Carl Lindner: I’m not sure there’s that significant of a difference in that. We continue to have great result last year. Our first quarter results are continue to be excellent for Workers’ Comp. I think in our Summit business — our Summit business, our strategic comp business, our high deductible business and National Interstate’s Workers’ Comp are all performing very well. Our California business is the part of the business that has an underwriting loss, both last year and in the first quarter. So that’s relatively small — smaller part of our Workers’ Comp business in that. But I suppose that could have some impact. So we’re getting a good start, have excellent comp results in the first quarter. We do think that the — that this year that the profitability won’t be as good as the previous year. One reason is the 15% rate decline in Florida, which is a significant state for one of our large comp subsidiaries Summit.
Michael Zaremski: It’s very helpful. Thank you.
Operator: Thank you. Our next question comes from the line of C. Gregory Peters of Raymond James. Please go ahead.
Unidentified Analyst: Hey, good morning. This is John [ph] on for Greg. Just wanted to follow-up on the growth in the Specialty Financial. I know in the prepared remarks, you highlighted the financial institutions. But curious if you could provide a little bit more information on what you’re seeing as attractive in that area of your business? It feels like there’s been a step change in growth. I’m just trying to get a sense if we should expect this to continue.
Carl Lindner: I think we expect solid growth this year. I think the first quarter was very strong in that. I think different companies talk about leaning into the property opportunities. This is a business that we’ve done very well over a long period of time with significant underwriting profitability. With pricing going up 9%, with an industry that’s focused on getting the proper insured values, there are states like Florida, a number of other states that are moving to anybody doing this business, doing — making sure that things are insured to replacement cost value, not just the principal balance, replacement cost value could be appraised value or it could be what’s called — known coverage replacement cost, which would have been maybe somebody’s last homeowners policy in that — that was written.
So both price and getting proper insured value competitively. There have been a number of competitors that have faltered and that have allowed us to pick up significant accounts, one in particular last year that were continuing to benefit from. We’ll see if we — this is a lumpy business in that when you pick up an account or lose an account, it can have a decent impact on your overall comes in lumps. So we’re hoping that we continue to have some opportunity to pick up maybe some additional accounts, by the same token. You know how — what our thoughts are on business that’s too catastrophe exposed. So if there are accounts that we don’t think are performing or have too much catastrophe exposure or maybe we may decide not to go forward with some.
So bottom line is we’re pleased with how this business is starting out, very profitable, really good growth above the price increase and insured value momentum that we’re getting. And I think we’re excited about the business.
Unidentified Analyst: Okay. Thanks. And then as my follow-up, in the press release, I believe you said the returns in the alternative investment portfolio exceeded expectations for the quarter. And I know you’re not providing detailed guidance anymore, but just curious if the first quarter results change your view on the expected performance of the portfolio for this year or if the 6% annualized return is still the right bogey to use for 2024?
Craig Lindner: Sure. This is Craig. On our last conference call, when we talked about assumptions that went into our plan — we talked about a 6% assumption on total return on alternatives for the year, and that was made up of a low single-digit return on our multifamily properties which account for about half of that portfolio at stronger would earn on the other investments. And what I would say is multifamily is performing pretty much in line with our expectations. We’re pretty much in line with what we were kind of expecting to see when we guided to or said that we were using a low single-digit return on that piece. I don’t think we changed our thoughts on that, kind of given the outlook for the balance of the year on multifamily.
We got off to a very good start. We had very good returns on the balance of the alternative portfolio. But as you know, that can be pretty lumpy. I think we did benefit from the very strong market in the fourth quarter of 2023. In calendar year 2023, we report the returns and margin a quarter delayed basis. And so I think in the first quarter, we benefited from the very strong work last year. It’s early in the year. Hard to predict what the market is going to do the balance of the year. So at this point in time, we would not change the assumed 6% return for the year.
Unidentified Analyst: Okay. Thanks for the answers.
Operator: Thank you. Our next question comes from the line of Andrew Andersen of Jefferies. Your question please, Andrew.
Andrew Andersen: Hey, good morning. In the press release, you pointed to improved profitability on Workers’ Comp. Am I correct in thinking that is due to stronger releases year-over-year and not due to the underlying loss ratio? And maybe with that, could you touch on the seasonality of perhaps how ’23s Workers’ Comp developed on a quarterly basis?
Carl Lindner: So the combined ratio — actually the combined ratio is fairly similar in Workers’ Comp in the quarter-over-quarter as well as development. So there was a little bit of growth in Workers’ Comp this year, but the underlying loss ratios were similar in that business. There was some — there can be some lumpiness in the development, but this — in the first quarter of 2024, it was similar to the first quarter of 2023. I think our press release said, we had an increased margins there. I think I just said we did well. And I think that’s what my earlier comment was that we had a strong quarter.
Andrew Andersen: Okay. Thank you. And then maybe looking at some Schedule P accident year picks for other liability claims made seem to improve year-over-year and occurrence was kind of flat year-over-year for accident year ’23. I guess I would have thought there’d be maybe a little bit more conservatism just given the loss trend environment. But can you kind of help us think through these picks here?
