Operator: Good morning, and welcome to the Cincinnati Financial Corporation Q3 2026 earnings conference call. All participants are in a listen-only mode. After the speaker's remarks, we will conduct a question and answer session. To ask a question at this time, you will need to press star, followed by the number 1 on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Andy Gossard, Investor Relations Officer. Thank you. Please go ahead.
Andy Gossard: Good morning, and thank you for joining us for our Q3 2026 earnings conference call. Late yesterday, we issued the news release on our results, along with our supplemental financial package, including our quarter-end investment portfolio. To find copies of any of these documents, please visit our investor website, investors.cinfin.com. The shortest route to the information is the Quarterly Results section near the middle of the Investor Overview page. On this call, you will first hear from President and Chief Executive Officer Steve Spray, and then from Executive Vice President and Chief Financial Officer Mike Sewell. After their prepared remarks, investors participating on the call may ask questions. At that time, some responses may be made by others in the room with us, including Executive Chairman Steve Johnston, Chief Investment Officer Steve Soloria, and Cincinnati Insurance's Chief Claims Officer Marc Schambow, and Senior Vice President of Corporate Finance, Andy Schnell.
Andy Gossard: Please note that some of the matters to be discussed today are forward-looking. These forward-looking statements involve certain risks and uncertainties. With respect to these risks and uncertainties, we direct your attention to our news release and to our various filings with the SEC. Also, a reconciliation of non-GAAP measures was provided with the news release. Statutory accounting data is prepared in accordance with statutory accounting rules and therefore is not reconciled to GAAP. Now, I will turn the call over to Steve.
Steve Spray: Good morning, and thank you for joining us today to hear more about our results. We had another quarter of strong operating performance that reinforces our confidence in the long-term direction of our business. Our insurance operations produced excellent underwriting results, even as the property-casualty combined ratio increased from last year's exceptional level. Net income of $459 million for the Q3 2026 included recognition of less than $1 million on an after-tax basis for the increase in fair value of equity securities still held. Non-GAAP operating income was $443 million for the quarter, down only $6 million from a year ago, despite catastrophe losses that were $146 million higher on an after-tax basis. The 90.9% Q3 2026 property-casualty combined ratio increased by 2.7 percentage points compared with Q3 last year, including an increase of 7.0 points for catastrophe losses.
Steve Spray: Our current accident year combined ratio before catastrophe losses for the first nine months of 2026 was 86.5%, improving slightly compared with the 86.7% reported through the first nine months of 2025. Moving to premium growth, our consolidated property-casualty net written premiums grew 2% for the quarter. Premium growth moderated as expected, reflecting our commitment to pricing discipline, careful risk selection, and segmentation on a policy-by-policy basis. Estimated average renewal price increases for most lines of business during Q3 were lower than Q2 2026, but still at levels we believe were healthy. Commercial lines and excess and surplus lines averaged increases in the low single-digit percentage range. Our personal line segment included homeowner increases in the high single-digit percentage range and personal auto increases in the mid-single-digit range.
Steve Spray: Although market conditions continue to be challenging, we remain confident that our diverse product portfolio, exceptional service, and strong relationships with independent insurance agents provide a solid foundation for long-term success. Next, I'll highlight Q3 performance by insurance segment compared with a year ago. The commercial lines combined ratio was 92.8%, an increase of 1.7 percentage points, including 4.3 points from higher catastrophe losses. Net written premiums grew less than 1%. Personal lines grew net written premiums 1%, impacted by lower new business premiums that reflect continued softening market conditions. The combined ratio for personal lines was 90.3%, just 2.1 percentage points higher than last year, despite an increase of 12.1 points from higher catastrophe losses. Excess and surplus lines grew net written premiums 5% and produced another excellent combined ratio of 89.4%.
