Q2 2025 Kinsale Capital Group Inc Earnings Call
Good morning and welcome to Kinsale Capital group's second quarter 2025 earnings conference. Call all participants are in a listen-only mode. After the speakers remarks, we will conduct a question and answer session.
To ask a question at this time, you'll need to press star followed by the number 1 on your telephone keypad.
As a reminder, this conference call is being recorded.
Before we get started, let me, let me remind everyone that through the course of the teleconference can Sales Management may make comments that reflect their intentions beliefs and expectations for the future.
As always, these forward-looking statements are subject to certain risk factors which could cause actual results to differ materially.
These risk factors are listed in the company's various SEC filings, including the 2024 annual report on form 10K, which should be reviewed carefully.
The company has finished a Form 8K with the Securities and Exchange Commission that contains the press release announcing its its second quarter results.
K Sales Management may also reference certain non-gaap Financial measures in the call today.
A Reconciliation of gaap to these measures can be found in the press release, which is available at the company's website at www.kings.com.
I will now turn the conference over to Kale's chairman and CEO Mr. Michael keiho. Please go ahead, sir.
Michael Keiho: Thank you, operator. And good morning, everyone. Brian Petrocelli our CFO and Brian Haney. Our president and CEO. Oh are both joining me on the call this morning.
Michael Keiho: In the second quarter 2025 can sales operating earnings per share increased by 27.5%.
Michael Keiho: And gross written premium Group by 4.9% over the second quarter of 2024.
Michael Keiho: For the quarter of the company, posted a combined ratio of 75.8%.
Michael Keiho: And a 6-month operating return on Equity of 24.7%.
Michael Keiho: Our book value per share increased by 16% since the year end 2024.
Michael Keiho: In both hard markets and soft.
Michael Keiho: Can sales differentiated strategy and execution, allow us to drive both profit and growth.
Michael Keiho: We focus on small units accounts. We maintain absolute control over our underwriting.
Michael Keiho: We provide exceptional customer service.
Michael Keiho: We have advanced technology and no Legacy software.
Michael Keiho: A strong emphasis on data and Analytics.
Michael Keiho: And by far, we have the lowest costs in the industry.
Michael Keiho: This strategy and the skill and experience of our almost 700 full-time employees.
Michael Keiho: Give us confidence in our prospects, for both profitability and growth in the years ahead, in all types of Market environments,
The ens Market in the second quarter was consistent with the first quarter.
Michael Keiho: Overall it is a competitive market.
Michael Keiho: With the level of competition. Varying, quite a bit from 1 industry segment to another.
Our commercial property division saw premium drop by 16.8% in the second quarter due to a high levels of competition and rate, declines.
Michael Keiho: Absent. This division can sales premium grew by 14.3% in the second quarter.
Speaker Change: Brian Haney, will offer some more in-depth commentary on the market here in a moment.
We we renewed our reinsurance program on June 1st.
Given the strong returns we have generated for our reinsurers over many years.
Speaker Change: The overall program was slightly more favorable for canale upon renewal.
Speaker Change: Some of the modest changes in the program include a million dollar retention on our casualty treaty up from a 2 and a half million dollar retention on the expiring.
Speaker Change: On our commercial Pro on our property. Quota, share contract, the seating commission. We received from reinsurers increased slightly reflecting, favorable historical results,
And our retention increased to 60% from 50% on the expiring program.
Speaker Change: On the catastrophe excess of loss. Treaty we increase our retention from 60 million to 75 and purchase some additional limit at the top of the tower.
As we have stated many times over the years, we endeavored to post loss reserves with some measure of conservatism.
So that they are more likely to develop favorably than unfavorably over time.
Speaker Change: Our 16-year track record Bears out our commitment to cautious, reserving, and building, a strong balance sheet.
At a time when there are substantial questions around the reserve adequacy of the broader PNC industry. It's important for investors in canale to know that our loss reserves have never been more conservatively stated than they are right now.
And with that I'll turn the call over to Brian Petra. All right. Thanks Mike again just another strong quarter with net income and net operating earnings increasing by 44.9% and 27.4% respectively.
Speaker Change: The 75.8% combined ratio for the quarter included, 3.9 points from net, favorable prior year loss Reserve development.
