So that’s one opportunity, and we are exploring some other opportunities from the E&S side of business or potentially like, for example, in some reinsurance opportunities or stuff like that, but nothing that we’re really prepared to discuss right now.
Aryan Gupta: Sure, that makes sense. And just one last quick question on the quota shares. Is that expected to sort of go down this year? And if you could give any sort of clarity on what that ends up being for the new renewal on 6/1 this year.
Daniel Peed: I would prefer that — we can’t really provide any specific numbers, but we have stated in the past that we did 40% quota share at June 1st of ’23, and then we would expect that to go down to eventually 25%, 15%, 0% in the course of two to three years. So I would say, that would be our expectation going into 6/1/24 is for that to go down by a third to a half – the quota share component.
Aryan Gupta: Sure. Thank you so much, Dan.
Daniel Peed: Okay. Thank you.
Operator: Thank you. Next question is coming from Bill Dezellem from Tieton Capital. Your line is now live.
Bill Dezellem: Thank you. First of all, would you please discuss your view of the reinsurance market specifically as it relates to your renewal — June renewal?
Bennett Bradford Martz: Yes, certainly. We did issue a press release describing some of the details of the January 1st, all other perils cat or AOP cat placement we did, spent $100 million a limit. So it’s significantly smaller than our hurricane focused core catastrophe reinsurance program done at mid-year. But we did see just under a 10% risk-adjusted rate decrease on that limit, and we did buy more limit. So my comments were guiding towards — we do expect to see — more capacity available, the feedback we got at both 1/1 and 2/1 was that capacity is available, our reinsurers are hungry. They’re remaining disciplined, so we have to be cognizant and mindful of that. But last year’s program was distressed, right. We still have the cloud of uncertainty hanging over the company regarding the disposal of our former affiliate, United Property and Casualty.
And it definitely impacted the pricing and the capacity available to us, as well as other terms and conditions. So we see, now that that is further away in the rearview mirror, and we’ve proven that we’ve got a very strong company and book of business, I think we’re in a much better overall negotiating position. But we respect our reinsurance partners immensely, we need their support and we’re playing long ball with them for sure. So while this is an annual opportunity to drive terms, and I do think we’re a little bit in a sedent market at the moment, we’ll have more details for you in the coming months.
Bill Dezellem: Thank you. And then secondarily, you’ve highlighted a number of things that you are doing. Would you please walk through for 2024 specifically, what you see as your most important strategic initiatives?
Bennett Bradford Martz: Sure. Number one is underwriting profitability, that’s always job one. That’s never going to change. Number two, is developing pathways for earnings growth, that doesn’t mean top-line growth, it means earnings growth. So that can come in the form of fee income. It can come in the form of deploying capital intelligently, whether it’s direct assumed or reinsurance, to earn strong returns on capital. The third, I would say, is to continue to support and complete the runoff of discontinued operations. So we still have a couple of things on our to-do list there, most notably Interboro, getting that sold and continuing to support the Department of Financial Services in any way we can. And then lastly, it’s building bench strength.
I think we showed everyone in January that we’re serious about that naming two new named Executive Officers, Svetlana Castle joins us as our new Chief Financial Officer. I’ve known her a long time and am very excited she’s joined our team. She will likely be participating on this call next quarter. She’s here with us today, listening in and learning and getting up to speed on how we operate. But she’s a terrific hire, and we also promoted from within and created a new position of Chief Compliance and Risk Officer. And that title is pretty self-explanatory, given what we went through in 2023. There’s going to be increased emphasis on risk management and compliance at the company going forward. So those are my top four.
Operator: Thank you. We’ve reached end of our question-and-answer session. I’d like to turn the floor back over to Dan for any further closing comments.
Daniel Peed: Okay. Thanks, everybody, for your time and your interest on our company, and your time on this call. And that ends our call. Thanks again.
Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
