Q1 2025 Kemper Corp Earnings Call
Speaker Change: Good afternoon ladies and gentlemen and welcome to Kemper's first Quarker 2025 Earnings Conference Call.
Konstantin: My name is Constantine and I will be your coordinator today. At this time, all participants are in listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded for replay purposes.
Speaker Change: I would now lecture and introduce your host for today's conference call, Michael Marinaccio, Kemper's Vice President of COP Corporate Development Investor Relations, Mr. Marinaccio, you may begin.
Michael Marinaccio: Thank you operator. Good afternoon everyone and welcome to Kemper's discussion of our first quarter 2025 results. This afternoon you'll hear from Joe Lacher, Kemper's president and chief executive officer. Prad Camden, Kemper's executive vice president and chief financial officer, and Matt Hunton, Kemper's executive vice president and president of Kemper Auto.
Michael Marinaccio: We'll make a few opening remarks to write context around our first quarter results, followed by a Q&A session.
Speaker Change: Attorney Interactive portion of the call, our presenters will be joined by Chris Flynn, Kemper's Executive Vice President and President of Kemper Life.
Speaker Change: Dwayne Sanders, Kemper's Executive Vice President and Chief Claims Officer for PNC, and Jon Peshalli, Kemper's Executive Vice President and Chief Investment Officer.
Speaker Change: After the market is closed today, we issued our earnings release, filed our form 10Q with the SEC and published our earnings presentation and financial supplement.
Speaker Change: You can find these documents in the Investors section of our website, Kemper.com.
Speaker Change: Our discussion today may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Security Illigation Reform Act of 1995.
Speaker Change: The statements include, but are not limited to, the company's outlook on its future results of operation and financial conditions.
Speaker Change: Our actual future results and financial condition may differ materially from these statements. For information on additional risks that may impact these further looking statements, please refer to our 2024 form 10K and our first quarter earnings release.
Speaker Change: This afternoon's discussion also includes non-gaup financial measures we believe are meaningful to investors.
Speaker Change: In our financial supplement, earnings presentation and earnings release, we have defined and reconciled all non-GAAP financial measures to GAAP, where required in accordance with SEC rules. You can find each of these documents in the investor section of our website, Kemper.com.
Speaker Change: All comparative references will be to the corresponding 2024 periods unless otherwise stated. I will now turn the call over to Jon.
Joe Lacher: Thank you, Michael. Good afternoon everyone and thank you for joining us today.
Joe Lacher: A proud report that we delivered another quarter of very strong financial results, led by continued robust profitable growth in our specialty auto business.
Joe Lacher: While we'll spend time drilling into these results, I know we're all aware that right now we live in interesting times. We'll talk about that too.
Joe Lacher: So today we're going to do three things. First, review our first quarter results. Second, discuss the current economic environment, including tariffs, our capacity to respond, and our associated resilience.
and third, discuss our near-term outlook.
Joe Lacher: Now let's move to page 4 and jump into our first quarter results.
Joe Lacher: Book Value for Share and Adjusted Book Value for Share, grew by approximately 13% and 16% year-over-year respectively.
Joe Lacher: We returned our debt-to-cap ratio to the low 20s and we delivered a trailing 12-month operating cash flow of roughly 520 million which is quickly returning to our all-time peak levels.
Our core businesses continue to perform very well.
Joe Lacher: especially auto-generated a healthy 92% underlying combined ratio, while producing strong piff growth of nearly 14% year-over-year. Written premiums grew a very significant 24%, poor shadowing a similar increase in earned premiums and future periods.
Joe Lacher: We continue to see strong demand for our products and expect significant growth to persist.
Matt will provide more texture on this later.
Speaker Change: The business fundamental of underlying our life segment remains stable. The business continues to produce strong return on capital and distribute will cash flows.
Speaker Change: As mentioned earlier, we continue to further strengthen our capital and liquidity position.
Speaker Change: Brad will discuss our financial results in more detail later, but overall we're very pleased with our first quarter results.
Speaker Change: Moving to our second topic, I want to acknowledge there's a lot of macroeconomic noise in the market, especially regarding tariffs.
