I think weather is probably on everybody’s minds, think about geopolitics these days, the world has never been more active than it is now and on and on. And so I can’t speak for anybody else, but we’re reacting to those things in our pricing. At the same time, we’ve had — returns were in a much better place than they were a few years ago because we’ve done a pretty good job with pricing terms, conditions and all the rest. And so the pricing you see from us, and you referred to it as a competitive marketplace. I would say that it is a marketplace that is pretty disciplined. I suspect reacting to many of the things that we’re reacting to. Greg, anything to add?
Gregory Toczydlowski: No, I think that’s spot on.
Alex Scott: Got it. The second one I had is on personal auto. Can you just give us maybe a high-level idea of what’s going on with severity in the claims, and we can look a lot at used cars and that kind of thing, but some of the more new settlements around core repair and that kind of thing. Any color you can provide on some of those trends?
Michael Klein: Yeah. Sure, Alex. It’s Michael. Maybe just give a couple more comments relative to the comment I made earlier about moderating trends. You’re right to point to sort of vehicle severity and used car prices, and we certainly see moderation there in the level of increase year-on-year. And in fact, when you look at the dynamics underneath the prior period adjustments that I described in the script, those really are driven by the physical damage coverages. Late last year, we were adding to our estimates for vehicle losses because physical damage coverages were rising more than we thought they were going to. And this year, we actually took down some of our estimates for vehicle severity on prior periods because they’ve been a bit more favorable than we anticipated.
Broadly speaking, severity in auto is running mid to high0single digits, think closer to mid in the vehicle severity, think closer to high and bodily injury. And so that’s sort of where trends are running today. We don’t have a dramatic improvement in those trends sort of factored into our comments about when we’re going to get to written adequacy state by state or those types of things, but that’s a little bit more detail on sort of where things are running today. The other thing that we’ve mentioned a couple of quarters throughout the year is we are also monitoring the mix of losses between vehicle loss and losses that have third-party property damage and bodily injury. We’ve seen a bit of a mix shift towards more bodily injury claims, which is one of the things that has us keeping our severity trend estimates at that sort of elevated level.
Operator: Your next question comes from the line of Paul Newsome from Piper Sandler. Please go ahead. Your line is open.
Paul Newsome: I want to follow directly on that, maybe similar thoughts about the home part of the business, Michael?
Michael Klein: Sure. Just in terms of outlook for tends, Paul?
Paul Newsome: Yes, please.
Michael Klein: Yeah. So in property, again, the big driver of the improvement this quarter really was catastrophes and non-CAT weather. The non-CAT weather and I guess the non-weather loss dynamic that I would elaborate on is a lot of that non-CAT weather favorability and some of the non-weather loss favorability that we’ve commented on throughout 2023, really has been frequency driven. We do still see pretty healthy severity trends in the property space, offsetting some of that favorable frequency. Now again, we’ve had favorable results in the quarter. So the net is a good guy. But labor and some large loss pressure along with that favorable frequency is what’s happening kind of underneath the loss levels in property.
Paul Newsome: I’m just curious for some time, I think we’ve seen a little bit of a divergence between commercial auto and personal lines auto. Has that continued to be the case or are we seeing pretty similar claim trends in across sort of anything that drives?
Alan Schnitzer: I think broadly, the claim trends are similar. I mean we see similar threads. It’s obviously — I mean that the exposures are different. The size of the vehicles are different. Mike, what else would you add.
Michael Klein: Limits profile…
Alan Schnitzer: Yeah. Limits profile were different.
Michael Klein: Limits profile were different. Mix of vehicle versus bodily injury is different between Business Insurance and Personal Insurance, right, Greg?
Gregory Toczydlowski: Yeah. I mean, one of the benefits, Paul, of having two large cohorts of auto business, commercial, auto, personal our product managers and actuaries spend a lot of time together and compare the trends. And for commercial, we’ll have passenger — private passenger light vehicles, think Vans of that sort. And then we’ll have heavies, which aren’t as relevant, but we spend a lot of time on the two cohorts that are private passenger like and the trends are very similar, both on a frequency and severity basis between the two portfolios.
Operator: We have time for one more question. And that question comes from the line of Andrew Kligerman from TD Cowen. Please go ahead. Your line is open.
Andrew Kligerman: Hey. Great. I made the queue. Question — most of my questions are answered. But in Bond & Specialty, the results looked exceptional. But in the context of renewal premium change, I’m very curious as to how pricing fared with regard to D&O and cyber in the quarter and what you’re thinking in terms of those two lines going into 2024.
