Rob Berkley: Commercial auto and quite frankly the — some of the excess and umbrella as well.
David Motemaden: Yes, that makes sense. Understood. Appreciate it.
Rob Berkley: Thank you.
Operator: We’ll move next to Elyse Greenspan at Wells Fargo.
Elyse Greenspan: Good morning. Sorry. Thank you. My first question is just in terms of the flow of business you guys are seeing with the E&S market. We saw some stamping capacity out of three of the largest E&S states turned negative in March, which I recognize is only one month of data. But just curious what you’re seeing with the flow to the E&S market and any color you have just on what we saw in those three states in March?
Rob Berkley: So I’m not familiar with the data, Elyse, that perhaps you have in front of you. But speaking to our experience, we continue to see during the first quarter very robust activity on the E&S front, particularly on the casualty or liability. In general property, there continues to be an opportunity. But again, I think it’s probably not what it was a year ago. And I think that that’s just the reality of things and the cycle. So we are more of a liability shop than a property shop though we do participate in property. I expect that we’ll try and make some more hay and property before we call it a day, but it is possible that, that may have not peaked, but property is peaking. On the liability front, there is nothing that leads me to believe that the momentum is going to be subsiding anytime soon.
I think the reality is that social inflation, the legal environment, the social environment persists and that continues to drive lost costs. And I think that there’s some reasonable chance that the reinsurance marketplace is becoming more acutely aware of this social inflation issue and you’re going to see them look for opportunity to try and put pressure on the insurance marketplace when it comes to like casualty and liability lines like they did on the property front. As it relates to us, we are less exposed or susceptible to that because we are a small limits player, approximately 90% of our policies that are legally allowed to have a limit have a limit of $2 million or less. So we are not as exposed to the whims of the reinsurance market, but we look forward to the reinsurance market embracing greater discipline on the casualty lines.
Elyse Greenspan: And then going back to one of the prior questions on the loss ratio, I guess, you know, within insurance, I know you guys mentioned mix driving that up and it sounds like there’s, you know, nothing else going on there except, you know, some prudence you pointed to within the picks around commercial auto. So given that you guys have these designed loss ratios, would you expect like the underlying loss ratio over the balance of the year in insurance to be pretty consistent with what we saw in the first quarter?
Rob Berkley: I think that we will continue to look at the business and the data and how we think things are performing. And, Elyse, hopefully you would expect we will respond accordingly. So that’s the best I can do, sorry, if it’s not good enough.
Elyse Greenspan: No, that is good enough. And one last one on workers comp. Anything that you’re seeing there, I know at times you kind of called for a floor and a turn and obviously that’s been good opportunities for folks for a while and I know that business for you guys, we did see a little bit of a decline in the Q1, but how are you thinking about the comp market not only in 2024, but also going into 2025 as well?
Rob Berkley: My colleagues and I — we continue to have a view that frequency remains the industry’s friend and we along with others have benefited from that, but are sensitive to or maybe I would take a step further and suggest concerned about medical costs and where they are likely going and there’s a delay there. So are we at the bottom? It would seem as though my calling the bottom, I was just, some might say early, others might just say wrong. That having been said, I think we are seeing more signs of California bottoming out and the rest of the country or much of the rest of the country is probably a pace or two behind.
Elyse Greenspan: Thank you.
Rob Berkley: Thanks for the questions. Have a good day.
Operator: We’ll move next to Ryan Tunis at Autonomous Research.
Rob Berkley: Good morning, Ryan.
Ryan Tunis: Hi, good morning, Rob. Yes. So just, I guess on this E&S point, if we do get into an environment where business starts to flow from E&S back to admitted. Can you just talk about, I guess, the capability of your business to be able to write it on admitted paper as well? And I would guess you’d have better capability to do that on the casualty side than the property side. But I’m not sure about that, but I’m just curious like I know in the past you’ve kind of been a “standard not admitted player” you’ve kind of lived between. So, yes, just curious on your thoughts?
Rob Berkley: Ryan, thanks for the question and long story short, obviously we have both the tools and the expertise to write both non-admitted and admitted. I mean, ultimately what it really boils down to is when some of those exposures make their way back into the standard market is that something that we think is a sensible use of our capital, when the standard market, if it were to become more competitive at that time, do we still think that it’s a good use of capital? So do we have the ability to do it? Yes, but we’ll need to look at the pricing, the terms and conditions and my colleagues will have to reach a conclusion as to whether they think it’s sensible or not. So the tools and the capabilities, yes and colleagues will have to decide whether it makes sense or not.
