Tom Wilson: Of course, yes. So they’re there but we factor that into our overall position here.
Operator: [Operator Instructions] And our next question comes from the line of Michael Zaremski from BMO.
Unidentified Analyst: This is Jack [ph] on for Mike. Just one question on changes to Allstate’s captive distribution commission and fee structure. I think you mentioned earlier, how it has driven greater bundling rates. I’m just wondering does also expect this change to impact overall organic growth levels? And do you expect a meaningful benefit to the company’s expense ratio?
Tom Wilson: Well, I think when you go all the way up to transformative growth. Yes, we think that the whole package of stuff will drive market share growth. That includes making sure that the agents do what customers want them to do and that they’re supported in doing that with technology and everything else in marketing and that they’re well compensated for what they do. But yes, so there’s various pieces on Mario, do you want to talk specifically about the account changes?
Mario Rizzo: Yes. So again, I would characterize the most recent set of changes as a continuation of what we started really several years ago which was intended to drive higher levels of productivity in the exclusive agent distribution system but also reduced distribution costs over time. And I think what we’re seeing if you — particularly if you take out the impacts of the 3 large states where we’re purposely driving reduced volume is exactly what we had hoped would happen. So from an expense standpoint, you see in the quarter, we benefited by 2 or 3 from [ph] the distribution cost perspective. So we’re continuing to see the impacts and benefits of lower distribution costs. but more importantly, the productivity of the exclusive agency system continues to improve.
So I can take out those 3 states, overall production was up 7.6%. Average productivity was up over 13%. And when you look at our top tier of agents, we segment agents into 3 categories, emerging Pro and Elite, that elite group, their level of production was up 15%. So that shows that agents continue to invest in their businesses and take advantage of increased shopping levels in the marketplace but they’re focused on driving the kind of growth that will certainly become a real asset for us as we begin to lean back into growth as different states hit target levels of profitability. So we’re really encouraged, both in terms of the performance of our agency channel, how they’ve adapted and the fact that we’ve been able to take cost out of the distribution system at the same time.
Operator: And our next question comes from the line of Joshua Shanker from Bank of America.
Joshua Shanker: I have a model that goes pretty far back. And historically, if you look at reserves and try and analyze that — it’s hard in short-tail lines. Historically, Allstate run at about a 95% paid to incurred loss ratio. For every dollar of loss you put 5 in the reserves for future losses. And that’s true in 3Q ’23. But for the previous 5 quarters, it ran at an astonishingly low 83%. I know that you try and get the reserves right. But it does feel over this period of elevated loss ratio that the company put a lot more of its reserves of losses into reserve than any time in my model. Is there something different that had gone on over the past 5 quarters now that you’re resuming a normal sort of pay to incur trend? Or is it just — that was unusual period in you needed to put more reserve?
