Mark Hughes: The ceded premiums, 22.5% is – I assume that goes along with your property exposure. If casualty maybe outgrows property a little bit in coming periods, should that come down? Or what some rough thoughts there?
Michael Kehoe: It’s Mike. This is always going to impact that. We buy a little more reinsurance on the property side because of some of the volatility that goes with certain accounts that are exposed to natural catastrophe. And we buy more reinsurance when we put up larger limits. So our excess casualty book, the primary policies we typically [indiscernible].
Mark Hughes: Brian Haney, you talked about the accelerating submissions. Will that be accompanied by a little more pricing? Are you pushing a little bit more on the rate in this environment?
Brian Haney: It’s not going to affect how we look at price. We are pushing pricing up. But that’s less to do with submission and more to do with kind of optimizing the wealth building. So we’re taking a look at all the market conditions and what the competitors are doing and coming up by line with where we’re going to push rates. So now going from 20% to low 20s to 25% would not affect how we rate the business.
Mark Hughes: And then the final question, the property is more orderly. Is it as attractive now? Pricing, still seems like it’s going up. And if it was attractive last quarter, is it still is attractive now? How are you looking at your appetite for property given your current mix and the price levels?
Brian Haney: This is Brian Haney. I would say that prices are still going up. So it’s more attractive than it was last year when it was less orderly. So we still see a great opportunity in property.
Operator: [Operator Instructions]. And we will take our next question from Andrew Andersen with Jefferies.
Andrew Andersen: Maybe going back to pricing and competitive positioning, trying to think about the underlying loss ratio into 2024. And how I’ve been thinking about Kinsale over the past couple of years is you haven’t had to compete much on pricing. And I suppose one way of looking at that is the bound policy to issue quote ratio, which hasn’t moved much. So it sounds like if you’re not competing more on a relative position with pricing versus peers, we could still see flat underlying loss ratios into next year. Is that a fair way to think about the competitive market and underlying margins?
Michael Kehoe: Andrew, this is Mike. I would probably take issue with the idea that we don’t compete on price. We bind 10%, 12%. I think it varies a little bit by line of business, but we bind 10% or 12% of our new business quotes. And I would say, price is the biggest driver. It’s a huge concern to our customers. Clearly, the last few years have been a little bit more of a seller’s market. So that’s given us the ability to raise rates, and at the same time grow the top line at a really good clip. But you’re not completely divorced from sensitivity around price. So, it’s still a competitive business in terms of where loss ratios can go from here. We don’t really forecast that publicly. But if you take into account all the information we’re providing, I think you can probably come up with a good guesstimate.
Andrew Andersen: And in the context of submission flows and maybe rate coming down a little bit in property from some industry data, just trying to get an idea of the average premium in property versus casualty. And if you were to lose some property business, because of the pricing dynamic, does the casualty transaction flow overweight that because the average premium there would be higher?
Bryan Petrucelli: I would say the average premium for property depends on what sort of property we’re talking about. Commercial property would have a relatively high average premium, but our small property team, homeowner’s team, and our personal insurance book all have relatively low average premiums. I wouldn’t anticipate a huge impact from – the market is becoming more orderly. But I don’t think – it’s not a dramatic effect. It just explains why that property growth rate went from a very, very large number in the fourth quarter 2022 to a still large, but less large number in the fourth quarter of 2023.
Andrew Andersen: Mike, maybe just one clarification. You mentioned accident years 2016 to 2019 favorable inception to date. Just want to be clear, that is on both a consolidated basis, but also on a general liability/casualty basis as well and it’s not…?
Michael Kehoe: It’s on a consolidated basis. I think we’ve got about a dozen statutory lines of business, you run into more variability because you’ve got smaller numbers. But on a consolidated basis, we’ve got a really good track record of posting reserves in a conservative fashion and develop favorably over time.
Andrew Andersen: I guess I was trying to get at, it’s not benefiting from property outweighing casualty because you weren’t really writing much casualty back then to begin with or property back then to begin with?
Michael Kehoe: It gets pretty complex, though, Andrew, because property is a short tail line that develops pretty quickly. Some of our casualty business, I would – I’m not an actuary, but I call it medium tail, right? It’s kind of in the middle. And then we write a lot of long tail casualty. I think, candidly, our book of business is a nice mix of short, medium and long. But in general, I would say the casualty business has performed well. We don’t have one line of business for general liability. It’s other liability occurrence, other liability claims made, products liability occurrence, products liability claims made. We may even track the excess separately from the primary. So, yeah, I think that’s kind of complexity run amok for a conference call.
But in general, I think the takeaway for investors is they should have a lot of confidence in the Kinsale balance sheet. And the reason we’re reiterating that is kind of, to Brian’s point earlier, there’s a lot of companies coming out saying, hey, we need to take a big charge because we didn’t put enough away in past years. And we’re trying to give our investors confidence and say, that’s not coming here.
Operator: And we will take our next question from Pablo Singzon with J.P. Morgan.
