As a matter of fact it didn’t move at all in the quarter. It started the quarter at 29.4%, it ended the quarter at 29.4%. So we would like to see that financial ratio come down. But you are right we feel really good about the financial and the economic ability the economics of our balance sheet. If I was doing it on an economic basis. And then lastly, I would say you did say, there’s softness all across our markets. On the insurance side I guess I’d characterize it, we’re still seeing some of the best markets we’ve seen a while in our insurance opportunities. And with that I’d ask Vince to add on to that.
Vince Tizzio: Peter I think you characterized our situation and our current view of the market well and there’s ample opportunity for continued growth and we’re evidencing some of that in today’s call with the appointment of our inland and ocean cargo investments in North America. Thank you, Josh.
Josh Shanker: Thank you.
Operator: The next question will come from Meyer Shields with KBW. Please go ahead.
Meyer Shields: Great. Thanks. This is not really – it’s not just an access question. But when we look at liability lines and we’re facing elevated social inflation and older accident years are developing adversely. And the more recent accident years are maybe weird because of COVID and all that disruption. How much additional margin needs to be baked into price or you be confident that pricing is adequate?
Pete Vogt: So Meyer, this is Pete. I’ll take that. As we look at it, we do the studies where as we’ve seen the negative development, we on level everything to sort of say, okay based upon where we are, do we think, we take all that information what does those prior years tell us about our pricing in our current year. And then we take that as a forward look to where do we think social inflation is going to go. And given the prudent view that we have today, given everything you just mentioned we see emerging in the marketplace, we do believe we’ve been able to take that prudent view and put it in today’s pricing. As you know, it’s still an uncertain environment going forward but we believe we’ve been very prudent and exactly where we’ve been pricing our business as we think about growing in the liability classes today.
Vince Tizzio: I think that’s right Pete.
Meyer Shields: I’m sorry I didn’t mean to get you off.
Vince Tizzio: That’s okay Meyer. Go ahead.
Meyer Shields: Yes. Just I guess this is a related question, but we look at recent accident years loss emergence. And I know we’re talking long tail lines so it’s slow. But are there any early indications of how don’t over the last three years casualty or liability reserves are playing out?
Pete Vogt: To your point, they are long-tail liabilities Meyer. So I would say that what we’re seeing is more coming out of the older accident years and anything we’re doing in the more recent years tends to be prudence related, where if we’re seeing like a spiky claim or something like that we’d rather just take push the reserve up for the claim rather than do anything to offset it. The other thing, I would say is as we have mentioned in our program book, where you actually see the claims a little bit quicker because it’s very small limits, low level, mostly primary. There we have seen some negative development in that 2020 and 2021 years. So again, we’re being very prudent about our thoughts even on 2021 and 2022.
Vince Tizzio: With the different limit profile as well –
Pete Vogt: Absolutely.
Vince Tizzio: Appetite in certain of those lines and certainly a different limit. So the profile of the business in those latter years is changed.
Meyer Shields: Thank you so much. That’s very helpful
Vince Tizzio: Thank you, Meyer
Operator: The next question will come from Brian Meredith with UBS. Please go ahead.
Q – Brian Meredith: Yes. Thanks. A couple of them here for you. First one Vince, I’m just curious you mentioned that front. I know you talked about it last quarter kind of some of the changes in reserving process that you’re at least looking at. Maybe you can give some insight into kind of what you’re thinking about, what you’re doing any changes that you’re anticipating as you look into the fourth quarter process?
Vince Tizzio: Brian, thank you. Good morning. So we are not done with the process that we articulated in my opening remarks and that process is well underway. We’re confident that we’ll bring it to a conclusion in the fourth quarter, consistent with what I outlined in my opening remarks.
Q – Brian Meredith: Got you. Okay. And then second question, maybe you can talk a little bit about what you’re seeing in the call it casualty loss trend environment been a lot of talk about some acceleration there and things going on. Are you seeing that in your book as well? Does it continue to get worse? Or what are you seeing is from a tort inflation perspective?.
Vince Tizzio: Certainly, one, we have a very vigilant eye toward the class generally and certainly because of social inflation. And yes, there is certainly evidence whether it’s as a result of the pandemic, inflation or a combination of factors that there is an increase. And certainly we’ve been observing to it. Pete in prior quarters has spoken to our programs, liability business as an example of increased severity. And so we have a vigilant eye. We have a close coordinated view of risk in terms of our loss picks, our mix and certainly our expected trend. And so taken together, we think we’re watching it in a prudent underwriting way. And I think that there’s certainly continued focus that you’ll see from us. And as you’ve heard reported elsewhere, there’s continued vigilance generally around liability and social inflation.
Q – Brian Meredith: Great. And one other quick one, if I could just sneak it in here. With the Monarch transaction Pete, any changes or thoughts on the investment portfolio probably shortens up duration on your reserves? Is that going to cause any changes from investment allocation?
Pete Vogt: No, Brian, right now I don’t see us changing our investment allocation, overall. I would expect the duration to stay at around three years, which is for us the short end of neutral. And right now we still have about 15% of assets in risk assets. And right now, I think we — we’re keeping that where it is right now.
Q – Brian Meredith: Great. Thank you.
Vince Tizzio: You’re welcome, Brian
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Vince Tizzio, President and CEO for any closing remarks. Please go ahead, sir.
