Tom Wilson: Of course, it’s — I would say, Josh, it’s a good question, but I would say it’s not like not like every quarter or every 6 months, we adapt it is like every day. So Mario and Guy are constantly looking at our pricing, and we’re going to maximum file rates everywhere we can, and we’re not getting as much pushback from goes because the numbers are pretty clear. Like it’s not like we’re making it up, you pay for the cars and they see the cash go out so you — and they do have to pay attention to what the rules are in the rating. Now we have 3 states, which are a problem, and we’re working aggressively with them. so that we can get the right amount of it. But yes, so our — the rate expectation for the year has gone up from the beginning of the year.
And it will keep going up until we get to our target combined ratio. We have — we’ve talked about some of the issues we have in some of those states, you see us agreeing to lower amounts than we actually need because the time value of money and the multiplication works for you. So why take a 6.9 when you need 35 in California because you can get 6.9 right away as opposed you could wait 18 months to get 35. So we’ve we’re very sophisticated and have good relationships with them, so we can manage it so that it meets our needs. So and we’ll just keep rate that’s on auto, which I assume where you’re going, Josh. Same thing applies in homeowners and our price increases are up a little bit, but not up as much as what we thought they were going to be.
but they’re still from where we set out where we thought would be in the beginning. Mario, add anything you would add?
A – Mario Rizzo: Yes. Just a couple of additional data points, Josh. As Tom mentioned, our data is immediately — our indications are immediately responsive to the data we’re seeing. So we’re constantly updating rate indications and filing for what we need based on what we’re actually experiencing versus what we thought we would have needed going into the year. And the other point I’d make is, and this is on a couple of the states that we’ve spiked out for you. We’re evaluating trade-offs and leaning in where we think it just makes sense. So for example, in California, got the 2 6.9% rate and we turned around and filed for essentially our full indication at 35, knowing that, that was likely to require a longer review period.
There was a little more risk there, but we thought it was the right thing to do. In New Jersey, we did the same thing. We got the 6.9% rate approved, which is essentially the cap that the state hold you to, but then we opted to utilize an administrative provision and file for a 29% rate. So again, we’re aggressively pushing on the amount of rate we need based on the loss experience where we’ve got in real time. And we’re going to keep doing that. and keep pushing rate through and working with all the departments and each of the regulators to get those rates approved as quickly as we can to continue to bend the line on that loss trend.
Q – Joshua Shanker: And outside of the 3 problem states, when you are submitting the filing, does the filing need to be audit financial statements or financial data in arrears, or can you pretty much file new rate with current data as it’s coming into the systems?
A – Mario Rizzo: Yes. I mean for filing used state, certainly, we’re filing based on current data as opposed to relying on prior year-end or any of that information. So what we’re doing is, Josh, is reacting to the loss trends we’re seeing incorporating that into the filing, and that’s what kept submitted.
Josh Shanker: Okay. Thank you for the answers to the question.
Operator: One moment for our next question. And our next question comes from the line of Elyse Greenspan from Wells Fargo. Your question, please.
Elyse Greenspan : Hi. Thanks. Good morning. My first question, I wanted to go back to the capital discussion and the decision you guys made to pull the buyback program. Can you just give us a sense of what you’re looking for when you return to buybacks? I sense maybe some of this is also dependent going into wind season, right, which could bring additional cat losses to Allstate and you guys are still working on improving the profitability of your auto business. So what would you need to see to turn back on the buyback at some point next year?
