg: We do a deep dive as a company.
Greg: And objectively look at everything regardless of the event and determine if there is.
Greg: Lessons learned there's always lessons learned there is anything we need to do and changing our strategy moving forward if anything.
Greg: Well, obviously do that here with California.
Speaker Change: With the wildfires and Theres just a lot of as you can imagine Greg there is a lot of moving parts with this as well.
Speaker Change: Yes, the regular the regulation.
Speaker Change: Great environment.
Speaker Change: Things of that nature, there's a long list of things that we will look at.
Speaker Change: But I think right now we are really focused on paying claims.
Speaker Change: Fairly.
Speaker Change: Empathetic Lee face to face and the lessons learned although we are we're looking at them actively.
Speaker Change: That'll take a little longer to.
Speaker Change: To really formulate.
Speaker Change: To make any changes going forward.
Speaker Change: Okay, I'll pivot away from that line of questioning just by my question broader broadly speaking is there is there is.
Speaker Change: In the commercial lines market maybe.
Speaker Change: In the personal lines market ex California, just a growing sense that.
Speaker Change: The pricing cycle kind of peaked maybe it's moderating.
Speaker Change: Price increases aren't as robust in some instances are going down.
Speaker Change: Can you just can you remind us and just give us a snapshot of where you were at the end of the year and I know part of your book has multi year policies can you give us a snapshot of where those those policies reside and what the percentage of the total was.
Speaker Change: Yes sure so.
Speaker Change: As we as we just talked about.
Speaker Change: For the major lines of business commercial property general liability and auto were in the high single digit range.
Speaker Change: <unk> is down in the mid single digit range, that's been it's pretty been pretty well documented so.
Speaker Change: Were still seeing rate into that commercial lines book.
Speaker Change: But I think the point estimate of the average Gregg just doesn't it doesn't tell the story for us our underwriters at the desk level working with agents.
Speaker Change: Using the precision.
Speaker Change: Pricing tools that they have are segmenting. Our book. So there is a large percentage of our book of business.
Speaker Change: We're a package underwriter that may.
Speaker Change: Just as an example may get.
Speaker Change: Flat increase and there is a percentage of our book.
Speaker Change: Albeit smaller may get 20, or 30% point being is that we are segmenting, where underwriting and pricing policy by policy.
Speaker Change: Risk by risk so.
Speaker Change: We're still seeing rate come into the book.
Speaker Change: Right from last year 18 months ago was still earning into the book so.
Speaker Change: Hi.
Speaker Change: I see.
Speaker Change: Suspect here throughout 2025, Youll still see rate coming into that commercial lines book.
Speaker Change: Thank you for your answers.
Greg: Sure. Thank you Greg.
Speaker Change: The next question is from Dean <unk> with <unk>. Please go ahead.
Dean: I wanted to.
And sorry to dive deeper into the reserve strengthening both in commercial auto in the excess and surplus line segment I would just sort of curious if theres anything else you can provide on sort of the accident years that the strengthening came from and what sort of trends you're seeing in those lines.
Speaker Change: Yes. Thanks for the question Dan This is Mike Sewell so.
Dean: Yes.
Speaker Change: Youre keying in on a couple of points there so on the personal auto.
Speaker Change: It's really I think our case incurred for some of the liability coverages that are in there, we're showing a upward trend.
Speaker Change: And I would say that those were mostly for the 2023 and the 2022.
Speaker Change: Accident years, mostly so thats, where.
Speaker Change: You saw a little bit of reserve strengthening there and then as it relates to the surplus lines.
Case incurred so there.
Speaker Change: They were just they were they were just materializing greater than what we did.
Speaker Change: We had expected.
Speaker Change: <unk> is about 90% casualty at least of our book. So it is really kind of similar to the industry averages.
Speaker Change: We are seeing with inflation.
Speaker Change: Etc. So more prudent reserving was there and as I indicated we added $998 million of <unk>. So.
Speaker Change: For the overall book about a third of that went to commercial casualty. So.
Speaker Change: Just prudent reserving watching what we're doing and being being.
Speaker Change: Being consistent with our process. So thanks for the question.
Speaker Change: Yeah got it that makes sense and then.
Speaker Change: Just quickly on the commercial proper.
Speaker Change: Property like current accident year ex cat loss ratio.