Speaker Change: Compared to 2.8 points last year.
Speaker Change: with less than a point in cat losses, uh, this year compared to 1 point in Q2 of 2024
Speaker Change: As Mike mentioned, we continue to take a cautious approach to releasing Reserves.
Speaker Change: We produced a 20.7% expense ratio on the second quarter compared to 21.1% uh last year.
Speaker Change: Uh, the expense ratio continues to benefit from seating commissions generated on the company's casualty and commercial property quoter, share reinsurance agreements.
Speaker Change: And from the company's intense focus on managing expenses on a daily basis.
Speaker Change: On the investment side.
And that investment income increased by 29.6% and the second quarter over last year.
Speaker Change: As a result of continued growth, in Investment Portfolio, generated from strong, operating cash flows.
Speaker Change: Ken sales, float. Mostly unpaid losses and unearned premium grew to 2.9 billion dollars at June 30th up from 2 and a half billion at the end of 2024.
Speaker Change: Annualized gross return was 4.3% for the first half of the year and consistent with last year.
Speaker Change: Intensity varies by division. We're seeing robust premium growth in small business property, high value, homeowners Commercial Auto entertainment and general casualty.
Speaker Change: Meanwhile, commercial property, construction, life sciences and management liability are facing tougher competition. And in some cases declining premiums,
Speaker Change: The market is clearly more competitive than a year ago, however, much of the aggressive pricing is coming from mgas and fronting companies.
While there are some highly regarded mgas out there with long track records of success, the model is a whole is challenged by a misalignment of interests.
Speaker Change: Some front-end companies are posting unsustainable, gross loss, ratios of 100% or higher, signaling Capital destruction.
Speaker Change: Notably in our largest reserve line. Other liability occurrence. The top 6, en front and carriers are projecting 2024, gross loss ratios well below. Ours, despite consistently worse experience in older, exit years and consistently worse loss development.
Speaker Change: either they as a group have experienced a miraculous turnaround or they are under reserving
Speaker Change: eventually loss reserves turn into paid claims and posting inadequate reserves, only pushes the problem down the road for a Time.
Speaker Change: The situation is reminiscent on a smaller scale of the mortgage crisis of 20 2008, where you had a misalignment of interests between The Originators and bears of risk, which resulted in a fundamental mispricing of that risk.
Speaker Change: Given the size of the problem, this will not be a significant for the economy as the mortgage crisis.
Speaker Change: But it will be very significant for the insurance industry and for some players in it, in particular and it's encouraging to us because ultimately under reserving is a self-correcting problem.
We continue expanding our product Suite to capture Market opportunity. In Q2, we broadened our Agro business vertical to include property coverage and launched a new homeowners product in Texas, Louisiana, Colorado, and California with more states, on the way.
Speaker Change: Submission growth was 9% for the quarter, which is down slightly from the 10% in the first quarter, our commercial property division, experienced a decline in submissions, which depressed the company's overall submission growth rate. Without that the submission growth rate would have been in the low double digits.
Speaker Change: Pricing Trends aligned with the ambulance index which reported at 2.4% overall decrease.
Speaker Change: Commercial property, especially in Southeastern wind zones was down 20%.
Cassidy pricing was mixed. But modestly positive, some professional and management. Liabilities, uh, lines were slightly negative.
Speaker Change: Finally, we continue to be cautious around lost cost Trends headline. Inflation is above the fed's 2% Target and with various governmental policy changes. It's not clear where things go from here, which is even more reason to be cautious and conservative with our Reserves.
Mike: Overall we remain optimistic, our lust results are good. Our growth prospects are good and as the low cost provider in our space we have a durable competitive advantage and with that, I'll hand it back over to Mike.
Mike: Thanks Brian operator, we're ready for a Q&A.
Thank you as a reminder to ask a question. Please press star. Followed by the number 1 on your telephone keypad.
Speaker Change: Our first question comes from Andrew kleger from TD Cowen please go ahead. Your line is open.
Speaker Change: Andrew. This is my uh where we've got a very poor connection, so we weren't able to understand your question. You want to try 1 more time, showed up, you know,
Speaker Change: Operator, let's drop uh that call and let's go to the next 1.
