Q2 2025 Old Republic International Corp Earnings Call
Unknown Executive: Second Quarter 2025 Earnings Conference Call. All participants are in a listen-only mode. After the speaker's remarks, we'll conduct a question and answer session.
Good afternoon and welcome to Old Republic International second quarter 2025 earnings conference call.
All participants are in a listen-only mode.
Unknown Executive: To ask a question at that time, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded.
After the speakers remarks, we'll conduct a question and answer session.
to ask a question at that time, you'll need to press star followed by the number 1 on your telephone keypad,
Joe Calabrese: I would now like to turn the call over to Joe Calabrese at MWW. Thank you. Please go ahead. Thank you.
As a reminder, this conference call is being recorded.
Speaker Change: I would now like to turn the call over to Joe Colibri at mww. Thank you. Please go ahead.
Craig Smiddy: Good afternoon, everyone, and thank you for joining us for the Old Republic conference call to discuss second quarter 2025 results. This morning, we distributed a copy of the press release and posted a separate financial supplement. Both of the documents are available on Old Republic's website at www.oldrepublic.com.
Thank you.
Good afternoon, everyone and thank you for joining us for the Old Republic conference call to discuss, second quarter, 2025 results.
Unknown Executive: Please be advised that this call may involve forwarding statements as discussed in the press release dated July 24th, 2025. Assumptions, uncertainties, and risks exist that may cause results to differ materially from those set forth in these forward-looking statements. For more information on the assumptions, uncertainties, and risks, please refer to the forwarding statements discussion of the press release and the company's other SEC filings, and the risk factors discussed in the company's most recent Form 10-K and other recent SEC filings. We may also include references to net income, excluding net investment gains or net operating income, a non-GAAP financial measure, in our remarks or in our responses to questions.
Speaker Change: This morning, we distributed a copy, to the press release, and posted to the separate Financial supplements. Both of the documents are available on all Republic's. Website at www.republic.com, please be advised that this call may involve Frozen statements as discussed in the press release date of July, 24th 2025
Consumptions uncertainties and risks exist. That may cause results to different materially from those set forth in these 4 looking statements,
Speaker Change: For more information on the assumptions, I'm sorry. The needs and risks. Please refer to the following statements discussion in the press release and the company's other SEC filings and the risk factors discussed in the company's most recent form, 10K and other recent SEC filings.
Unknown Executive: Gap reconciliations are included in the prexilus.
We may also include references to net income. Excluding net investment gains or net operating income and non-gaap financial measure in our remarks or in a response to questions.
Joe Calabrese: Presenting on today's conference call will be Craig Smiddy, President and CEO, Frank Sodaro, Chief Financial Officer, and Carolyn Monroe, President and CEO of Old Republic's National Title Insurance Group. Management will make some opening remarks and then we'll open the line for your questions.
Speaker Change: Gap. Reconciliations are included in the press release.
Craig: for presenting on today's conference call will be Craig, Smitty president and CEO Brian sadara, Chief Financial Officer and Colin Munro, president and CEO of all Republic's National Title Insurance Group
Craig Smiddy: At this time, I would like to turn the call over to Craig. Please go ahead, sir. All right, Joe, thank you very much. And good afternoon, everyone. Thank you for joining our call.
Speaker Change: Management will make some opening remarks and then we'll open the line for your questions.
At this time, we would like to turn the call over to Craig. Please go ahead, sir.
Joe Colibri: All right, Joe, thank you very much.
Craig Smiddy: And welcome again to our second quarter 2025 earnings discussion. Well, our story of strong growth and strong profitability continued through the second quarter of this year. During the second quarter, we produced $267.5 million of consolidated pre-tax operating income, up from $253.8 million in the second quarter of 2004. Our consolidated combined ratio was 93.6 compared to 93.5 in the second quarter of last year. In specialty insurance, we grew net premiums earned by 14.6% in the second quarter and produced $253.7 million of pre-tax operating income. That was up from $202.5 million in the second quarter last year.
Craig: And uh, good afternoon. Everyone, thank you for joining our call.
Craig: And uh welcome again to our second quarter 2025 earnings.
Craig: Uh, discussion.
Craig: Well, our story of strong growth and strong profitability. Continued through the second quarter of this year.
Craig: Uh, during the second quarter, we produced 267.5 million of Consolidated pre-tax. Operating income up from 253.8 million in the second quarter of 24.
Our Consolidated combined ratio was 93.6.
Craig: Compared to 93.5 in the second quarter of last year.
Craig Smiddy: The specialty insurance combined ratio was 90.7 in the quarter and that compares to 92.4 in the second quarter of last year. In title, despite the continuation of higher mortgage interest rates and a slow real estate market, the title insurance folks grew premiums and fees earned by 5.2% compared to the second quarter last year, and they produced $24.2 million of pre-tax operating income, down from $46 million in the second quarter last year. And title combined ratio was 99 in the quarter compared to 95.4 in the second quarter of last year, and of course Carolyn will give us a little more insight into those figures.
And uh, specialty insurance. We grew net premiums earned by 14.6% in the second quarter and produced 253.7 million of pretax. Operating income, that was up from 202.5 million in the second quarter last year.
The specialty Insurance, combined ratio was 90.7 in the quarter and that compares to 92.4 in the second quarter of last year.
Craig: Uh in title despite the continuation of higher uh mortgage interest rates and a slow real estate market.
Craig Smiddy: Our conservative reserving practices continue to produce favorable prior year loss reserve development in both specialty insurance and title insurance. Our balance sheet remains strong and we continue to invest in our new specialty underwriting subsidiaries as well as in technology and in talent.
Craig: Last year and title combined ratio was 99 in the quarter compared to 95.4 in the second quarter of last year. And of course Caroline will give us a little more insight into those figures.
Craig: Our conservative reserving practices continue to produce favorable prior year loss, Reserve development in both specialty, insurance and title insurance.
Frank Sodaro: So with that, as opening remarks, I'll now turn the discussion over to Frank, and Frank will then turn things back to me to cover specialty insurance, and then I'll turn things over to Carolyn to cover title insurance, and then we'll open it up to the Q&A part. So with that, I hand it to you, Frank. Thank you, Craig. And good afternoon, everyone. This morning, we reported net operating income of $209 million for the quarter, compared to $202 million last year. On a per share basis, comparable year-over-year results were $0.83 compared to $0.76, a 9% Net investment income increased 2.4% as a result of higher yields on the bond portfolio, partially offset by lower invested asset base from returning excess capital, and that included the $500 million paid as a special dividend during the first quarter of this year.
Craig: Our balance sheet remains strong, and we continue to invest in our new specialty underwriting subsidiaries as well as in technology and in Talent.
