Operator: And ladies and gentlemen, at this time, I’m showing — we do have a follow-up question from Josh Shanker from Bank of America.
Josh Shanker: Well, I’m not going to let all this time go without getting more questions in. So…
Dino Robusto: I had a hunch, Josh.
Josh Shanker: All right. So obviously, this is not the quarter for the LTC study. Where do you — in terms of thinking about interest rates and behaviors for reserving as we close out the year, obviously, we’ve gone through COVID, you’re learning more about behaviors. Can you talk to us a little bit about how you think about incidents and adequacy of coverage given where rates are?
Scott Lindquist: Sure, Josh. It’s Scott here. So yes, if I can comment a little bit about just the past few years and then kind of where we’re at right now with the long-term care book. So I would say, over the past 3 years relative to reserve expectations, the long-term care block has generally experienced lower claim frequency, higher claim terminations and more favorable claims severity amid the effects of COVID-19. And those effects were definitely more pronounced earlier in the pandemic. And as the pandemic has abated, these effects have largely dissipated as we’ve worked our way through 2022. I’d also remind you, in the third quarter call, when we talked about the GPV update, we also reduced our IBNR. We had actually built up IBNR over 2020, 2021, expecting somewhat of a delay in reporting of claims that did not materialize.
So we reduced IBNR by $107 million. During the third quarter, it was somewhat masked by an uptick in our claims reserves for LTC for our disabled life reserves that was about $82 million. So I think that’s a big picture how things are looking as we’re emerging from the COVID era as we sit here right now.
Josh Shanker: And then obviously, the things — you’re probably more so than any . You’re slow to recognize good news in LTC but quick to recognize anything that might be unfortunate. Is there good news in the trends that’s not baked into reserves yet?
Scott Lindquist: Well, I guess I would point you back to the third quarter call when we did our GPV review. We ended up increasing the margin. We increased the margin from $72 million to $125 million. We had some puts and takes. We had a very positive tailwind around discount rate, higher interest rates. That was a significant positive. Also rate, we had increased margin by $190 million for — increased outlook for rate on a net present value basis. And then offsetting that was cost of care inflation and higher utilization. So you kind of shake that all up and we were at a net plus $125 million margin at Q3. We have not updated our study since then. So I would say that’s pretty much how we feel right now because right now that $125 million is our best estimate.
Josh Shanker: And then it’s probably too early to ask this question. But if I go back in time to the previous decade, sometimes people might have said, if we knew how good the business was back then, we would have written more of it and maybe been a little more aggressive on the price because it turned out to be so strong in the profitability. When you think about the 2020 to 2022 period and then there’s a lot of puts and takes with social inflation and whatnot but there was a lot of pricing, do you think that those years are going to be years that people reflect on, if we knew how good it was going to be, we would have written more?
