I think at this point, they feel a little bit more comfortable. It seems like capacity is as strong, probably stronger than it was even a year ago for us to be able to execute. I think our ability to consistently execute in those markets since we started our quotas here back in 2013. It’s helpful in that regard on making sure that we have capacity but the reality is, I think that feels very good. How does it play into sort of the primary market ultimately from a pricing standpoint? There’s a feedback loop there but ultimately, I think we want to price in the primary market such that we think we’re getting appropriate returns and that the reinsurance is just another way for us to think about how we sort of fund the capital and think about being able to distribute losses in a stress environment.
So not trying to play too much over line upon what’s happening in the reinsurance market as far as the impact on direct pricing versus feel like when we deploy capital, we want to make sure that we’re getting a good return day one on that. Nate, anything else you’d want to add?
Nathan Colson : I think just on the traditional reinsurance market, I do think 2023 was a challenging year from a capacity standpoint as many reinsurers insured a lot of mortgage risk in ’21 and ’22 and persistency increased quite a bit, so it wasn’t running off as fast. But now that you see the smaller origination volumes in ’23 and also what most expect for 2024, I think some of that capacity has rebounded a little bit. And you can even see that in our quota share placement. We’ve already got — we’ve already agreed to terms on a 30% quota share to cover our 2024 underwriting year for 2023 that was at a 25% quota share level just because of capacity challenges some reinsurers. But now that some of their larger books are running off a little bit, and there’s less kind of new risks coming in just because of a small origination market, it does feel a little bit more normalized now than maybe the first part of 2023.
Eric Hagen : Okay. That’s great detail. Thank you, guys. I mean we’re looking at both the GAAP book value and we’re also presenting the 1x [ph] AOCI. So is there like a market yield for the securities portfolio that we can think about relative to the GAAP yield you guys present. Thank you, guys.
Nathan Colson : I’m sorry, Eric. The market yield on the investment portfolio is what you’re asking about.
Eric Hagen : Yeah, exactly. Since we’re talking about the book value with and without the AOCI in there?
Nathan Colson : Got it. I don’t have that immediately in front of me, but it’s about 200 basis points better than the book yield. So we can follow up and get you the exact number, but I think you’re looking mid-5s and the book yields mid-3s.
Eric Hagen : Got you. That’s helpful. Thank you, guys.
Operator: There are no further questions at this time. I would now like to turn the call back over to management for closing remarks.
Tim Mattke : Thanks, Michelle. I just wanted to thank everyone for their interest in MGIC and thanks to all of our coworkers and all of our customers for another great quarter. And look forward to the last part of 2023 and then 2024. Thanks, everyone.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.
