Operator: We’ll take our next question from John Campbell with Stephens.
John Campbell: Congrats on a good snapback quarter. Very good results for you guys. And I apologize. I did have to jump on a little late here. So, I don’t know if you’ve already addressed this. But I was hoping that you guys can maybe talk to the losses, if you can maybe unpack the kind of combined ratio for the insurance side of things. As best you as you can tell, how much of that was just generally less loss activity or maybe just less severity losses versus the strategic actions that you guys have taken on the higher risk policies, as well as maybe just better — or better avoiding bad policies to the proprietary data?
Shawn Tabak: Yes. I could take that one. Yes. Look, I think overall, the insurance segment adjusted EBITDA increased $20 million year-over-year. The significant driver of that is the actions that we’ve taken around improving the gross loss ratio from increasing premiums per policy. Our team did a really great job getting out ahead of the market there. The various underwriting actions that we’ve taken specifically, on the policies and some of the changes that we’ll be continuing to do that, we talked about today. Non-renewing higher risk policies. And I think the other thing that we talked about, we’re seeing significant benefit from the data that we have and leveraging that data to improve our underwriting results, which I think are already really great.
As Matt said last year, in 2022, we were a top decile performer with respect to gross loss ratio. But as we continue to leverage that data more and more, those 40, 50, 60 pages of inspection reports, we continue to see benefits through our loss ratios. And you saw that today with the non-cat loss ratio decreasing quite significantly year-over-year.
Matt Ehrlichman: I’ll add just two other quick things for you, John, just to round out the answer. One, I would also say from a combined ratio, the team’s done a really nice job of managing expenses also. And that’s happened across our business. But there has been good cost reduction, which certainly helps the combined ratio overall. I mean, the 58% combined ratio is obviously — we feel very proud of kind of where the business is at. And so, I certainly would want to credit the team for that work also. But it really is, all of those things combined, it’s executing on each of those things together, which builds up to that 39% combined ratio. Last comment, in case you missed it, I did note in the comments that there was $8 million of meaningful, net catastrophe related losses, particularly primarily from the large hail event in the end of — toward the end of the quarter, And I wanted to note that specifically just to call out that the results weren’t from this very unusual pristine weather quarter, it really is from the operational changes that the team has put into place to account for what we know to be true, which is there will be meaningful weather events.
John Campbell: A similar kind of question here, just kind of unpacking or trying to better understand the insurance revenue drivers. How much of the growth this quarter kind of stemmed from just better renewal pricing versus the less reinsurance ceding? And then I don’t know if you guys are able to disclose, but, like, just broadly, roughly, what percent of the book today, the P&C book, is HOA versus agency?
Matt Ehrlichman: Shawn, why don’t you take the first one, and I’ll take the second?
Shawn Tabak: Yes. Sounds good. So the revenue growth, year-over-year, about half of it, for the insurance segment was driven by the Vesttoo contract termination. And then the remaining half is driven by also just general less ceding that we did, as well as I mentioned, the premium per policy increased 38% year-over-year as the team got out ahead of the market and increased prices. So, those are the key components of that — of the increase to revenue there.
Matt Ehrlichman: Yes. So about $30 million, John, from the quarter tied to ceding, ceding less. And then in terms of second, no change in policies, John. We don’t break out the percent of the policies from agency or carrier.
