The Baldwin Insurance Group, Inc. (BWIN) 10 Aug 222022 Q2 Earnings call transcript

Company Profile

Participants

Bonnie Bishop	Executive Director, Investor Relations
Trevor Baldwin	Chief Executive Officer
Brad Hale	Chief Financial Officer
Kris Wiebeck	Chief Strategy Officer
Greg Peters	Raymond James
Elyse Greenspan	Wells Fargo
Pablo Singzon	JPMorgan
Michael Phillips	Morgan Stanley
Meyer Shields	KBW
Josh Shanker	Bank of America
Yaron Kinar	Jefferies
Weston Bloomer	UBS

Call transcript

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Operator

Ladies and gentlemen, greetings, and welcome to the BRP Group, Inc.

Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the conference over to Bonnie Bishop, Executive Director of Investor Relations. Please go ahead.

Bonnie Bishop

operator. you, Thank BRP the quarter earnings XXXX Welcome Group call. to second being Today's recorded. is call

Second Form risks materially company's by information earlier supplemental subject may made quarter results, financial differ forward-looking include and The Please that and statements. statements such company's available today results may ir.baldwinriskpartners.com. various this are contemplated XX-Q uncertainties. on from at the assumptions, those website to note remarks and afternoon issued were actual

refer discussion for our of and note these website. to For to a of please the release the filings, most forward-looking factors, earnings our more all BRP XX-Q, this which in statements including detailed Form subsequent periodic XX-K regarding available risk are the and recent most company's recent quarter on

company discuss measures. also call During certain the the today, financial non-GAAP may

company's For which these the of measures, information, refer Group. SEC to closely call to and in Officer now the been company's Chief of Trevor most have over filings. both Executive can posted at please company's I turn BRP Baldwin, the supplemental a reconciliation will announcement the ir.baldwinriskpartners.com earnings and website the be of found to comparable GAAP measures on

Trevor Baldwin

afternoon, for thank XXXX everyone, and for joining you us Thank Bonnie, call. you, our good of quarter second and earnings

by The the and internal organic segments. sustained beginning organic This organic quarters public since with an being the growth to remain outsized excellent posted by particularly highlighted show X questions. few organic building the excited the some XX%, During of and quarter growth then all for our XX% who bear a strongest call, the short, financial a in was growth we've momentum level several about the across I by quarter. highlights investment will of recorded quarter I growth of QX in the We Brad, growth highlighted take that fundamental MGA growth last drivers brief MGA. initiatives Brad, and Future will we followed the are and during remarks, Both company powered double-digit our quarter, In history underlying organic of results the share of as have fruit. XX% in will and of business address select Kris, seen best MainStreet is its IPO.

we states, the As in premium of we products products AM May, builder-sourced X from managing Florida, A-rated and million Texas, today, admitted In California. in in new started X E&S Florida, Massachusetts, over in homeowners in announced $XXX have a live originally live March. XX we Best products states also of homeowners portion including book including and a agreement XX admitted QBE,

in homeowners' to previously rate continue largest a into expect launch quarter and we contributor our impact organic the the the to April, our of had to growth that to Westwood, growth we and a completed year our we and positive meaningful XXXX. acquisition of of MGA products organic signaled, be the ensuing balance distribution during date. second As momentum and partnership the on proprietary material the In

top a solutions is new homebuyers. homebuilders of that to purpose-built to platform insurance personal Westwood reminder, embedded lines-focused XX homeowner with XX provide a As the distribution the U.S. is in new

exceeding XX% to impacts meaningful rate June in improvement retention, and of client revenue significantly benefit any and outweighed excess new XX% expectations. roughly a from home business sales rates Westwood, strong May environment. capture Importantly, in saw The increased homebuyer growth of initial of increases slowing our a

our retention for strong to the tailwinds sales of expansion, our in backdrop result that, momentum continued be clients, overall best our With for of colleagues sales outperformance that and drive closing, rate results the our While and colleagues we segments capture confident confident leave we trading all performance home for rate the In will us our to continue thank our our expect outperformance I'll will challenge in strong new turn a and dedication as in and remain durability home the who overcome model year. headwinds is underlying business XXXX, to over of call partner the partners, to balance and year-to-date, remainder increasing business now the that growth outstanding efforts, continued of our our history. fundamentals I its its Westwood. the the any position strong of channel drive continue for property across improvement, want Brad. the and

Brad Hale

Trevor, us today. and to good joining everyone Thanks, afternoon

Adjusted XXXX, of with was all per income and revenue or excludes XX-K for income quarter quarter, growth second expenses double-digit compensation, the with quarter strong SEC. income regarding for AR XXXX. from of quarter in fully reconciling Future rose compared which one-time I out we extremely items few our share. table of period the for in this amortization had aggregate because point for flow the year. Organic the cash, to XXX% as expectations a of income rules million negative year, organic in net fiduciary We to and million net and hitting the considering diluted change cash earn-out segments in for the A because adjusted margin a for of XX% in Adjusted the quarter For be the $XX to to growth filed of flow year. free compared meaningful QX diluted item. net our which operations per year our million XXXX are operations contributed generated carrying found million through XX% or in our and the prior $XX free Adjusted excellent share-based to to release other do improved AP some share. in running prior net GAAP million Adjusted from year the same the income prior of in second cash to of payment can this These GAAP earn-out the $X.XX the earn-out results that recorded EBITDA April, second the fully compared MGA $XX quarter. prior the second $XX.X earnings EBITDA the A and second was X XX% million. of $XXX X-month full to want period. especially payments $XX XX% year GAAP we specifically was the $X.XX growth period.

