Tom Wilson: Well, we look at it from an enterprise risk and return standpoint. So the first thing we do is say, how much capital do we want to allocate to the investment portfolio. And then John and his team figure out how they best want to allocate that amongst various asset classes. So John may want to make a comment on where we are at today. I would point out that if you look at Slide 14, we made the right calls at the right time.
Mario Rizzo: Yes. I’d just add that — another thing to consider when one lengthens out duration is just that you keep the appropriate amount of liquidity and flexibility in the portfolio. And I can assure you that we are doing that between the cash that we hold short-term position to other things that we can turn into cash in short order and just maturities by year-end, we’re close to $10 billion. So we believe that we’re both capturing the additional income that the market is giving us. lengthening out to preserve the capture of that income for a longer period of time, building some resilience into the portfolio in case the economic environment would change, while also providing adequate liquidity.
Tracy Benguigui: Okay. So it sounds like you feel comfortable with durational mismatch because of your strong liquidity position. Is that fair?
Tom Wilson: Well, the Property-Liability business is a little different than the life business in terms of matching to liabilities. In the life business scores, we have a set maturity date and you can factor in some stuff and you figure out let’s match that off. In the Property-Liability business, of course, the liabilities are much shorter but then they’re naturally recurring. So you pay off 1 claim and you get another one. Is that a separate claim or — and so if you match it to that, you’d be having here for 90 days for a physical damage claims. So it’s really more about liquidity and overall risk management. And I would also point out a large part of our set capital is there in case we mess up on underwriting income. And so that has a really long duration on it.
Mario Rizzo: Yes. Tracy, 1 other thing to add, if you look at the slide, the blue line depicts the duration, we’ve really just reverted back to what’s been more of a long-term average for us. So we were at a point in time where we were in a lower level of duration, a lower level of interest rate exposure. We thought that was right given what was happening with the Fed and interest rates in general. Now that rates have climbed back up pretty aggressively. We want to go back to what has been a longer run central tendency for us.
Operator: Our next question comes from the line of David Motemaden from Evercore ISI.
David Motemaden: I just had a question on the frequency trends that you guys saw in the third quarter. Could you just describe what you guys are seeing. It sounded like that was up a little bit. I was hoping you could put some numbers around it and sort of what you’re seeing, especially as it looks like you’re shrinking units. I would think that there would be some benefit from improving the mix of business. But I was hoping you could maybe just touch on that.
Mario Rizzo: David, it’s Mario. Thanks for the question. I’ll talk a little more qualitatively about frequency since we now are disclosing more pure premium trends which combine the overall loss trend. We just think it’s a better way for you all to look at and think about auto profitability. But in terms of auto frequency, the headline is it continues to revert back to pre-pandemic levels but remains below where it was in 2019. There continues to be a tailwind when you think about the safety features embedded in vehicles that will continue to help improve frequency, we think, from a long-term trend going forward. And then when you look at the other driver which is driving activity. When we look at our telematics data, we look at the number of miles that a person is driving each day.
