Brian Hertzman: Sure. So a couple of things are going on there. One is, as Carl mentioned, there are rate decreases happening in workers’ comp. So that puts some pressure on the accident year. And then even though we haven’t been experiencing medical cost inflation, we’re mindful of that and being careful to consider that, as we said, current year accident pick. So the accident year loss ratio in workers’ comp would be a little bit higher for those two things, but still producing those ROEs when you look at the business overall that Carl mentioned earlier.
Andrew Andersen: Okay, thank you.
Operator: Thank you. Our next question comes from the line of Gregory Peters with Raymond James. Your line is now open.
Gregory Peters: Well, good afternoon, everyone. I thought I’d start with my first question, going back to Craig’s presentation on the investment portfolio and the performance. And I think, Craig, you mentioned that the fixed income yields are now up to around 6%, which is a nice lift from where it was a year ago. Can you maybe step back and give us some perspective on how — because of the higher yield environment, you might be altering allocations where you have new money going into whether it’s industry group or sector type? And also as investments come up and mature, how you’re allocating those inside the portfolio?
Craig Lindner: Sure, Greg. I wouldn’t say that we are significantly altering our allocations. I’d say, certainly, fixed income is more attractive than it’s been in a long time. So probably a bit heavier weighting to medium-term fixed maturity investments versus certain other asset classes. But I wouldn’t expect us to change the allocations at a very significant way. We do think on the real estate side as an example, there are going to be some really interesting opportunities over the next couple of years. And time will tell whether we’re right on how things are going to evolve there. But we do think that there’s going to be an opportunity to get some extraordinary returns in the real estate market. I don’t think you should expect to see a significant change, though, in the allocation in the investment portfolio.
Gregory Peters: Okay. Fair enough. It makes sense. And then I guess, pivot back to Carl. And let’s focus on the — the property business, Property and Transportation business ex-crop. I think you called out in your comments, an underperforming book of transportation business, maybe it was $50 million that you’re re-underwriting. Can you give us some perspective within your Property and Transportation business of how the competitive landscape is? Do you feel like there’s more pressure from competition at this juncture? Or do you feel like it’s status quo? Any updated perspective would be helpful.
Craig Lindner: Are you asking me to focus on commercial auto in particular? Is that…
Gregory Peters: Well, yes, commercial auto would be one topic. But inside Property Transportation, there are other businesses on top of just commercial auto outside of crop. So just the — I’m just focused on ex-crop business inside Property Transportation.
Craig Lindner: Yes. I mean, there’s a number of different businesses. Our transportation business is a significant part. I think it’s a mixed picture within the transportation business. There are some parts of the business that seem to be more competitive, others that seem to be tightening. And with competitors, some competitors like Nationwide and others leaving part of the space in that. Our business continues to perform well. And has for years. That said, on the commercial auto liability part, it’s not where we want it to be. It’s probably 101-ish or so and through nine months. And for that reason, we’re continuing to take strong commercial auto liability rate increases of about 10% year-to-date. We — versus a prospective loss ratio trend of about 7% or so in that.
We have — and when you put our businesses together in that space, mid-single-digit net written premium growth through nine months in that. So — that’s kind of that part of the business, business — parts of the business like our nonstandard aviation or Property Inland Marine or Ocean Marine, there seems — to continue to be opportunities in those areas for growth. And we continue to have good results in those businesses in that. So I think that speaks to some of the larger businesses within the Property and Transportation, excluding comp.
Gregory Peters: Great. Well, thanks for the detail.
Craig Lindner: Sure.
Operator: Thank you.[Operator Instructions] Our next question comes from the line of Paul Newsome of Piper Sandler. Your line is now open. Paul Newsome, your line is open. Please check your mute button.[Operator Instructions] And I’m currently showing no other questions at this time. I’d like to turn the call back over to Diane Weidner for closing remarks.
Diane Weidner: Thank you, and thank you all for joining us today as we’ve walked through our third quarter 2023 results. If you have any other questions, feel free to reach out to our IR department, and we look forward to talking with you next quarter. This concludes our call for today. Thank you.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
