Unfortunately, there is a number of, for us, pretty meaningful states, three of which we highlighted in the presentation: California, New York, New Jersey, where they’re much more challenging regulatory environments. And we need to continue to execute on both rate increases and underwriting restrictions to curb growth to really bend the line in aggregate. And just using California as one example. So as you all know, we got a 6.9% rate approved late in the year, but we immediately filed another 6.9% increase pending with the department. We took down paid requirements up pretty dramatically. We have not changed those down paid requirements even with the first rate. We’re working with the department on getting approval for the second 6.9%. But then we’re going to come back with another rate increase because we need more rate in California.
So that’s a big state for us where we’re going to have to continue to really lean in and take €“ continue to take dramatic and aggressive actions to improve margins. And I put New York in that same category. We got a 5% flex rate in New York. Middle of the year, we got approval for a 9.4% rate in New York towards the end of the year, while we’re prepared to do additional €“ an additional round of rate filings in New York early in 2023, because loss trends are not where they need to be. And in the interim, we’ve taken underwriting actions around prior incidents, down pay and other actions to curb new business growth, and we’re going to continue to lean into those actions because we can’t afford to write the new business at the current rate levels and we’ll continue to take the appropriate actions there.
So I think you got to look at the states in a different way. I think we’ve made a lot of progress in a number of states, but we still have some work to do. And as we said, we expect to take some pretty significant rate increases in 2023, particularly leaning into some of those states where we haven’t, really for regulatory reasons been able to make the kind of progress that we would have liked.
C. Gregory Peters: That’s good detail. Just the follow-up question on those three states, California, New York and New Jersey. And I know you’re not going to start negotiating with the Departments of Insurance on an earnings conference call. But when I look at California, for example, you yourself said 6.9% is not going to be enough. One of your competitors recently got, just last month got a rate increase improved that was in the teens. Why not pivot and get more aggressive with rate filings in some of these challenging states? It seems like some of your peers might be doing that and getting €“ having some success.
Tom Wilson: Greg, I would just maybe provide €“ I think we’ve been very aggressive when you look at how much we’ve raised rates in total for the year across the country. We’ve been very aggressive. And depending whose measures you want to use, more aggressive. As you never really know where people start and what they finish and what their losses are. Mario, do you want to talk specifically about California?
Mario Rizzo: Yes. Sure. So, Greg, I think we’ve been working really closely with the Department of Insurance in California. We were able to pretty rapidly get approval of our first 6.9%, and we’re in active dialogue around the second 6.9%. And as I mentioned, when we get that one behind us, there’ll be a third one coming. We always have the option of going down the path of filing a larger rate increase. California generally takes a longer time period to get approvals for rates as it is. And the one you mentioned specifically, I think, have been pending with the department for over a year. So we’re €“ as we look at the map, we want to get approval, we want to get approval as rapidly as we can, so we can implement the rates and move on.
