Hamilton Insurance Group, Ltd. (NYSE:HG) Q3 2024 Earnings Call Transcript

Hamilton Insurance Group, Ltd. (NYSE:HG) Q3 2024 Earnings Call Transcript November 10, 2024

Operator: Hello and welcome to the Hamilton Insurance Group Earnings Conference Call. As a reminder, this call is being webcast and will also be available for replay with links on the Hamilton Investor Relations website. I’d now like to turn the call over to Jon Levenson, Group Treasurer and Head of Investor Relations. Please go ahead.

Jon Levenson: Thank you, operator, and welcome all to the Hamilton Insurance Group third quarter 2024 earnings conference call. The Hamilton executives leading today’s call are Pina Albo, Group Chief Executive Officer; and Craig Howie, Group Chief Financial Officer. We are also joined by other members of the Hamilton management team. Before we begin, please note that Hamilton financial disclosures, including our earnings release, include important disclosures regarding forward-looking statements. Management comments regarding potential future developments are subject to the risks and uncertainties as noted in these disclosures. Management may also refer to certain non-GAAP financial measures. These items are reconciled in our earnings release and financial supplement. With that, I turn the call over to Pina Albo, Hamilton’s CEO.

Pina Albo: Thank you, Jon, and hello, everyone. Let me start by extending my warm welcome to all of you joining us for Hamilton’s third quarter 2024 conference call. Before we discuss our results for the quarter, as you know, there have been a series of natural catastrophes these past 3 months that have impacted the lives and livelihoods of many people. We want to address all of those who suffered these catastrophes. Our heartfelt thoughts go out to you. As I reflect on these tragic events, I have to say that I’m proud to be part of an industry that helps individuals and communities rebuild when such devastation takes place. Moving forward with today’s call, almost a year ago today, we launched the initial public offering for Hamilton, which marked our transition from a private company to the New York Stock Exchange listed firm we are today.

In addition to raising capital, which we successfully and quickly deployed into our underwriting operations, the IPO also afforded us the opportunity to refine and share with you a detailed set of objectives to guide our business into the future. The most important of those objectives was and remains producing sustainable underwriting profitability. By this, we mean achieving underwriting profit throughout market cycles. We strive to reach this goal by focusing relentlessly on underwriting discipline and by having a shared accountability for results across our organization. The third quarter of 2024 was a real world test of our commitment to this objective, not to mention the resilience of our balance sheet. I am happy to report that we passed with flying colors.

We had net income of $78 million despite $38 million of net losses from Hurricane Helene and other large loss events around the world. And turning to underwriting results, Hamilton had $29 million of underwriting income and a group combined ratio of 93.6%. In other words, we were comfortably able to absorb the significant losses of the quarter and still produce a very solid underwriting result. Our International segment posted a combined ratio of 97.6% and our Bermuda segment posted a combined ratio of 89.4%, commendable results given the loss activity in the quarter. On a year-to-date basis, our combined ratio is 89.9% and our annualized ROE is 22.4%, points of pride as we celebrate 1 year as a public company. These results are a testament to the quality of our team, our portfolio construction and our disciplined underwriting approach.

On this latter note, our underwriting results this quarter reflect our underwriting philosophy and the intentional actions we have taken and continue to take in our business. I’ve mentioned our Group Underwriting Committee or our GUC in the past. This committee meets regularly for in-depth discussion of our business performance by underwriting platform and by line. We discuss emerging risks, our risk appetite, our view of the market conditions, when to lean in and out of certain classes or geographies. Our analyses and discussions are robust and inform underwriting decisions and portfolio construction and also ensure we maintain our high underwriting standards. The GUC is representative of the discussions that take place regularly at Hamilton, also between meetings amongst members of our executive team and frontline underwriters.

I see engaging with and in some cases, challenging our team as one of my main responsibilities as CEO. What are they seeing in pricing and rate adequacy? How is the market moving? What opportunities are we pursuing and what risks are on our radar? I credit this regular dialogue and our underwriting culture for our vastly improved book of business and our strong underwriting results. Turning now to the overall market environment. The third quarter also marks an important time in both insurance and reinsurance renewals. It’s when our industry begins discussions with clients and brokers regarding a number of items, including demand, appetite, opportunities, pricing and terms and conditions. Hamilton participated in a number of these events, starting with the annual Reinsurance Rendez-Vous in early September, moving to the Wholesale and Specialty Insurance Association Meeting, or WSIA, continuing through the Council of Insurance Agents and Brokers meeting, Baden-Baden and the Professional Liability Underwriting Society conferences in October and November.