Speaker Change: The president made clear his affinity for tariffs while on the campaign trail.
Speaker Change: As such, we've been taking their potential impact into account since his election last November [inaudible]
Speaker Change: We believe Kemper is fairly care of resilient for several reasons. Let's walk through them.
Speaker Change: First, tariffs do not change long-term ongoing inflation, but rather have a one-time upward movement.
Speaker Change: Tariff Delays, existing parts inventories and similar factors should spread the lost cost impact over several quarters, allowing for a reasonable response time.
Speaker Change: Second, tariffs principally impact the vehicle damage component of auto loss cost and not bodily injury
Speaker Change: in broad terms about half of our lost costs relate to bodily injury and therefore are not tariff impacted.
Speaker Change: of the half related to vehicle damage. About two-thirds to that is related to the vehicle itself and replacement parts.
Speaker Change: The balance relates to things like body shop labor rates, rental car expenses, towing charge or do another non-part cost.
Speaker Change: Together, this means that only about a third of our lost costs are directly exposed to potential tariff-related cost increases.
Speaker Change: This weightening is both driven by and further enhanced by the nature of our specialty auto book of business.
Speaker Change: About half of our customers by liability only coverage, meaning we do not cover first-party
Speaker Change: The majority of our customers by policies with minimum limits, thus further capping our exposure to third-party damage.
Speaker Change: Third, we are starting from a very strong position with a low 90s combined ratio in significant growth. We are very well prepared to navigate the pressure and remain within our long-term margin in growth ranges.
Speaker Change: and finally, we are well positioned to quickly respond to ultimate loss cost impacts.
Speaker Change: In Private Passion, Gerardo, we utilize six month policy terms for over 90% of our workforce and 95% of our new business policies.
Speaker Change: This means our book is highly responsive to any necessary price increases.
Speaker Change: There's broad market awareness, including with insurance departments of tariffs and their potential impact on lost cost.
Speaker Change: This impact will be readily visible and we are confident in insurance departments or respond appropriately with ordinary course rate filings.
Speaker Change: and substantially all the non-rate tools we utilize in recent years are currently available to protect the book as any needed rate increases move through the system. We can respond quickly.
Matt will further comment on some of these topics later.
Speaker Change: Again, we believe we are reasonably care of resilient and are well positioned to successfully navigate these interesting times.
Speaker Change: Turning to our third topic, let me comment on our outlook.
Speaker Change: We have a very focused set of specialty businesses with refined sustainable competitive advantages. These businesses are favorably positioned to deliver profitable growth throughout all parts of the underwriting cycle.
Speaker Change: We're in a strong financial position, a low 90s combined ratio, 24% written premium growth, strong returns on capital, and growth in book value for share.
Speaker Change: Our auto businesses have solid tariff resiliency and possess the capacity to nimble and swiftly respond to any likely tariff related cost impacts.
Speaker Change: Bringing these factors all together, we remain confident in our ability to manage the business within our long-term margin and growth ranges.
With that, I'll turn the call over to Brad.
Brad Camden: Thank you, Joe, and good afternoon. I'll begin with our financials on page 5.
Brad Camden: for the quarter we reported net income of $99.7 million or $1.54 per eluded share and an adjusted catalytic net operating income of $106.4 million or $1.65 per eluded share.
Brad Camden: These results continue to demonstrate that our businesses are strong and are creating significant value for our shareholders.
Brad Camden: As a reminder, two key metrics we use to track our performance are return on adjusted equity and adjusted book value for share growth.
Brad Camden: We turn on adjusted equity with a healthy 21% and growth in adjusted book value per share with a solid 16% year-over-year. These metrics demonstrate the strength of our performance and the efficiency of our model.
Moving to page six.
Brad Camden: Here we highlight the strength of our balance sheet. Our capital and liquidity positions are excellent, and are supported by a healthy balance sheet with wealth-funded deterrent entities.
Brad Camden: Over the past year we generated 520 million in operating cash flow, approaching the all-time high from the 2018 and 2019 time frame.
