Stephen Spray: Yes, Grace, Steve Spray. Thanks for the question. The accident year combined ratio, loss ratio for work comp is, yes, it’s under pressure. Calendar year is still performing quite well. The — it is — I hate to keep telling the same story, but it really is simply just pressure — downward pressure on the rates that are put out by the rating bureaus. And fortunately, I think for Cincinnati Insurance company is we’ve always been conservative on the workers’ compensation line. We’ve got tremendous expertise, we’re ready to grow that business when we think that the pricing is at an attractive level. But right now, it’s — again, we’re doing it risk by risk, and we are running new workers’ compensation business. But just — it’s a line that, as you mentioned, medical inflation can impact it over time.
I can’t see that we’re seeing anything out of the ordinary with the medical inflation at this point. But that line of business is definitely under pressure on an accident year basis and primarily from just rate pressure.
Grace Carter: And I guess on Cincinnati Re, you all mentioned kind of reducing casualty premiums in that book for a couple of quarters now. And we’ve also heard some more players in the market start talking about concerns over casualty loss cost trends here lately. I was just curious if you think if there’s anything particularly new going on in casualty reinsurance or if the recent comments are surprising to you all at all? Or — and I guess, next year, just if you think opportunities from property, specialty, et cetera, will outweigh any sort of ongoing pressure on the casualty piece of that book to allow it to inflect back to growth?
Steven Johnston: Thank you, Grace. Really good question. And I think it boils down to our model at Cincinnati Re and that we didn’t really actually form a company Cincinnati Re. It writes on Cincinnati Insurance paper. So there’s the A+ quality there. And then it’s an allocated capital model. So what we try to do is just look at every contract as it comes up. We don’t try to do things this much in property, this much in casualty this much in specialty. Just look at each contract that becomes available to us on its own merits and if we can get the target hurdle rate that we’re looking for and feel good about how it fits into our overall risk model, we’ll go ahead and write that. So I would think that we will see movements in the various business lines that reflect that.
I think right now, just what we’re seeing is certain lines like professional liability, transactional liability and so forth are areas where we felt that the pricing and sometimes the opportunity or not is as good as they’ve been in the past, where we are seeing really good opportunity in the property and specialty lines. So we’ll just go at that contract by contract and very bullish with everything that Cincinnati Re is bringing to us in terms of profitability and diversification.
Operator: [Operator Instructions]. The next question is from Meyer Shields with KBW.
Meyer Shields: Great. Two questions on Personal Lines. First, is there any appreciable difference in the profitability of private clients and middle market?
Stephen Spray: Meyer, Steve Spray. We don’t — right now, we are disclosing the difference in loss ratios for our specific book between middle market and high net worth or private client. But I can tell you, over the long pull, the industry, private client has outperformed middle market by a pretty good margin. And we feel like we can create those same results over time as well. Not that we want to subsidize middle market. The middle market book needs to stand on its own. We’ve got the pricing precision there. Again, we’ve got the agency force. So we expect both segments to be profitable. But we do think, over the long pull, the high net worth of private client will outperform.
