Meyer Shields: Thanks. I want to start with a question on personal lines. Michael mentioned that the deceleration and claim cost inflation wasn’t as strong as we anticipated. I thought you could give us some color on what – I guess, the indicators that you’ve previously used what they’re suggesting for personal loss cost inflation for the back half of the year?
Michael Klein: Sure, Meyer, I don’t – I don’t know that – that the external indicators that we look at are significantly different than the ones you look at or have – or do have available. What I can say is, auto severity has sort of remained stubbornly in the low-double-digits, and we had not anticipated that it would remain in double-digit territory for this long. I think the other thing I commented on in my prepared remarks was that we are seeing some signs of easing. The predominant thing, I’m talking about there is the Manheim Wholesale Index. And again, an update just came out this week on that, and I believe Manheim’s estimate now is that used car prices will end 2023 below 2022 levels. But importantly, that’s just one element of our loss cost, right?
So wholesale car prices impact retail car prices, which impact our total loss settlement values, which is a portion of our loss cost. I think one of the reasons you continue to see double-digit pressure on severity is continued elevation in repair costs, labor, materials, et cetera. And then again, we’ve talked about just broad-based severity pressure. I think what we are seeing is some of the potential good news that we’re starting to see in the physical damage coverages is being offset a little bit by this shift in mix to more claims with bodily injury and property damage and so on a mix – that mix impact impacts those loss costs as well. But again, the short answer is, we’re still seeing low-double-digit trends in auto severity and we hadn’t anticipated that they would last this long.
Meyer Shields: Okay, perfect. That’s helpful. And final question. When we look at, I guess, whether it’s possibly changing weather patterns or the mix shift within BI slightly towards property or just inflation pushing more weather losses above the cat threshold, how do you think about sort of the magnitude of coming year’s catastrophe load compared to where you’ve been recently?
Alan Schnitzer: I’m not sure we’re quite ready to talk about that or to certainly give an outlook for that. Obviously, as we start to put our views together for 2024 and beyond, we’ll think about the experience that we’ve had this year and in recent years, and other factors whether that’s changes in exposure in our book or other things and we’ll come up with a view that we hope will be sort of thoughtful and appropriate.
Operator: Thank you. We have time for one more question. Your next question comes from the line of Tracy Benguigui of Barclays. Please go-ahead.
Tracy Benguigui: Thank you. Good morning. My focus these days is on the liabilities, and I especially appreciate your legal perspective, given your background, Alan, and I am not sure if AJ is on the call or not. Last quarter, you indulged me by talking about this. And this quarter, I’m wondering if you can indulge me again and talk about PFAS. Sorry in advance, my question is quite meaty. Is PFAS, a chemically – a chemical explicitly excluded from GL, like included in a pollution exclusion. And for pre-1986 exposure, does the statute of limitations apply?
Alan Schnitzer: Yes. Tracy, it’s hard to answer a question like that without claiming a policy. So I’m going to – I’m going to avoid that. And we’re happy to take this offline with you and talk a little bit more about it if we can do that consistent with Reg FD. About PFAS, what I would say about that is, this issue has now been around for a while. What we know about it is, it is reflected in our reserves, and I’m not sure there’s a lot more to say about it at this point.
Tracy Benguigui: Okay. So you said, reflected in your reserves, so the adverse development you took in the quarter didn’t reflect an update to PFAS.
Alan Schnitzer: Didn’t say that Tracy, but we’re not going to really go into the drivers. We gave you the big drivers of the – of PYD, We’re not going to go into the specific coverage issues in PYD.
Operator: Thank you. There are no further questions at this time. I would like to turn the call over to Ms. Abbe Goldstein.
Abbe Goldstein: Thank you very much. We appreciate everyone’s time. And as always, if there’s any follow-up, please feel free to reach out directly. Thank you.
Operator: This concludes today’s conference call. You may now disconnect.