Craig: So uh with that as opening remarks, I'll now turn the discussion over to Frank and Frank will then turn things back to me to cover specialty insurance and then I'll turn things over to Carolyn to cover title insurance and then we'll open it up to the Q&A part. So with that I hand it to you Frank.
Frank: Thank you, Craig. And good afternoon everyone this morning, we reported net operating income of 209 million for the quarter compared to 202 Million last year.
On a per share basis comparable, year-over-year results or 83 cents compared to 76 cents a 9% increase.
Frank Sodaro: Our average reinvestment rate on corporate bonds during the quarter was 5% compared to the average yield rolling off of about 4%. Total bond portfolio book yield now stands at 4.7% compared to 4.5% at the end of last Turning now to loss reserves, both specialty insurance and title insurance recognized favorable development in the quarter, leading to a benefit in the consolidated loss ratio of 2.1 percentage points compared to 2.2 points last year. Within specialty insurance, Workers' Comp continued to have strong favorable development and accounted for the majority of the group's total favorable development. Commercial auto and property also had favorable development, while general liability had unfavorable development.
Frank: Net investment income increased 2.4% as a result of higher yields on the bond portfolio. Partial set by lower invested asset base from returning excess capital and then included the 500 million paid as a special dividend during the first quarter of this year.
Our average reinvestment rate on corporate bonds during the quarter was 5% compared to the average yield rolling off of about 4%, the Total Bond portfolio book. Yield now stands at 4.7% compared to 4.5% at the end of last year.
Frank: Turning now, to loss reserves, both specialty, insurance and Title Insurance. Recognized favorable development. In the quarter, leading to a benefit in the Consolidated loss ratio of 2.1 percentage points compared to 2.2 points last year.
Frank: Within specialty insurance.
Workers comp continued to have strong, favorable development, and accounted for the majority of the groups total favorable development.
Commercial Auto and property also had favorable development.
Frank Sodaro: However, the year-to-date impact was less than one-half of one percent on the specialty insurance loss rate. We ended the quarter with book value per share of $25.14, which inclusive of the regular dividend equated to an increase of just over 12.6%, resulting primarily from our strong operating earnings and higher investment valuation. In the quarter, we paid $71 million in regular cash dividends. We did not repurchase any shares during the quarter. And our repurchases since the end of the quarter were not material, so that left us with just over $200 million remaining in our current repurchase program.
Frank: While general liability had unfavorable development. However, the year-to-date impact was less than 1/2 of 1% on the specialty insurance loss ratio.
We ended the quarter with book value per share of twenty 5.14 which inclusive of the regular dividend equated, to an increase of just over 12.6%, resulting primarily from our strong operating earnings and higher investment valuations.
In the quarter. We paid 71 million in regular cash dividends.
Frank: We did not repurchase any shares during the quarter.
Craig Smiddy: I'll now turn the call back over to Craig for discussion of specialty. All right. Thanks, Frank. So specialty insurance net written premiums were up 9% in the second quarter, and that came from strong renewal retention ratios, rate increases on most lines of coverage, and solid new business writing. and an increasing level of premium production in our new specialty underwriting subsidiary. We continue to expand our E&S presence with E&S direct written premiums up 12% so far this year.
Frank: And our repurchases, since the end of the quarter were not Material, so that left us with just over 200 million remaining in our current repurchase program.
Frank: I'll now turn the call back over to Craig for to discussion of specialty insurance.
Speaker Change: All right. Thanks Frank.
Speaker Change: So specialty Insurance, net, written premiums were up 9% in the second quarter and that came from strong, uh, renewal retention ratios rate increases on most lines of coverage and solid new business writings.
And an increasing level of Premium production in our new specialty underwriting, subsidiaries.
Craig Smiddy: As mentioned in my opening remarks in the second quarter, specialty insurance pre-tax operating income was $254 million and the combined ratio was 90.7. The loss ratio for the second quarter was at 62.5, and that included 2.9 percentage points of favorable prior year loss reserve development, compared to 64.3 in the second quarter last year. That included 2.5 points of favorable development. Dispense ratio was in line with expectations coming in at 28.2 in the second quarter compared to 28.1 in the second quarter last year.
Speaker Change: We continue to expand our ens presence with ens direct written premiums up 12%. So far this year,
Speaker Change: as mentioned, in my opening remarks. In the second quarter specialty Insurance pre-tax, operating income was 254 million and the combined ratio was 90.7.
Speaker Change: The loss ratio for the second quarter was at 62.5 and that included. 2.9 percentage points of favorable prior year loss, Reserve development compared to 6 4. 3 2
Craig Smiddy: So given these top-line and bottom-line results, we continue on our journey of profitable growth within specialty insurance.
Speaker Change: The expense ratio was in line with expectation uh, coming in at 28.2% in the second quarter last year.
Craig Smiddy: Now to just dive into the details a little bit more on commercial auto and workers' compensation. Commercial auto net premiums written grew 10% in the second quarter, while the loss ratio came in at 70.3 compared to 72.3 last year. Rate increases on commercial auto were approximately 14%, which will keep us ahead of the loss severity trend we're observing. Here, given the higher wage trend within payroll, which is what we apply our rates to, and given the declining loss frequency trend and stable loss severity trend, we think our rate levels for workers' compensation remain adequate.
Speaker Change: So given these Top Line and bottom line results, uh, we continue on our journey of profitable growth uh within specialty insurance.
Speaker Change: A lot of that premiums written grew 10% in the second quarter while the loss ratio came in at 70.370% which will keep us ahead of the loss. Severity Trend were observing
Speaker Change: Uh, workers comp, that premiums written were 2% lower in the second quarter. While the loss ratio came in at 48.5% 50.7. Last year, we saw rates stay relatively flat this quarter while loss frequency Trend continues to decline and loss severity, Trend remains stable. So
Craig Smiddy: So going forward, we expect solid growth and profitability to continue in specialty insurance throughout the rest of this year, reflecting the success of our specialty strategy and our operational excellence initiatives. We also expect to continue to see growing contributions from our newer specialty underwriting subsidiaries.
here uh given the higher wage Trend within payroll, which is what we apply our rates to and given the declining loss frequency Trend and stable loss severity Trend. We think our rate levels for workers compensation remain adequate.
Carolyn Monroe: So, that's a high-level summary for the specialty insurance group, and I'll now turn the discussion over to Carolyn, who will report on our title insurance. Carolyn. Thank you, Craig. Title insurance reported premium and fee revenue for the quarter of $698 million. This represents an increase of 5% from the second quarter of last year. Although we are pleased with continued revenue improvement, we've seen very little change in the real estate and mortgage market. Premium from our direct title operations were up 3% from second quarter of 2024. Our agency produced premiums were up 7% and made up 77% of our revenue during the quarter, up from 76% during the second quarter of last year.
