Ryan Krueger: Hi, thanks. Good morning. I had a question on expenses. When you think about 2023, do you view the full year expense ratio for 2022 as a reasonable starting point? Or do we think more about the more elevated level in the fourth quarter?
Steve Zabel: Yes. It’s Steve. I’ll take that one and then maybe kick it over to Mike for a little bit more detail. So just stepping back, when we came into 2022, we set the expectation that our expense ratio is going to be anywhere between 125 and 175 basis points higher than what we saw in 2021. That was mostly driven by getting the full employment and starting back up with travel and different things that we do to engage with our customer. And so we had expected that. And then as we got into the year, we just feel really good about being able to have a sustainable, stable workforce and really rewarding those employees because it’s just so important for us to be able to serve our customers. So we ended up pretty much in the middle of that range as far as what we saw on the expense ratio grow to.
I’d tell you that we expect that to pretty much be at a high point, peak a little bit more maybe in 2023 as we have full year of some of those compensation increases. But then definitely, I think, beyond that, we’re going to be able to work that back down like we always do through adoption of digital tools, productivity, and so that would be our expectation. But maybe Mike can talk a little bit more specifically about where we’re investing.
Mike Simonds: Yes. Thanks, Ryan, for the question. And just again, going down under what Steve says, would like the results we’re seeing in the business and the momentum we’ve built with the investments that we’re making. I think Steve appropriately highlighted our team. So we’re the most biased you’re going to find, but we feel we’ve got the best talent in the benefits industry. And you see that in things like 16% growth across of our core operation and sales. That’s really strong sales client management and underwriting teams. You see that in our benefits organization and the recoveries we talked about, just exceptional team in terms of helping people get back to our product is lifestyle and back to work. And so making sure that we are fully staffed and appropriately rewarding folks is really important to us.
And the second item that’s driving OEs is the technology investment. And so Tim just mentioned our new Colonial Life enrollment and engagement platform, we are very excited about what that’s going to mean for our small business clients and what it’s going to mean for growth. Rick at the outset mentioned total leads, our HR Connect capability and the way we’re winning on Workday on ADP Workforce now and UKG platforms. We replatformed our dental business, and we’re very encouraged with the growth that’s helping us drive here, and you saw that in sales in the fourth quarter. And that’s probably the last thing I’d say, Ryan, is as you think about those investments in technology and as we have success with those in market, they have a dual benefit.
The first is on the growth side. It’s helping us differentiate and drive high levels of client satisfaction. But importantly, these are more efficient ways of doing business. And so like Steve said, as these take hold and more and more of our transactional volumes are coming digitally and through self-serve, we would expect that OE ratio to start coming down in the second half of next year, and that’s both because our expenses will be growing at a slower rate, and we see that acceleration back into that 4% to 7% long-term growth rate that we have for the top line.