Brad Camden: We anticipate continued operating cash flow growth and expect to exceed the all-time high with trailing 12-month cash flows exceeding 600 million in the second quarter.
Brad Camden: Our cash flows and operating performance provided us the opportunity to do two things.
Brad Camden: First, enable the repayment of 450 million of senior debt in February .
Brad Camden: This improved our debt to capital ratio to 22.9%, which is approaching our long-term power range and represents an impressive 8.1 point improvement since last quarter.
Brad Camden: 2nd, he allowed us to re-purchase 4 million of comments back during the quarter
Brad Camden: We have approximately 130 million left on our Sherry Perks to authorization and continue to believe our stock represents an attractive value.
Overall, we have Significant Financial Flexibility Support Organic Road.
Navigate Markets Autility
Pays shareholder dividends and interests and repurchase additional shares.
Now turning to our investment portfolio on page 7.
Night Investment Income for the Quarter was 101 million.
Brad Camden: This was below our quarterly guidance of 105 million due to lower returns from alternative investments.
Brad Camden: and a rolling four-quarter basis. We continue to believe net investment income will average around 105 million a quarter and will gradually increase throughout the end of the year.
Brad Camden: Given the tariff induced market volatility in April , we want to emphasize that we maintain high-quality, well-diversified investment portfolio.
Brad Camden: Currently, approximately 95% of our fixed maturity portfolio is investment grade, of which 71% is rated AR better.
This helps provide to the booty drink periods of volatility.
Brad Camden: It also gives us the flexibility to shop for underpriced assets but market conditions allow. With the recent market volatility, we are taking the opportunity to purchase attractive risk assets to create incremental value over time. Before turning it over to Matt, I want to reiterate that we are well positioned for long-term profitable growth.
Our core businesses are generating strong results [inaudible]
Brad Camden: Specialty Auto is expected to grow properly while maintaining combined ratios below a 96% ceiling.
Brad Camden: The investments we've made to enhance our capabilities over the past five years give us confidence in our businesses to generate and shareholder value going forward.
Matt Hunton: I'll now turn over to Max to provide further details.
Matt Hunton: Thank you Brad and good afternoon everyone. Turning to page 8, our specialty PNC segment continues to yield healthy margins, producing a total underlying combined ratio of 92.2 percent.
Matt Hunton: Private passenger auto produced a 92.2 percent commercial auto produced a 92.3 percent.
Matt Hunton: Shifting to production, we are very pleased with our results this quarter. For the segment, Britain Premium grew 24% while PIF and Earn Premium each grew around 14%.
Matt Hunton: We remain hyper focused on properly growing the book, and our new business loss performance continues to be well within our lifetime pricing targets.
Matt Hunton: Dropping into some perspective on our key states, California continues to see very strong growth supported by a hard market backdrop.
Matt Hunton: We are confident in our pricing adequacy, customer and agent demand for our products remain strong, and our deep understanding of the market supported by our enhanced tools is as confidence in our ability to profitably grow this business.
Matt Hunton: The Florida market is becoming increasingly competitive largely driven by the favorable impacts of
Matt Hunton: As we previously stated, we had a deliberate wait and see approach and wanted to see the results of these reforms earn in before we adjusted pricing.
Matt Hunton: Additionally, since November , the increased background noise on the potential impacts from tariffs supported this approach.
Matt Hunton: That said, some competitors have taken aggressive pricing action modestly pressuring your term production.
Matt Hunton: As the full impact of tort reform and tariffs work into the market, we are well positioned to navigate this environment and expect profitable growth in the state.
Matt Hunton: In Texas, we were intentionally a little slower to ramp up production until we refreshed our pricing plans [inaudible]
Matt Hunton: Those changes went live in the middle of the first quarter and we are now seeing positive momentum Similar to Florida, we expect profitable growth in the state going forward [inaudible]
Matt Hunton: A commercial lot of business growth remains very strong, complemented by consistently favorable underwriting results.
