Shai Wininger: Yes, I would think of it as an opportunistic approach. Obviously, the California rate approval and our concentration in that state is a pretty dramatic change in our ability to grow generally in car. It’s also notable that we can see a loss ratio, even before that rate increase, continuing to improve, higher than our target, but certainly continuing to improve. And so, I think in the same way that we’re able to pick and choose among marketing channels. This will enable us to pick and choose among not only states, but also regions and you can get quite granular in terms of where and how we grow with five products car, is not the only game in town and will be fairly thoughtful about how we grow the renters book, the home book, the pet book continues to really perform nicely in terms of marketing efficiency, in terms of growth and certainly in terms of loss ratio.
So car certainly looks a little, our ability to grow within car that date has come much closer with these recent changes, but we’ll continue, to really looking to build out all our products.
Tommy McJoynt: Thanks. And then just my last question, just from a modeling perspective, do you guys have an expectation for what you’re kind of annual cat load would be like a percentage or probably a percentage basis, the dollars talk with how much you guys are growing. Not sure if you guys, I’m just kind of the baseline number that you guys think of?
Tim Bixby: Yes. So – we don’t guide to that by design, but we certainly think and model it, probably the best way to think about it is to look back over the last eight, maybe nine quarters and you’ll see an average cat load of roughly, between 9.5% and 10.5%. There’s obviously a spike in Q2 of this year which skews that number, but actually not a whole lot when you’re looking over the course of a couple of years or so. So that, I would think of that as sort of a normalized cat load obviously that may change somewhat as the mix of business grows over time, but that’s been relatively consistent. So, if you’re looking at the course of a year, that’s a pretty reasonable number. Obviously quarter-to-quarter will have fluctuations, and they won’t always be as expected.
Q2 and Q3, this year are notable examples where if you were just looking at weather patterns, historically you’ve probably swapped two quarters in some ways, but over the course of the year. That’s a reasonable assumption. Right.
Tommy McJoynt: Makes sense. Thanks, Tim.
Operator: Thank you. Our next question comes from Jason Helstein of Oppenheimer. Jason, your line is open. Please proceed.
Jason Helstein: Hi, guys. So just before last question, just want to send our support to everyone in Israel are dealing with the current situations, thinking of everybody. Just two questions. And they kind of both tied to cat. So just Tim, can you clarify, like what was the Cat impact this quarter. Just want to make sure we heard it right. And then to the extent that it sounds like this was a light quarter for cat, the extent of fourth quarter comes in light. Do you think about like reinvesting that back in the business either in growth or other areas? Just how – like how would you think about it, if the next, let’s say, four quarters just happened to be meaningfully less cat. And what we’ve kind of gone through. Does that change how you think about where those dollars go? Thanks.
Tim Bixby: Sure. Yes. Great, great question in terms of the impact in the quarter, it was roughly 10 points from all cat combined in the quarter. And it was a little skewed, slightly skewed more to what we call a major storm, not a named storm, but a major storm versus just general cat maybe a 60-40 split, but 10 points in aggregate in line with the historical average for a couple of years quarterly average as I noted. And about half what it was in Q2, Q3 is – from a hurricane and a home product perspective a seasonally higher expected quarter that actually came in somewhat better. We saw that in the numbers. Q4 that seasonal impact diminishes somewhat. If we were to see a reputation of Q3 and Q4, where the expected pattern is a little bit better.
Yes, you would – we would see that flow through in terms of our choice or our ability to redeploy that that upside or that incremental margin or cash flow. It’s a little tricky, you don’t know as you go through a quarter, you don’t know until you know right, you can have a cat on the last day of the quarter or the first day of the quarter and they can have a similar impact, but I would say from a macro view, if we had several quarters in a row as in your example sure that’s a benefit. I mean, one of the things we’re striving towards is visibility into long-term cash flow, our cash flow cushion and growing faster helps that. And so, we’re balancing all of those things. And if we see some upside as a benefit in the coming quarters that enables us to nudge that growth and that’s been up a bit, which gets to scale faster.
So it’s a little bit of a, I would call it sort of a virtuous cycle and we’d love to see that pattern evolved. I don’t know that it would be – every single dollar you pushed back in, but certainly it would give us the ability, to be more thoughtful and lean in, a bit more on growth. We’re already planning to do that based on, what we know now, but that could certainly help a bit.
Shai Wininger: Hi, Jason.
Jason Helstein: And then just one follow-up.
Shai Wininger: Sorry about that. Just two things first of all, thank you too for your kind warm wishes. They are warmly received as well, a couple of funny kind of comments about cat. One is the quarters may be slightly less randomly distributed than you might expect. What I mean by that is, there were some speculation in Q2 and we saw very severe storms in Q2, at a time that we didn’t expect and in some places that, didn’t expect. California for example was basically really hit. Those put some speculation at the time that that may result in a lighter wildfire season which would have been around now, because so much of the timber, so much of the fuel is dampened by it. So, we do see perhaps that Tim’s earlier comments about the quarter is being swapped around, there may be some actual basis for that rather than it being entirely random.
But it is an opportune time to say these storms and wildfires, and other catastrophes come basically in a way that we can’t predict. And we do encourage everybody to look at the long-term trend, we do have reinsurance that Buffett’s from the worst of the shock, at least in terms of our EBITDA impact. And by the same token, if we have one or two good quarters. We don’t necessarily bank that on the assumption that that trend will continue. We always prepare also the notion that, the next quarter may be different. We tried to take a zoomed-out long-term perspective on this. You had another question, Jason.
Jason Helstein: Do you have any thoughts about competitors who’ve been kind of moving in and out of markets and obviously these things take kind of long planning and what not, but have you made any change to kind of your three-year plan based on or five-year plan. Based on competitors moving in and out of markets?
