Pablo Singzon : The next question I had was just on development, right? I think — reserve development. I think it’s pretty clear at this point that you guys have good underwriting margins embedded in accident years 2020 and forward, right? Pretty good margins. So if I look at the 2020 accident year for casualty occurrence, for example, I think from your ’22 10-K, incurred losses are running at 15% below your initial fix. So I guess I’m trying to sort of size the benefit that’s still embedded in your balance sheet, right? Just a couple of questions. Like, one, how long would it take for your casualty books for the season, right? So like 2020 is like 3 years in. Not entirely there, but maybe getting closer to the end. And then would you say qualitatively that the pricing spread on business you put in ’21 and ’22 and maybe even this year is better than what you put in 2020?
Michael Kehoe : Yes. I think the current year is probably the best ever, but the last several years have been really attractive levels of pricing for Kinsale as a risk-bearing entity, unequivocally. We’re being well paid for the risk we take. In terms of the when the — I forget how you characterized it. The reserves are seasoned or whatever? [indiscernible] say that again, Pablo?
Pablo Singzon : No, I was just confirming what you said, Mike. Yes, just when the book — when these books will fully season, right? It’s not 3 years, maybe closer to 5 or 6, but I just wanted to get an answer from you.
Michael Kehoe : I would just remind you, we write a lot of different lines of business, short, medium and long tail. And so the property is where you know pretty definitively within a year or 2 or 3. The excess casualty, the — some of the construction business related to construction defect claims can drag on for quite some time, which is great from an investment standpoint. We get to invest those reserves at higher interest rates. But you are more exposed to things like inflation. Brian is a former actuary in his career, I assume. Brian?
Brian Haney : I guess I would say at the outside, probably by 3 or 4 years, I would say, for the average of the book, we have a pretty good idea. And then for even the longest tail, I think, by that — by year 6 or 7, we have a very good idea. But…
Michael Kehoe : When you get 4 or 5 years out, most of the claims have been closed, right? So you’re with a dwindling number of claims, but they happen to be the more [indiscernible] so it’s —
Pablo Singzon : Yes. That’s helpful. And this is my last question. It will be the simplest one. Just for the reinsurance, so with updated program, you were gaining less premiums, but I was wondering if there is a benefit on the ceding commissions that you earned from the higher quota shares?
Michael Kehoe : Well, the benefit is we get a 27.5% ceding commission on our property quota share on the business we cede away. So if you look at that, it’s like, hey, we don’t really take much in the way of any underwriting risk on the premium we cede away, and there’s a de minimis amount of capital required for that business, and yet we get a 27.5% ceding commission. We tend to pay direct commissions to our brokers on 14% or 15%. So the net, it’s a nice addition to our bottom line without a lot of risk. On the casualty, it’s a little bit different. We cede away — it’s a variable quota share, so it depends on the limits. But I think in general, it’s about 60% of the excess casualty. The higher limit casualty business, we cede away about 60% of that.
