Andrew Robinson: Okay. Well, let me — let me first — I’ll make a couple of industry observations. Not to sort of take too much of the time on that, but if you follow what’s been going on, I will tell you that there’s no consistent theme. You’re hearing, in some instances, discussions on professional when the earnings season — before the earnings season started, there was a very large announcement around — that was driven a lot by professional. Then you’re hearing — you’ve been hearing the drumbeat of auto for a long time, now it’s GL and , making its way to the next. And so there’s no clear theme. I think really great companies of which there are some fantastic competitor set that we see. Everyone’s been talking about rising loss costs here for a long time.
It feels like a combination of the media and the analyst community, investment community said, well, now it’s a good time to do — to dump your kitchen sink in this quarter, and some companies did that. But I think a lot of the great companies who have been talking about that just the inflationary environment on liability have recognized that in both how it is that they’re writing risk and how it is that they’re booking their loss ratios. For our part, listen, nothing’s ever perfect. But to Mark’s point, in the third quarter of 2022, we move to take our LPT reserve position to the top of the . We’ve been incredibly conservative, not released a dollar of reserves since I’ve joined. And we’ve reported out very consistently about our pricing above loss cost trend, our new business pricing, and all of that to ensure that our balance sheet is strong and getting stronger period-over-period.
People’s — other companies’ decisions about what to do in this quarter, I — that’s just us — to me, that’s a little bit of a conundrum. It seemed like it was a kitchen sink for some, but the competitive environment certainly feels like it has consistently been a relatively rational environment. There are some crazies out there. The reason we’re not doing anything in public , because the people who are writing that business, particularly a lot of the MGAs, are nuts. We see something similar on certain areas within auto. Occasionally, I ask my underwriters to send me examples of stupidity that are happening in the market where our competitor is just undercutting for no reason at all on what likely is a challenging kind of exposure. And I, of course, get a handful of those every week.
And so you see kind of silly behavior. But in aggregate, it feels like the market this quarter, the market last quarter, the quarters before are relatively orderly and constructive, and that’s showing through in our results, 34% increase in submissions in the quarter is absolutely astonishing. Now some of that’s because of the talent that we brought with us. But that tells me that there’s plenty of opportunity. The fact that we grew by 21% versus proportional to the submission flow also tells me that our underwriters are doing a fantastic job of leading through and picking out the things that really suit us at terms that suit us. So I — when I look at this, I feel like it’s been a kind of a rational, orderly market in aggregate. Some of the areas that have been talked about for some period of time and the actions that that folks have taken the fourth quarter, it feels like, I don’t know, there was almost an escape hatch that was — that occurred in the fourth quarter that some took advantage of.
And we’re just trying to be more consistent, more orderly about how it is that we’re approaching things and holding onto our reserves and allowing ourselves to have a position where we can consistently see the seasoning and the redundancy play out and at that point, we would move.
Operator: Our next question comes from the line of Bill Carcache with Wolfe Research Securities.
Bill Carcache: Following up on your investment portfolio commentary, what’s your latest thinking on the possibility of extending the duration of the core fixed income here ahead of the rate cutting cycle that most expect to begin in the coming months?
Mark Haushill: We’re not — right now, we’re not looking to extend duration. Our duration is right at about 4 and has been for quite some time. Not real — honestly, not real interested in extending it out just yet. We’ll see how things play out, but not right now.
Bill Carcache: Understood. That’s helpful. And separately, if I may, Andrew, at a high level, can you speak to how focused you are on the risk that some of the E&S business that you’ve written you could ultimately see move back to the admitted markets over time? How much exposure do you think you have there?
Andrew Robinson: It’s hard to sort of partition it and it’s also about what you believe. I was at an industry event last week, it’s a big topic of conversation. What I can tell you is that within our transactional E&S unit and within our global property unit. And I’d say, in most parts of our professional unit, we’re not writing what I would describe as kind of E&S light. I think that the stuff that we’re seeing is very sticky into the E&S market. And so I feel good about that. But that said, the challenge around it is it’s not just whether that is true E&S business, if there’s less flown in an E&S marketplace, there’s more competition for the business that’s there. And so it does obviously have a second-order effect. But I would be — I’d be surprised if it’s more than a small percentage of our business that ultimately will end back up in the admitted market.
We — I would describe ourselves as a true, true E&S writer. We’re looking — when I — I give you all examples. I try to write great example while we’re being very thoughtful around where we were at management liability and we’re doing only private company, you want to do a Web3 risk or you want to do a cannabis risk, well, that’s not going into the standardized markets anytime that I can imagine. And it takes real expertise that tends to be the domain of a small number of people. And that’s generally true across our business.
