Robert Farnam: Hi, there, good morning. A couple of questions, one on the workers’ comp segment. It’s more of a broad view. So, the workers’ comp line for the industry has done pretty well over the last decade or so, but it seems like you guys have had a hard time generating any meaningful underwriting profit for several years now. So I’m just curious, what’s the primary difference between your book and maybe the overall book, is it just the shorter tailed aspect of it, you recognizing the severity trends or is there something else that’s going on that’s creating a less profitable book in the industry?
Ned Rand: Bob, it’s a great question, and I think it is essentially what you said, which is we are closing claims faster, which I think means that we are kind of owning up to some of the things that are happening in the loss environment and costs in the loss environment perhaps faster than some of the industry will ultimately recognize them. As for the mix of business, I don’t think there’s anything particular to our mix of business that is vastly different. In fact, because we write largely more suburban and rural risks and smaller employers that generally has favored the loss environment where you’ve kind of got a more wholehearted effort to get injured workers back to the wellness and the dignity of work. Kevin, what would you add to that?
Kevin Shook: Yes, absolutely. Bob, it’s really all how we have recognized prior year development and booked our accident year loss ratios more precisely because of that shorter claims tail. So if you think about the industry depending upon the research that you read, calendar year combines are 91, 92 estimates for ’23, but there’s 15 points, 14 points of favorable development, which means the accident year combined are 104 to 108. When we look at our book of business and did this at the end of ’22 and we compare our accident year loss ratios over the last five years to the industry, we’re still several points better. So I think it’s the acceleration of the development that we’ve already taken in the past, more precise accident year loss ratios in the industry being slower from a claims perspective when it comes to favorable development so.
Robert Farnam: Okay. So, what you’re saying, so the 72.5 or so that you’re booking thus far this year you’re saying for an accident year loss ratio, you’re thinking that’s — that’s actually decent relative to the industry at least the peers that you go against?
Kevin Shook: No, that’s correct. And keep in mind when the industry historically has booked and again lately 14 points or 15 points, historically Eastern has booked 3 points or 4 points, so I do think that is the biggest difference.
Robert Farnam: Okay, great, thanks for that color. And the second question I had was on the Segregated Portfolio Cell Reinsurance. Now, this may be something better taken offline, but I was just curious like that the underwriting performance of the portfolio cell segment has done really well for some time so it could go back. So I was just curious what makes the underwriting results in that segment much stronger than in the Specialty P&C and the Workers’ Compensation segments?
Ned Rand: I think it’s the way that we share risk, right? I mean there’s more skin in the game for all the participants, be it a company on captive, where they’re taking risk or an agency on captive, where we’re sharing risk alongside an agency partner because everyone is sharing more fully in that risk, I think that leads to better results.
Robert Farnam: Okay. All right. Now, that makes sense. All right. That’s it for me. Thanks for the color, guys.
Ned Rand: Thanks, Bob.
Operator: [Operator Instructions] Now turn to Matt Carletti with JMP. Your line is open.
Matt Carletti: Thanks, good morning.
Ned Rand: Good morning, Matt.