Steve Spray: Cincinnati Re and Cincinnati Global both contributed meaningfully to premium growth and continue to provide diversification benefits for our insurance operations. Cincinnati Re's Q3 2026 net written premiums increased by 34%. Its combined ratio was 94.8%. Cincinnati Global grew 13% while maintaining an impressive 70.7% combined ratio. Our life insurance subsidiary had another solid quarter, including 11% net income growth. In addition, term life insurance earned premiums grew 2%. Now, I'll give a summary of our primary measure of long-term financial performance, the value creation ratio. Our VCR was -2.1% for Q3 2026. Net income before investment gains or losses for the quarter contributed 2.7%. Lower overall valuation of our investment portfolio and other items contributed -4.8%. Before I hand the call to Mike, I wanted to give you an update on our ongoing investment in data, technology, and artificial intelligence.
Steve Spray: We continue to prioritize applications of generative and agentic AI that can improve the efficiency and effectiveness of our associates. We want to optimize their efforts, allowing them to add more value to our business, deepening relationships, sharing expertise, and focusing their energy on the most complex insurance and technology decisions. I'll give you two examples of AI applications that are in production today that we believe have already and will continue to produce meaningful benefits across the organization. Many other use cases exist in varying stages of development, from design all the way through production. First, our AI Center of Excellence is harnessing cloud provider large language models to create reusable internal capabilities that can be adapted for additional business areas where the use case and supporting evidence are strong.
Steve Spray: So far, we have developed seven proprietary intelligent assistants for associates to use in areas such as underwriting, claims, and loss control. These assistants, along with other tools we have deployed, reduce the time spent on information-intensive tasks, such as summarizing underwriting and claims files and understanding internal appetite and risk guidance. Second, we are applying automation and AI-enabled capabilities within selected new business and commercial service workflows. More specifically, we are using these capabilities to process new business submissions received by email, enabling us to accelerate quote delivery by more than 30% across our commercial lines and excess and surplus lines businesses. Our approach is disciplined. We establish a baseline, evaluate the operating results, ensure we have strong governance and controls, and then expand the capability only where the evidence supports it.
Steve Spray: Because our agents tell us that speed to quote is a key variable as we compete for business, we believe reducing the average time to quote will positively support our continued profitable growth. Now, I will turn it over to Chief Financial Officer Mike Sewell for additional insights regarding our financial performance.
Mike Sewell: Thank you, Steve, and thanks to all of you for joining us today. Investment income growth of 10% in Q3 2026 contributed nicely to our operating results, driven by strong cash flow from insurance operations. Bond interest income grew 11%, and the net purchases of fixed maturity securities totaled $1.1 billion for the quarter and $2 billion for the first nine months of the year. The Q3 pre-tax average yield of 5.04% for the fixed maturity portfolio was down six basis points compared with last year. The average pre-tax yield for the total of purchase taxable and tax-exempt bonds during Q3 of this year was 5.93%. Dividend income was down 4% for the quarter. Net sales of equity securities totaled $52 million for the quarter and $784 million on a year-to-date basis.
Mike Sewell: Valuation changes in aggregate for Q3 were slightly favorable for our equity portfolio and unfavorable due to rising interest rates for our bond portfolio. Before tax effects, the net gain was $6 million for the equity portfolio, while the net loss was approximately $1.2 billion for the bond portfolio. At the end of Q3, the total investment portfolio net appreciated value was approximately $7.4 billion. The equity portfolio was in a net gain position of $8.9 billion, while the fixed maturity portfolio was in a net loss position of $1.5 billion. Cash flow continued to benefit investment income growth. Cash flow from operating activities for the first nine months of 2026 was $2.1 billion, a decrease of less than 1% from a year ago. Moving to expense management, our goal is to balance making strategic investments in our business while also controlling expenses.