Speaker Change: So going forward, we expect solid growth and profitability to continue in specialty Insurance throughout the rest of this year. Reflecting the success of our specialty strategy and our operational excellence initiatives. We also expect to continue to see growing contributions from our newer specialty underwriting subsidiaries.
So that's a high-level summary for the specialty Insurance Group, and I'll now turn the discussion over to Carolyn who will report on our Title Insurance Group Caroline. Thank you Craig Title. Insurance reported premium and fee revenue for the quarter of 698 million. This represents an increase of 5% from the second quarter of last year.
Carolyn: Although we are pleased with continued Revenue Improvement, we've seen very little change in the real estate and mortgage market conditions.
Carolyn Monroe: Commercial premiums increased this quarter and were 23% of our earned premiums compared to 21% in second quarter of last year. Investment income was also up this quarter nearly 12% compared to second quarter of 2020. Our overall loss ratio increased to 2.9% this quarter compared to 2.3% in the second quarter of last year. Although prior policy years continued to develop favorably, the amount of favorable development in the second quarter of this year was less than the second quarter of 2021. Our pre-tax operating income this quarter was $24 million, compared to $46 million in the second quarter of last year.
Carolyn: Premium from our direct title operations were up, 3%. From second quarter of 2024, our agency produced premiums were up 7% and made up 77% of our Revenue during the quarter up from 76% during the second quarter of last year.
Carolyn: Commercial premiums increased this quarter and were 23% of our earned premiums compared to 21% in second quarter of last year.
Carolyn: Investment income was also up this quarter nearly 12% compared to second quarter of 2024.
Carolyn: Our overall loss ratio increased to 2.9% this quarter compared to 2.3% in the second quarter of last year. Although, prior policy years continued to develop favorably the amount of favorable development in the second quarter of this year was less than the second quarter of 2024.
Carolyn Monroe: Our expense ratio is 96.1% compared to 93.1% in the second quarter of 2020. The cost from the settlement of a legal matter was the primary driver of this increase. Our combined ratio increased to 99% this quarter, compared to 95.4%. in the second quarter of last year. During the quarter, we continued progressing with the advancement of digital transaction tools and solutions for our directs and our title agencies. through our strategic partner. We remain focused on the importance of providing our agents and employees with the innovative technological solutions required to maintain a competitive edge. These include our internal systems, such as our remittance, policy issuance, and rate engines to work seamlessly with all the closing and production.
Carolyn: Our pre-tax operating income this quarter was 24 million compared to 46 million in the second quarter of last year.
Our expense ratio is 96.1% compared to 93.1% in the second quarter of 20124.
Carolyn: Costs from the settlement of a legal matter. Was the primary driver of this increase, our combined ratio increased to 99% this quarter compared to 95.4% in the second quarter of last year.
Carolyn: During the quarter, we continued progressing with the advancement of digital transaction tools and solutions for our directs and our title agents through our strategic Partnerships.
Carolyn: We remain focused on the importance of providing our agents and employees with the Innovative technological solutions, required to maintain a Competitive Edge.
Craig Smiddy: and I'll now turn it back to Craig. Okay, thanks, Carolyn. So profitable growth continues in specialty insurance. And in title insurance, we remain focused on profitability in a very challenging marketplace. As noted in the financial supplement, annualized operating return on beginning equity improved to an annualized rate of 14.6% compared to an annualized rate of 12.1% in the second quarter last year, which is reflective of our thoughtful management of capital.
these include our internal systems, such as our remittance, policy issuance, and rate engines to work seamlessly with all the closing and production platforms,
Speaker Change: I'll turn it back to.
Carolyn: Okay. Thanks. Carolyn.
So profitable growth continues in specialty insurance.
And in title insurance, we remain focused on profitability in a very challenging Marketplace.
Unknown Executive: So, that concludes our prepared remarks and we'll now open up the discussion to Q&A where either I'll answer your questions or I'll ask Frank or Carolyn to help me out. As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. To withdraw any questions, please press star one again. We'll pause for just a moment to compile the Q&A roster.
Carolyn: Uh, as noted in the financial supplement annualized operating return on beginning Equity, improved to an annualized rate of 14.6% compared to an annualized rate of 12.1%. In the second quarter last year, which is reflective of our thoughtful management of capital.
So that concludes our prepared remarks and we'll Now open up the discussion to Q&A. We're either, I'll answer your questions or I'll ask Frank or Carolyn to help me out.
Gregory Peters: Our first question comes from Gregory Peters from Raymond James. Please go ahead. Your line is open. Good afternoon, everyone. Hi, Craig. In your comments, Craig, you talked about retention across your specialty property casualty business.
Speaker Change: By the number 1 on your telephone keypad to withdraw. Any questions, please press star 1. Again, we'll pause for just a moment to compile the Q&A roster.
Speaker Change: Our first question comes from Gregory Peters from Raymond James. Please go ahead. Your line is open
Gregory Peters: Good afternoon, everyone.
Hi Greg.
Gregory Peters: Your comments. Craig, you talked about um,
Craig Smiddy: Can you give us a little more detail about how retention is moving across different lines of business? Sure, Greg, be happy to. So we do look at our renewal retention Metrics by line of business and by each one of our 17 different subsidiary companies. And I can tell you that regardless of the line of business. or the subsidiary, we are experiencing renewal retentions north of 85% pretty much across the board. And we think that is attributable to our value proposition whereby we're not selling price, we're selling service, we're selling long-term commitment to these market segments, selling our specialty expertise in underwriting customer service, risk control, claims handling.
Speaker Change: Retention. Uh, across your specialty property casualty business, can you give us a little more detail about how retention is moving across different lines of business?
Gregory Peters: Sure, Greg be happy to. So um, we do look at our renewal retention
Uh, metrics, uh, by line of business. And by each 1 of our 17, different subsidiary, uh, companies. And, uh, I can tell you that, um, regardless of the line of business,
Gregory Peters: Or the subsidiary. Um, we are experiencing renewal, retentions north of uh, 85% uh uh pretty much across the board. And um, you know, we think that is is attributable to our value proposition where whereby, um, you know, we're not selling, um, price. We're we're selling service, we're selling long-term.
Craig Smiddy: And so long and short of it is we think we have sticky. Renewal retention ratios, given our, again, our value proposition and the kind of clients and distribution partners we work with that are focused on the long-term and not those distribution partners that, as we, the so-called spreadsheeting of price and going with low price, that's not the type of customer that we go after. We, and therefore, as I say, across all lines of business, across all subsidiaries, very strong renewal retention ratio.
