So that’s — but we will continue to generate a lot of free cash flow in this business. It’s a great cash business and if you think about maybe instead of an adjusted operating cash flow metric, maybe even a free cash flow metric at about, call it, 85% to 90% of adjusted EBITDA, that’s kind of what we target.
Peter Heckmann: Yeah. I know I hear what you are saying and I sympathize it just — if you are having a hard time forecasting it then it’s just that much more difficult for us. So, I guess, I will continue to listen in and think about some of those factors driving the reversal here this quarter.
Keith Jezek: Okay, Peter. Thank you.
Operator: Our next question comes from the line of Vincent Caintic with Stephens. Please proceed with your question.
Vincent Caintic: Hi. Thanks for taking the question. Good afternoon. I wanted to go back to the profit share. So, wondering if you could kind of go into more detail about in the fourth quarter kind of what the big changes in assumptions were plus what gives you comfort that what you built into the expectations for profit share now or where they should be or could you give us sensitivity around if used car prices are different things move around what could profit share do? Thank you.
Keith Jezek: Yeah. No. Hi, Vincent. I think I said earlier when David asked the question around profit share, maybe I will start with what changed in the fourth quarter. It was an accelerated decline in the Manheim, unprecedented 15% for the year and when we were at Q3, we projected the Manheim to be down about 11%. So used car values is a direct driver of our estimate of future claims and severity of loss. So, it had a significant impact on us in the quarter, and as you may recall, earlier in the year, Cox was forecasting the Manheim to be down in Q1 and Q2, only 3% for the year. So, it was a significant change here in the later part of the year. As we think about sensitivities around it, the $546 that we discussed earlier where we put the Q4 originations on the books and we stress that, call it, about 23% from what we call the baseline, which is a 50% loss ratio and that’s stressed on defaults increasing, as well as severity of loss.
So that’s our estimate at this point in time, and if you think about it, that $546, if you think about sensitivity around it, for example, of every 5% maybe an incremental loss ratio or claims going up, that could be about $100 in unit economics in our profit share just from just an average unit sensitivity.
Vincent Caintic: Okay. That’s helpful. Thank you. And then on the insurance companies, so I appreciate you gave us the, I guess, how long each company’s contract goes up into. But I am sort of wondering if before a contract and an insurance company change anything, so can they slow down approvals or change otherwise change things that might affect the volume all else being equal? Thank you.
Keith Jezek: Yeah. I mean we have great relationships, as we said earlier, and as a partnership with our carriers and we review all changes, underwriting changes together with our approvals, as well as theirs. So, I mean, again, it’s a strong appetite for our business and it’s been very profitable for AmTrust, in particular, as well as Arch and Aneco going forward and they are excited to get more flow of our business as CNA exits and changes their priorities. So we continue — origination volume is — this year was $4.7 billion for us, and obviously, with our — going into 2023 it’s — volume is going to be down, but there’s plenty of capacity, not only for 2023, a lot of growth into the future with our three carriers.
Vincent Caintic: Great. That’s helpful. Thank you.