Mike Sewell: The Q3 2026 property casualty underwriting expense ratio increased by 0.4 percentage points due primarily to timing of recognition of certain expenses. Regarding loss reserves, our approach remains consistent and aims in net amounts in the upper half of the actuarially estimated range of net loss and loss expense reserves. As we do each quarter, we consider new information such as paid losses and case reserves. Then we updated estimated ultimate losses and loss expenses by accident year and line of business. For the first nine months of 2026, our net addition to property casualty loss expense reserves was $1.26 billion, including $997 million for the IBNR portion. During the Q3, we experienced $94 million of property casualty net favorable reserve development on prior accident years that benefited the combined ratio by 3.6 percentage points.
Mike Sewell: For the commercial casualty line of business, there was no material reserve development for any prior accident year during the quarter. On an all-lines basis by accident year, net favorable reserve development for the first nine months of 2026 included favorable $203 million for 2025, favorable $70 million for 2024, and an unfavorable $56 million in aggregate for accident years prior to 2024. I will conclude my comments with Q3 capital management highlights. We paid $142 million in dividends to shareholders. During the quarter, we repurchased an immaterial number of shares. We believe our strong balance sheet continues to provide substantial flexibility and supports our financial strength. Parent company cash and marketable securities at quarter end was $6.1 billion. Debt to total capital remained under 10%.
Mike Sewell: Year to date, VCR was 5.8%, and our quarter-end book value was $105.42 per share, with $16 billion of GAAP consolidated shareholders' equity, providing plenty of capacity for the profitability growth of our insurance operations. Now, I will turn the call back over to Steve.
Steve Spray: Thanks, Mike. Before we open the call for questions, I would like to take a moment to thank and recognize Chief Claims Officer Marc Schambow for his nearly 40 years of dedication to Cincinnati Insurance, our agents, and our policyholders. As most of you know, this is Marc's final earnings call before his January retirement. Since Marc took the reins of our claims operations, we faced some of the worst catastrophe events in our company's history, including Winter Storm Elliott, Hurricane Helene, and the California wildfires. Marc has handled it all with unshakable confidence. He has continued to lead with empathy, nurturing our belief in responding person to person as we have made bad days better for countless families and businesses in their time of crisis. We are grateful for his contributions, and we wish him the best in this next chapter of life.
Steve Spray: As a reminder, with Marc, Mike, and me today are Steve Johnston, Steve Soloria, and Andy Schnell. Julianne, please open the call for questions.
Operator: Thank you. As a reminder to ask a question, please press star followed by the number 1 on your telephone keypad. Our first question today comes from Michael Phillips from Oppenheimer. Please go ahead. Your line is open.
Michael Phillips: Thank you. Good morning, everybody. Let me start with the Commercial Casualty again for the first question. Your loss pick is in line with the H1 of the year, maybe where you thought it would be at the end of 2025. I guess just want to see, and you talked about conservative prudence for potential severity rises. Have you seen anything in claims activity that would support that yet, or you're still keeping it elevated just in case of, and maybe just being conservative?
Steve Spray: Well, I wouldn't call it conservative, Mike. I'd call it prudent. We take a consistent We've talked about this a lot. We take a consistent process. We've got a consistent group, and it is management's best estimate of ultimate losses, obviously. I think I have not seen, I don't think we've seen anything out there on the casualty front that would be a reversal from a lot of the legal system abuse, the challenges that we face, third-party litigation funding, just increased activity there. I think there's enough uncertainty, enough variability. We're just being prudent, as you've noticed, that accident year pick through 9 months has stayed pretty consistent throughout the year and is right there with the pick that we had at the end of 2025.
Michael Phillips: Okay, Steve. Thank you. I may be staying with Commercial Lines for a second on the expense ratio side. You have talked about investments and how likely they are going to continue, I guess, with all your AI enhancements. Mike gave some examples in Commercial Lines in his opening comments. I guess, given top line pressure is probably going to last through at least the next year, is there a ceiling you think we could expect on the expense ratio of Commercial Lines, or just how do you think about the pressure there?