Hamilton Re, Hamilton Global Specialty and Hamilton Select were well represented at these events. The benefit of our active participation at these conferences is the opportunity to meet face-to-face with our customers and brokers to better understand their needs and goals for the upcoming renewals and to discuss how we can partner with them to meet these needs. Let me share a few takeaways from those meetings. First, Hamilton is seen as a valuable and reliable partner, not only for our capacity and responsiveness, but also for our creativity and ability to provide solutions. This has proven particularly valuable when other markets make broad-brush decisions, for example, to back down or exit completely from a certain line of business. Our ability to step up and provide solutions matters a great deal to our customers, helps us win business and develop broad, long-standing relationships, some of which are now over 10 years old.

The second key takeaway is that market discipline continues to remain strong. The underpinnings of the market reset that took place in 2023 are intact as we continue to grapple with the realities of climate change, geopolitical turmoil and inflation. The catastrophe events of the past few months only serve to uphold attractive market conditions. A third observation is that the concerns over economic and social inflation are real, affecting many lines of business, but particularly casualty classes. We have been wary of this development for several years now, building what we believe to be cautious assumptions into our pricing and reserving and reviewing development regularly, a topic which Craig will provide more detail on in a few minutes. Many of our peers who leaned into casualty during the softer market years continue to pull back.

The fact that we were until very recently underrepresented in this class, coupled with our recent rating upgrade has created opportunities for Hamilton, which we are selectively pursuing. A couple of comments related to the growth in our business before I hand over to Craig. The punch line is that growth has remained strong in the quarter, up 17% year-over-year. Bermuda had a particularly strong quarter, in part driven by the A.M. Best upgrade to A, which has led to meaningful amounts of new business as well as the ability to increase our line size on targeted accounts. International growth also continues a pace, albeit at a more measured clip, but within our expectations and reflecting our focus on maintaining pricing and underwriting discipline.

As a reminder, International includes both Hamilton Select, our domestic U.S. E&S operation and Hamilton Global Specialty, which houses our Lloyd’s Syndicate and our Irish carrier. While we continue to see very strong double-digit growth in Hamilton Select, as you will have heard from others, the level of competition in the London market has been heating up for certain classes of business. Cyber is a perfect example, where we at Hamilton have stood firm both on coverage terms and price, which has consequently led to a reduction in premium written in this line. Having said this, given that we write specialty insurance across all 3 of our underwriting platforms and that we have a very diversified book, we continue to expect double-digit growth in specialty insurance, including in the International segment.

In closing, I’d like to say a word about how proud I am of our results this quarter, particularly in the face of meaningful catastrophe losses. As we noted when we went public, we have built Hamilton for the long term. We aim to be a resilient and reliable partner, providing valuable solutions and meaningful capacity. This will ultimately benefit all of our stakeholders, namely our clients, our brokers, our shareholders as well as the individuals and communities we serve. Craig, now over to you.

Craig Howie: Thank you, Pina, and hello, everyone. Hamilton had a very strong third quarter and first 9 months of financial results with excellent investment returns, solid underwriting income and record gross premiums written. For the third quarter of 2024, as Pina mentioned, Hamilton reported net income of $78 million equal to $0.74 per diluted share, producing an annualized return on average equity of 13.8%. This compares to net income of $44 million or $0.41 per diluted share and an annualized return on average equity of 9.8% in the third quarter of 2023. With those figures as highlights, let me provide some additional detail around our underwriting and investment income components for the quarter and for the first 9 months.

Starting with underwriting results, Hamilton continues to grow its top line at an impressive double-digit rate. For the first 9 months of 2024, gross premiums written increased to a record $1.9 billion compared to $1.5 billion this time last year, an increase of 24% all 3 of our operating platforms, Hamilton Global Specialty, Hamilton Select and Hamilton Re continue to take advantage of favorable market conditions, all of which contributed to our profitable growth. Underwriting income for the group was $29 million for the third quarter compared to underwriting income of $25 million in the third quarter last year. The group combined ratio was 93.6% compared to 92.6% in the third quarter of 2023 despite an active catastrophe season. In terms of the combined ratio components, the loss ratio increased due to catastrophe losses in the quarter, offset by a decrease in the expense ratio.

