Gregory Peters: Well, that was great color. Thank you. I guess I would like to pivot for a second on the reinsurance portion. Just curious about how — I think you said the Hawaii losses wound up coming at the low end of the range of what you originally guided to. So just curious about how the reinsurance worked for that loss, how much cover is left or some parameters that you can provide? And then do you think it’s going to affect your pricing for next year? Or considering that your catastrophes elsewhere have been pretty limited at least year-to-date, maybe you’ll get a pass on that? I’m just curious if you have an early view on reinsurance costs for next year.
Craig Kliethermes: Well, I’m going to let Jen — this is Craig. I’m going to let Jen talk about what she thinks about next year because she’s probably a lot closer to it than me. But [indiscernible] all you say is the loss — with the reinstated premium that Todd referred to, there are no holes in our program. The program exists just like it did previous to the Maui loss. So if we were to have another large event, we would have coverage through the tower just like it was pre-Maui as a result of the reinstatement premium that we paid.
Jennifer Klobnak: Yes. So we had disclosed a $65 million to $75 million net range, net of reinsurance that would be. And that would include all in, so that includes reinstatement premiums. We booked $66 million. You can see it was at the low end of the range. That included $14 million of reinstatement premium, as Todd referenced earlier. If you look at it, our tower is a $750 million tower excess of $50 million retention. We are not going to get near the top of that tower with this event. In fact, we are towards the lower end. We think we have plenty of coverage for events like this. I think this was an odd event. If you talk to our local Hawaii underwriting and claims staff, they would say they have never seen anything like this on the island.
They’ve been there quite a while. It was quite a severe event. But we look at concentrations for property business across our portfolio. We have a number of units that write property business, from E&S properties, to marine, to our packaged products to Hawaii. And in all cases, we do the old-fashioned circles of limits, how much limit do we put in an area. And are we comfortable that in a particular event, whatever time came through that area, are we comfortable sustaining that loss on a net basis and just sharing that information with our reinsurers. I think we’ll have more conversations with our reinsurers given this was unusual for our portfolio, at least in our history, but we have been in contact with them. We’ve been — with reinsurers in Bermuda and London already this year.
So we’re in contact with everybody. We are pretty transparent when it comes to a loss. So we give them a lot of detail around the particular individual losses and what’s happening and how we adjusted the claims. In this particular event in Hawaii, there are several coverages involved. So we — in our loss estimate, we looked at things like additional living expense, for example, and we have reserved the full amount of that limit because we have seen an increased cost for housing in the area, and we think it will take a long time to rebuild. So we’ve built in all of those assumptions into our estimates. We’re comfortable with that. Going forward, the reinsurers of course are going to say, “we want to charge you more.” That’s what they do. You hear that in all the headlines.
We are going to work with them to show them what our exposure is, what our process is and look for differentiation in the market because, again, we think we do a pretty good job in this area, and we’ve been doing it for a long time. And so we wouldn’t expect it to cause a huge impact to our reinsurance renewal process, but we are very early stages in the negotiation for 1-1s at this point. So we will see how it turns out.