Mike Sewell: We have worked extremely hard. Great question. We have worked extremely hard to get the expense ratio under 30%, and I think we are going to continue to do that. That is a great observation as the top line is going to be growing. We are still going to do everything we can to control expenses. We have got to invest in the business, et cetera, and we will be working very diligently to keep it under the 30%.
Michael Phillips: Okay, Mike. Thank you. Congrats, everybody. Appreciate it.
Mike Sewell: Great. Thanks for the question.
Operator: Our next question comes from Gregory Peters from Raymond James. Please go ahead. Your line is open.
Gregory Peters: Well, good morning. I am going to focus on just the outlook for growth, lasering in or focusing in on the Commercial Lines piece. Just trying to see when we look forward, where you think the growth is going to come from. Is it exposure growth with existing clients? Do you think new business is going to accelerate? Or maybe you can also come at it from just where are you seeing the most competition in Commercial Lines and where are the areas that you might be concerned about?
Steve Spray: Yeah. Thanks, Greg. We are still seeing the most pressure, I would say, in Commercial Lines, the larger the premium. I would say small to mid-size, the way we would define it, business. It is competitive out there, but it still seems rational. Where we are seeing the most aggressive or the most difficulty on the growth side would be in that larger account space. No real guidance going forward for you, Greg. One thing I would, maybe if you would not mind, if I could just maybe expand on it a little bit. It is obvious the industry, they are slowing growth. They are slowing growth for us as well, but I would like to put it in context. The new business dollars, on an absolute basis for us, still remain very strong. I think what we are seeing, I would characterize as more of a normalization from really exceptionally strong growth. Not a reversal.
Steve Spray: We are coming off a very hard market over the last few years, especially in Personal Lines. Just as a reminder, over the last four years, we have doubled our Personal Lines net written premiums. We have tripled it over the last 10 years. More broadly, since the end of 2018 to 2025, we doubled the company's net written premium. Our compounded annual growth rate over the last five years has been at 10.4%. That is for the entire company. It has been 8.6% over the last 10 years. And our combined ratio over that entire time has been in the mid-90s. We have not had one year in excess of 100. I know there is a lot of talk about growth. We are focused on it. I think we have got a great business model. We have got great agents. We have got a great team. We have got a proven track record over a long period of time.
Steve Spray: We are just going to keep, I hate to use the cliché, but just the blocking and tackling to get out in front of our agents, keep listening, keep servicing them, keep broadening our product portfolio, and that would probably be my guidance for you on growth in the future. The one thing I can tell you is it is profit first. We are not going to just grow for the sake of growing. But over time, from what I shared, I think we have proven that we can grow through all market cycles.
Gregory Peters: Yeah. One of the things that I thought was pretty unique relative to a number of other companies over the last couple of years is your usage of multi-year policies. Can you give us an update on where you are, how that looks inside the book, the total book of business, where it is helping, where maybe it is becoming less of an emphasis?
Steve Spray: Yeah, I think we have had the 3-year policy since I have been with the company for 35 years. I am a huge fan of it. If you look at our underwriting results or underwriting performance, our 3-year policies outperform the 1 year from an underwriting. So our underwriters are the terms, conditions, the pricing, the intuition that they place on that 3-year policy, our results are better. I think if I step up a little higher level, I have always looked at the 3-year policy. It is consistent with Cincinnati's long-term approach to everything. We want to make a commitment long-term to our agents. We make long-term commitments to the great policyholders that we have. If you look at the 3-year, we write package business. And what we do is we are guaranteeing that the rate will not change on the property, the GL, the crime, and the inland marine.
Steve Spray: The auto, the work comp, the umbrella, those are all subject to anniversary rate change. But we are giving a 3-year commitment to that policyholder. Right now, it is over 50%, or it is a majority of our policies in commercial lines, package policies are on a 3-year basis, and we are committed to it. It will go up and down, I guess, as in policy count or package account based on market conditions. And if our underwriters feel like the pricing is getting a little too thin, they cannot get the type of terms and conditions as they feel like they need, that is when you might see a policy on a 1 year or if we have had some loss issues, but we still believe in the account, we may go year to year on that one just to get it through that period and then hopefully get them back on a 3-year contract.
