Tom Wilson: Maybe I’ll start and then Jess can fill in here. First, Josh but we think the reserves are right and we put up what we think we need to put up when we need to put it up as painful as that was last year. We felt we needed to put it up. When you look at the — I don’t know — I’m not looking at specific numbers you have but I’ve been through reserves enough to the paid bounce around a lot. It depends what happened in the pandemic with impending levels and we adjust for all that. So, I would say just may have Jess may have some answer for it. I think Jess and Brent could walk through your model with you and help you see it. But I don’t — like we just think the reserves are right and we put them up when we believe Jess, anything to?
Jesse Merten: No, I would agree with that. I also think you should keep in mind that, that same period was a period of extreme acceleration in the loss cost trend which you wouldn’t see over the historical periods, right? So you’re going to get a different pay-to-incurred ratio when you have acceleration, the way that we’ve seen and you saw what our severity trend was last year, you’ve seen what it is this year. So I think a component of that clearly is just the time period that you’re looking at and the acceleration of the underlying trend.
Joshua Shanker: And if you’ll indulge me another question, Allstate over the next 20 years has really changed its geographic footprint away from catastrophe. And obviously, with climate change, people have seen a lot of losses and maybe the severity trend over the long term for cat-exposed properties up. But how does the — severity trend compare between the trend in generally non-cat-exposed property versus cat exposed property, are states like Illinois and a lot of the Midwest seeing a very different trend than severity trends longer term from weather along the coast?
Tom Wilson: Let me start and then Mario just if you guys want to jump in. First, I would start with saying we’ve built a really great business model in homeowners just like we make more money than the industry on auto insurance were even better in homeowners. And you see those results over 10 years. You do see this year a lot of catastrophes which is like to have an underwriting loss which we prefer not to have that said, catastrophes happen and that’s why people buy insurance. So we’re comfortable that, that worked. When you look underneath that and say, okay, what’s driving those cat losses storms are more severe now. So just the fact you have a more severe storm will increase the severity of the losses that you have one on a strong, whether that’s hail storm or a tornado or a hurricane, it just causes more damage.
Underneath both that and a traditional loss are just the normal inflationary pressures. And so the cost of lumber goes up, whether you burn your house down or get knocked down by a hurricane, it’s that underlying it. So you have kind of a compounding impact on catastrophes. That said, we’re good at it. We manage it by state. So you’re correct, Illinois would have less pressure because it would have less catastrophe losses than perhaps a state along the East Coast or in the Southwest on the coast. So — we factored that all in and both of those things there. We do think though that we — you’ve seen the raise in prices that spend both of those factors have increased it. So the dramatic increase in homeowners insurance prices has been driven by both those factors.
Anything to add, Mario [ph]?
Mario Rizzo: Yes. The only thing I’d add, Josh, I think you take a step back and say, what are the underlying drivers of the increase in homeowner severity — and it’s principally, as Tom mentioned, it’s labor costs and its material cost to repair homes. And to the extent the rates of inflation vary across different parts of the country. Obviously, that will have an influence on state-specific severity. I think it’s more driven by that. Than any — whether it’s cat exposed or not cat exposed because those costs just get amplified when there’s a large event and we just have to repair a larger volume of homes.
