Meyer Shields: When you look back at the experience you had as you sort of expanded modestly into property cat in 2023, does that leave you wanting more or less exposure in 2024?
Rob Berkley: The answer is that I think that 2024, at least so far, based on what we saw at 1/1, is likely to continue to provide a very good opportunity. Is it going to be quite as attractive as 23? Perhaps not, but I think that even if it isn’t, that doesn’t mean it’s no longer an attractive opportunity. So we, as far as property cat goes in a very measured way, continue to be bullish on the opportunity. But as I said earlier, we are doing a bit more, but if the growth is really driven by the rate, I don’t think you are going – you would not see a dramatic shift in our risk profile.
Meyer Shields: Okay, understood. Thank you so much.
Operator: Your next question comes from the line of Brian Meredith with UBS. Your line is open.
Brian Meredith: Hi, good evening, Rob.
Rob Berkley: Good evening.
Brian Meredith: A couple things here. First one just on that, just some clarity here. So obviously, big growth in property reinsurance. What did you all do at 1/1? I’m assuming we won’t see the same type of growth in 2024 that we saw in 2023 in that area. I know you were pretty opportunistic in ’23.
Rob Berkley: I’m sorry. As far as our property writings?
Brian Meredith: Property re. Property re. Reinsurance.
Rob Berkley: Reinsurance starting. Brian, I think that – I think, I’m happy to share that with you, but I want to check with our General Counsel to make sure that I’m allowed to share that with you. But what I know I can share with you is that our general view on the property cat market at 1/1 was that it was still very attractive, maybe not quite as attractive as it was at 1/1/23, or said differently, I think the market is still very attractive, but I also believe it has peaked, at least for the moment.
Brian Meredith: Okay, interesting. And then I guess my next question. Rob, and we talked a little bit about this earlier. The ceded reinsurance program and your flexibility there. I’m just curious, is this kind of the time in the market that maybe you do want it to retain more of that business just because rates are quite adequate, your operating leverage is still relatively low compared to history? Why wouldn’t you kind of just lean in here and retain more of it?
Rob Berkley: And – there are parts of the business that we are grappling with exactly those questions. Ultimately, the reinsurance marketplace, from our perspective, is that there are some people that are our partners through thick and thin, and there are some people where it’s much more of a transactional relationship. Those that are our partners through thick and thin, we are not likely going to cut them off, if you will. Those that are more transactional in nature, we come to the table recognizing we are renting their capital, and we have a choice whether we’re going to use our own or whether we’re going to rent theirs. And my colleagues are pretty good at doing the math and we try and figure out what makes sense. So are there parts of the business where if the reinsurance marketplace were to push us, we might exercise that option of keeping more for exactly the reasons that you’re flagging?
Brian Meredith: Got you. Thanks. And then can I ask one big picture question? I’m just curious. If I look at the industry and the commercial lines and the combined ratios and margins that companies have been reporting, and you’ve been pretty consistent the last couple of years, but they’re about as good as they’ve ever been, right? I mean, at least in 2025 years. So I guess my question then is with the client pushback there, with the broker pushback, when you’re kind of trying to push for incremental rate, and I get it, that loss cost inflation is improving a little bit here, but the returns the industry is generating right now are incredibly attractive.
Rob Berkley: I’m not close enough to it, but I think we’re using a pretty broad brush. I think that if you look back at some of the personal lines players or even some of the commercial line folks that write property books, it hasn’t been necessarily a wonderful five years for them. Maybe it’s better today. But when the day is all done, I think one needs to use a bit of a finer brush and really look at it at product line by product line. I think, as I suggested earlier, I think Q4 is going to be a really attractive quarter for many market participants. But I don’t think 2023 proved to be this remarkable experience for all carriers. So again, do I think that the industry is in a better place today, certainly for many product lines, than it’s been at other moments in time? Yes, I agree with that comment. But I think if you look at the total results for a lot of insurance companies for the ’23 year, not everyone is hanging their hat on a return that starts with a two.
