Brian Meredith: Got you. And then I guess my second question is, are you seeing any call it increase and kind of competitive from the standard markets vis-a-vis the E&S markets? Or does it continue to flow that way towards the E&S and out of the standard markets.
Robert Berkley: We still see a pretty healthy flow of business coming into the E&S market, both on the casualty side on parts of the professional market and it’s building momentum on the property side as well. I think I may have made the comment in the past, and it’s still very accurate today. The standard markets, particularly the national carriers, if it is in their appetite, it is jaw-dropping how aggressive they are. If it’s outside of their appetite, then it’s a great opportunity for the rest of us that are happy to run around to pick up the crumbs that fall off their table and price them as we see fit. But the standard market, their appetite, ebbs and flows and moves in different directions, we continue to see a reasonable flow of business but if it’s still within their strike zone, look out, to step out of the way.
I would tell you, one area that we have seen, perhaps, moving back towards the standard market, which isn’t a huge deal for us, but it’s worth noting, is product — large account products liability. Why? I have no idea, but the standard market, particularly national carriers, seems to have a thirst for it. And I think we all know how that’s going to end.
Brian Meredith: Yeah. Thanks, Rob. Appreciate it.
Robert Berkley: Good evening, Thanks, Brian.
Operator: We’ll go next now to Meyer Shields at KBW.
Robert Berkley: Good evening. Hi. How are you?
Meyer Shields: A couple of brief questions because I know it’s late. One, am I reading too much to be worried by the fact that the expense ratio 30%. You’ve been well below that for a while.
Robert Berkley: I don’t think it was 30%. I think what Rich and I perhaps failed to articulate was it’s going to be comfortably below 30%. I don’t know if we’re going to be able to keep it below 28%, we’ll have to see what happens with our earned premium, we’ll have to see a variety of things, and we’re making investments. But I think that our expense ratio will remain competitive and remains a focus, and we’ll be comfortably under the 30% as Rich said.
Meyer Shields: Okay. That’s helpful. Second question, I guess, broadly, like I know on the insurance side, we’ve been talking about social inflation for a while. And I’m wondering with regard to the actual insurers, is there any push for them or by them to get higher limits to contend with social inflation?
Robert Berkley: Yes. I think the short answer is, yes, but — so if you are an insurer, you’re sitting there saying, “Well, I’m concerned and my agent or broker is perhaps advising me to buy more capacity because of the environment. But at the same time, the cost of capacity may be going up. So it’s a matter of what can I afford? One of the things sometimes we’re seeing people do think about an SIR or a large deductible as a way to try and figure out a way to move dollars around as to what they’re buying. But I think that there is a broad awareness in society. I think distribution is advising. But I think, ultimately, it’s really a matter of what people can afford. And I think it’s an important point because what you’re touching on is something that society doesn’t always really appreciate.
And that is social inflation. And what that means for claims activity, it’s not paid by the necessarily the insurance company long term. The insurance company this turns around and raises the rates. Ultimately, the bill is paid by society.