Matt Hunton: This business grew written premium by over 27% and TIFF by approximately 19% year-over-year. Both new business and TIFF are more evenly balanced across our core states. We fully anticipate further profitable expansion of this business supported by its competitive
Matt Hunton: As Joe mentioned, our business is well positioned to navigate the upcoming tariff changes. We enter this period with strong underlying results and solid pricing adequacy.
Matt Hunton: We have continued to enhance our pricing and underwriting capabilities that enable both flexibility and speed.
Matt Hunton: We have a demonstrated track record and ability to flex our rate and non-rate actions to address any changes in the environment.
Matt Hunton: Additionally, the composition of a private passenger auto book offers advantages over traditional standard auto carriers.
Matt Hunton: Approximately 50% of our policies carry liability only coverage and exclude tear-of-expose first-party collision and comprehensive coverages.
Matt Hunton: 90% of our book is written at state minimum limits. This means any tariff exposed third party property damage liability is capped with a low limit.
Matt Hunton: and over 90% of our enforced books and 95% of new business consists of six-month policy terms which enables frequent book re-underwriting and accelerated earning of rate.
Matt Hunton: In closing, our specialty auto business is delivering very strong earnings and growth. We expect tariff impacts to be a manageable one-time pressure on a subcomponent of our lost cost being realized over several quarters.
Matt Hunton: We're confident in the competitive strength of both our private passenger auto and commercial businesses. We are well positioned to continue to properly grow our business at a 96 or better combined ratio.
Joe Lacher: I'll now turn the call back to Joe to cover the life business and closing comments.
Thank you, Matt.
Joe Lacher: Turning to our life business on page 9. As noted earlier, the underlying business continue to generate stable operating results. Mortality and persistence see we're in line with historical trends. The life business continues to generate strong return on capital and distributable cash flows.
Joe Lacher: Turning to page 10, in closing, I'd like to reiterate the highlights for the quarter.
Joe Lacher: First, Kemper delivered very strong operating results. This was led by specialty PNCs underwriting performance, double digit year-over-year pith growth, and roughly 24% written premium growth. We delivered an adjusted ROE of 21% and grew adjusted book value per share 16%.
Joe Lacher: Second, we're entering a potential tariff disrupted macroenvironment from a position of strength. The competitive advantages of our specialty business provide tariff resiliency.
Joe Lacher: and finally, we continue to improve our capital and liquidity position. We've reduced the debt to capital ratio toward our long-term range and are producing operating cash flows approaching all time highs.
Joe Lacher: I want to take a moment to thank our entire Kemper team for their efforts.
Joe Lacher: These results would not be possible without their commitment and hard work toward achieving our goals.
Joe Lacher: Over the last couple of years, we've invested significant effort into building a stronger, more resilient company, preparing us well to navigate the current market environment to remain confident in our ability to create long-term shareholder value.
With that operator, we can now take questions.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press tar followed by the number one on your touchstone phone. You will hear a prompt that your hand has been raised.
Joe Lacher: Should you wish to decline from the polling process, please press star followed by the number two.
Joe Lacher: If you're using a speaker phone, please make sure you lift your handset before you press any keys.
Speaker Change: Your first question is from the line of Ragory Peters from Raymond James. Please go ahead.
Oh, hey, good afternoon, everyone. I wanted to...
Speaker Change: For the first question focus on your commentary about market conditions in Florida, Texas, and then in California where you say hard market conditions still persist.
Speaker Change: I'm wondering if you could build that on your open comments on on those markets.
Speaker Change: You know, you're producing substantial tiff growth and just wondering about the durability of that growth as we look for the rest of the year.
Speaker Change: Sure, Greg. Thanks. I'll take a shot at this, and I'm sure Matt will have some other...
the comments on it.
Look, the California growth numbers are strong.
Speaker Change: You'll find that they likely temper slightly in California as we move into the second and third and fourth quarter. Part of that is just the timing of when we sort of restarted new business and rebalancing or work their way through. But you'll also see an offsetting fairly significant increase in Florida and Texas.
Speaker Change: Those numbers for Florida and Texas both, on a year over year base, you should move more toward a high single digit, potentially low double digit, but probably high single digit.