Speaker Change: It seemed abnormally low this quarter is there any other color you can provide on why the profitability was so strong this quarter.
Speaker Change: Sure Deane this is Steve spray, yes, we will take it.
Speaker Change: <unk>.
Speaker Change: But what's driving that.
Speaker Change: Just a.
Speaker Change: Drop in large losses.
Speaker Change: Drove the absolute lion's share of those commercial.
Speaker Change: Commercial property results.
Speaker Change: But I would be.
Speaker Change: Get you can get volatility with those large losses quarter to quarter, we've had it where are we.
Speaker Change: Where it's gone the other way so again prefer to look at the kind of the full year.
Our teams I'd be remiss, if I didn't talk about commercial lines underwriting teams working with the agents and underwriting that commercial property book.
Speaker Change: It was it was running a bit of a temperature and so just as we always do all hands on deck with risk selection and pricing segmentation.
Speaker Change: Got it got us in a good spot there.
Speaker Change: Got it thank you.
Andy: Thank you Andy.
Speaker Change: Again, if you have a question. Please press Star then one.
Speaker Change: The next question is from Michael <unk> with BMO capital markets. Please go ahead.
Speaker Change: Hi, Good morning, it's Diana on for Mike If I could just go back to adding commercial casualty.
Speaker Change: Are you still adding to those levels year over year, maybe a little less so in magnitude in 2023, but can you just talk about the loss cost inflation trends that youre seeing now and how that's changed throughout the year.
Speaker Change: Yes.
Steve: Sure, Mike Steve spray again.
Speaker Change: Yes.
Speaker Change: As you know we don't disclose.
Speaker Change: Specific loss cost increased.
Speaker Change: Increased but I would say maybe I'll answer this a little broader too as we feel.
Speaker Change: We feel that.
Speaker Change: That our rates are premiums.
Speaker Change: Again this was on a prospective basis everything we do with ratemaking as prospective that that are.
Our pricing is exceeding our core matching.
Speaker Change: Loss costs.
Speaker Change: The only one caveat on that would be with the workers compensation line of business.
Speaker Change: Okay. Thanks, and then maybe just on the.
Speaker Change: The casualty trend.
Speaker Change: What how much of that would you say is a reaction to cities contractors industry exposure I think some peers have talked about this industry.
Speaker Change: Overly exposed to social inflation.
Speaker Change: Yes, I can't say that we have seen.
The construction business at least the business that we write Mike.
Speaker Change: <unk>.
Speaker Change: Overly exposed to.
Speaker Change: The social inflation.
Speaker Change: Love the social inflation, we see us into the umbrella of a volatile commercial auto losses.
Speaker Change: We do.
Speaker Change: Back to the construction piece, we do watch closely.
Speaker Change: And it really depends on the jurisdiction you're in or the venue in construction defects.
Speaker Change: <unk> can be a challenge from time to time.
Speaker Change: And maybe that's what they are referring to but for our construction book.
Speaker Change: It would be small to mid market, particularly.
Speaker Change: Trade contractors as such.
Speaker Change: With that mix of business, we haven't seen I can't say, we've seen the social inflation into our construction book.
Okay. Thanks, and then also just on Workers' comp you mentioned.
Speaker Change: That's the only line of business, where youre seeing.
Speaker Change: Trend above.
Speaker Change: Thanks.
Speaker Change: There wasn't acceleration reserve leases and comp.
Speaker Change: This year are there any thoughts to maybe adjusting that pick going forward or taking some more of the good news upfront.
Speaker Change: Well, that's something that we talk regularly here with with the actuarial team.
Speaker Change: Theyre, taking a look at it all the time, so I don't have anything to report on that Mike obviously.
Speaker Change: <unk> been talking about the deterioration in work comp pre.
Speaker Change: Pricing for <unk>.
Speaker Change: I don't know how long now.
Speaker Change: <unk>.
Speaker Change: Calendar year.
Speaker Change: Results continue to be favorable so we'll take it.
Speaker Change: But your point is also well taken as far as.
Speaker Change: Just understanding and maybe taking a different view of it we'll leave that in the hands are in discussions with the actuaries.
Speaker Change: Thank you.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Steve spray for any closing remarks.
Thank you Gary and thank you all for joining US today, we look forward to speaking with you again on our first quarter 2025 call.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yes.
Speaker Change: [music].