Gregory Peters: Fun detail. Thanks.
Steve Spray: Hey, you know what, Greg? I might add one more thing that came into my mind is that three-year policy, it protects us, too, in a down market. When we've got those rates locked in in a down market, it can protect us on the downside, too.
Gregory Peters: That's what I was thinking of. So yeah, great. Thanks for the point.
Operator: Our next question comes from Mike Zaremski from BMO Capital Markets. Please go ahead. Your line is open.
Mike Zaremski: Oh, hey. Thanks. I guess the first question is just kind of looking at the reserve release trend line and looking also at IBNR levels, which remain very high by recent historical standards, if you would agree with that. Maybe they should stay high for reasons you might want to elaborate on. Is lowering IBNR levels a tool to help achieve the value creation ratio goal going forward? Said in other ways, have you guys been a bit too conservative on reserves, do you feel?
Mike Sewell: Hey, Mike, that is a good question, and I would say absolutely we do not release reserves, set up reserves based on VCR or where that might end up. It is an actuarial process. We follow actuarial methods. It is consistent. It is with the same actuary folks that are doing the work. So that is totally independent. You kind of mentioned two things in there with the reserve development, IBNR. I would say for the reserve development for the quarter, 3.6 points, that was probably, and it was just a little higher than our five-year average, which was 3.1 points of favorable development on average. When you look at it on a full year basis, we are at 2.8 points on a year-to-date basis so far through the three quarters. If I look back at the last five years, that range has really been in a 2% to 3% range.
Mike Sewell: So year to date, we are within that average. I would say for IBNR, related to that, we still have uncertainty out there. You have got legal things going on, this and that. We did add most of our IBNR is in the commercial casualty, which is not a surprise to you as you have looked at our materials. But we will stay prudent. We want to be in the upper half of the actuarial range. You look back at the consistency, for 30 years, we have been extremely consistent with how we reserve, what the process is, and we are very proud of that. So, great question. I appreciate it, Mike.
Mike Zaremski: That is helpful. Maybe pivoting to some of the market dynamics on pricing power versus loss trend. I believe in the remarks earlier you said that there is more pressure on kind of the larger account business. You guys have been through lots of cycles, but I think that over the last 10 years, you guys have grown into large account, whereas you did not have a lot of large account in the past. Just trying to tease out what percentage of the book is what you define as larger and just in terms of the competitive environment, given the industry's very healthy profitability levels, does this level of competition kind of make sense for pricing to start falling below loss trend from a kind of industry perspective? Thanks.
Mike Sewell: Yeah. Mike, on as far as pricing on falling below loss trends, we have been pretty consistent there in that other than workers' compensation, we think, and then I think general liability would be under pressure there, too. Time will tell. But we think that on the other major lines of business, the rate is meeting or exceeding loss trend. We are a package writer. As you know, we underwrite policy by policy. We price policy by policy. So, I was just making a general statement as far as where we are just seeing a little more intense competition. Other carriers, and all carriers, I think really, when you get these larger accounts, they just get under more premium pressure. But I would not think about a segment or at an account level that the pricing would fall below loss costs. We are underwriting and pricing policy by policy.
Mike Zaremski: Okay. Yeah, understood. I think I was multitasking. It was Hartford that just said that GL pricing was a bit below loss trend, so apologies. Thank you. Good call.
Mike Sewell: No, no. Well, yeah, we are seeing, like I said, we are not saying that. It is under pressure.
Mike Zaremski: Thank you.
Operator: Our next question comes from Josh Shanker from Bank of America. Please go ahead. Your line is open.