The loss ratio increased 4.2 points to 61.0% compared to 56.8% in the prior period. The increase was primarily driven by $38 million or 8.5 points of current and prior year catastrophe losses, which consisted of Hurricane Helene for $34 million, the Calgary hailstorms for $12 million and Hurricane Debby for $6 million. This was partially offset by favorable prior period catastrophe development of $13 million. This compares to $7 million or 2.1 points of catastrophe losses reported in the third quarter last year. The current year attritional loss ratio was 53.2%, a decrease of 1.6 points compared to the same period in 2023. This was primarily driven by the absence of large losses in the current quarter. We also saw about $3 million of attritional favorable development driven by specialty and property lines.

This compares to less than $1 million of favorable development in the third quarter last year. Turning to our expense ratio. This decreased by 3.2 points to 32.6% compared to 35.8% in the third quarter last year. Year-to-date, the expense ratio decreased 3.2 points to 32.4% compared to 35.6% in the first 9 months last year. The decrease in the expense ratio was mainly driven by improved operating leverage due to the growth in our earned premium base as well as third-party fee income, which is offset against expenses. As for corporate expenses, they are trending higher, but this is primarily due to an increase in the variable expenses associated with our long-term incentive compensation plan, which is based on performance over a 3-year period.

I’ll discuss the expense ratio on a year-to-date basis in more detail in the segment results section, which I’ll turn to now. Let’s start with the International segment, which includes our specialty insurance businesses, Hamilton Global Specialty and Hamilton Select. For the first 9 months, international gross premiums written grew to $958 million from $832 million, an increase of 15%. This was primarily driven by growth, improved pricing and new business in casualty and property insurance classes and specialty reinsurance and insurance classes. For the third quarter, International had underwriting income of $5 million and a combined ratio of 97.6% compared to underwriting income of $4 million and a combined ratio of 97.7% in the third quarter last year.

The international current year attritional loss ratio increased by 0.7 points to 55.3% in the third quarter compared to 54.6% in the prior quarter. The increase was primarily driven by business mix and a modest increase in the casualty insurance class as a result of a more conservative assumption regarding social inflation of about $2 million. Moving back to some year-to-date figures. For the first 9 months, the international acquisition expense ratio decreased 0.9 points to 25.2% compared to 26.1% in the first 9 months last year. The decrease was primarily related to lower acquisition costs in casualty insurance in 2024 compared to 2023. The other underwriting expense ratio decreased 2.5 points to 13.8% compared to 16.3% in the first 9 months last year as a result of the growth in the premium base.

I will now turn to the Bermuda segment, which houses Hamilton Re and Hamilton Re U.S., the entities that predominantly write reinsurance business. For the first 9 months, Bermuda gross premiums written grew to $921 million from $685 million, an increase of 34%. The increase was primarily driven by new business, expanded participations, and rate increases in the property and casualty reinsurance classes. Specifically for the third quarter, we generated a considerable amount of new business as a result of our AM Best rating upgrade. For the third quarter, Bermuda had underwriting income of $24 million and a combined ratio of 89.4% compared to underwriting income of $21 million and an 86.9% combined ratio in the third quarter last year. The increase in the combined ratio was primarily related to catastrophe losses in the quarter.

Bermuda had $29 million of net catastrophe losses in the third quarter of 2024 compared to favorable $3 million of net catastrophe losses in the third quarter of last year. The Bermuda current year attritional loss ratio decreased 4.1 points to 51.0% compared to 55.1% in the prior quarter. The decrease was primarily driven by the absence of large losses in the current quarter. This was partially offset by a modest increase in the casualty class as a result of a more conservative assumption regarding social inflation of about $4 million. Moving back to some year-to-date figures. For the first 9 months, the Bermuda acquisition expense ratio increased 0.1 points to 19.9% compared to 19.8% in the prior period. The other underwriting expense ratio decreased 2.5 points to 5.6% compared to 8.1% in the first 9 months of last year.

As a result of the growth in our premium base and the performance-based fee income from our ILS platform, which offsets expenses. I encourage you to look at our full-year 2023 results as a gauge for many of our underwriting ratios. Now turning to investment income. Total net investment income for the third quarter was $83 million compared to investment income of $46 million in the third quarter of 2023. The fixed-income portfolio, short-term investments, and cash produced a gain of $94 million in the quarter compared to a loss of $5 million in the third quarter of 2023. This includes the realized and unrealized gains and losses that Hamilton reports through net income as part of our trading investment portfolio. The fixed-income portfolio had a return of 4.1% or $90 million and a new money yield of 4.3% on investments purchased this quarter.

