Ryan Tunis: All right. Just a couple from me on – from an insurance growth standpoint. First one just on professional lines. I guess I was kind of hoping that as we started lapping some of those comps from when this first started a year ago, maybe we’d see a little bit better growth. But it looked like growth was down again even after being down last year in the fourth quarter. Is that not the right way to think about it? Is this a line that based on where market conditions are…
Rob Berkley: Are you speaking specifically about professional? Sorry, Ryan. Trying to make sure….
Ryan Tunis: Professional lines, yes, I’m just trying to understand like….
Rob Berkley: Yes. The skinny on that, at least through, in my opinion, is the D&O market, particularly public D&O market has been, from a pricing perspective, in somewhat of free fall, and rates went up considerably, and now they’re coming back down. And then we have a view as to what rate adequacy is. And ultimately, while we’re sorry to see it go, if it goes, it goes. We’re not going to chase it down the drain. In addition to D&O, a couple of other product lines that I would call out would be medical professional, specifically hospital professional liability, where the lack of discipline in that product line over the past, quite frankly, a couple of years, I think, has given reason to pause. To our colleagues credit, they also – they have been operating with the discipline.
So that’s quite frankly having an impact on the top line as well. Other areas that I would flag, maybe one other would be architects and engineers with some of the larger accounts where again, we have found that the market is willing to do things we don’t think make sense, and the pricing has come off. So professional liability, extraordinarily broad category, just trying to give you a little bit of a flavor with some of the bigger pieces of that puzzle. But yes, there are some areas within the professional space that we still find notably attractive, particularly nonstandard. And then there are some big chunks of the professional line, some of which I just referenced, that I think should be giving anyone who’s responsible and disciplined real reason to pause.
Ryan Tunis: Got it. And then I guess just to follow up on the short tail lines.
Rob Berkley: Please.
Ryan Tunis: Growth for the full year was like around 20%. Just trying to understand how much is the composition – how much – from a composition standpoint, did that change this past year? Was it more than normal because of the rate environment, or was most of that growth exposure and rate action on stuff you’d already been writing in 2022?
Rob Berkley: So it’s a combination of both. As you’d expect, we’re pushing pretty hard on the rate front and it’s sticking. In addition to that, as we see rate adequacy more and more attractive, then we’re going to lean into that. And you would take note the growth, for example, in short tail lines or specifically property in the reinsurance business during the ’23 year. And of course, we had meaningful growth on the property front and the E&S space as well, both through our domestic businesses as well as through our London operation.
Ryan Tunis: Got it, So, I guess, how is like, your outlook for the type of cat exposure you have? Has that changed at all?
Rob Berkley: Not meaningfully, when the day is all done. I mean, as I said a few moments ago, the majority of our growth is driven by rate. So there’s a lot of things where our exposure hasn’t changed, but we’re charging considerably more. But also, that has led to opportunity to write some additional business as well. But I don’t have a specific breakout on the 20% what’s rate versus exposure. But if you’d like, you’re welcome to follow up with us tomorrow and we can give you some more context.
Ryan Tunis: Appreciate it.
Rob Berkley: Thanks for the question.
Operator: Your next question comes from the line of Meyer Shields with KBW. Your line is open.
Rob Berkley: Hi, Meyer. Good afternoon. Good evening, rather.
Meyer Shields: Hi Rob, how are you?
Rob Berkley: Good, how are you?
Meyer Shields: I’m doing well, thanks. Sorry, I don’t mean to talk over you. Follow up Ryan’s question. We’ve seen growth in commercial auto accelerate over the last two quarters, and I was wondering, is something changing in rates there, or is that a change in exposure?
Rob Berkley: I think primarily what’s driving it is we’re just charging a lot more. We’re insisting on a lot more rates. That’s the big driver, no pun intended.
Meyer Shields: No, taken. No, that’s helpful. Second, I know that you’ve talked about sort of waiting for, let’s say, accident years 2020 and subsequent to mature a little bit. I hope we can get a little bit of a peek in terms of what you’re seeing even before you take any reserve actions on those years.
Rob Berkley: Well, I would suggest you look at the paid loss ratios. I’d also sit because that’s a reality. In addition to that, I would encourage you to have a look at how much IBNR we are carrying relative to case for some of those years. And further, I would encourage you to look at how much IBNR we’re carrying relative to our total reserves.
Meyer Shields: Okay.
Rob Berkley: For those years.
Meyer Shields: Helpful, And….
Rob Berkley: And I think that directionally should give you something to hang your hat on.
Meyer Shields: Perfect. And if I can throw in one other question really quickly.
Rob Berkley: Sure.
