Stewart Ellis: I think we’re also seeing growth.
Karol Chmiel: Okay.
Stewart Ellis: We’re also seeing growth, fairly substantial growth from some of our existing programs as well. So we really have multiple levers, right? We have existing programs that are growing year-over-year. And as Rick said, there are a number of programs that are looking for partner on the fronting business, and we’re excited to be able to support them.
Karol Chmiel: All right. Great. Thank you. And then, just one last question, I’m just curious because it kind of came up recently. In terms of the terms and conditions on the Hippo Home Insurance Program, is there — are you thinking of any creative changes to the terms and conditions? For example, actual cost replacement instead of the replacement cost on the roof replacements?
Rick McCathron: Yes. And in fact, we’ve implemented those already this as part of this project to reduce volatility generally. So we’re doing all the things one would expect on increasing deductibles, changing the terms and conditions, replacement costs — or actually cash value versus replacement costs. We’re also looking at other partnerships or other avenues that might make sense to stabilize the SCS exposures, whether it’s a partnership with roofers, with hardened roof materials, whether it’s partnerships with Parametric providers because when you increase the deductibles that puts a significant burden on the customer. Is there a way for them to buy that deductible down through a different risk bucket? So we’re looking at a lot of structural things that we can do because frankly, this is an industry problem.
The SCS exposure is increasing. That’s not shrinking. Much of the burden has been placed on the primary carriers over the last year or two. And we think that there needs to be a settling of that disproportionate burden on the primary carriers, mostly through the form of increased deductibles and things that you mentioned, cosmetic exclusions and actual cash value. So we’re looking at a lot of different things as all part of this renewed effort to ensure reduction of volatility in the book.
Operator: Thank you for your question. [Operator Instructions]. Our next question is a follow-up from Yaron Kinar with Jefferies. Please proceed.
Yaron Kinar: Thank you. Two quick ones, I hope. One, the underlying loss ratio in HHIP, so excluding cats, the PYD seemed to tick up a bit this quarter relative to the last two quarters. Any one-offs there and anything you could call out?
Stewart Ellis: Hi, Yaron, it’s Stewart. I think there is some seasonality of kind of interior water claims. But I think we also had a very small number of non-wildfire total lost fires in the quarter. So nothing that would make a trend.
Yaron Kinar: Okay.
Stewart Ellis: But I would point back to the significant improvement year-over-year. There is some seasonality to this end. So while we do look — quarter-over-quarter is important, but year-over-year is really where we spend most of our clients.
Yaron Kinar: Okay. And then can you offer the catastrophe and the PYD impact to the net loss ratio?
Stewart Ellis: Yes. I think we published that in the shareholder letter. I’m trying to understand your question.
Yaron Kinar: Okay. I missed that. Okay. I’ll go back and look at it. That’s fine.
Stewart Ellis: Yes.
Yaron Kinar: And so maybe one last one then, with the expense reduction program, are there particular OpEx lines that you think would be more significantly impacted?
Stewart Ellis: Yes. I think it’s more across the Board the — because the employees exist in all of the lines. And we do have vendor savings that we’re expecting making all the lines as well. So it’s not going to be driven by any one place in the P&L. But an acceleration of the operating leverage trends that were already seeing in the business. And our operating expenses have declined even before these actions very, very substantially as a percentage of premium and as a percentage of revenue. This is just going to be an acceleration of that trend.