Josh Shanker: Yeah, thank you for taking my question. On that Hartford call, they talked a little about workers' comp margins changing. I realize you're not a big comp writer, but I was looking at your comp numbers, and it reminded me that it seems there's been a change in how you are reserving for comp. Once upon a time, you used to have an accident year loss ratio in the '70s, and there was less favorable development. Now it's being booked up in the mid-'90s with lots of favorable development. Can you talk a little about the transition, about what that accounting means, and how we should understand that in terms of where we are in workers' comp and whatnot?
Mike Sewell: Josh, yeah, no, there's not been any change in the consistency of the process there. I know what you're saying. It's just, I think, we look at frequency and severity, pure premium, on every major line of business, and I think we've just, probably along with the rest of the industry, just been a bit surprised in the muted frequency and the severity over time. As you know, it's a long tail line. As you've seen in prior cycles, it can turn on you pretty quick. So just maintain a consistent, prudent process in the way we reserve. Workers' compensation, Josh, 15 years ago happened to us. We grew up in a monopolistic state here in Ohio. We obviously don't write work comp in Ohio. We don't write work comp in California. We do not write workers' compensation in Florida.
Mike Sewell: About 15 years ago, we got very deliberate about managing workers' compensation on all underwriting, pricing sophistication, loss control, claims management, and work comp and our ability to write work comp business for our agents as part of the package. It's just that that rate environment has been difficult over the last few years, and that's just put pressure on our ability to grow it. You mentioned, Josh, workers' compensation is now a little less than 5% of our total net written premiums in commercial lines.
Josh Shanker: I realize I am being rare, but it does give me some insights how you think about the reserves. I imagine that if you really thought the business had a loss ratio in the 90s, you would not want to write it, or am I thinking about this incorrectly?
Mike Sewell: No. If we really thought that the loss ratio is in the 90s, that is correct. That would not be something that we would be targeting to grow.
Josh Shanker: That is where your loss ratio is right now. No?
Mike Sewell: Yeah. Our accident year right now is at 95.8.
Josh Shanker: That is your best estimate of where you think the market is right now, yes?
Mike Sewell: That is, Josh, where we think we are, but we follow a consistent process. Again, it is our reserving methodology. There is nothing that you are reading into that. It is a smaller line. It is $1 billion of reserves out of our $12.3 billion total reserves. So, yeah. It is something that we will continue to look at when we allocate our capital to the various lines of business.
Josh Shanker: If you will indulge me with one unrelated question to that. You are appointing a lot of new agents. The growth is slowing. Is there any indication that the agent appointments you are making today are the same, more, or less efficient than the past of getting the agent to give you the proportion of their books that you are looking for?
Mike Sewell: Yeah. Thanks, Josh. Yeah, that is something we monitor very closely. As a matter of fact, we were just having a discussion on that this morning, and we are seeing a consistent approach over the long term, including the more recent years when we have picked up the pace of adding agencies. What we are looking for in any community is we are looking for a professional agency, an agency that is a pillar in the community, does things the right way. They are seen as centers of influence, and that is what we are looking at or looking for regardless of the size of the agency. So we will appoint agencies in some cases that are startups, that are smaller agencies, and we are obviously doing business with the largest brokers in the world as well.
Mike Sewell: I think if anything, Josh, maybe that's the dynamic that's moved around a little bit over the last several years is just the M&A activity on the agency front. But we underwrite each and every agency on its own merits, and we want every agency, I think another key point there, we want every agency that we appoint to get what we call the Cincinnati experience. They get the entire field team. They just get the same care, services, and relationship building that we've provided to our agencies for years.
Josh Shanker: Well, thank you for all the details.
Mike Sewell: Thank you, Josh.
Operator: For any additional questions, please press star followed by the number 1 on your telephone keypad. Our next question comes from Mike Zaremski from BMO Capital Markets. Please go ahead. Your line is open.
