Meyer Shields: Okay. That’s worrisome about recent years for the industry, but that’s very helpful.
Operator: Our next question comes from the line of Bob Huang from Morgan Stanley.
Bob Huang: Congratulations on the quarter. Just a quick question on your insurance segment’s loss ratio year-on-year loss ratio improved for about 30 bps. But just given just the strong E&S pricing environment, shouldn’t we expect a little bit better improvement in loss ratio. Is there anything in the loss trends that probably differed from how you thought about your loss picks in the past, just see if there are any comments around that?
François Morin: Maybe — I mean I think the answer is really around like us being proof and initial loss picks. We don’t want to get into the game of being overly optimistic. There’s still a lot of risk out there. There’s still a lot of uncertainty when we price the business, whether, again, we just been talking about casualty loss trends in particular, that’s an area that we’re watching carefully. So, we’d rather — and it’s been our model for many, many years is pick a realistic kind of a bit more conservative initial loss pick on — when we book the business and then react to the data when it comes in. So, we’re hopeful there could be good news down the road. But for the time being, we’re very happy with our loss picks.
Bob Huang: Okay. My second question is a follow-up on the reinsurance core combined ratio. Obviously, it was very strong and I think you mentioned that a lot of it is due to business mix shift, right, shifting towards property and then because of that and then you naturally have an improving combined rate — loss ratio there. Just curious if we were to think about going forward, the run rate combined ratio for your reinsurance segment, based on the comments so far, is it fair to sort of assume that it’s going to be closer to what you printed over the last two quarters and probably better than the prior quarters. Is that a fair way to think about it just from a modeling perspective?
François Morin: Again, I mentioned like the thinking around trailing 12 months, which is where I would start — to help you kind of with assumptions, I would — if you’re going to — we think about it in totality around the combined ratio, but if you’re breaking down the loss and the expense ratio, yes, maybe there’s a — given the growth, maybe there’s potentially the latest quarter of OpEx is probably more sustainable given we’ve been able to generate that premium, that growth with the same level of resources. But on the loss ratio side, I think it’s just — I would be careful not to over I mean give too much weight to the latest quarter.
Operator: Our next question comes from the line of Brian Meredith from UBS.
Brian Meredith: A couple of questions here, first on the MI segment. I know there’s clearly some market pressures, but NIW definitely down year-over-year. And it looks like just looking at some of the stats you all have been losing some market share in the MI segment. Is that intentional? Are you any concerns about the outlook here on the MI as far as delinquencies? Or is it more related to perhaps just better use of capital elsewhere?
Marc Grandisson: It’s more the latter than the former. I would actually say tell you, right, that the market is better this year than it was in last year. So, I would argue that we might change the way we intent the market over the next 12 to 24 months. But certainly, at heart, we have been saying that to you historically it hasn’t changed last quarter, which in terms of relative returns based on the three segments on the underwriting segments. MI is a third one, but a very strong one, I would say, at this point in time. But again, it’s more a reflection of the relative opportunity between the units than anything else. In the market, Brian, I’ll tell you the market is very, very disciplined. We’re very impressed by the industry or the MI industry.
Brian Meredith: Good to hear. And then I guess my second question, Marc, as I think about if this next leg is coming through the third act on the casualty reinsurance side. I guess that probably comes through a lot on the ceding commission side, if you get you get better ceding commissions, should we continue to see kind of the acquisition kind of expense ratios on the reinsurance side kind of moving down here as we head through 2024, given was going on with the casualty reinsurance part, particularly since you play quota share?
Marc Grandisson: Well, yes, I think the ceding commissions about store three right now we’ll see what that ends up. There might be a slight change or we’ll see how — it’s also going to be dependent on how the underlying market is improving as a reinsurance player. But I think what’s our acquisition comes right now reinsurance is mid-low, low 20s. So, I think if you have more of a portfolio even if that’s argued, it’s a 30% ceding commission. So you might see actually, the acquisition going up a little bit. But again, as Franco mentioned, all the time talk about when we have these questions about the expense ratio and loss ration but not restarted the return and whether the combined ratio lends ourselves to return when it comes from losses of expenses we have already losing sleep here. So, I think this is…
Brian Meredith: And I was going to say that I guess maybe the right way to think about it is that if you’re leaning more into the GL, the underlying combined ratios may actually move up some here as you look forward because we have a different return profile.
Operator: Our next question comes from the line of Scott Heleniak from RBC Capital Markets.
Scott Heleniak: Just on the MI. I wondering if you could expand on the growth opportunity internationally, you referenced in your commentary. I know Australia is a big market for you, but we’re also are you focused outside of the U.S.? Or is it mostly just Australia you’re referring to?
Marc Grandisson: Great question. I think in non-U.S. base is also the CRT, which is granted exposed to the U.S. MI, the excess of loss program that the GSEs have developed over that and we have developed over the last 11, 12 years. Internationally — so that’s a piece of it, you see it in our financial supplement. Internationally, we have Australia. As you know, we have a good size, great relationship and a great presence there. We’re very pleased with it. We’re also getting a little bit more market share there even though the mortgage origination is a slowdown there as well. The other is really in development is the international with European specifically, SRT, which are 90% mortgage-backed credit risk transfer, they look a lot like the CRT business that we have in the U.S. Most of it is done because banks need to release capital that Basel III led the transactions.
And we’ve been doing it for a little while, and we’ve partnered up, we actually with another European company who’s very steep in that area. So that’s a growing area right now because I think the — there’s a lot more need for capital. As you know, Scott, not only in the U.S. [indiscernible] has a similar consideration. So, it helps us be there for them to provide more capital relief and it’s certainly something that we’re focusing more efforts on.
Scott Heleniak: Okay. That’s helpful. And then the — just the risk profile and the credit quality and the default ratios on those, I would assume those are very favorable. But how does that all compare to outside of the U.S. and internationally versus the U.S. book?