Speaker Change: Certainly our next question, comes from Michael zaremski from beimo. Capital markets, please go ahead, your line is open
Hey morning, it's Dan on for Mike. Um, maybe first just on your longer term growth Target 1 of your peers, recently lowered their near-term. Growth Target, due to the heightened pricing environment, competition with 2 quarters below 10 to 20, that you've got to. Is there any thought to recalibrating the New York term number? Or is there still belief in that that 10 to 20 number nice?
Speaker Change: Yeah. Um, we don't offer a, um, a growth Prospect because ultimately, we don't really know what that number is going to be. Um, I think 10 to 20% over the course of the cycle is a, um, it's a good faith estimate. And it's actually a I think a conservative 1.
um,
I think, 1 of the 1 of the challenges of of estimating the near-term growth is that
especially, um,
Speaker Change: Some of that business that's concentrated in uh you know, larger Southeastern wind accounts that's where we're seeing, you know. Um,
You know, uh, kind of a big Market correction.
Speaker Change: So, um, you know, we did report the fact that if you take the commercial property division, out of it,
You know, we grew in the mid teens.
Speaker Change: Um, you know, we think that's a really healthy number that, um, showcases the competitiveness of our model,
Speaker Change: uh, the accuracy of our underwriting, uh, the, the market segments, we focus on the fact that we operate at an enormous expense advantage over our competitors. So, um,
Speaker Change: You know, we're quite optimistic but we're also realistic that near-term. You know, we've got some headwinds with competition and maybe the last comment I'd make, is that um,
Speaker Change: You know, the year-over-year comparison in our commercial property division will be a little bit easier, the second half of the year than it was the first.
Speaker Change: because we wrote a disproportionate amount of that business uh, in the first half of, you know, last year,
Speaker Change: so, we'll get a little bit of
Speaker Change: um um, you know, less of a headwind if you will on the um,
Speaker Change: I don't know what you call it correction in the commercial property division.
Speaker Change: That's helpful. Thank you. And then maybe Switching gears to the underlying margin, just with rates being negative in the first half of 25, and, you know, a higher casualty mix. Um, you just help us reconcile reconcile, the source of the underlying margin Improvement year-over-year.
Speaker Change: on, I mean there's uh,
Speaker Change: We We Lay It All Out in the, in the release, right? It's the current accident year. Um, I think the cat losses were down
Speaker Change: maybe, um,
Speaker Change: Sorry, I meant I just meant the the underlying current asset here. Yeah.
Speaker Change: Uh, the current accident year is a composite of of variety of lines of business.
Speaker Change: um, you know, I think, uh, you know, if kind of the
Speaker Change: General movement within that number would be, we continue to be very cautious around longtail casualty.
Speaker Change: Um you know, Brian Haney mentioned, the fact that inflation is still higher than the fed's target.
Speaker Change: Uh, I think longer tail casity lines are a little bit more exposed to that. So we're being conservative on the longer tail casualty and um,
Speaker Change: To the extent that we're over performing. It's probably disproportionately due to our shorter tail lines like property where the experience has been really.
Speaker Change: Quite compelling.
Pablo Sings: Our next question comes from Pablo. Sings on from JP Morgan, please go ahead, your line is open.
Pablo: Um, hi, good morning. First question I have is about the commercial property business. Uh, excuse me. Got your sense of the positive gap between
Pablo: Expected profitability and Technical pricing today or or put another way, right? How much for you do you think prices can drop before, you know, the markets are throws up in hands and says you know, this is as far as it will go. Any sort of sense you have around that.
Yeah, Pablo, this is Mike. Um, I would just remind you that we write property coverage in a whole variety of different. Um,
Pablo: Underwriting divisions or verticals within our company.
Um, the commercial property division specifically is where we're seeing the most intense competition.
Pablo: And it's not just rates dropping, although that's happening. It's also, uh, terms and conditions, uh, line sizes and the like so it's a, it's a whole mix of things. Um,
Pablo: We also have a small property division, we write in the Marine coverage, we write high value homeowners. We have a regular homeowner's book so, um, you know the other areas are much more attractive to us than, you know, in particular, the larger uh,
Pablo: Southeastern wind accounts. So it it, it's a mix. But in terms of the
Pablo: You know, where the market goes from here, you know, where we don't really have any kind of special insight into that.
