TriNet Group, Inc. (NYSE:TNET) Q3 2023 Earnings Call Transcript

And yes, that target is very doable.

Jared Levine: Got it. And then, Kelly, in terms of – or what you’re anticipating for FY 2023 on the health insurance margin. How did that compare to your long-term target of 88% to 90%? And then are there any reasons why you can now perform better or worse versus what was embedded in that long-term insurance margin over the medium term here?

Kelly Tuminelli: Yes. Well, one of the things I would highlight on that, Jared. And within that margin or insurance cost ratio is truly both workers’ comp and health. So – on the workers’ comp side, we are evaluating this, but we have had the benefit this year of prior period development and particularly in the second quarter, that was a significant benefit to our insurance cost ratio. It was less of a benefit this last quarter. It only added about one point to our margin overall. But that was part of the benefit. We don’t really expect or forecast prior period development. And so that’s one unusual thing I’d pull it aside. As we look at the trends that we’re seeing in health care, we are always trying to anticipate those, and we’re adjusting our renewal pricing every single quarter to reflect the trends that we’re seeing, both upwards and downwards.

To give a little bit of color on it, we have seen pharma prices increase pretty significantly and pharma usage increased significantly. But on the flip side, we’ve seen benefits with people using lower cost settings. Like rather than in hospital outpatient has been a change in terms of situs of care. So we’re just going to continue to watch it, target our long-term overall average, and we’ll give you more guidance as we get into 2024.

Burton M. Goldfield: And Jared, just to give you a little bit more color. What we are going to do is control our costs. We are going to grow our sales, and we are going to retain our customers. And we are at the early innings of being able to accelerate that growth.

Jared Levine: Great. Thank you.

Burton M. Goldfield: Thank you.

Operator: This concludes our question-and-answer session and also concludes today’s conference call. Thank you very much for attending today’s presentation. You may now disconnect your lines.