Gregory Peters: Commitment to these market segments, selling our specialty expertise in underwriting, customer service risk, control claims handling. And, uh, so, uh, long and short of it is, we think we have sticky.
Gregory Peters: Renewal retention ratios. Um, given our again, our value proposition and the kind of clients and distribution Partners. We work with that are focused on the long term and not those, uh, not those uh,
Distribution.
Gregory Peters: Yeah, that's the reason for the question is there's a lot of commentary on the other calls that have happened so far about competition pockets in certain areas. And one of the themes that has emerged in the first half of this year is increasing competition in the larger account business. And it's more property than probably where you play.
Partners that uh, as we the so-called spreadsheet of price and going with low price, that's not the type of customer that that would go after we uh and and therefore, uh, as I say across all lines of business across all subsidiaries very strong, renewal retention ratios.
Yeah, that's the reason for the question is there's a lot of commentary on the other calls that have happened. So far about competition, um pockets in certain areas,
And 1 of the the themes to has emerged in the first half of the series increasing competition.
Craig Smiddy: But maybe you could segue and just talk a little bit about how your business at Old Republic Risk Management is doing, because I know that targets the larger account, larger corporate market. Yeah, thanks. Thanks for that. That question, Greg. And I agree with your your comments. I think, you know, one of the things that does differentiate us, even on property for us, we had a slight uptick in in our overall property rate increase this quarter, because the property we're writing is not the large account, catastrophic exposed types of properties. You know, we're writing property that is often packaged along with the other lines of business.
Gregory Peters: In the larger account business, and it's more property than than probably where you play. But maybe you could segue and just talk a little bit about how your business at at older, public risk management is sharing because I know that targets the larger account larger, corporate Market.
Yeah, thanks. Thanks for that. That question, Greg and I agree with your your uh comments. I think, you know, 1 of the things that does differentiate us. Um,
Gregory Peters: Even on property for us. Uh, we had a slight uptick in in, uh, our overall property, um, rate increase this quarter because the property we're riding is, is not the large account.
Craig Smiddy: And Yes, some of our property has catastrophic exposure and we buy catastrophic reinsurance to protect us on that, but we're not a big rider of property cap where I think a lot of our peers have pretty decent sized portfolios. So, we don't have that dynamic that others are experiencing and overall I think the competition that we're seeing elsewhere is nothing. Nothing that I would say is a dramatic change from what we've seen earlier. Again, back to our value proposition and the kind of clients that we're seeking. You know, an example where perhaps we have seen competition and we've pulled back a little bit as I've talked about the last few quarters, a public company, D&O, in our subsidiary that does write a fair amount of that business, we've been pulling back.
Gregory Peters: Catastrophic exposed types of properties. Um, you know, we're riding uh, property that is often um packaged along with the other lines of business.
um, and and um,
Gregory Peters: Yes. Some some some some of our property has catastrophic exposure and and we buy catastrophic reinsurance to protect us on that. But um we're not a a big Rider of of property cat where I think a lot of our peers are um have pretty decent sized portfolios so we don't have that Dynamic um uh that others are experiencing and um
Craig Smiddy: And rate increases, rate decreases on public D&O have looked like they're starting to flatten out, still a little negative, but we've been encouraging our underwriters there to maintain rate. And if that means top line is down like it was last year on public D&O, that's perfectly fine. So, you know, we're not immune to the competition, but I think there are some differences in our business model as well as the lines of business that we're in.
Craig Smiddy: And in risk management, just had a 40-year risk management client into our corporate headquarters here a couple of days ago and had a nice conversation with them. And, you know, on that business, as you know, Greg, we're, it's all about service. And that's why that business is so sticky for us. And that's why we have 40-year relationships with a lot of the big clients. They retain a lot of their risk themselves, so they're not looking to us for risk transfer. They're looking to us for service. And we have large deductibles or they have captives that we cede most of the premium back to.
Gregory Peters: Decreases on public DNL. Have looks like they're, they're starting to flatten out still a little negative but we've been encouraging, um, our uh, Underwriters there to to, uh, maintain rate. And uh, if that means Top Line is is down. Like it was last year on public dno. That's perfectly fine. So, you know, we're not immune to the competition, but, um, I think there are some differences in in our business model, as well as the lines of business that we're in and in Risk Management. Uh, just had a, a 40 year risk management client into our corporate head.
Gregory Peters: And, again, there too, that requires a relationship and long-term focus. There's a lot of collateral at stake there. And so when we collateralize, we have those obligations collateralized by the client. Again, it has to be a relationship and we have very strong long-term relationships in our large account risk management business for sure. And we continue to add new clients based on a lot of, there's a lot of discussion, as you know, from attending RIMS or other events among the risk managers of large companies. And we have a top-tier reputation. Yeah, thanks for that, that additional information.
Gregory Peters: Quarters here a couple of days ago and had a nice conversation with them and, and um, you know, on that business, as, you know, Greg were were sir, it's all about service and that's why that business is so sticky for us. And that's why we have 40 year, relationships with a lot of the, the big clients, they retain a lot of their risk themselves. So they're not looking to us for risk transfer. They're, they're looking to us for service and we have large deductibles or they have captives that we see most of the premium back to. And again there too, that requires a relationship and long-term Focus. There's a lot of collateral at stake there. And um, uh so when we collateralize, we have those, uh, obligations collateral.
Ized, by the client again, it has to be a relationship and, um, and we have very strong long-term relationships in our large account risk management, uh, business for sure. And we continue to add new clients based on a lot of. Um, there's a lot of discussion as, you know, from attending rims or other events among the Risk, Managers of large companies and we have, um, a top tier reputation
Unknown Executive: Um, I guess, I'll just ask one other question.
Speaker Change: Yeah, thanks for that that, uh, additional information. Um,
Gregory Peters: I'll pivot to the title business. You know, one of the things that's popped up in the second quarter was, you know, the the issue around what's happening with title insurance rates in Texas. and there's a rate decrease that's being implemented and just curious about how. What your views on that are? Do you anticipate that that's going to spread to other states? Or how does that impact your operations? And just give us a broader sense of how you see the market reacting to that.
I I guess. Uh I'll just ask 1 other question. I'll pivot to the title business.
Speaker Change: Um, you know, 1 of the things that's popped up in the second quarter.
Speaker Change: Was um, you know, the the the issue around what's happening with title insurance rates in Texas.
and, you know, there's a rate decrease that's being implemented and I'm just curious about how
Speaker Change: What your views on that are. Do you anticipate that that's going to spread to other states or how does that impact your operations? And just give us a broader sense of how you see the market?