Pablo: Okay.
Pablo: Um, and then, uh, just switching to, I guess, Capital right? And uh, Capital return so would be beam and growth willing from a recent levels, right? I I think even if you assume some pickup from the recent Trend, uh, your your area, you will just naturally decline, right? You're just going off, like, pretty high growth years and you're going to accumulate capital. Is there some
Pablo: Um, yeah, it's, um, you know, um, I think we expect our roi's in the, you know, low to mid 20s or better.
Um,
Pablo: You know that the the returns are always a function of the pricing, we get. It's uh, lost cost Trends. It's the amount of conservatism in our ibnr that that drifts out over time.
Pablo: Right. So there's a lot of things that goes into the returns. Um,
Pablo: in terms of, um,
You know, returning Capital. It's something we look at every year and we'll continue to adjust. But uh you know, we want to maintain a healthy Capital position but we don't uh ever want to hold um an excessive amount of redundant Capital either.
Pablo: So you know, right now we address that in a in a very small way through the dividend and the share BuyBacks.
Pablo: Uh, and we'll continue to evaluate that on a go forward basis.
Pablo: Thank you.
Speaker Change: Our next question.
Speaker Change: Your line is open.
Speaker Change: Yeah. Thanks. Good morning. I want to get a little more color on. I think it was Brian's comments on the pricing. Um and and the casualty side, I think you said mixed but positive, um, can you can you provide a little more color on on on where you're seeing the mixed? What what you meant by that and then maybe specifically if you can drill down into the excess cavity book um and and basically what you're seeing in pricing there, thank you.
Yeah. I think some of the uh you look at the Casey lines, some of the um higher return lower. Growing lines. Like let's say products liability would be experiencing, you know, rate increases on the lower end or rate decreases and then some of the more
Um, longer tail lines. Let's say like in structure X is casually would be at the higher end.
Oh, okay. And and then, I guess sticking with construction, it's not the first time. You've you've mentioned, um, some adjustments, actual adjustments on the reserves for construction defect and liability. Um, I guess, can you say what you're seeing for Trends their lost Trends there and any certain geographies that are more conducive to kind of those adjustments you made?
Speaker Change: Um, I think a lot of the uh, California used to be a very big uh, state for us in construction and we've kind of pivoted away from that. So I would say to the extent that we were seeing, you know, abnormally High loss development, that required some sort of adjustment that's where we were seeing it. And so, um,
Speaker Change: We, we adjusted the loss 12 and patterns. We also adjusted our rates and it resulted in us growing outside of, um,
Speaker Change: California, which was good.
Speaker Change: Okay, so so your adjustments, I'm sorry your adjustments you made were because of the California book. Um but you're seeing I was just I was just making I was just giving you. I was just giving you some color detail about what was going on within the construction book, generally speaking. It was, it was worse in California where we were a little over concentrated.
Okay and are no longer over concentrated.
Speaker Change: Okay, thank you.
Bob Hang: Our next question comes from Bob. Hang from Morgan Stanley, please go ahead. Your line is open.
Bob Hang: Good morning. Uh, my question is on growth and specifically new business. Um, not sure if you touched this already. So apologies, um, just curious how much of the premium growth for the quarter was driven by new business growth. And uh, broadly speaking, understand that we're facing challenges in property. But is there a way to think about that new business and the renewal business Dynamics going forward? Uh are there lines of business that are more exciting than others? Just curious to see your view on that.
Bob Hang: um,
Bob Hang: I for Kate, the, you know, the growth between the renewal book and the new business book, but I would say generally, it would probably be driven mostly by new business because the pricing environment, we're in today, we're not seeing dramatic changes.
Bob Hang: um,
Speaker Change: And then what was the second part of the question was uh, oh yeah. Just in terms of like if we think about just the growth going forward, is there any specific line of business where you think new business? Would be more exciting.
Speaker Change: Well, Brian Haney mentioned a whole series of underwriting divisions where we're still still seeing very robust Topline growth.
Speaker Change: You know and that typically correlates to a better price and environment and you know maybe a little more dislocation within the industry it's Etc.
Speaker Change: So, um, you know, uh, entertainment. Um, I I value homeowners we're, we're rolling out a new, uh, homeowners product in a variety of states.
