Anthony Viozzi: Thank you, Dan. Throughout 2023, we made strategic asset allocation shifts that allowed us to take full advantage of historically high market rates which contributed to net investment income of $10.7 million for the fourth quarter of 2023 and represented our seventh consecutive quarter of higher investment income for the full year of 2023, we achieved a record level of net investment income with 20% growth year over year to $40.9 million for the fourth quarter of 2023, the average tax equivalent yield was 3.34%, up from 3% for the same period in 2022. This ranks as the highest quarterly average portfolio yield we have achieved since 2012, reflecting the favorable impact of higher market rates on reinvested cash flow.
Portfolio reinvestments in the fourth quarter resulted in an incremental gain in the yield on those funds of approximately 225 basis points. Reinvestment spreads peaked during the fourth quarter and are trending downward toward 100 basis points of improvement on new bond purchases in 2024, where we are currently projecting approximately $120 million of bond reinvestment cash flow, the average short-term cash rate of 5.25% for the fourth quarter of 2023 was higher than we achieved in both the preceding quarter and the fourth quarter of 2022. We expect short-term rates will begin to trend lower as the year progresses. Net investment gains were $2.2 million for the fourth quarter of 2023 compared to $600,000 for the fourth quarter of 2022. For full year 2023, net investment gains were $3.2 million compared to net investment losses of $10.2 million for the prior year period.
Those gains and losses largely mirrored the S&P 500 index performance in both periods. While we reduced our equity holdings in 2023 to take full advantage of strong fixed income rates. We will consider increasing our investment allocation to equities as the market dynamics shift in the future. At December 31, 2023 book value per share was $14.39 compared to $14.79 as of December 31, 2022 for a $0.40 per share decrease year over year. Increases in book value from investment income, equity investment gains and unrealized gains within our available-for-sale fixed income portfolio during 2023 were more than offset by our underwriting loss and stockholder dividends declared during the year. As in the past, we will continue to maintain a conservative investment approach to preserve and increase capital limit volatility and support our operations.
With that, I will now turn it back to Kevin for closing remarks.
Kevin Burke: Thanks, Tony. Before we move into our question and answer session, I want to take a moment to express my appreciation for the tireless efforts from our Donegal team, their unwavering commitment and exceptional teamwork makes a significant difference in our organization. Of course, to our stockholders. We reflect on the challenges of this past year and look forward to reaping the results of the many strategic initiatives we are executing to increase the value of your investment. I want to express my gratitude for your ongoing support. In summary, we have all the building blocks in place to execute our intentional strategies. We expect our financial results will soon begin to reflect the incredible amount of work our team has put into building a solid foundation for prudent growth and consistent underwriting profitability. I look forward to sharing the details of our progress in future calls. I’ll now turn it back to Karin.
A – Karin Daly: Thank you, Kevin. We will now move into our question and answer session. In advance of today’s call, we requested and received a number of questions from interested parties. And while we’ve answered some of these questions within management’s prepared remarks, we will address several questions directly. The first question is relating to reinsurance. Can you please provide a summary of the renewal of your reinsurance program for 2024 and highlight any changes to the structure or reinsurance coverage?
Jeffrey Miller: This is Jeff Miller. As a reminder, Donegal Mutual and the insurance subsidiaries of Donegal Group purchased reinsurance together to achieve economies of scale compared to the challenging environment we faced a year ago, the reinsurance market for January first, 2020 for renewals was more orderly. We were able to successfully renew our program for 2024 with generally the same structure. We made no changes to our external catastrophe reinsurance program or the inter-company catastrophe reinsurance agreement with Donegal Mutual for several of the per-risk programs, we increased retention amounts to limit pricing increases driven by utilization of those programs in recent years. In total, we expect our reinsurance premiums spend for 2024, we’ll increase approximately $5 million compared to 2023.
Karin Daly: Thank you. The next question relates to rate increases and pricing for commercial auto and commercial property. Can you comment on the trajectory of those reach in the fourth quarter of 2023 compared to past quarters?
Jeffery Hay: This is Jeff Hay. I can take that one, Karin. We began pushing for rate and margin expansion in commercial auto several years ago and have been averaging just over double digit written rate increases in this line for the past two years. The fourth quarter rate increase of 12.7% for commercial auto was consistent with that recent trend. Commercial property has been an area of focus for us in 2023 with average written rate and exposure change entering double digits at the beginning of the year and growing to 13.9% in the fourth quarter.
Karin Daly: This rate and exposure change, coupled with the underwriting actions that I previously talked about expected to bring this line of business back to profitability while we’re on the topic of rate increases, we also received several questions about the trajectory of personal lines rate increases and the related inquiry about the higher rate of premium growth in personal lines relative to commercial lines, considering the underperformance of personal lines in the industry and your own book of business. Jeff? Hey, you touch on this topic in your prepared remarks. Can you elaborate further here?
