As we take those off, there is an earned rate cost to them. That’s why we put them on is because they had an – they had the effect of a positive earned rate earlier. As we take them off, you will not see the full impact of the earned rate running through the P&L. So we’re trying to give you a little more guidance towards target margins, and you’re going to have to put some model in of what that non-rate is to get the PIF growing again, we have to take those off and let the PIF move in. So some of that earned rate will go there. You will get, if you’re worried about 1 or 2 or 3 points of frequency and that’s your primary focus, you will miss the forest through the trees because of the non-rate actions that are reversing.
Andrew Kligerman: Got it. That makes a lot of sense. And then maybe lastly, as I looked at Slide 7 with the LAE, it looked like your program, you’ve got another $20 million to $40 million of savings there. Is that something that that we should think about going forward? I mean, you’ve achieved your 150 plus. But it looks like there might be another 20 to 40 versus budget. So I’m kind of wondering how to look at that going forward?
Joseph Lacher: We gave a range, right, $150 million plus. What I would tell you is we’re always going to be looking to optimize our cost structure. We want to be a low cost provider in the industry in the non-standard space and sell life insurance at affordable cost. So we’re always looking to optimize it. I would expect us to take out some additional costs as we move forward. But we’re not going to – as I mentioned in my comments, we’re not going to continue to updating on it because we believe, we’ve achieved our objective and what you’re going to see from here is incremental.
Andrew Kligerman: Got it. Very helpful. Thanks a lot.
Operator: Thank you. And your next question comes from the line of Brian Meredith from UBS. Your line is open.
Brian Meredith: Yes. Thanks. Joe, I want to dive a little bit back into the policies and situation and kind of what’s going on here. Maybe you can kind of highlight or kind of talk about the competitive landscape and how difficult or easy it will be to kind of ramp up that PIF up when you get to kind of rate adequacy. I mean was just looking at your PIF count and it looks like you’ve lost probably five years worth of PIF growth in these underwriting actions, if not more. What is the competitive dynamics right now and how challenging do you think will it be to kind of recover some of that? And then maybe on that, talk a little bit about the distribution and distribution relationships through this whole thing?
Joseph Lacher: Sure. And I’ll provide some and then Matt, I’m sure will have some adds to it. I’ll make it maybe an overall comment in two spots. We clearly had profitability issues and ours might have been more exacerbated than some because of our – the high volume of business we had in California and the delay that California had in – the delay that California had an incoming in rate. So what we did is we had to push harder on some of those non-rate actions. What that effectively is, is it means, it’s restricting underwriting in some cases. It might be lowering commissions. It might be tightening up pay plans, any number of things. Where we are right now is a pretty hard market. What a hard market characteristic wise typically means is there is less availability.
Most competitors have tightened their underwriting. Most are doing something similar, trying to enhance profitability. And as a result, your typical agent has fewer product offerings and fewer choices and less availability than they’ve historically had. As we come back in and we have the ability to do it fairly briskly, those distributors don’t think that we did something idiosyncratic. They don’t think that we were the only one who had a problem, we haven’t damaged a relationship, we haven’t broken something, we can come back into that environment and they’re happy, they’re happy to have the capacity returning because they’re looking for capacity. So we have a high degree of confidence in the relationships. We have a high degree of confidence that there’s market demand.
Our relative price competitiveness was strong before we went into this disrupted environment. We dealt with the same inflationary environment everybody else did. So we think we applied comparable, competitive responses to the inflation. So we think we’ll be competitive on the backside, and that’s what we’re expecting to see as we open the markets.
Matt Hunton: Yes. The only thing I would add on that is in the fourth quarter through the test and learns. We learned a bit about customer buying patterns. We learned a bit about loss trend and sort of what’s happening there. But overall, we’ve built a nice baseline to continue to enhance our capabilities and accelerate this in Q1 and Q2. And so just as Joe mentioned earlier, I think the ability for us in the first half of 2024 to accelerate production in a thoughtful way is there. And distribution is ready for it. I think credibility has been enhanced over the last couple years in terms of those relationships. And the hard market continues to present an opportunity for the time being. So we’ll look to take advantage of that in a thoughtful way.
Brian Meredith: Great. That’s helpful. Thanks. And then just another one, just quickly here, Joe, are we seeing any benefits yet from the legislative actions that happened in Florida beginning of last year?