Speaker Change: Growing at a really good clip. I think the pricing there is favorable.
Speaker Change: you know, the
Speaker Change: you know, there's it's uh we we have a as a, you know, we're a
Speaker Change: you know, uh, I guess we're still a boutique insurance company, but we've got a relatively broad product line and we participate in
Speaker Change: You know, a whole range of different industry segments.
and it's just a good reminder, they don't all move in tandem,
Speaker Change: And, um, you know, in general, we feel generally positive about the market, okay? Oh really appreciate that. Uh, thank you, may maybe just like 1, follow-up on that comment, uh, specifically homeowner right 2.7% of your total premium year to date is homeowner. Uh, you, you talked about the excitement of that going forward is, is that purely just driven by what's going on in California? That's resulting in homeowner. Now growing like, do you I'm guessing that business should be growing exponentially from here? Does that change your 7030 split on casualty and property, going forward? Like how should I think about the the growth trajectory there?
Speaker Change: Yeah. Look uh homeowners is a volatile line of business where the broader PNC industry is I think underwritten that business to a loss for like 5 or 7 years in a row.
um,
historically, it's been mostly standard markets. I think there's now a shift.
uh, we're more of that business is coming into the ens market and so can sail is
Speaker Change: Working hard to address the opportunity there. It's
Speaker Change: Partly California, but it's partly in the Southeast, uh, southeastern states Texas around to the Middle. Atlantic driven by Coastal wind. Um,
Speaker Change: but as we, uh, as Brian, I think mentioned earlier in his comments, we've also rolled out a new homeowners product in, um,
Speaker Change: Um, you know, Colorado, for instance. So, um, yeah, I I think we see that as a growing opportunity for the company, uh, in a whole range of different states. And, um, I wouldn't expect any kind of near-term, uh, shift in the 7030, split between casualty and property, but uh, depending on how successful we are, uh, over the years ahead, you know, it could, it could shift a little bit.
Speaker Change: Great, really appreciate the color. Thank you very much.
Looking at the Opex ratio, it looks like it's been about 8% year to date and I think you were doing some technology Investments that I think have ended. So is that 8% kind of a good run rate for the near term?
Speaker Change: uh, yeah, I think that is
okay. And you know, if we look at the the session ratio, it came in this quarter.
And if we go back a few years, it was kind of in a, a mid teens territory. Now that was before you were, you know, more um, ready more property business. So perhaps it's not going to go back towards the mid teens. But should we be thinking about 17% kind of near-term.
Speaker Change: I mean, it's going to Andrew is Mike, it's going to depend on the mix of business, of course, uh, you know, when we renewed our reinsurance program, we took a little bit bigger bigger net on the casualty, and on the property, a little bit bigger, uh, cat retention. So,
uh, the reinsurance program will will result in a little bit of a
Speaker Change: shift to a lower seating ratio and then the rest of its going to be mixed up business over time. So,
Speaker Change: I I, to be honest, I don't have a number to give you but, you know, you can just judge mentally expect it to uh, maybe go down a bit.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Joe, tamiyo from Bank of America, please go ahead. Your line is open.
Speaker Change: Hey, good morning everyone and thanks for taking my questions. My first question is regarding the bind submit ratio. I believe. Historically, this is ranged from like 9 to 11 12%, but I was just curious to see where we are on that today. And generally this year has that ratio remained relatively steady for most divisions, excluding commercial property.
Speaker Change: Uh yes, it's been relatively stable.
Speaker Change: Okay. All right. Great. Thank you. And then the other question is kind of just kind of further on the conversation regarding the competition MGA. It seems like some of your competitors have also joined in that competition, even 1 mentioning being approached by Acquisitions. I'm kind of curious to see where you guys think we are in the cycle with mgas given kind of the loss ratios, and the history they've been putting up, like, is this something that we kind of expect coming to a head in the near term? I know it's really in a way to predict it, but just kind of curious on your thoughts on this.
Companies.
Speaker Change: And prognosticating so we'll we'll leave that in your capable hands.
Thank you for the talk.
Our next question comes.
Speaker Change: Cues from truist, please go ahead. Your line is open.
Speaker Change: Thanks, good morning.