Craig Smiddy: Carolyn, I'll start off. You and I have had discussions about this and, you know, every state is very different. Texas is unique in promulgating specific rates and other states, we file rates and Carolyn has, I know, been working closely with her team to take a very careful look at our rates and make sure we have adequate rates in every state and our assessment, I think thus far, Carolyn, correct me if I'm wrong, but I think our assessment so far is that the promulgated rate in Texas Still an adequate rate, but I'll let you talk more about that, Carolyn.
Speaker Change: Reacting to that.
Speaker Change: Uh Carolyn, I'll I'll start off you and I have had discussions about this and you know, every state is very different. Uh, Texas is unique in in uh promulgating uh, specific rates and other states.
Carolyn Monroe: Yeah, also, Greg, if I'm not mistaken, right now that rate decrease has not gone into effect because it's been challenged and The last I checked, the challenge was held up in the court, and I think they're trying to come to maybe a more reasonable settlement than what was initially proposed, so that has not taken effect yet, but, you know, when they generally, in the promulgated states like Texas, New Mexico, and Florida, You know, they look at prior year history and kind of determine if it's an adequate rate. And we have a lot of input on determining that as well, our state associations do.
Speaker Change: Uh, we file rates and um, Carolyn has, I know been working closely with her team to take a, a very careful, look at our rates, and make sure we have adequate rates in every state. Um, and, um, you know, our assessment I think thus far, Caroline, you correct me if I if I'm wrong but I think our assessments such far so far is that the promulgated rate in Texas is still inadequate rate, but um, I'll let you talk more about that Carolyn.
Speaker Change: yeah, also um Greg if I'm not mistaken right now that rate decrease has not gone into effect because it's been challenged and
Speaker Change: um,
Speaker Change: the last I checked, the challenge was held up in the court in, um, I think they're trying to come to maybe a more reasonable settlement, than what was initially proposed so that has not taken effect yet. But, um, you know, when, when they generally, uh, in the promulgated states, like Texas, New Mexico and Florida, um,
Speaker Change: you know that they they look at prior year history and kind of determine if if it's an adequate rate and we have a lot of input on
Gregory Peters: So I would think whatever we come up with will be an adequate way to still service the industry. Okay, thanks for the answer.
Speaker Change: on determining that as well, our state um associations do. So I would think whatever we come up with will be an adequate weight to, um, still serve as the industry.
Speaker Change: Okay.
Speaker Change: Thanks for the answer.
Unknown Executive: And ladies and gentlemen, once again, it is star one.
Paul Newsome: If you have a question, we'll go next to Paul Newsome from Piper Sandler. Good afternoon. Thanks for the call.
Speaker Change: And ladies and gentlemen, once again it is star 1. If you have a question we'll go next to Paul Newsome from Piper Sandler.
Paul Newsome: I wanted maybe to revisit to capital management. There was no stock repurchase in the last quarter. It sounds like not to date. Why not? And how do you think about your own capital position at the moment? Sure, Paul, I'll be happy to talk about that. So as Frank mentioned in his opening comments. As a reminder, we had a $2 special dividend that we that we just paid in the first quarter. And that was on top of the large amount of share repurchases that we made last year and in the preceding few years. So we closely look at both tools in our tool chest, special dividends, as well as share repurchases and We're also very mindful of where the market price is relative to our book value when we make share repurchases decisions.
The last quarter, it sounds like not to date. Um, you know why, why not? And you know, how do you think about your own Capital position at the moment?
Speaker Change: Sure, Paul, I I'll be happy to uh to talk about that. So as Frank mentioned in his
Opening comments as a reminder. We had a 2 dollar special dividend that we, uh, that we just paid. Yeah, in the first quarter and, um, that was on top of the, um, large amount of share repurchases that we made last year, and in the preceding few years. So,
We closely look at at both Tools in our tool chest, special dividends as well as share repurchases. And um,
Speaker Change: uh,
Craig Smiddy: So the higher the market price is to book, the less we're going to be excited about share repurchases. And on the other hand, the lower the market price is to book, the more excited we get about share repurchases. And then to manage capital, we're cognizant of ROE, as I mentioned in my opening comments. We're very thoughtful about capital management, and while we think we carry probably more capital than some of our peers, we want to maintain a strong balance sheet and be prepared for the unforeseen, and we want to continue to invest, be able to invest in new opportunities.
Speaker Change: We're also very mindful of where the market price is relative to our our book value. When we make share repurchases, uh, decisions. So you know that the higher the uh, market prices to book the, the less we're going to be uh, excited about share repurchases. And, and on the other hand, um, the lower the, the market prices is, is to book. Um, the more excited we get about, uh, share repurchases, and then, um, to manage Capital, um, we're cognizant of
Craig Smiddy: So we're conservative in the amount of capital we carry, but we're also very cognizant of ROE, and we don't want to carry too much capital.
Craig Smiddy: And that was primarily what led us to the decision that on top of all the share repurchases, we also issued a special dividend in the first quarter because we were carrying far too much capital. So we'll use both tools, and we'll look at both options and take into consideration what has the best benefit to shareholders, and then we present that to our board with a recommendation from management and proceed accordingly.
Of Roe. You know, as I mentioned in my opening comments, uh, we're very thoughtful about Capital Management and while we think we carry probably uh, more Capital than some of our peers. Um, we want to maintain a strong balance sheet and and be prepared for the unforeseen. And we want to continue to invest, be able to invest in new opportunities. Um, so, um, uh, we're conservative in the amount of capital we carry, but we're also very cognizant of of Roe and, and we don't want to carry too much capital and, and that was primarily what led us to the decision that on top of all the share repurchases. We also issued a special dividend in the, um, first quarter because, uh, we were carrying, uh, far too much Capital. So, um, we'll use both tools and, um, we'll look at uh, both options and and um, take into consideration.
And what has, uh, the the best benefit to shareholders and and then we present that to our board with a recommendation from management and proceed accordingly.
Paul Newsome: Second question, maybe a little bit more commentary on the investment outlook. You know, obviously a combination of cash flow and new money yields.
Craig Smiddy: Where do you think the longer term trend here, at least the intermediate trend is for investment? Well, I'd be happy to start it off. And if you I think Frank might have addressed it in our opening comments, but if you compare where our new money rates are coming in on our fixed income portfolio, vis a vis our average yield on our on our portfolio, that's getting pretty tight. So, I think that there can't be a big expectation that's going to improve dramatically, incrementally maybe. There still might be a little room comparing those differences between new money and our existing yield, but no big dramatic.
um, second question, maybe a little bit more commentary on the investment out that investing Outlook, um, you know, obviously a combination of cash flow and new money yields
Speaker Change: Where do you think? Um,
Speaker Change: the longer-term trend here, at least the internet trend is for investment.
