Last call, I mentioned our beautiful client center that we’ve opened in Tsim Sha Tsui. We’re seeing a lot of activity through that. And then Dah Sing is our first quarter where we’ve activated our exclusive banker relationship, and we’re seeing strong sales through that, which we haven’t disclosed separately. So that’s on the distribution. On products, we continue to be leaders in innovation and actually incorporating some of the ESG concepts so that we’re relevant for how important it is to address the climate aspects. And then the third part and also important in a brand-conscious Asia is investing in our brand, and were excited in August that we were in the top five of brand movers in Hong Kong alongside a number of leading brands, whether it’s in mobile 1010 or you’ve had other competitors.
So that’s part of the reason why we are shifting gear in Asia. And so to give you a sense, pre-pandemic, MCI was around 10% of the overall sales in Hong Kong. Today, we’re standing at roughly 30%. So that’s a threefold increase.
Kevin Strain: I might — I may just reiterate that in Hong Kong, you saw a combination, as Ingrid mentioned, of our investments in agency and growth there. Our investment in Dah Sing, and it’s off to a great start. It started selling on July 1. A big bulk of the sales — were through the broker channel, and that’s been driven by Mainland Chinese visitors, but also leverages our knowledge of the high net worth business out of Bermuda. So there’s a combination of things that are happening in Hong Kong that are driving those good sales. And I think that’s a good thing to see that balanced growth across agency brokerage and our new bancassurance relationship. So we’re seeing it in all three areas in Hong Kong. The team is doing a great job there.
Operator: Thank you. And I show our next question comes from the line of Mario Mendonca from TD Securities. Please go ahead.
Mario Mendonca: Good morning, Dan, could you help me understand the redetermination a little better. I understand where — how it can affect your premium growth in Dental. In fact, that’s well described in your supplement in your MD&A. I’m not sure I understand how the redetermination impacts experience gains in this segment, which I think you offered that the redetermination was one of the factors that drove experience gains to be down noticeably on a year-over-year basis. So help me understand that dynamic a little better the experience line in the context of the redetermination?
Daniel Fishbein: Sure. And hopefully, this will answer it. The loss ratio does experience some pressure from the redeterminations because the people who are being dis-enrolled tend to be lower utilizers than the people who stay on the books. What happened during COVID was a lot of people who might even have had gotten other coverage through getting employment remained on the books because nobody could be dis-enrolled. So we did anticipate and we are seeing some modest loss ratio impact from the disenrollment of those lower utilizing members. And then, of course, there’s also just fewer members, which puts a little pressure on the expense ratio as well.
Mario Mendonca: So applying your outlook for the next few quarters then. And I appreciate that there are a lot of moving parts or plenty of things could change. But just focusing on this Medicaid redetermination, you’d expect the experience to be a little modest experience gains, maybe even some modest losses relative to what we’ve had in the past because of this — that I’m referring to. And then would you then expect experience to improve again sometime in 2024 once the redetermination has run its course?
Daniel Fishbein: Yes. So a couple of key factors there. One is we built some impact on the loss ratio into the experience plan. We would only see pressure on the experience gains if that impact was bigger than what we anticipated. And so we think we’ve built in the right amount. But of course, we could always be a little bit off there. Another very important point is 80% of our Medicaid contracts re-price where are available for renegotiation of pricing in one way or another during the next 12 months. Generally, the states have been very cooperative wanting to make sure that the loss ratios on this business stay within a target range. So if they see that the loss ratio is moving in the wrong direction, generally, they’ve been very amenable to some renegotiation there.
But in many ways, the loss ratio is a short-term commitment in these contracts because they do tend to get reset. Right now, we don’t think that’s a big issue. But if it did become an issue, we would have an opportunity to address that. And so you would expect to see as this process completes and the business reset, you would also expect to see the loss ratio refer to historical norms.
Operator: Thank you. And I show our next question comes from the line of Doug Young from Desjardin. Please go ahead.
Doug Young: Hi. Good morning. Just, Dan, quickly — excluding the U.S. redetermination, so just forget about that, what was Dental experience in the quarter? Was it in line with expectations? Or was it adverse or better than expected? Just trying to get a sense of like excluding this noise, what the underlying experience trend has been?
Daniel Fishbein: Yes. So there were several things that happened all at once in this quarter. If you compare either to the same quarter last year or even to the prior quarter, it’s about the — those were similar quarters. The variance is about half these factors related to the end of the public health emergency, the redetermination. So mostly revenue and then some, as I’ve mentioned, some loss ratio pressure. The other half are some accounting and contractual true-ups. We — for example, we aligned on some accounting practices post acquisition. There is the seasonality impact. The third quarter is always the worst for seasonality or the highest for utilization. And then there were some unique investments in the Advantage Dental Plus business, we’ve been opening new practices, especially in Texas. So half of it was in those categories and half is related to the public health emergency.
Doug Young: Okay. And so there wasn’t anything from a loss ratio perspective. It seems like it’s just more normal course outside of the redetermination.