Speaker Change: 20. Does that mean stable sequentially?
Speaker Change: Yeah. Yeah, I would say that's fair.
Very good.
Speaker Change: Um,
Speaker Change: how about the, uh, current accident year trajectory?
Speaker Change: uh, I think historically you've
Speaker Change: Started out the year. Um, I think being a little more conservative, a little higher current accident year, lost picks anything that you have seen through the 6 months that might, uh, interfere with that historical pattern of improvement in the back half.
Speaker Change: Uh no, I don't think so.
Speaker Change: You know, I mentioned earlier that, you know, we're obviously, we evaluate and analyze our uh, loss development every quarter.
Speaker Change: and um,
Speaker Change: You know it was a in response to a prior question mark uh you know we we continue to be cautious around the longtail casualty.
Speaker Change: And uh, to the extent that um, you know, there's any uh, shift in the good news coming out. It's largely driven by the short tail business like property,
Speaker Change: Mike. Any, uh,
More thoughts on this dynamic in Florida, where it seems like more business is going into the ens Market. Even as the, uh, pricing is softening up. Um,
Speaker Change: Why? That would be, you know, how long that might last? Is that something you've seen in Prior Cycles?
Speaker Change: Uh, you know, I I don't think we know. Um, we don't have anything definitive to offer. I would just
Speaker Change: uh, maybe comment that, um, ens
Speaker Change: Is reaching all-time highs?
Speaker Change: um, not just in Florida but all over the country in terms of, um,
You know, its share of the overall, uh, premium dollar being placed. And so I think as people become more comfortable with ens markets,
Speaker Change: um,
Speaker Change: I think the acceptance uh, of the ens paper is just increased.
Speaker Change: and um,
Speaker Change: it's just becoming more and more common. So, um,
Speaker Change: It's it's a healthier way to manage and insurance company especially when we have, you know, as Dynamic a tort system as we do in the United States.
Uh, certainly Florida has seen a lot of shifts in tort uh law over the years.
Speaker Change: and then of course on the property side with you know, reacting to Natural catastrophes, there's been a
Speaker Change: You know, significant uptick in cat activity, the last 5 or 7 years.
And ens companies with freedom of ring form can react to that.
uh, much more quickly than the standard companies can so
It. It just seems like it's a positive trend all the way around.
Speaker Change: Very good. And then 1 more. If I can uh um Brian Petra, uh, the cash flow up a little bit through 6 months. Um,
Speaker Change: What kind of Topline growth do you need in order to keep the cash flow?
Speaker Change: Uh in positive. Well it's obviously in positive territory but increasing year-over-year, you know if you get 5% growth will catch from operations, still move up or is there some point at which
Speaker Change: To pay out and losses, uh, starts to dampen that any general thoughts would be helpful.
Speaker Change: I think that's a fair assumption Mark. And and I think 1 thing that's probably depressed at a little bit is, you know, paying out all the cat losses from the Palisades wildfire
Speaker Change: that there's a these are short-term uh short tail.
Speaker Change: Claims they get resolved quickly, especially when you have a limits loss.
Speaker Change: Um, so I think that's probably depressed the uh, the growth rate there on a temporary basis.
Speaker Change: So, as long as the top line is moving up then cash from operation should likewise move up.
Speaker Change: Yeah, but it's always a function of your loss experience. And again I think we're good Underwriters we're establishing very conservative laws for reserves so
Speaker Change: Uh, I I'd be optimistic.
Speaker Change: Thank you very much.
Thanks Mark.
Speaker Change: Our next question comes from Andrew kleger from TD Cowen please go ahead. July this is open.
Speaker Change: Hi. Hi, can you hear me? This time? I'm so sorry for the bad line before.
Speaker Change: So um, so I've been hearing so much about a lot of these startups in kind of small, mid ens. Um, what do you what are you seeing in terms of that competition? Are you seeing a big pickup and how is that affecting pricing?
Speaker Change: I think.
I would, I would say that the
Speaker Change: Small.
Speaker Change: Startup balance.
Business are not having a lot.
