Michael Ward: Thank you.
Operator: Your next question comes from the line of Robert Cox with Goldman Sachs. Your line is open.
Robert Cox: Hey, thanks. So we saw some data potentially indicating a slowdown in premium growth in the E&S market. And I know Travelers has about 2.5 billion in E&S and you guys have indicated that margins there are quite attractive. Just curious if you saw any changes in competitive dynamics in E&S or pricing.
Gregory Toczydlowski: Hi, Robert. This is Greg. Yes, as we’ve shared with you, underneath that 2.5 billion, we have quite a bit of diverse businesses that drive that. And we didn’t really see any material slowdown in the segments that we compete in.
Robert Cox: Okay, got it. And maybe secondly, I’m curious as I think you’ve started to go through some of the re-underwriting of the Corvus book, if you’ve learned anything material and if there’s any major takeaways.
Jeffrey Klenk: Yes, thanks, Robert. It’s Jeff. We’re 3.5 months now into our integration. We’re feeling really good about bringing and leveraging the capabilities of both organizations. I would tell you that we feel really good about the quality and the profitability of the Corvus book of business. It’s consistent and we’re taking some of those capabilities. We’ve already completed the scans using their proprietary technology to the existing Traveler’s book of business. Really comfortable with what we’re seeing. Thanks for the question.
Robert Cox: Thank you.
Operator: We have time for one more question. It will be from Paul Newsome of Piper Sandler. Your line is open. Paul Newsome, your line is open.
Paul Newsome: Hi, good morning and thanks for squeezing me in. Maybe just a couple of quick personalized questions. Is it fair to say that the renewal premium change for both auto and home, given what you’ve already filed and the fact that you’re getting closer to or you’ve gotten most states to adequacy, that we should see that decelerate fairly meaningfully in the next couple of quarters? Just any thoughts about that so that we aren’t surprised?
Michael Klein: Sure, Paul. It’s Michael. I would separate auto and home. For auto, you’ll see RPC moderate as we go throughout the year. I wouldn’t suggest it’s going to be a sharp decline. One of the things that I think is important to think about as you think about RPC over time for us is we write mostly 12-month policies in auto. While someone who writes a lot of six-month policies is going to see RPC accelerate quickly on the front end, they’re going to actually see it decelerate more quickly on the back end. Ours is going to be a more gradual increase and then a more gradual decrease because we file a rate in May of 2023. We’re still renewing policies at that same higher rate in April of 2024. So just a little bit of context for why I say it’s going to be more of a gradual deceleration in auto RPC.
In property RPC, we don’t anticipate a deceleration. We’re going to continue to drive rate into the property portfolio in response to increased loss costs. I would expect RPC to remain relatively consistent through the balance of 2024 in property.
Paul Newsome: I did notice that the renewal rate in home did come down quite a bit, at least sequentially. Is that just sort of an anomaly or is it something to note?
Michael Klein: Sure, Paul. The RPC drop from Q4 to Q1 in property is what we were referring to last year when we talked about the fact that we’ve made a lot of progress on insurance to value in home. So when you think about renewal premium change in personal lines property, it’s really driven by two primary things. One is rate and then the other is increasing the coverage limit on the dwelling. And in 2022 and 2023, we made dramatic increases in property coverage A limits in home that drove a decent amount of the property RPC. In my prepared remarks, that’s why I mentioned that when you look at that 13.4%, it actually reflects improvement in rate from last quarter to this quarter. And the drop is really because we’ve essentially caught up on insurance to value in property.
So that’s why I say you’re not going to see a further incremental change in RPC due to that coverage A limit dynamic because that’s just going to stay the same. And now what you’re looking at is mostly our outlook for rate in property for 2024, which again is to keep it pretty consistent.
Paul Newsome: Thank you. That helps always much appreciated.
Operator: Thank you. I will turn the call to Ms. Goldstein for closing remarks.
Abbe Goldstein: Thank you all very much again for joining us this morning. And as usual, if there’s any follow up, please feel free to reach out directly to Investor Relations. Have a great day.
Operator: This concludes today’s conference call. We thank you for joining. You may now disconnect your lines.
