Douglas Howell: Yes. Well, a lot of that — remember those numbers are impacted considerably by our M&A program. So as we close the year out strong on M&A, those numbers would be in the December numbers and not in last year’s December numbers, and that would impact the quarter 2.
Patrick Gallagher: And I would want to comment on that as well. We are not undergoing an organic surge in new hiring. We have a very strong internship. We bring on a very strong number of young people every year. Of course, we’re always looking for good solid production hires, but you are not seeing our organic head count surge beyond the M&A activity that Doug just mentioned.
Unidentified Analyst: Great. And as we think about supplemental and contingent commissions, I suppose a part of that is based on underwriting profitability of those programs. So when you think about ’23, is there kind of a loss trend that you bake into forward guidance there? Or maybe more broadly, what is your view on loss trends over the course of the next year?
Douglas Howell: Are you’re talking about the carriers loss trends?
Patrick Gallagher: Yes, our contingents.
Douglas Howell: Right, that relates to the contingents.
Patrick Gallagher: Supplementals are not subject typically to profit-sharing arrangements, our contingents are. And to date, I’d say we probably factored nothing in, in terms of having significant increases in our operating loss ratios.
Operator: Our next questions come from the line of Mark Hughes with Truist.
Mark Hughes: Another P&C CEO suggested he didn’t see as much increase in property rates in the fourth quarter as you might have expected in light of the reinsurance market dynamics, but maybe that’s something that builds up as the time goes by is the higher reinsurance rates do directly impact the carriers. Would you share that observation? Do you think property could get firmer on the primary level?
Patrick Gallagher: I think property could get a lot firmer. I would say in the fourth quarter, it was very firm, in particular, in anything that had to do with Coastal, any area that was exposed to wind and fire. This market in terms of property is very difficult as it exists. And, yes, the changes to reinsurance at 1/1 will filter additional pressure onto the retail buyer. And we are out early telling our retail buyers about this. And it is going to get more difficult in what is already a very extremely difficult situation.
Douglas Howell: Yes. If you think about — remember, our fourth quarter, Ian hit right at the beginning of the fourth quarter, there were replacements that were done in October and November that hadn’t had the full impact of the $70 billion loss.
Mark Hughes: Yes. Yes. And then, Pat, last quarter, you mentioned a potential spillover effect on casualty. I don’t know whether you updated your commentary on that this quarter, but do you think the reinsurance market, how much of an impact, I think, it’s having on casualty, ?
Patrick Gallagher: Mark, I don’t have a number on that yet. I just think that it’s possible that in order to pay for some of these property increases, other lines are going to have to be tagged. And I think I’ll be able to feel that since it maybe have a better number around that at the end of the first quarter. And I may be wrong on that. At this point, I’m not being told by our carriers that that’s happening.
Operator: Our final question will come from the line of Michael Ward with Citi.
Michael Ward: I just had a quick follow-up maybe on Elyse’s question and the potential for double-digit growth in reinsurance. Just wondering if that’s kind of — if we should think about that as being achievable with current capacity or if incremental capacity might need to come to the market in order to get there?