The duration of the portfolio decreased slightly into 3.1 years. The average yield to maturity on this portfolio was 4.2% compared to 4.5% at year-end 2023. The average credit quality of the portfolio remains strong at AA3. The Two Sigma Hamilton Fund produced an $11 million loss or minus 0.6% for the third quarter of 2024. The fund had a net return of 12.2% for the first 9 months. The latest estimate we have for the Two Sigma Hamilton Fund year-to-date performance is 13.3% through October 31, 2024. The Two Sigma Hamilton Fund made up about 9% of our total investments, including cash investments at September 30, 2024, compared to 43% at December 31, 2023. Last quarter, we announced a $150 million share repurchase authorization by the Hamilton Board of Directors.

During the quarter, we used $10 million of that authorization to repurchase 530,000 shares at an average price of $18.87 per share. Based on our book value per common share of $22.82 at September 30, the shares were repurchased at a 17% discount to book value. Next, I have some comments on the strength of our balance sheet. Total assets were $7.8 billion at September 30, 2024, up 17% from $6.7 billion at year-end 2023. Total investments in cash were $4.6 billion at September 30, an increase of 16% from $4 billion at year-end 2023. Shareholders’ equity for the group was $2.3 billion at the end of the third quarter, which was a 13% increase from year-end 2023. Our book value per share was $22.82 at September 30, 2024, up 23% from year-end 2023.

In terms of our reserve position, we completed our midyear external actuarial review, which allows us to continue to say that we are comfortable with the strength of our reserves. I’d like to conclude my remarks with some comments on the recent Hurricane activity. Shortly after Hurricane Helene hit Florida in late September, Hurricane Milton also made landfall on the Gulf Coast of Florida in early October. The company estimates that losses from Hurricane Milton will be in the range of $30 million to $70 million net of reinsurance. It remains early for both of these events in terms of the information flow on the claims side. Consequently, loss estimates from both events are subject to uncertainty. The estimated losses from Hurricane Milton will be reported in the company’s fourth quarter 2024 financial results.

Thank you. And with that, we’ll open up the call for your questions.

Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of Alex Scott from Barclays. Please go ahead.

Unidentified Analyst: Good morning, everyone. This is Justin on for Alex. My first question was related to sort of the favorable reserve development. I was wondering if you could discuss the unfavorable casualty reserve development that you mentioned in the release and to what degree it was just driven by one large claim that you had called out. Thank you.

Craig Howie: Justin, this is Craig. Thanks for the question. The group had favorable prior period development of about $3 million for the quarter, but that’s a net number. The favorable part was property and specialty classes. The unfavorable part, as you mentioned, was one large loss on the casualty side. That loss occurred in the International segment this quarter. The loss occurred originally in the fourth quarter of 2023. We just received additional claims information this quarter, and we’re reacting to that new information. That’s the reason for the adjustment for this quarter.

Unidentified Analyst: Great. Thank you. And just a quick follow-up on retention, it looked like this quarter saw higher retention on gross premiums. I was wondering if you could help sort of like unpack the drivers of this and what we should expect going forward and if sort of the upgrade on the rating had any impact on the retention.

Pina Albo: Alright. So, there is a couple of questions in there, I will take that. This is Pina. Thank you. In terms of the additional retention of business both in international and Bermuda, that was a stated goal. As you might recall, we raised some primary capital at the beginning of the year when we went public, and we partly deployed that capital by keeping more of the well-priced business that we have on our books, so that goes to that. In terms of the rating upgrade and the impact that the rating upgrade has had for us, the most of the benefit of that rating upgrade was for our reinsurance operations, our Lloyd’s Syndicate already benefits from an A rating being part of Lloyd’s. So, it was expected to impact mostly the reinsurance side of our business.

To be really honest, we started fielding calls on new business and ability to increase line sizes basically the minute they are release to us was made. And we then had opportunities for brand new deals with existing clients, the opportunity to access new clients and also the ability, as I said, to increase our line size, and we did that selectively during this quarter. If I look out, I can tell you two things. On a year-to-date basis and I am not going to give you a precise number. We do track this. On a year-to-date basis, I can tell you we had a high-double digit million in terms of additional premium. And if I – I know you are probably going to ask me what else I expect because we did say that this impact would affect not only this year, but we also believe it will affect our business opportunities going into ‘25.

