So we’ve built more vertical towers in North America and in international and Japan specifically. So I think the overall market has responded most to property. Casualty has started to tighten up. I still think that there’s ample capacity in quota shares. They may be with some tighter terms and conditions and ceding commissions or by and large, it was placeable. And yes, facultative, I think, has become harder to place on property just based on the capital available. But for us, we don’t heavily rely on facultative to deliver results. It’s really our core treaty structures.
Paul Newsome: Makes sense. Can you also talk about the change in conditions in commercial lines? Obviously, AIG led the market in changing terms and conditions in commercial lines. Is the impact pretty much fully there now today at AIG? And have you seen €“ are you seeing any change in the market as well for terms and conditions that’s meaningful sort of outside pricing change?
Peter Zaffino: I think we’ve done an exceptional job on the underwriting side with terms and conditions. I think the entire team has focused over the last several years as not only €“ certainly pricing’s an output, but how we structure our insurance deals, how we focus on client needs, but also how we customize terms and conditions to make sure that we have the appropriate policies and endorsements in the marketplace. I don’t think it’s over. It’s something that’s a nuance, but as we look to the property market in 2023, it’s one of the areas where when you report out rate, you really have to understand the risk-adjusted implications of rate increases. For instance, in Excess & Surplus lines property, I expect to see higher deductibles, more wind deductibles, tighter terms and conditions.
We’ve seen what used to be all risk, which covered all perils now to name perils, and so you can strip out a lot of coverage in terms of when you’re placing it, whether you’re trying to solve for wind or quake or flood, you don’t provide all of the apparels. And so if you said to me, what’s one of the big areas that you’ll see an improvement in 2023, it will be on the terms and conditions and how we price those perils. And I think we will offer, particularly in excess and surplus lines, the appropriate coverage, but we will be restrictive on terms of conditions if we don’t feel we’re getting paid for them. So I don’t think it’s over.
Paul Newsome: Thank you.
Peter Zaffino: Thanks Paul. Next question.
Operator: Thank you. Our next question comes from Erik Bass with Autonomous. Please proceed with your question.
Erik Bass: Hi. Thank you. Just hoping you could help us think about the base NII trajectory for 2023. So we’ve seen a nice step up in the past couple of quarters, and you gave some guidance for the first quarter. But how much of the increase is coming from resets on floating rate assets? And how much is the tailwind from higher reinvestment yields and the portfolio changes that you’re making that should continue to build throughout the year?
Peter Zaffino: Thanks, Erik. As you know, this has been an active strategy for us, particularly over the back half of 2022. I think the team has done an exceptional job. And Sabra, maybe you can just provide a little bit of insight in terms of some of the NII and the reinvestment rates.