Speaker Change: Well, I'd be happy.
To start it off. And if you I think Frank might have addressed it in our opening comments, but if you compare, where are new, money rates, are are coming in on our fixed income portfolio. Visa V are, um, average yield on our on our portfolio, um, that's getting pretty tight.
Frank Sodaro: And Frank, please feel free to correct me if you see it differently or if you have anything to add. No, I would just say the biggest component now is as we've returned so much capital, our base is so much lower. From a yield perspective, that's right. It's tightening up. I would expect there to be improvements, all things being equal, but no longer are the, what I expect, that 10 to 15 percent and higher that we had. somewhere along the mid-single digits is probably what I would say all. Appreciate it.
Speaker Change: So, um, I think that, um, there there can't be a, a big expectation, that that, um, that's going to improve dramatically incrementally. Maybe. Uh, there's still might be a little room, comparing those differences between new money and and our existing yield. But, um, no, big dramatic and Frank, please. Feel free to correct me if you see it differently or if you have anything to add.
No, I would just say the biggest component now is as we've returned so much Capital, our base is so much lower from a yield perspective, that's right. It's tightening up. I would expect there to be improvements, all things things being equal. But no longer are the would I expect that 10 to 15% and higher that we had?
Somewhere along the the mid single digits is probably what I would say. All things being equal.
Paul Newsome: Nice to be able to put Craig in a hot seat. Thank you. Appreciate that, Paul.
Speaker Change: Appreciate nice to be able to put Frank in a hot seat.
Speaker Change: Thank you, appreciate that, Paul.
Evan Tyndall: The next question will come from Evan Tyndall, Byrim Capital. Hi, thanks for taking my call. Hi, Evan. Hi.
The next question, will come from Evan Tindell by room capital.
Evan Tyndall: My question is on the the specialty insurance segment. I mean, you guys have pretty consistently now been posting combined ratios like around 90-91. And obviously, you guys guide to 90 to 95 over the full cycle. And I'm just wondering, has anything given how consistently you've kind of outperformed or almost outperformed that that range? Can you talk about like, has anything fundamentally changed in terms of the mix of your business or how well you guys are executing that might allow you to kind of tighten or lower that range in terms of guidance on the combined ratio for the full cycle?
Hi, thanks for taking my call. Um hi. Hi Evan.
Hi. Um my question is on the the specialty Insurance segment. I mean, you guys have a pretty consistently now been posting uh combined ratios like around 9091.
Speaker Change: Has has anything.
Like given how consistently you've kind of outperformed, or almost outperformed. That that range.
Craig Smiddy: Or do you guys still expect that to go back up to 95 at some point?
Speaker Change: Can you talk about like, has anything fundamentally changed in terms of the the mix of your business or how how well you guys are executing. That might allow you to kind of tighten or lower that range in terms of guidance on the combined ratio for the full cycle. Or do you guys still expect that to go back up to 95 at some point?
Craig Smiddy: Right, well, you know, let me first just say a comment that I made earlier about the complexion of our portfolio and the fact that we're not writing large, catastrophic, property business, per se, vis-a-vis our peers. Again, we have some of that exposure. But when you write a large amount of catastrophic property, you can post some pretty decent combined ratios in good quarters, and then you post some fairly awful combined ratios in quarters where there is a catastrophic event. So I think our combined ratio, given our casualty-focused business, is going to be in that range of 90 to 95.
Right. Well, um, you know, uh, let me first just say, uh, uh, comment that I made earlier about, uh, the complexion of our portfolio and the fact that
Speaker Change: we're not riding, um, large catastrophic. Uh,
Craig Smiddy: We have written a little bit more property and short-tail business. As you can tell in the supplement, you can see the growth rate in property has been a little bit stronger as we improve our footprint. With our Inland Marine new specialty subsidiary, our new ENS specialty subsidiary, they're able to write property in conjunction with other coverages. And so we've grown it, but it's still not a huge area for us. So given our predominantly casualty-focused business, given our conservative loss-reserving approaches, that 90 to 95 is still a good target and one that, if you were able to parse out the property catastrophic portions of our competitors' combined ratio and strip out the other drivers of lower combined ratio lines of business, I think that's a pretty respectable target and difficult to achieve a much lower target on the lines we write, particularly given the proportions of our lines.
Uh, property business. Uh, per se Visa VR peers again, we have some some of that exposure. But uh, um, when you write a large amount of of catastrophic property, you can post some pretty decent uh, combined ratios in good quarters. And then you post some fairly awful combined ratios in quarters where there is a catastrophic event. So so I think our combined ratio given our our casualty focused business um is is going to be in that range of 90 to 95. We have written um a little bit more property and short tail business as you.
Speaker Change: As you can tell in the, the supplement, you can see the the growth rate in properties. It's been a little bit stronger, as, as we, um, improve our footprint, with our inland marine um, new specialty subsidiary, our new ens specialty subsidiary. Um, they're able to to write um property in conjunction with other coverages. And um, so we we've grown it, but um, it's still not a a huge area for us. So given our predominantly casualty focused, uh, business, given our conservative loss reserving approaches that 90 to 95 is still a, uh, a, a good Target and, and 1 that um, you know, if you were able to parse out the the property catastrophic uh, portions of our competitors combined ratio and
Speaker Change: Strip out. Um, the other, um, drivers of lower combined ratio, um, lines of business. I, I think, you know that, that's a pretty respectable Target and, uh, difficult to achieve a much lower.
Speaker Change: Uh, on the lines, the lines we write particularly given the proportions of our lines of business.
Evan Tyndall: Okay, great. Thank you.
Evan Tyndall: Um, one other question. Obviously, there's been, you know, AI is the talk of the town in various industries. And I'm just curious, How you how you guys are playing with or implementing AI at this point, if you think it can, you know, maybe make the underwriting process more efficient or help you guys cut costs or otherwise your otherwise impact your business over the next, you know, three to five years.
Speaker Change: Okay, great. Thank you. Um 1 1, other question obviously there's been uh you know AI is the The Talk of the Town in various Industries and I'm just curious.
Craig Smiddy: Sure, I'd be happy to talk about that. So we are very much involved as an executive team here and with our subsidiary companies at exploring all of the AI tools that are available and ones that we want to consider building ourselves. We just announced that we hired an AI leader at the corporate holding company level that can help lead our Steve Cross. He is leading our AI efforts and it's hard too to talk about AI without talking about data analytics because you really need the data analytics to go hand in hand with the AI to put the AI to work for you.