Speaker Change: for the two of them. Some of those, the trough, if you think about a rolling four-quarter basis, the trough for Florida and Texas is a little later.
Matt Hunton: And as Matt pointed out, there were reasons why we were a touch slower in the last quarter and are accelerating. So a high degree of confidence that those will move up into that high single digit
and California it will sustain. So we'd expect
Matt Hunton: You know, I'm not giving you guidance, I'm not giving you a specific number, I'm trying to give you a general durability but we'd be surprised if the pith growth wasn't still solidly in the double digit range.
and just an attic pocket.
Matt Hunton: Couple of quick comments to that. California, the market there, we're still seeing limited suppliers in that marketplace, which is providing a favorable backdrop for us.
Matt Hunton: When we think about the other component of durability in California, it's the the economic performance of that business. We feel really good about our pricing adequacy in that market with the tools in our intimacy. Let's see.
Matt Hunton: You know, Florida and Texas, as mentioned in the prepared comments, we have a series of enhancements we put in the first quarter in Texas that are now starting to take hold.
Matt Hunton: and Florida is a pretty competitive environment that we continue to move our product in position for profitable growth but have an optimistic outlook in both of those markets.
Speaker Change: Okay, thank you. I guess my follow-up question would be, I think the manhine used car indexes out and I think it was up.
in April , compared with March and on a year-over-year basis.
Speaker Change: So maybe there is some mild inflationary pressures in the system. I'm just curious, you know, giving it to your underlying results or in line with your expectations, you know, how are you viewing your competitive position on a price perspective and do you anticipate?
Speaker Change: Any filing for additional rates or tweaking any or rates in any of your markets?
[inaudible]
Speaker Change: Yeah, you got a bunch of things going through their Greg and I'm gonna I'm gonna try to hit each of them but but actually pull it up
Speaker Change: First, we've got a very strong combined or underlying combined ratio of the 92.
Matt pointed out that in Florida there were positive trends.
Speaker Change: The underlying loss trends related to their reform items that we expected we would take into account in some of our pricing to become a little bit more competitive there. We temper that a little bit as we were watching and digesting the effects of tariffs.
Speaker Change: I'd be surprised if the net results of what we we didn't Florida wasn't becoming somewhat more competitive to reflect the net of those items and I'd expect we'd do that.
Speaker Change: Texas, we made our changes that were largely a class plan implementation, so that may have pockets of competitive impact. It wasn't like we moved the base rate up or down, it was a segmented pricing change.
Speaker Change: So we'll have that there. And then the balance of the comments really come back to how we've talked about loss trend before. You know, we spend a couple of years where people want to talk about the man-hime use car index.
Speaker Change: and we repeatedly come back and say that is one minor component of total loss cost trend. We price to total loss cost trend, which is frequency and severity combined on a forward looking basis.
We've taken...
What we see is normal trend, we've taken tariffs.
Speaker Change: into account. We, you know, to be abundantly clear, we do not believe tariffs to be a material earnings impact for us. We think they're going to...
Speaker Change: Be within our normal view of what loss cost trend could be and will be handled with normal ordinary course rate changes and rate filings.
We had provided.
Some level of guidance early last year.
Speaker Change: that we said our combined ratio would gradually rise to a more traditional long-term number, probably in a 93.5, 94.5 range. We're still at a 92. That gradual rise, it was later than we thought it might have been.
Speaker Change: It will still likely come at some point and work its way back to that more long-term trend and that's still our expectation. We still expect it would be three or four quarters. We were just wrong about when it started. So that's good news.
Speaker Change: We'll expect that general drift and will price accordingly to all lost cost trends wherever they are and whatever the tariff impact is. But again,
Speaker Change: to be really clear because a lot of folks have been nervous about this. Given all of the attributes of our book and our starting point, we just don't see the tariffs to be a material earnings impact and when you take the nature of six-month policies.
Speaker Change: The ability to reprice the timeliness of that. We're very confident in our ability to navigate the economic environment and have a highly durable growth number.
Makes sense. Thanks for the answers.
Speaker Change: You next question is from the line of Paul and Newsome from Piper Sandler. Your line is now open.
