Kirk Lusk: Appreciate it. Thanks, Paul.
Operator: Our next question today comes from Mark Hughes of Truist. Please go ahead.
Ernie Garateix: Hey, good morning Mark.
Mark Hughes: Yes. Thank you. Good morning. How was the weather this quarter? Was this an unusually good weather quarter, or was this normal weather quarter? Just sort of thinking and certainly of seasonality, but is this kind of run rate, or was this something unusual?
Ernie Garateix: Are you referring to the fourth quarter or the first quarter? Fourth, right?
Mark Hughes: Fourth quarter, but you can talk about first quarter, too
Ernie Garateix: If you want us to, yes.
Kirk Lusk: Yes. The fourth quarter was almost about what you would expect from a €“ when you look at the non-cat weather, the non-hurricane cats and then the hurricane cats, it was very comparable to last year. So, I would say, it was about kind of a flat year.
Mark Hughes: Yes. Okay. And then anything you want to say about the first quarter?
Ernie Garateix: No. At this year, so far, the first quarter is kind of mirroring what we gave seen in the past, and so…
Mark Hughes: Okay. So, normal, similar to the fourth quarter seasonality or adjusted?
Ernie Garateix: Yes.
Mark Hughes: You have mentioned pricing, you expect it to continue and perhaps, accelerate with the rate actions you are taking, will that kind of keep this pace of rate increase is going? If I am thinking to accelerate, do you need to see what happens with the reinsurance renewals and then that would drive the acceleration, or how are you thinking about that?
Ernie Garateix: So, there is definitely a component with the reinsurance, right. As we mentioned over with Paul, cat XOL has placed 61. Once we have what that pricing would be, then we would kind of evaluate that and obviously, rates would be adjusted accordingly to that piece. So, in some areas of our portfolio, you might see rates go up further because of the increase in reinsurance from that perspective.
Kirk Lusk: Yes. And I think it’s a good question. I mean we do expect reinsurance rates to continue to go up. Last year, they went up rather substantially. And so I mean that is actually contributing to the some of the substantial rate increases that we are taking. And I think that, that is probably going to continue, and we will actually be looking at each state to see what we need to do based upon those reinsurance rates because, yes, unfortunately, I think that the overall market is going to see increases across our footprint. Even despite some of the positive recent legislative actions, which we are very pleased about, but I don’t think that, that’s going to ease reinsurance rates at this point.
Mark Hughes: What was the dollar amount of that cat XOL spend last year roughly, just so we can sort of get a sense of what the base is when we think about potential increases?
Kirk Lusk: Yes. That net spend was €“ I will confirm that number up, and it was around €“ one second. Yes, about $370 million.
Mark Hughes: Okay. And then the E&S in Florida, what was that bringing for you? When did you say you started offering E&S policies? And then is that driving business that you are €“ you feel is adequately priced?
Ernie Garateix: So, it definitely is adequately priced. We have been in the Florida E&S business for a little bit over a year. As we saw some of the conditions in the market, we basically paused or suspend to be admitted. So, we will continue focusing on the E&S with select agents in the area, but it is adequately priced. We do have the flexibility there as market conditions change to make those pricing changes accordingly.
