Charles Peters: Excellent. So my other area, just giving some attention to the Title business. The revenue is down again. I appreciate Carolyn, your comments about the lag nature of that. You gave us some idea that the expense ratio was — there was some anomalies going through that. Is your expectation for this year that the expense ratio for the Title business ex this anomaly that happened, is it going to be in the same range as it sort of was last year? Or has your view on that changed?
Craig Smiddy: Yes. Carolyn, I think Greg’s question, it’s hard to know what’s happening with interest rates and real estate market, especially as we get further out toward the end of the year. But Greg, I think if we answer your question, and I’ll let Carolyn do that, assuming that the business would be — the revenues would be flat with last year, I think, is probably the context in which we should answer that question. And I’ll hand it to you, Carolyn.
Carolyn Monroe: Yes, that’s correct. We are really trying to reach the same combined ratio that we did last year. It’s just going to depend on the revenues. We’ve got our expenses in line. And so we don’t feel like — we just — we need the revenues to start coming back and at least to what they were last year. And we’re kind of a glass half full kind of group. And we — just sort of the trends we’re seeing just right now at the beginning of the year, we really believe we can aim for what we did last year.
Operator: We’ll go next to Paul Newsome at Piper Sandler.
Craig Smiddy: Hello, Paul. Are you there?
Operator: Paul, you may have your line muted.
Jon Newsome: Okay. How about this? The — I want to talk a little bit about maybe some context with the last quarter with the GL business. It looks a little reserve negativity this quarter. Last quarter, if I recall, it wasn’t GL. It was commercial auto, but commercial auto has turned to be a good guy this quarter. Am I remembering that right? So is that a fair assessment? And I guess, thoughts — usually you have the sort of quarterly variation, unless it’s very small.
Craig Smiddy: Well, let me comment on that and refer back to our comments last quarter. So we were still having favorable reserve development on commercial auto throughout last year. I think what you’re referring to that I spoke a little bit about on the last call was that at the end of — after seeing the end-of-the-year results, we decided that we wanted to move our current accident year loss ratio for commercial auto back to where it was in 2022. So it didn’t deteriorate. As a matter of fact, I think it was still just a few points of percentage better. But we went into the year thinking that it would be a little bit lower. And at the end of the year, we said we’re going to go back and for the whole year. Because of our conservative nature, we said, let’s set us to where it was back in 2022.
So there — favorable development is not bouncing around by any stretch. We had favorable development for the last several years on commercial auto because of our conservative approach. And our conservative approach, again, was demonstrated that we got to the end of the accident year, and we said, let’s uptick that accident year loss ratio a little bit just to make sure we have that cushion we strive for. And so that’s what happened last year. It wasn’t anything unfavorable coming from prior years. There’s no favorable development in 1 quarter, unfavorable development in another quarter. It was simply taking — at the end of the year, we took a little bit more conservative approach that we started the year with on commercial auto, but it was still a loss ratio that was a bit lower than it was in the year before.
So that’s what happened. And therefore, when we saw favorable commercial auto come through again this first quarter, that was within our expectations.
Jon Newsome: And on to the GL, I get it’s not a big part of the business. One of the investors I spoke to is quite concerned maybe sort of a relatively fast-growing part of the business and growth has always been — from our perspective. Is that really fair to say? Because they don’t think of you as a GL company and I think you said it’s sort of spread in a lot of different businesses. And is this a priority? Or is it just sort of happening sort of organically because what’s going to be in the business?
Craig Smiddy: I understand the question, Paul. And what I would tell you is that the growth you’re seeing in GL, I’ll tie it back to the comments that I gave to Greg when he asked about that growth. The majority of that is coming from our E&S operation, which is focused on very small policies with very low-hazard general liability type of exposure. And the other piece I would add is that where we saw the unfavorable development in GL, even though as you point out, it’s a small line for us; and if you look at the supplement and you look at the general liability loss ratio and you go back those 5 years that we show there, it’s been between 78% and as low as 56%. But — so the 74% that we saw this quarter is really almost smack dab in the middle of those last 5 years.
So it’s nothing. For us, that jumps out. We expect volatility in that line. And where we did take some unfavorable development was from business that has a very different complexion than the business we’re writing in the new Old Republic E&S, those older years, our business that looks nothing like the business that we’re writing in today and that we’re adding.
Jon Newsome: Great. And maybe I can squeeze one Title question. The biggest sort of pushback I get on Title is considering that essentially Title Insurance is for refinancing. And any sense of like what that would do to your business? And I don’t know if the majority of what you do is not refinancing or is refinancing depends. Any thoughts on that?