Speaker Change: Just because they're dwarfed by um the what the mgas are doing those 6. Uh ens front, end companies, I mentioned
Speaker Change: Write something like um 6 billion dollars in Gross written premium. So, you know, it would take a long time for the the newer balance sheet businesses to
make a debt in that.
interesting and then following up on an earlier question about sessions and, you know, seating off
Speaker Change: The numbers like 17% and and and this quarter, I noticed that, you know, gross written was up 5, but net written was up close to 7 so, oh over time like let's let's look out. Maybe 5, 10 years from now. Do you see that session declining to as low as 10%? Um, do you need to see see that much over time?
Speaker Change: Um, we see more.
Speaker Change: Uh, premium on the property side.
Speaker Change: Uh, where we have?
Speaker Change: Uh, significant natural, catastrophe exposure.
And where the limits are higher.
Um so you know what? The seating ratio looks down? The looks like down the road is really going to be a function of
Speaker Change: The mix of business, more than anything. I think on a homeowner's policy, the seating ratio would be modest.
Speaker Change: If it's a, you know, Hotel on the beach in Florida, it's going to be more significant.
Speaker Change: See, thanks a lot.
Is open.
Speaker Change: Um, hi thanks for taking my follow-up. So you go through this in the 10 CE, but I was wondering if you could provide more commentary in the reserve, releases you booked this quarter, I think in the 10, you mentioned, accident years 2020 2024. Um but I was working years about the balance of releases uh between casualty and property. I think in 1 key you highlighted property more, I'm wondering if that's still the case or if there's any material changes to order. Thank you.
Um wait Pablo, you're you're asking for some commentary on.
The the Reserve movements in 20120 through 2024. No no, no, no. Um, what what you booked this this quarter, right? I think it was from accident years 2022 2024. Um, uh, but I was just curious about any any color on the lines of business where you release the reserves, right? I think in once you
Uh you highlighted property a bit more um, you know, but but anyway any sort of commentary on the on the releases ebook this quarter. Thank you.
Speaker Change: yeah, I I would say this that um, you know, we we have I think it's about a dozen
Statutory lines of business. We write, uh, this is our 16th year in business.
I don't think we have any open claims for the for the first couple years we were in business, but in general, there there is a lot going on in our Reserves.
Uh every quarter and so I I don't think we want to get into any kind of granularity on a, on a conference call because it's just it's too technical. But, uh, in Broad Strokes. I think it's important for the investors to understand 1 that we're being very conservative.
In setting aside reserves today to pay claims in the future.
Speaker Change: Uh, especially in an area in an era of heightened inflation, Etc.
Speaker Change: and then the second thing is um in terms of broad movement in our reserves, we're being more, conservative, so slower to release
Speaker Change: Uh, on the longtail casualty lines, where we think there's, you know, the greatest degree of uncertainty. And then, to the extent that, uh, there's good news coming out of our results. It's disproportionately on the, uh, short tail business, which is property for us.
You know, 30% of our business is property. Those claims tend to be reported and uh resolved relatively quickly uh compared to the casualty business. So
Speaker Change: Uh, again, it just just kind of reinforcing. Uh, we're trying to be cautious in building a rock, solid balance sheet.
Okay, Mike. Thank you.
Speaker Change: Please. Please go ahead. Your line is open.
Speaker Change: Thanks. Just wanted to go back to the pricing commentary on casualty and the modestly positive I guess that that sounds a little low. It could be partly that you're in small commercial but it could also be interpreted that you're just competing more to win business. So I guess is that the case? And do you feel that you're more competitive pricing between the competition and the spread there is growing in your favor.
I Andrew, I think we said we we uh in saw in our book, something similar to uh the ambulance index which I think was uh pricing, right? And exposure down about 2.4%.
Speaker Change: our, our large commercial property deals, South Eastern wind accounts, we're down about 20,
Speaker Change: Um, everything else is a little bit of a mix up up or down slightly.
I I would say getting back to my comment about uh the uh, MGA printing business. I, I think it's true that our casualty experience has been better than
Speaker Change: The industry. And so I think there's more of an opportunity for us or there's less of a need for us to increase rates than there is for the industry.
Speaker Change: Thank you.
Speaker Change: We have no further questions at this time. I'd like to turn the call back to Michael kahoe for any closing remarks.
Okay, well, thank you everybody for listening and uh, we look forward to speaking with you again, uh, down the road a little bit.