Richard McCathron: Yes Michael, I’ll go ahead and take that one. I think if you look at traditionally, how insurance companies adjust for inflation, in building cost replacements coverage, a replacement, there’s usually some arbitrary inflation guard. From the beginning of Hippo’s of Hippo’s offering, we re-underwrite every single policy at every single renewal. And we – run it through our replacement cost estimators. So if in fact, we see 20% inflation as an example, and the building, we were covering the home, we were covering coverage area was $400,000. At that renewal, we would make coverage a $480,000. So from our perspective, we believe that we get exposure increase and rate increase at the policy level at every single renewal, which dramatically reduces any uncertainty on what inflation trends are, if we’ve missed it, and we’re a little bit high.
We’ll adjust that it next renewal, if we missed it, and we’re a little bit low, we’ll adjust that at next renewal at the policy level.
Stewart Ellis: Yes and Mike, this is Stewart, with respect to this reserve release, you know, we’re constantly looking at the development curves for the claims that we’ve received, that we’ve paid, the IBNR associated with those. And we have estimates for how various events and various cohorts of customers’ claims are going to develop. And when the actual experience begins to indicate that we’re over reserved, you know, we adjust. So it’s not our intent to over reserve, but we have been getting better operationally, as we’ve matured as an organization. And in certain circumstances, some of the reserves from 2021, related to very large events that we’ve been able to look at the experience curve since then, and we believe that the reserves are not bringing us or the – release is not bringing us to a level of reserve, that is any different than what we’ve had at each of the past quarters in terms of adequacy for future development.
We feel very good about – the reserving amounts that are left on the balance sheet.
Michael Phillips: Okay, thank you guys. And then can you talk again, about the impact of the economic slowdown and what they might have on different parts of your business, particularly the builder program and how that might – not just that program, but any the other segments of your business might be impacted?
Richard McCathron: Yes, it’s a good question. And I think everybody’s aware that there is a slowdown in the builder channel. I think, if you consider our early stage in that channel, the opportunities of new builds, even at a depressed level, we think we’re just at the tip of the iceberg with the partners that we have in this particular space. So even if a given partner might be reducing the amount of housing starts that they have, we think that there’s still massive upside in our funnel and conversations we’re having to bring more partners in that area. So we don’t think that this will slow down our trajectory and builders for several years.
Michael Phillips: Okay, great, thank you.
Stewart Ellis: And outside the builder channel, we’re still seeing I think we’re a small enough share in the market where, you know, general, mortgage rate increases and other things have not yet materialized, has meaningful impact as we think about growth.
Richard McCathron: And keep in mind, our target customer, the generation better customers I was referring to, these are customers that we believe are looking for a partner to protect their home, and they haven’t found it in the industry. And we are – finding those customers, they’ve identified us as that partner. And that’s not somebody that that only moves when they move into a house that’s new to them. These are people that switch at renewal, and we’re seeing a significant number of our generation better customers as switchers, not just people that have newly moved into a house.