Speaker Change: How you, um, how you guys are are playing with or implementing AI at this point. And if you think it can, you know, maybe make the underwriting process more efficient or help you guys cut costs or otherwise otherwise impact your, your business over the next you know, 3 to 5 years.
Sure, be happy to, uh, to talk about that.
Speaker Change: So,
Speaker Change: we are.
Um, involved as an executive team here. A and with our subsidiary companies at exploring all of the the AI um, tools that are available and ones that we might want to consider building ourselves. We just uh, announced that we um hired, uh, an AI leader, uh, at the corporate holding company level that can help lead our, uh, Steve cross. Uh, he is, um, leading our AI efforts, and it's hard to to to talk about AI without talking about data.
Craig Smiddy: And when we talk, as I commented in my opening comments, we're making investments in technology. We're making a concerted effort to retire our legacy IT debt. That's the first step. You've got to have, in order to, in turn from there, leverage what's available in AI. You've got to have modern technology in place. So we are investing in technology. We're retiring our legacy technology debt. We're investing in data analytics here too. A couple of years ago at the corporate level, we hired a data and Steve Cross and his team can set on top of that what's available from the AI perspective.
Speaker Change: Technology debt were investing in data analytics here, too.
Speaker Change: A couple years ago at the corporate level, we hired a data and analytics expert and uh, that expert uh, works with our John geangelos, with our um, our subsidiary companies on data analytics and we've built out that team. So that we have those that data and analytics available and then
Craig Smiddy: And we think of it as an executive team in two ways. for the most part, AI will help you make better decisions, or it will help you be more efficient. So we have numerous AI projects we're exploring, and one of the first categories is, is this an AI project that's going to help us with efficiency, or is this an AI project that's going to help us with better decision making? And we have several pilots in place, several that are helping us right now with better decision making, better efficiencies, and we have numerous in the pipeline.
Steve cross and his team can set on top of that what's available from from uh, uh the AI perspective and we think of it as an executive team uh in in, in 2 ways, either.
Craig Smiddy: And again, we're building the data and analytics for that to sit on top of, and then the data and analytics sits on top of modern IT technology, which is what we're investing in.
Speaker Change: For the most part AI will help you make better decisions or it will help you be more efficient. So we have numerous AI projects. We're exploring. And 1 of the first categories is is this uh an AI project that's going to help us with efficiency, or is this an AI project that's going to help us with better decision making. And we have several pilots in Place several that are, uh, helping us right now, with better decision making better efficiencies and we have numerous in the pipeline. And again, we're we're building the data and analytics for that to sit on top of and then the data and analytics sits on top of, uh, modern it technology, which is what we're investing in.
Craig Smiddy: Awesome, thank you. And actually, maybe maybe one more if there's there's time. On the title insurance business, do you guys think, do you think that you need to see mortgage rates fall before you start to see combined ratios getting back into the, you know, 96, 95 or below range? Or do you think you can improve margins in the current kind of housing environment?
Speaker Change: Awesome. Thank you. And actually maybe maybe 1 more if there if there's uh there's time uh
Craig Smiddy: I'll kick it off Carolyn and then let you add what you think. We are not satisfied with a combined ratio in title above 95. We realize that in a tight market like we're in now, with high interest rates, a very slow real estate market, that we're going to be at the top end of that range. And Carolyn and I have had many discussions, and we're working very hard to bring our combined ratio down. Assuming the same environment that exists today, we should be performing at a 95 combined ratio. So there are things that we're doing to look at where we're spending money, and I think an example of that is our decision to discontinue our focus on providing a closing platform, because there's other partners and vendors that can provide very good closing platforms that our technology works well with.
On the on the title insurance business. Do you guys think? Do you think that you need to see um mortgage rates fall before you you start to see combined ratios getting back into the, you know, 96 95, or or below range, or do you think you can improve margins in the kind of in the current kind of housing environment?
Speaker Change: I'll kick it off.
Carolyn: Carolyn, and then,
Brad: Brad, what you think? Uh, we are not satisfied with a, a combined ratio in title above 95.
Speaker Change: Uh, we realize that in a tight market like we're in now with high interest rates, a very slow real estate market. Um that we're going to be at the top end of that range and Carolyn and I have had this many discussions and we're working very hard to bring our combined ratio down assuming the same environment that exists. Today, we should be performing at a 95 combined ratio. So, um, there are things, uh, that we're doing to to look at, um, where we're spending money. And I think an example of that is our decision to, to, uh, discontinue, our focus on providing a closing platform because there's other, um, partners and and, uh, um, vendors that can provide very
Craig Smiddy: We don't need to be the ones providing the closing platform. So that's an example of, you know, we're looking to make sure we're being as efficient as possible. Our hope for this year was that we would get below that 95 mark. Carolyn still has, and her team still have aspirations to bring that down. We had the litigation expense we talked about earlier that drove up our combined ratio a couple points this quarter, but last year we finished at 97. This year, you know, it could be in that range, but our aspiration is to get it below 95.
Carolyn Monroe: Carolyn, is there anything you would add to that? No, just that, you know, absent of any kind of an increase in the market, we just continue to look inward to see what we could be doing at a more efficient level that will help us save money. We never stop doing that, but given the fact that, you know, we have to understand that this market we have right now might be what we have, so we've just got to figure out what we could be doing different. And so we're honestly looking at that every day, so we don't just depend on the market to get better.
Very good closing platforms. That our technology works. Well with, we don't need to be the ones providing the closing platform. So that's an example of, you know, we're looking to make sure we're being as efficient as possible. We're we're our, our our hope for this year was that we would get below that 95. Mark, uh, Carolyn still has and her team still have aspirations to bring that down. We had the the um litigation expense. We talked about earlier that drove up our combined ratio, a couple points this quarter. But last year, we finished at 97 this year, you know it it could could be in that range but our aspiration is to get it below 95.
Speaker Change: Carolyn is there anything, you would add to that?
Unknown Executive: We depend on what we're doing as well. Thank you.
Speaker Change: No, just that, you know, absent of any kind of an increase in the market, we just continue to look inward to see what we could be doing um, at a more efficient level that will help us save money. We never stop doing that. But given the fact that, you know, we have to understand that this Market we have right now might be what we have. So we we've just got to figure out what we could be doing different. And so we're honestly looking at that every day. So we don't just depend on the market to get better. We depend on what we're doing as well.
Gregory Peters: and we'll take a follow-up from Gregory Peters from Raymond James.
Gregory Peters: Take a follow-up from Gregory Peters from Raymond James.
