We get a commission of 35%. We tend to pay 14% or 15% commissions to our brokers, so we net about 19% or 20% pretax on the business we cede away, again, with minimal underwriting risk and minimal capital being required. So it’s just a nice complement to our business. From a profitability standpoint, it allows us to write higher limits than maybe we otherwise wouldn’t want to retain net. Those are some of the ways we think about it, but there’s no profit contingency embedded in that business. It’s just a straightforward split of the economics that’s negotiated upfront.
Operator: Your next question comes from the line of Mike Zaremski with BMO.
Michael Zaremski : I guess a follow-up on some of — along the lines of Pablo’s initial questions on reserving, and I apologize. I got into the queue late, so give me a short answer if you guys already walked through this. But if we look at reserve release levels year-to-date, obviously extremely healthy, but down fairly materially year-over-year. Not just the Kinsale issue, it’s an industry-wide phenomenon from what we can see. Curious if you have any just thoughts on whether it’s due to kind of just changing business mix simply? Or you’re seeing slight changes to kind of loss trend that are kind of just meaning that there’s going to be a little bit less good guy, or there has been a little less reserve releases? Any color would be great.
Michael Kehoe : Yes, Mike, this is Mike. I would say, and this is what we said earlier in the call, was the drop in redundancy was — I would look at it as a prospective additional amount of conservatism. We’re reporting phenomenal results in terms of profitability, but we’re also mindful that we’re in an uncertain era in terms of inflation and where it might be going in the years ahead. And again, our book is a mix of short, medium and long tail business. The longer tail business can be more exposed to inflation, and so we’re doing what we always do, which is we have a very quantitative process with how we set reserves. But there’s also some judgment that’s brought to bear, and we’re always looking to set aside more dollars today than we think we’re going to need to resolve claims over the years ahead so that we’re never going back to the well to take a big reserve charge.
We want to continue to have that redundancy drift out year after year, and I think it’s 1 of the things that makes this a phenomenal business and a great way to create wealth year after year, by having conservative reserves upfront that develop favorably over time. So that’s all it is. We’re just setting aside a little bit more incrementally but still reporting good results in the process.
Michael Zaremski : Okay. That’s helpful. And lastly, you just detailed kind of this arbitrage that you have on your ceding, especially some of your casualty book in terms of kind of what your expense ratio is versus the commissions you get. But just a couple of reinsurers have just very recently talked about the dynamics in the reinsurance space, allowing them to potentially continue to change the ceding commission ratio back more into their favor. Just curious, I was assuming your reinsurers are making good money, so — but do — is that a dynamic that we should be thinking about over the coming year that could just incrementally impact Kinsale if the reinsurers are able to kind of move in that direction?