Mike Zaremski: Oh, great. Thanks. I guess my follow-up, I do not think this was fully covered, was the personal lines competitive environment. Obviously, on a multi-year basis, you all have grown meaningfully. In more recent quarters, we can see the trend. Just wanted to further unpack what the competitive environment looks there so we can better understand how to think about going forward.
Steve Spray: Yeah. Thanks, Mike. You already mentioned it, I talked about it earlier, just coming off an unprecedented hard market. I think new business and just net written premium growth has normalized from exceptionally high levels versus a reversal. That middle market personal line space, so think replacement cost of the home, let us just call it under $1 million, and all that goes with that. That marketplace really plays out in the independent agency model, too, through real-time raters or comparative raters. So it is a really competitive marketplace. I think the key in the middle market space is that you have got to have sophisticated, segmented pricing algorithms, really using the data and the analytics that you have and that we have here at Cincinnati, and other carriers do, too. That is the key in that market through all market cycles.
Steve Spray: About 60% of our personal lines business now is high net worth. High net worth is certainly competitive. There are fewer participants there. I think entry is a little more difficult. Got to really be able to provide the services and the things that segment needs. We have proven that, I think if you asked our agents, we would be considered one of the premier private client underwriters in the business, and we are capable of writing some of the largest accounts in the United States in that ultra-high net worth space, too. So I think you have seen our book move more towards that ultra-high net worth. It does not take away one bit our commitment in the middle market space, but I think you will continue to see that private client or high net worth will become a bigger and bigger portion of what we do.
Mike Zaremski: Great color. Thank you, Steve.
Steve Spray: Thank you, Mike.
Operator: Our next question comes from Meyer Shields from KBW. Please go ahead. Your line is open.
Meyer Shields: Great. Thanks so much. I guess first on commercial auto, we have seen progress in the underlying loss ratio pretty much every quarter this year, and I am wondering, is that a recalibration of earlier quarter impact?
Steve Spray: You broke up there on us, Meyer, but it was commercial auto, and I think you said we are seeing good results there throughout the year, and I think you mentioned something about a recalibration. It is not a recalibration. Again, I think one of the keys for us is that in commercial lines, we are a package writer. The majority of what we do is small to mid-size package business. I think our fleet that we insure is a little more predictable, a little more consistent. We are not into writing large trucking or transportation risks. We have been working hard on auto, going back to probably 2016, 2017. I think we were early to the game there and seeing some trends and managed through all of that, including that higher inflationary environment. The book was in a really good spot.
Steve Spray: We felt a little pain from inflation, but I think we were able to act upon it pretty quickly, too. It is a challenging line. It follows legal system abuse as well to an extent. So it is something we need to continue to watch, be prudent on. Obviously, it is shorter tail, but we feel good about where that auto book is. We will stay prudent with it and hopefully keep getting the results we are getting.
Operator: Our last question will come from Fred Nelson, a private investor. Please go ahead. Your line is open.
Fred Nelson: Everything I see has inflation to it, particularly regarding healthcare, automobiles. I was just curious, in your investment portfolio, you seem to be emphasizing fixed income over the equity dividends and rising dividends. Maybe you could make a comment. It would be helpful. Thank you.
Steve Soloria: Yeah, Fred, this is Steve. We continue to play both sides of the marketplace, but there is no doubt with interest rates higher than they have been in the last 15, 16, 17 years, we are trying to take a little bit advantage of that and lock in some longer-term rates. Some of the equity markets, it has traded very well over the last few years, and we have trimmed around some really well-performing stocks and redeployed some of that into the fixed income market. So we are trying to take advantage where we can, take some profits where we can, but continue to build a cash flow-driven machine moving forward.
Fred Nelson: Thank you. Thank you.
Steve Spray: Thank you, Fred.
Operator: We have no further questions. I would like to turn the call back over to the company's CEO, Steve Spray, for any closing remarks.
Steve Spray: Okay. Thank you, Julianne, and thank you all for joining us today. We look forward to speaking with all of you again on our Q4 call.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
