Operator: And your next question comes from the line of Mike Zremski of Bank of Montreal.
Mike Zremski: I’m more of a P&C guy, so my question’s on the health side actually. So on the P&C side, when we just think about kind of how much inflation has come into the system just that cost of auto insurance policy versus a few years ago pricing is up 50 plus percent, which I guess, I feel like should eventually help your transaction revenue volumes in outer years. On the health side, can you remind us what type of inflationary levels are impacting the health side of the business?
Pat Thompson: This is Pat here, I can address that question. And I would say the inflationary trends are pretty different between P&C and the health side of the house. So on P&C, the industry would call it severity, which is the cost of resolving the claims and inflation there has been kind of running in the double digits for a while now. And I think that is in kind of stark contrast to where it was for the better part of 20 years before that, which was — it anywhere from zero to low mid single digits. And really, I think what’s caused a lot of the the P&C hard market is the fact that they just haven’t been able to take rate fast enough given how high the claims cost inflation has been. On the health side, I think long term inflation for kind of health care claims has run higher than it has for auto insurance, but it’s also been more consistent and more predictable.
And so I think on the Medicare side, you have seen some of the big players talk about medical claims coming in above expectations, it’s a point or two above expectations. And that’s in stark contrast to P&C where for 2021 and 2022, it may have been 10 points above people’s expectations. And so, I think the health side, yes, there has been a bit of noise about that. But in our mind, that’s not a particularly big issue just given the the kind of range in which it normally operates.
Mike Zremski: We have been hearing and seeing data points about health inflation ticking up a bit, okay. On the P&C vertical, my last question, just in the past you have talked about maybe seeing some larger carriers enter the marketplace that weren’t larger carriers — that weren’t big players in the marketplace, in the past. Are you still — do you sense that in the coming year or so, there are some carriers that are trying to be bigger direct-to-consumer players through your marketplace or it’s just too early to tell?
Steve Yi: No, I think we are continuing to see that trend. I think that when you look at the list of the largest P&C carriers, I think they are punching according to the weight and varying degrees within our marketplace. And so there certainly are large carriers who traditionally have relied on agent based distribution whether the captive agents or independent agents who are looking to invest and have invested in direct-to-consumer capabilities. And they are at various stages of actually investing in those capabilities. And so we continue to expect large carriers, top one or two top five certainly, certainly within the top 25 carriers, to start to come into the marketplace in the upcoming years and become more relevant players in the marketplace, according to our thesis, which is that agent based distribution certainly isn’t gonna go away.
But really every top carrier needs to invest in direct distribution, because of the success that the direct-to-consumer model has had and really changing the landscape over the last 10 years and league table in the last 10 years. And so we continue to see that trend. I think what you have seen really in the hard market is essentially a pause in that secular trend. But as the market emerges from into a soft market and carriers get back into a growth mindset, I think you will see a continuation of that. And so you should see other larger carriers who again have traditionally focused on different types of distribution methods to really start to resume their direct-to-consumer investments and then some bigger players in our marketplace as a result.
