Mark Kociancic: Yes, Josh, it’s Mark. Just to add a couple of points to Jim’s commentary. So number one, we are obviously very, very certain of our ability to deploy by 1/1. So you’re dealing essentially with a 6-month time frame between the raise and the 1/1 deployment along the way. Clearly, we are deploying it where we see fit. From an investment point of view, it’s fully deployed the way we would like it for the time being. No issue for us to carry a little bit of excess capital. That’s going to get remunerated to some extent, but will be, like I said, fully deployed by 1/1. And there’s no benefit to rushing any kind of deployment. We want to stay disciplined and focused just as our initial plan back in May for the equity raise indicated.
Juan Andrade: Josh, and this is Juan. Just maybe to put a fine point on it. Rates are still improving in property. And we also got paid a lot more for the risk that we took, and so that’s part of the confidence that we have in being able to deploy this fully by the 1/1 renewal.
Joshua Shanker: And so we should expect a healthy growth with 1/1 given all that you’ve said?
James Williamson: Yes, Josh, it’s Jim. I mean my expectation is we are going to grow our Property Cat writings with our core clients very nicely. Again, we see significant demand. Our expectation is that risk-adjusted rates will increase at the 1/1 renewal. So lots of opportunity in the environment.
Joshua Shanker: Thank you for the extended answer. I appreciate it.
Juan Andrade: Right.
Operator: The next question comes from the line of Yaron Kinar with Jefferies. Please go ahead.
Yaron Kinar: Thank you and good morning. My first question piggybacks on your thoughts on 1/1 renewals in the property reinsurance market. So certainly, you sound very constructive. You’re also talking about demand being up. What about the supply side? Because I would have thought that with relatively benign reinsurance losses this year and certainly in hurricane season, you’re going to see an uptick in capital. So how are you thinking about that and the kind of supply-demand dynamic, especially for maybe more remote risk, which seems to be where the insurers are more interested in playing right now into 1/1, is the constructive view really driven by supply/demand? Or is it more about sentiment and discipline considering maybe a more balanced equation this year?
Juan Andrade: Yes. Yaron, this is Juan. Thank you for the question. Look, I think from our perspective, you’re seeing a couple of dynamics that really have not fundamentally changed since the beginning of the year since we’ve been talking about this issue. Number one, there’s still definitely a supply and demand imbalance that’s out there. And I think as we’ve discussed before, whether that’s $100 billion or $40 billion, it doesn’t really matter because it’s a pretty big gap between supply and demand. And there has not been a particularly large or moderate influx of capital into the industry to close that gap. So there’s definitely that imbalance that continues to exist on the supply side. In addition to that and building on what Jim said earlier, you’re still seeing pent-up demand and increased demand from our cedents across the board.
A lot of that is also generated by, frankly, a flight to quality. It is basically cedents wanting to work with more companies like us who have stronger balance sheet, who’ve been very constructive into renewals, et cetera. So from that perspective, we are not seeing anything in the environment right now that really fundamentally changes the pricing trajectory or the trajectory of this business going into 1/1. And frankly, further, you saw the growth rates that I quoted earlier in my prepared remarks, where we were up over 40% of property. You heard Jim’s comments just a minute ago about what he expects to see at 1/1. So we do expect that tailwind to continue to be behind us as we go forward. But let me ask Jim to jump in and see if he wants to add anything to that.
James Williamson: Yes. Sure, Yaron. A couple of other points I’d add to what Juan said. I mean there is — I think you’ve referred to it as a sentiment, but there’s an underwriting discipline that underlies all of this, irrespective of how much capital is available to underwriters. In our industry, every underwriter I’ve talked to, they want to get paid more for the risk they’ve been taking, and that’s a reflection of the last several years of elevated Cat losses and even what we’ve seen this year and in this quarter. And I don’t see any sign that’s dissipating. And then to your — the other point you made around more remote layers and that seems like an area where more people want to participate. You’ve seen some Cat bond activity up there, et cetera.
I mean that how much rate gets added to the effects of 2023 and at which levels will remain to be seen. But in our view, it doesn’t really matter. If there’s more supply at the remote level, that means that just below that there’ll be great opportunities. We are very flexible and nimble in where we deploy our capital. And so those kinds of impacts don’t really reflect our — or change our opportunity.
Yaron Kinar: Thank you. That’s very helpful. And then if I could maybe shift gears to the Insurance segment. And I think, Mark, in your prepared comments, you talked about some mix shift as maybe driving the loss ratios to stay — have unchanged year-over-year despite the fact that you’re getting rate over trend. Can you maybe elaborate on that a little bit? Because for me as an outsider, if I look at the book, it seems like property and short tail lines grew by about 40% year-over-year. In aggregate, over the last 12 months, I see other specialty up 40%. And then we see some of the lines that I would have thought have higher attritional loss ratios, such workers’ comp and professional liability actually coming in a bit. So I’d love to better understand the dynamics there if you could elaborate?
Mark Kociancic: Okay, Yaron. It’s Mark. I’m going to start, and then I’ll ask Karm to finish and add some color to it. Look, first of all, I think the attritional loss ratio is pretty much right where it should be. We are still setting conservative loss picks for casualty lines in particular. We are in an elevated risk environment. We want to be prudent on that. We are obviously getting rate, and we are getting the kind of business we want to write in terms of cycle managing this particular marketplace. So you’ve seen some increases in writings and decreases in different lines, and that gives you a sense of our discipline in the marketplace. And so that mix in the attritional loss ratio is coming out too broadly stable with last year.
We don’t see any problem with that. We’ve got an embedded margin in there that we are quite comfortable with, quite confident in, and we think it takes into account the risk environment that’s out there for the different lines we’ve underwritten.
Michael Karmilowicz: Yes. And Yaron, I would add — this is Mike Karm. I would add to it a couple of things. First, the focus for us is Juan stated in his opening comments, is about profitability, and we’ve been leaning into the first party lines pretty heavily, particularly in the property, aviation and marine. And then you see the other specialty lines like you mentioned, we are driving lines [indiscernible] and energy, where we see really, really strong risk-adjusted returns. I think you’ll see that play through, hopefully on the [technical difficulty]. Ultimately, that’s being offset when you think about what we are in that cycle management that Mark mentioned, particularly on the workers’ comp and financial lines, and that offsets it.