So, if I look at it on a run rate basis starting 2024 over a year, we are probably expecting about a 10% to 15% premium uplift for our business. I hope that answers your question.

Unidentified Analyst: Yes. Thank you for the color.

Operator: Our next question comes from the line of Elyse Greenspan from Wells Fargo. Please go ahead.

Elyse Greenspan: Hi. Thanks. Good morning. My first question was on the international underlying loss ratio, that 55 and change in the quarter. Do I think that reflects kind of a run rate for the segment? I know you pointed out business mix and just more conservative assumptions around social inflation as kind of driving the uplift in the quarter. But is that a good run rate to think about going forward?

Craig Howie: Elyse, this is Craig. What I would say to you is, again, I would encourage you to look at the full year results as a better gauge for some of these underlying ratios. As you know, or just to give you an idea, 2023 full year was about 53% on a year-to-date basis for international, that attritional loss ratio right now is at about 54.6%, but about 1.9 points of that is related to the Baltimore bridge from the first quarter. So, on an overall basis, obviously, it does depend on business mix, but if you look at the full year at about a 53%, that’s about where this book has been running pretty consistently.

Elyse Greenspan: And then from a premium growth perspective commentary, right, you guys had pointed to like 15% to 20% for the year in international last quarter. It sounds like you might be perhaps running a bit like there just because of the underwriting discipline and pulling back in cyber, but maybe growth is running better in Bermuda. Am I thinking about the components kind of correctly? And how would you think, I guess international and maybe overall growth to trend for the full year this year?

Pina Albo: Thanks Elyse, Pina here. I will take that. And Craig, I am sure, will fill in any blanks. You are right to point out and we encourage people to look at our year-to-date figures, which showed gross premium written for International segment up 15%. You are right to point out, it was lower in the quarter. And also right to point out, this is reflective of the discipline that we are deploying in light of the business that we are seeing. And I signaled cyber out on the prepared remarks because there, we are seeing pressure on premium and where we are trying to uphold both pricing and coverage terms. At the end of the day, we will never sacrifice – we will never prioritize top line for bottom line, and that is what you are seeing this quarter, but we are not changing our guidance.

You will also know that Select is part of our International segment. And there, we are continuing to see the benefit of very strong E&S market in general. But also, a strong reception to our product offerings in Hamilton Select with very strong premium flow to the operation. So, that is part of the International segment as well.

Craig Howie: Pina, the only thing I would add is Elyse also asked about Bermuda. We still expect Bermuda to continue to grow for all the reasons you just mentioned, including the AM Best upgrade.

Elyse Greenspan: Thank you.

Operator: Our next question comes from the line of Michael Zaremski from BMO. Please go ahead.

Michael Zaremski: Thanks. Good morning. I think you partially touched on this, but the increased competition coming from the London market, is that more isolated to cyber, or is it just kind of property too, or maybe you can kind of dimension more because I think we can see that your National segment, we can see the historical mix of property versus casualty versus specialty. So, I am just kind of wanted to help dimension kind of what pockets of your business are seeing those increased competitive pressures?

Pina Albo: Sure. Happy to take that. So, yes, I mentioned cyber as an area where we are seeing increased competition in the London market. Another area is an area that you have heard from other people on the – some of the financial lines, D&O class of business where we are still seeing pressure on pricing. And then I guess the third thing I would mention is on the large global property placements on our direct and facultative book, we are also seeing some pressure on pricing there. Having said that, with respect to that class, the property insurance class, let’s not forget that even with a little bit of pressure on pricing, this class has been seeing quarterly rate increases since 2017. So, it’s still adequate, but we are picking our spots on that class and making sure we target the most profitable business. Does that help?

Michael Zaremski: Yes, that helps. Understood that the absolute returns are probably are still excellent. Switching gears to maybe more so the Bermuda segment. But I am curious if you think the reinsurers will be able to push down ceding acquisition cost ratios, ceding commission ratios in the coming year or so. I think we all see this morning that Swiss Re, for example, took a pretty big liability reserve addition. Berkshire did as well. So, it feels like we are finally getting more action on insurers truing up their liability reserves. I am curious if that can kind of play into the benefit of reinsurers in the coming year.