Speaker Change: Good afternoon, folks. Thanks for the call. I was wondering if you had any thoughts on the potential for sort of secondary impacts from the home insurance crisis in California. I think my sense is a lot of the...
Speaker Change: You know, whatever's happening with the home business, I think Muslims are packaged.
Speaker Change: Writers anyway, but anyway, just thought your thoughts on that would be any interesting.
Speaker Change: It's an insightful question, Paul, and our guess is we're already seeing that.
Matt Hunton: Matt, I think describe that there was a reduction in supply, you know, there were fewer carriers.
Matt Hunton: Engage in the market that might be normal in that it wouldn't shock me if multi-line players were thinking about their total offering as a total, and where if they were troubled about homeowners, they might be tightening their underwriting across the board. [inaudible]
which is creating a more attractive narrative.
Matt Hunton: I'm an environment for auto only writers or players that are specialists there. I think we're benefiting from that right now. I wouldn't imagine that last for a decade but it should last for a while and we're capitalizing on that benefit.
Speaker Change: Interesting. My second question on investment income. The alternatives have moved around a little bit. It's not a huge number for you guys, but it has moved around a little bit. Given what's going on with the financial market, should we be a little bit more conservative
Matt Hunton: or potentially more conservative in the next quarter, even the volatility of the market recently. I think some of that stuff is reported on a lag if I'm not incorrect.
Brad Camden: No, you're correct. Paul, this is Brad. It is reported on a lag. When you mean conservative, are you talking about your estimates or are you talking about, oh, that's just a lower expectation for return in the next quarter or so, because of that.
Brad Camden: Financial Markets being potentially a negative number, I think that's a chapter with their alternative investments when the market hasn't been favorably.
Speaker Change: The, you know, the, how I would think about it is, you know, we're still as I indicated a couple quarters ago, looking at 105 million per quarter run rate.
Speaker Change: Um, obviously we missed, you know, by three or four million based upon the alternative investment performance which for many, you know, you're just seeing lower returns across the board in that asset class.
Speaker Change: Overall, though, as we generate more cash, we're growing and have more invested assets. You'll see it come up.
Speaker Change: and we anticipate reallocating some of our high quality investment portfolio to a higher yielding assets. I don't think about high quality, high yield, private credit, credit CLOs.
Speaker Change: So I'd expect kind of a rolling couple quarter average of a 105 and then for that to increase throughout the back half of the year.
Appreciate the help guys. Thanks very much.
Speaker Change: You next question is from the line of a Brian Meredith from UBS Securities, please go ahead
O'Brien Meredith: Hey, thanks. Joe, I'm just curious, what was the benefit in the quarter and maybe talk about little going forward of the increase in the California minimum women's on written premium growth?
O'Brien Meredith: Yeah, written premium, the California minimum I'm trying to remember, Matt was overall on the book was six or seven points.
High single digits.
O'Brien Meredith: So the 24% written premium growth definitely is benefiting from that and you'll see that modestly come down. You know, I wouldn't necessarily run rate the 24 written premium growth, you probably want to think about that.
high teams
I'm going to go forward basis.
O'Brien Meredith: which is, we just still see it in the second quarter of those since it's six month policies. IEA, you'd see part of it there, yeah.
Speaker Change: Gotcha. Okay, that's helpful. And then second question, more big picture here. You know, you've got ample liquidity. It's your holding company debt to capricious come down. You're in great, you know financial position right now. Thank you.
Speaker Change: What are your thoughts now with respect to M&AG? And is there any kind of opportunities out there given, you know, somewhat just had a little environment of search for a lot of small and big size companies that you can eat with?
Speaker Change: Yeah, great question. First, I'll start with the statement that we never comment on M&A because if we're not doing anything and we comment on it, then we are doing something and say no comment, it says something so we never particularly
So there's nothing serious, you'll be taking it as a specific.
Commentary, I'll point you back to our capital priorities.
Speaker Change: We describe those as first and foremost, looking to organically, profitably grow our business and our business is growing fairly significantly now and is profitable, so the first priority there, the capital employment is that.
