Mihir Bhatia: I wanted to first maybe just start with the reinsurance transaction. Just to clarify, the $21 million recovery you talked about, that’s just from lower ceded premiums. Is that right? Or is there something else going on there?
Sumita Pandit: Yes. So the $25 million was the ceded premiums that went up. So it’s a contra revenue line. So think of it as our revenue went down by $21 million because of the transaction. And the $58 million that we expect to get a benefit for will be a savings in the future years. So that would be our ceded premiums going down in the future years by $58 million.
Mihir Bhatia: Right. And of that 50%, I think you said $21 million would be within the next year.
Sumita Pandit: So we expect a cash breakeven within the next one year. So I think, in short, this is a really good NPV transaction for us, Mihir. And as we look at it, we are looking at our performance excluding the tender offer. And as we look at our numbers, I think our revenue would have been $25 million higher if we had not executed on the tender. Our net premium yield would have been 3.2 basis points higher. Our EPS would have been $0.10 higher, and our ROE would have been 160 basis points higher, excluding the impact of the tender. And because of this tender, we expect that we will actually have a higher future dividend capacity. So think about the $58 million that we have saved in future ceded premium that should help us increase our dividend capacity in future years.
Mihir Bhatia: And then I just wanted to ask about the 2018 deal. Like I recognize it’s hit the delinquency trigger currently, but given it also is not providing a miles benefit. Would that be a candidate in the future or because it’s hit the delinquency trigger, you basically are not likely to do that one?
Sumita Pandit: So we do have a call option in November for this year for the 2018 one, and we will look at our options and take a decision on that.
Mihir Bhatia: And then maybe just asking about the paid claims, just switching to the business. In terms of the paid claims, they’re running at a pretty low level relative to history. I think there was only 91 claims paid this quarter and 80 last quarter, which obviously is quite low. And my question is really, when does this normalize back to, I guess, the pre-pandemic pre-foreclosure levels or something more of a normal run rate level. Is there a cliff from a standing standpoint, just given the foreclosure programs expiring, et cetera? Just trying to understand what that glide path looks like and when we get back to what, I guess, would be a normal low environment?
Sumita Pandit: Yes, I think it’s a really good question. I wish I had future ball that I could look into and predict it, Mihir, it’s really hard to predict the future, as you know. I think what we can say is that we are taking a conservative view about how we think about the macroeconomic scenario. Our performance till date has actually been consistently better than our expectations. But as you said, if you look at the average direct line that we’ve paid this quarter, it was about 36,400. And as you know, our severity assumptions that we use when we reserve for a new default is higher. It’s about $60,000. So we are continuing to see consistently better performance than our expectations and we expect to continue to be conservative as we forecast our performance here. But Derek, and Rick, if you have other thoughts.