Pina Albo: Sure. I mean I will answer that specifically to casualty, but why don’t I give you a little bit more flavor overall in terms of what we are seeing or what we expect in terms of market conditions going forward. And I am going to start with on a very general umbrella level, overarching everything. I am going to start with market discipline. And this is probably as persistent as I have seen market discipline last in my 25 years plus in this business. So, with terms and conditions, attachment points, limit management, tower management, all staying very intact in this marketplace. And I think that is something that sometimes gets underestimated because those things are particularly important. When it comes to pricing, I will start with casualty, but I will also touch on property and specialty.

On the casualty side, no question, the continued concerns around inflation, be it economic, but also social, we believe that’s going to continue to keep insurance pricing attractive. So, we are going to see that uptick on pricing on the insurance side. And then specific to what you were asking, we also think that’s going to push some pressure on ceding commissions. Not every deal, but on certain deals, we certainly expect to see pressure on ceding commissions. Just in this context, I also want to mention, we did take the opportunity in the last – particularly since our AM Best upgrade to tick up our writing in the casualty reinsurance space because we were until very, very recently underrepresented in this class. And some of the actions of our larger competitors who have been involved in this class for – during the softer market years and you are seeing their reaction now and either scaling back, that’s created an opportunity for us, quite frankly, to get in on select deals that we want to get into, and we are taking advantage of that.

Just moving quickly to property, I think if I look at cat reinsurance, whatever sentiment was circulating about modest pricing decreases going into one-one, those sentiments were circulating as we went into conference season this year, dissipated as the storm activity increased. So, we are expecting pricing on the cat side to remain firm and attractive going into one-one. And then finally, if I – just on specialty classes, there too, we have had geopolitical tensions are not abating. We have had a slew of space losses in the recent past. We also had the Baltimore bridge loss at the beginning of this year. So, we think that’s going to keep pricing attractive for at least those specialty classes.

Michael Zaremski: And just a quick follow-up Pina, that’s good color. Since Hamilton is a bit underweight or underweight, U.S. casualty, especially the older vintages, are pricing at levels that you could potentially play offense? Just trying to better understand kind of if there was a read-through from your commentary just a moment ago about the casualty?

Pina Albo: So, yes, thank you for that question. Not only can we play offense, but we have been playing offense. You are right to point out, we completely re-underwrote our casualty reinsurance book of business starting from ‘18 to ‘20. We only started to selectively grow our book in 2021 when conditions started improving. This A rating has really turbocharged our ability, and it comes at a time, quite frankly, where we have larger peers or some players in the market who perhaps have seen some adverse development or have found themselves overexposed. This A rating comes at a time where those players are pulling back opening up the opportunity for us to selectively write the deals, quite frankly, that we have been targeting and isolating over the course of the last 1.5 years. So, we are playing offense. But again here too, we are playing offense with clients that we have targeted who have that same disciplined mindset that we have on this class.

Michael Zaremski: Thank you.

Operator: [Operator Instructions] Our next question comes from the line of Tommy McJoynt from KBW. Please go ahead.

Tommy McJoynt: Hey, good morning guys. Thanks for taking my questions. On the expense ratio, we have continued to see that ratio come down for really kind of 5 years in a row now, starting to realize some solid efficiencies around that. Is there some terminal level that we should think that we should be getting close to at this point, or do you still see opportunities for operating leverage to drive that expense ratio down further?

Craig Howie: Tommy, thanks for the question, and thanks for noticing that the expense ratio has come down every year since 2019. But as you say, as we continue to scale, we still expect to be able to produce a better expense ratio each and every year, and that’s our target. So, we have been able to achieve that target again every year since 2019.

Tommy McJoynt: Okay. Got it. And then on the capital front, for the holding company to deploy capital into buybacks, does it need to upstream some capital from the insurance companies, or is there already kind of capital at the holding company, so you guys have flexibility to utilize the buyback when you want?

Craig Howie: Yes. We do have flexibility to use the buyback as we need to. But there is some capital at the holding company, but predominantly, it would come from dividends up from the operating company as well. But we have flexibility to be able to utilize that full authorization. You may recall, we had $150 million authorization last quarter. We used $10 million this quarter during wind season, and we still have $140 million left on that authorization from the Board.

Tommy McJoynt: Okay. Thank you.

Operator: And those are all the questions we do have in the queue. So, I would now like to turn the call back over to Jon Levenson and the team.

Pina Albo: Thank you. Thanks everybody who joined us on this call today. We really appreciate your questions and the opportunity to answer them. We look forward to sharing our year-end results with you shortly. So, on that, thanks again.

Operator: That does conclude today’s call. Have a pleasant day.