Brian Hertzman: So, yes, so the 30% is sort of a guideline for us, so we would look at that as our maximum. Not that we couldn’t go over that if the opportunity presented itself, but that does leave open the possibility for borrowing money at the right rate and the right environment to move towards that ratio if it makes sense from a long-term value creation for shareholders’ perspective. So, it would be on the table, but not in our immediate plan.
Operator: Our next question comes from the line of Andrew Andersen with Jefferies.
Andrew Andersen: Hey, good afternoon. In the press release, you mentioned lower underwriting profit in ENS. Could you expand a bit on that? Were that just large losses on property or casualty and does it reflect a change in underlying loss trend assumption?
Carl Lindner: Yes, I think the quarter was in the 80s. The combined ratio for this hail board you’ve got to put that in perspective. So the quarter had an outstanding combined ratio and to start with. As Brian said, when you put it in the perspective of the whole year there was the difference in the reserve development was less favorable workers’ comp for the whole year. Some impact from social inflation and in some quarters some large loss on the casualty side activity. I think that’s the right way to look back and if you’re trying to look at trends in forms.
Andrew Andersen: Thank you. And are you seeing any change in the competitive environment within ENS?
Carl Lindner: I think maybe a bit more competition on, we’re not on the ENS property side, we’ve been expanding our property business on the on the ENS side. It seems like a some more interest in that sector and some more competition there. I think on the positive side other interesting things I think we’re seeing on the DNO side where the pricings been down double digit. In the fourth quarter, we saw it being down single digit which I saw as a positive trend when we thought that there have been too many competitors too much capital and pricing levels that don’t make sense in public DNO so that was positive. I think another positive thing we saw in the fourth quarter on the pricing front was our commercial auto pricing, their national interstate Vanliner moved to 10, move to double digit to 10% plus which I see as a positive competitive sign.
Andrew Andersen: Thanks and maybe just a quick numbers question, $34 million of other expense in the quarter. I suspect that’s higher amortization from CRS but is that kind of a good run rate for this line item in ‘24?
Brian Hertzman: So it looks like you’re looking at our line item for sort of other corporate expenses so what falls into that line is really everything that’s not part of our property and cash dealing operations and then we show the interest expense separately so that’s mostly holding company expenses in that line, but it’s also net of any investment income earned by the parent company. So there’s a couple things going on there in the quarter when you compare it to previous quarters, particularly the fourth quarter of 2022. One of the bigger things in there is that during the fourth quarter of 2023, we had lower levels of cash and investment balances at the parent company as we tend to keep most of our cash and investments down in the P&C operations.
So the investment income that’s sort of netted into that number is about $4 million lower in 2023 compared to 2022 in the same quarter. And then also in the fourth quarter of 2023, we just happened to have a couple of sorts of one-off elevated expenses, and that was magnified by a benefit in the fourth quarter of 2022. In the fourth quarter of 2022, we had a benefit related to some employee benefit plans that are tied to stock market that didn’t recur this year. So when you look at the things in the fourth quarter of 2023 versus the 2022 quarter that are different, I would say the lower parent company investment income, which is about $4 million, that’s probably something that I would go forward and I would consider if we were looking at a run rate.
The other items are really sort of one-off things that could happen in any quarter, but I wouldn’t consider them something that I’d put in a run rate.
Carl Lindner: Yes, I’m going to go back on the ENS, [Sonborough] and excess liability business just to be clear. When you look at, if you would just look at that part of our business in the fourth quarter, it would be in line with what the combined ratio was for the whole year in that. And we had ended up with excellent underwriting results in ENS, Sonborough and excess liability overall.
Operator: Our next question comes from the line of Meyer Shields of Keefe, Bruyette & Woods, Inc.
Meyer Shields: Great, thanks so much. In terms of understanding, I don’t want to call it guidance anymore, but the expectations, there are a few companies out there who provide some sort of outlook for combined ratio and explicitly say that that does not include reserve development. I just want to understand whether we should look at your expectations the same way or whether maybe there’s some measure of reserve least anticipated.
