Dominic Frederico: Well, Giuliano, I’m pleased to report that we filed applications with both regulators for a special dividend approval. So we’re now just in waiting mode, which we’re optimistic of this to be approved. So that’s part of the capital management strategy, part of the capital buyback strategy. So we’re doing exactly what we said we would do.
Giuliano Bologna: That’s great. And then one thing I would be curious on the new business front, the higher interest rate environment obviously drives lot, but it’s not linear the way it flows through. I’m curious when you think about market penetration rates on the M&A side. And where that could go over the next couple of years, obviously, assuming we stay at a higher for longer environment.
Dominic Frederico: Well, as I said in my comments, penetration rates are at all-time high relative to the last, say, 10 years. to give you some really startling statistics. As we said, in the quarter, there was not a lot of BBB issuance because I think there’s a wait and see in terms of the interest rate marketplace and going to finance side and then have the opportunity to look later on the life that the rates are a lot lower. But to give you some statistics in the third quarter on a transaction basis, 84.7% of all BBB issuance took insurance, 84.7%. That means only 15% of the BBB issuance did not take insurance. That’s a tremendous statistic for the insurance industry. I think it’s reflective of the higher rate marketplace.
Our problem is we just need more volume in the market to really drive more premium growth, which we can see in the future. As Rob mentioned, we’re having a great fourth quarter start. We expect the fourth quarter to be spectacular on the pulp finance side as well as our other marketplaces as well.
Giuliano Bologna: That’s very helpful. I realize it’s very early in the process with the Sound Point transaction. I’m curious just even from a high level, do you expect contribution to be positive starting next quarter because you referenced you get the first full quarter.
Dominic Frederico: Absolutely, we own 30% of a $50 billion asset manager, Tom, you said I’m sorry, Giuliano. So we expect it to be positive all the way through. We wouldn’t have done it otherwise.
Giuliano Bologna: That’s very helpful. I appreciate it. And I will jump back into queue.
Dominic Frederico: Thank you.
Robert Bailenson: Thank you.
Operator: [Operator Instructions] We will now turn to Geoffrey Dunn with Dowling & Partners. Your line is open.
Geoffrey Dunn: Thanks. Good morning.
Dominic Frederico: Good morning, Geoff.
Geoffrey Dunn: Dominic, I was wondering if you could just talk about how the market for new business has evolved in the last two years? Obviously, we’ve had a lot of movement on rates and spreads, but can you give either qualitatively or quantitatively how the market has changed over the past two years with respect to penetration rates, pricing terms, conditions? I mean, net-net, it seems like it all should be positive, but obviously, it gets distorted from what we see with mix change and all that stuff. So wondering if you could just dig a little bit more into that.
Dominic Frederico: Well, Geoff, I would say it’s all positive except for one thing, which is issuance. So let’s talk about it. So number one, interest rates are higher that’s a real benefit to our business across the board, both what we can charge for premium in addition to many people would seek insurance now to try to save some financing costs. Issuance has been, A, the municipalities has been wash with the release that they got through the pandemic. So they run out of their checkbooks, which has taken quite a long time, so we didn’t have any need to finance. And then two, because of the volatility in the marketplace and the interest rate environment, people are a little concerned that there’s always a prediction that rates are going to come back down to where they should wait to finance in six months or nine months until they get a better rate.