Gregory Peters: Hey, real quick, if we go to the supplement on page two, I wanted to just give us what's going on inside the small line home and auto warranty. That seems to be growing quite nicely. And then the other question I have is just on the new business initiative. Cyber, I think, is one of those initiatives, and not hearing great things about the pricing conditions in that market. So maybe you could talk about those two areas. Thank you. Sure, Greg. I'd be happy to talk about both of those. So on home and auto warranty, the majority of the growth that you see there is, really all the growth that you see there is auto warranty.
Initiative cyber I think is 1 of those initiatives and not hearing great things about the pricing conditions in that market. So maybe you could talk about those 2 areas. Thank you.
Craig Smiddy: We have entered into several new relationships with key partners, and we expect to continue to have the auto warranty business grow. The home warranty business is not growing, it's very dependent on the real estate cycle. Those warranties that we write are typically sold in conjunction with a property purchase, a new home purchase. So the real estate market interest rates have not helped our home warranty subsidiary grow, but that'll change, just like in title. We know things will turn at some point, but that's why we're diversified, and even in home and auto warranty, that's why, okay, the real estate market is tough right now, let's focus on building some new relationships that can help us grow our auto warranty business.
Sure, Greg, I mean, uh, happy to talk about both of those. So on home and auto warranty, um, the majority of the growth that you see there is, uh, uh, really all the growth that you see there is auto warranty. Um, we have entered into, uh, several new relationships with key partners. And, um, we, uh, expect to continue to have the auto warranty business grow. The home warranty business is not, uh, is not growing. It's, uh, very dependent on the real estate cycle. Those warranties that we write are typically sold in conjunction with, um, a a property purchase, a new home purchase. So, uh, you know, the real estate market interest rates have not helped our home warranty subsidiary um, grow uh, but you know that
Craig Smiddy: So that's what's going on there. You know, on the cyber front, one of our new subsidiaries is cyber, indeed, and I've met with that team, and one of the things I said to them is, given that you're a startup, the way that we handle startups is there's no incentive to put premiums on the books in the short term. You know, we even, even variable compensation, we will, on a new startup, we'll just say, listen, that's going to be fixed for three years, because we know it's going to take time to grow, we don't want you to grow too fast, we don't want you to grow into a market that's too competitive, we want to give you time.
Gregory Peters: Change. Just like in title, uh, we know things will will turn at some point. Um, but it's uh, you know, that's why we're Diversified and even in home and auto warranty, that's why. Okay, let's the real estate market is tough right now. Let's focus on on, uh, building some new, uh, relationships that can help us grow our auto warranty business. So that's that's what's going on there. Um, you know, on the on the Cyber, um, uh, front, uh, 1 of our new, uh, subsidiaries is is cyber indeed and um,
I I've met with that team and um 1 of the things I said to them is uh given that you're a startup. The way that we handle startups is there's no incentive to put premiums on the books.
Craig Smiddy: We focus on, our definition of success is 10 years out, and when we look back, you know, how does it look? Not the first three years. So in cyber, everything we hear from that team is that rates have come down over the last couple of years, but there is, I think, clear consensus indication that rates are at least flattening out, and I read this morning from others that there's indications of greater pricing discipline, greater underwriting discipline in the cyber arena. So the discussion we've had with our cyber team is, listen, focus on building out your team, we know you're going to be an expense load for the next couple, two to three years, take your time, build it right, wait for the market to turn, and for you to be certain that there's price adequacy in the marketplace.
Gregory Peters: Um, in the short term, you know, we even even variable compensation. Um, we will on a new startup. We'll just say listen, that's going to be fixed for 3 years, uh, because we know it's going to take time to grow. We don't want you to grow too fast. We don't want you to grow into a market that's too competitive. We want to give you time
Gregory Peters: We focus that where our our definition of success is 10 years out. And when we look back, you know, how does it look not not the first 3 years. So in cyber, um, everything we hear from that team is that um, rates, uh, have come down over the last couple years but
there is uh, I think clear
Gregory Peters: Consensus indication that rates are are at least flattening out. And um you know, I read this morning uh from others that um there's indications of Greater pricing discipline uh greater underwriting discipline in the Cyber Arena. So the discussion we've had with our uh, cyber team is listen.
Craig Smiddy: And then, so actually, the timing feels pretty good to us, because if they wanted to write a lot of cyber today, they couldn't, they're building it out, we don't expect to write premiums until probably beginning of next year, and even then, we'll go slow, but we'll be ready, and there's no incentive for them to put any premiums on the books until the timing's right, and meantime, they're just focused on building out that operation, and they have their sleeves rolled up and working day and night to get it built, so that when the market is right, we'll be there for it.
Gregory Peters: Focus on building out your team. We know you're going to be an expense load for the next couple 2 to 3 years. Take your time build it right. Wait for the market to, to, uh, to turn and, and for their for you to be certain that there's price adequacy in the marketplace. And then, uh, so actually the timing feels pretty good to us because if they wanted to write a lot of cyber today, they could, um, they're building it out. We don't expect to write premiums until probably beginning of next year and even then we'll go slow. Um, and uh, but we'll be ready. And, um, uh, there's no incentive for them to put any premiums on the book on books until the timing is right. And meantime, they're just focused on building out that operation and, uh, they have their sleeves rolled up and working day and night to, to get it built. So that when the market is right, we'll be there for it.
Unknown Executive: Makes sense. Thanks for the answers. Once again, ladies and gentlemen, that is star one. If you have a question today, we'll pause for just a moment. At this time, there appear to be no further questions.
Gregory Peters: It makes sense. Sexually answers.
Again, ladies and gentlemen. That is star 1. If you have a question today, we'll pause for just a moment.
Craig Smiddy: I'd like to hand the call back to management for any additional or closing remarks. Okay. Well, we appreciate all the questions and engagement. Sometimes our August conference call is a little slower, given people are on vacations and enjoying summer. So we wish everyone the best. Enjoy the rest of your summer. And again, appreciate your interest in Old Republic, and we'll be back next quarter to let you know how things are going. And by the way, there's the siren in the background if Craig Peters is still listening. All right, thank you very much. And everyone, that does conclude today's conference.
At this time there appear to be no further questions, I'd like to hand the call back to management for any additional or closing remarks.
Gregory Peters: Okay, well, we appreciate all the questions and engagement sometimes. Uh our August conference call is is uh, a little slower, giving people are on vacation and enjoying summer, so uh, we wish everyone the best and enjoy the rest of your summer. And again, appreciate your interest in Old Republic and um, we'll be back, uh, next quarter to let you know how things are going. So and by the way, there's the siren in the background if Greg Peters is still still listening. So,
Much.
Unknown Executive: We would like to thank you all for your participation today. You may now disconnect. Thanks for watching!
Gregory Peters: And everyone that does conclude today's conference, we would like to thank you all for your participation today. You may now disconnect