Steve Yi: Yeah. I think that’s a great question. I — so I don’t think it’s related to customer acquisition costs per se.
Andrew Kligerman: Okay.
Steve Yi: I think as the — some of the issues that they have been having is really getting a better grasp of what the expected lifetime value is of the policies that they were acquiring. Because at the end of the day, when you are in performance marketing and in growth marketing, what you need to do is understand the expected value of a policy that you sell and then match that to that customer acquisition cost so that you could have a target return on ad spend. And so, if you don’t have a granular understanding of really exactly duration of the policy and what the expected value is that you are going to extract for that consumer that you are selling a policy to, then you are going to have a hard time really dialing in to customer acquisition costs so that your ROI positive with your ad spend.
And so I think it’s really the fact that these brokers are getting a better handle on expected LTV, how these differ based on different marketing channels that they have and then leveraging the granular controls and the programmatic controls that you would have in a marketplace like ours to really be able to match what you are willing to pay to acquire that consumer with what you expect that consumer, well, the value that you can expect to gain from that consumer and it’s really that matching is what they need to get right. And so, I think, as they get a better understanding of really what the expected retention rates are of their consumers and how these differ based on different marketing channels, we fully expect them to be able to come back into the market and leverage a programmatic channel like ours to match what they are willing to pay, with that expected value.
And so it is related to customer acquisition costs in some ways, but it’s really about the ability to match that to the expected LTV and I think that’s really the nut that they are trying to crack.
Andrew Kligerman: Okay. Yeah. That is a tough nut to crack on. Thanks for that thorough explanation, Steve. And then maybe just digging a little deeper on the P&C transaction value, as you were talking about the players, most of them coming back in 2023, look that on a state-by-state basis. Do you see some companies that maybe disinclined to be in certain states, say those on the coast versus some other states? I mean, are you seeing some pickup that’s mixed among carriers, maybe you could talk a little bit about that?
Steve Yi: I think that’s a great question. I think in a normal market environment, that’s what you would see that there are some states in which profitability is challenged or pull back in marketing in those states and really go heavy in states where they actually have established profitability and have a high confidence in their rates. And what you would expect to see coming out of a market like this is that carriers start to lean back in those states where they have a high degree of confidence in the rates that they have achieved. Now I think one of the things that we are seeing in this marketplace that may be a little different than what we saw in the last hard market cycle is that we are seeing less of that kind of behavior and the indications that we are getting from carriers is that, their profitability has been challenged severely for the last couple of years.