The second is if there is an inorganic opportunity in the community.
Speaker Change: to expand the strength of our franchise. We will explore and look for that if it makes us better. You know, bigger isn't necessarily better, better is better. And if there's an opportunity, we will explore that. And then third, if we can't do either one of those and grow the franchise, we'll look to return capital to shareholders in an efficient and effective way possible. So...
Speaker Change: That's the reminder of the priorities. I would say we're a strong organization and we do believe we're back on the balls of our feet and our playing offense and like an environment that might have other folks a little disrupted when we're approaching it from a position of strength.
Oh, thank you.
Speaker Change: Lee DeCentralman is a reminder, if you would like to ask a question, please press tar followed by the number one on her touched on phone. If you're using a speaker phone, please make sure to lift her handset before pressing any keys.
Speaker Change: Your next question comes from the line of Andrew Kligerman from TD Securities, your line is now open.
Hey, good afternoon. Really good color on California.
I was interested, your competitor Geico,
Not necessarily specific to Geico.
Speaker Change: but outside of California, what degree would you say the competition?
Speaker Change: is back in the game and fully competing as if it were 2018 or 2019.
Thank you.
We're seeing...
Speaker Change: Generally, non-standard companies enter back into the market at a pretty good clip, Ex-California. We see...
Speaker Change: Now, in the non-California marketplaces, we'll see on a normal quote
Speaker Change: You know, and we're upwards of 10 to 15 competitors returning prices that's that's a that's a near normal level for us so so ex-California fairly competitive fairly back to back to business as usual there California as I mentioned is a bit of a different story where we're seeing limited supply. Bye.
Speaker Change: and nonstandard market is a bit different than the standard market in terms of how the market is soft and so forth and from a pricing perspective. But generally, ex-California, we are seeing the market back to a normal level of competitiveness.
Speaker Change: Got it, and then just a couple of quick win-wats [inaudible]
Speaker Change: Color on frequency and severity to what degree are you seeing frequency this year as it's still a little low versus prior year, and how about severity?
Andrew, this is Brad, you know, overall the book.
from a frequency and to very standpoint, is performing fairly well.
Speaker Change: You'll see a little bit better frequency this quarter than last.
and a year-over-your-basis [inaudible]
Speaker Change: and then severity is trending with, you know, where we're expecting it to be. I think previously I commented, you know, mid to high single digits on a year of a year basis. You get different coverages up higher than others, but in total, you know, we're priced for mid high single digits, and that's kind of what we're seeing at this point.
Speaker Change: Now I'd also comment there that includes the FR Limit Change in California and everything is basically moving as expected.
Speaker Change: And then just two really quick ones. Brad, how much rate is still there to earn in this year? And then secondly,
Speaker Change: with regard to the other states outside of the big three, Europa, a really robust 13% on PIFS, any standout states that you're getting excited about?
Speaker Change: Andrew, from a rate perspective, it's not something I would focus on. I would focus on more just the PIF growth. We'll take a rate up and down as needed and as indications dictate. Our goal is to remain competitive in all the markets that we operate in. So we're not in that environment where we're trying to get back to earned rate and excess of loss costs. We're already there.
Speaker Change: So we've kind of moved beyond, you know, displaying that and discussing it.
with respect to other markets. You know, we're focused on
Speaker Change: Obviously maintaining our competitive position in California, growing in Florida and Texas.
Speaker Change: and then other expansion states like Illinois, Arizona, Colorado, Oregon are other areas that we're focused on growing. The bulk of our businesses in those three main states, California, Florida, Texas, and over time, will grow those non-large states.
Speaker Change: There are no further questions at this time. I'd like to turn the call over to Mr. Joe Lacher for closing comments. Sir, please go ahead.
Joe Lacher: Thank you, Operator, and thanks everybody for your time and attention today. Again, we're pleased with the results that we've got and looking forward to continuing to deliver strong, strong results going forward. And capitalize on what we think is a very opportunistic market and opportunity throughout the year. Thanks.
Joe Lacher: This concludes to this conference call. Thank you very much for your participation. You may not disconnect.