Mark Hughes: And then the commercial business, what gives you confidence that you are getting reasonable pricing there? How open is that market for additional growth?
Ernie Garateix: So, a couple of things there on the commercial, each risk is modeled individually, and we do have some flexibility on the pricing side with an IRPN factor that we can adjust accordingly to make sure that again, we are adequately priced to the market conditions even for the residential piece.
Mark Hughes: Yes. I assume you are making some assumption about what your reinsurance costs are going to be looking like if you are still growing that commercial piece.
Ernie Garateix: Correct. Now that is the correct assumption, yes.
Kirk Lusk: Yes. Well, and also I mean, I think the €“ when you look €“ think about that commercial portfolio, it did grow last year. Premiums were up substantially. Actually, our policy count was down, but premiums were up substantially. I would expect that growth to slow to be flat this year as we manage our exposures for the reinsurance process. So, I think that the growth we had last year is probably not going to repeat itself in 2023.
Mark Hughes: Okay. Great.
Kirk Lusk: Yes. The other thing is on €“ the other thing on the commercial is we do write just the garden style, of course, habitational. So, from an underwriting standpoint, we are not going to deviate from that to actually getting more premium also.
Mark Hughes: Let me ask one more, the California E&S. How much are you leaning into that market at this point?
Ernie Garateix: We are not leaning heavily. Again, we do think that’s a long-term play. It is a small portfolio. It’s a disciplined underwriting approach, and I guess on an E&S basis. So, we do have our toe in the water there. It is a profitable business that we are writing out there, and we will kind of see long-term where that plays out.
Mark Hughes: Maybe the estimate on what you think the reform in Florida could mean? I have heard 10 points on the loss ratio. What do you think of that number?
Ernie Garateix: I don’t think we have a number at this point. I think it’s early. I think we are looking at all the metrics and the trends to kind of see where this will eventually end up. Am I cautiously optimistic that it is going to stabilize the property market in Florida, absolutely. But until we have a little bit more time and data, I think we kind of refrain from exactly what that would mean. But everything that was passed by the legislature in December is absolutely a promising sign for the Florida market.
Mark Hughes: Yes. Okay. Thank you very much.
Ernie Garateix: Thank you, Mark.
Operator: Ladies and gentlemen, our next question today is a follow-up from Paul Newsome with Piper Sandler. Please go ahead.
Paul Newsome: Thank you again. So, are you seeing any regulatory pushback with some of your rates? It sounds €“ it feels like it sounds like Florida is very accommodated, but obviously, California is much in the news. And I think even New York has been in the news with being resisting some of these rate increases. What’s your perspective on it? And what has your experience has been so far?