given organic the for XXXX, generate quarter First, high-teens. of expect third to our business, in across strong we the growth the performance

QX in the our for color of some closing beyond XXXX XXXX. in revenue in Additionally, activity Currently, QX expect we adjusted business as additional of a will line be XXXX and for XX% be because normally we $XXX to million margin the our changes provide of Westwood, with what we and partnership QX result seasonality roughly EBITDA of for projections. provide to

slightly expectation our are growth We organic for for the increasing high-teens. year full the to

call new throughout Despite you year. results XXX we QX we XXXX, earnings expectation consistent above key of the we we is the the and excited nearly paying expect As our $XX quarter. million our summary, all have now with investment an investment you concentrated are about in up and which off. in colleague and technology carried saw this last and beyond. discussed and year, QX for solutions the in to for on XXXX as These increase to the already development, and quarter's points margin additional we additions contribute Future deploying the year's open given MGA at will performance have primarily In the across for call, the thank of teams XX businesses, outsized into time and in investments momentum third that, business EBITDA of Operator? XX% organic still Trevor QX our we remain all in the this I should mentioned, MainStreet basis we With growth your adjusted Q&A.

Operator

[Operator James. Peters question the from Instructions] Raymond Our first line from of Greg comes

Greg Peters

additional point some growth. these starting the questions some And be Future, some, we I the rates answers of mean, going one this especially substantial 'XX And of 'XX? about organic results. how really and we beyond looking out when strong and some can questions consistently results think you specialty what's from And it and the would perhaps of organic is us MGA suppose get investors and around detail for -- gain of about pretty year. posting give confidence we the could a you're sustainability I in just the good driving

Trevor Baldwin

Trevor. this question. Greg, I is appreciate the

of So sustainable we believe get of that worthwhile see time But what's one, could bit going 'XX. kind around into from spending and the overall 'XX is kind I'm to not providing outsized guidance over results or you organic growth of what us the specific why driving I little time. is a just maybe into be think

really to was that first at and up in organic can of the that we to fact the be about quarter talked record year, And we a of end driver see, picked contributed launch going product you a growth home has kind MGA. to first, to meaningful meaningfully for quarter. organic the what be launched the as of the proved the initially So momentum growth the there

of into segments, broad-based paying $XX year investments seeing making across results. is we're off strength the we're last all Additionally, the million we really program driving that evidence investment further and this are performance and which year business our of that that and made

launch momentum overall out And programs. we signs initiatives of with the expect pleased from continue. of coming homeowners organic will are momentum early of and product we really we're across product and growth the investment that the rollout seeing the success with so the the have The those country

Greg Peters

look million growth should revolver. do left of think previously acquisitions. Okay. And M&A has guess, been then What because when had constrained we flow what, payouts. I your -- think on going associated I have, about how capacity know it with important -- we targets. some is you And guess, component your $XX forward? another we Cash revenue I at

M&A? if have What those wondering all. at thinking about Just targets you're shifted

Trevor Baldwin

Yes.

the the from our outlook the last balance for for M&A year changed call. hasn't So of

$XXX expect of M&A year. to call million range this the of that year. at to announced acquired continue million $XX million be at so for to revenue for low-end We're far as this the We $XXX

business We to create and result continue expansion M&A. margin bottom over of expect and line in delevering to that growth to capacity be incremental will the time a able top and as fuel

the so industry the that ourselves but reputation stakeholder And product feel sector is position in really all delivering have we of the incline home our and XXXX time, partners. growth in the business value, at going of the and industry's bring businesses not to continue position in about good for attributes necessary we're is and and premier The we the capabilities in. this the that drive get being outsized have organic industry we're expect unique guidance the for to we line premier double-digit

Greg Peters

what and you answer, for your targets that's and in process that's question. I'm deleveraging -- are? clarification are And in of mentioned last looking you a Trevor, your my Embedded where that just

Brad Hale

Brad. it’s Greg,

is So X.Xx. our net roughly leverage

As committed organic Trevor mentioned, continued the next delevering XX growth. months we are to outsized over to XX through the business

Operator

from Our the Elyse is line next of Wells from Fargo. Greenspan question

Elyse Greenspan

one first on just be my following would Maybe side. the up debt

that where you you time that then, is guys just remind the would like to can week? you X.Xx be? over So And after leverage announced us deal last your

Brad Hale

the pre last we I XXx deal less paid the deal. So than referenced but announced X.Xx for was that week, we

leverage. So it was largely neutral to net

we --. addition, In

the question. half hear didn't I Sorry, the of second

that addition, XX business. made to back And the growth can X.X long-term the be the next target X.Xx. change months In said, XX to to we've we range we believe in as no our we to in of get over

Elyse Greenspan

organic said growth you the quarter, right, And then guys you high-teens. guided that in the for third

relative I'm -- of about you do think growth your does quarter MGA expect Future the double-digit pretty segments from business. or you But again how guide when the you to all the your imply of see that strong assuming, of another quarter all So businesses? third in

Trevor Baldwin

into entirety forecast. the Yes, momentum level in going you of to today. and of is business. Elyse, growth And continued world all we what I'm -- not conservatism across a we organic And can our the as I that is, exists get that expect guide tell uncertainty specific strength result segment characteristic our across the

Elyse Greenspan

quarter consistent? through the you like, second slowdown of would guess, I'm say seen of as the went you growth the you the of assuming I haven't know kind end towards was that there month you went you the through did if is quarter. But a quarter,

Trevor Baldwin

Elyse. slowdown, no No, is there

In ever the they've quarter saw that prepared my the fact, as fundamentals as strong in growth as of mentioned of our IPO. drivers since organic remarks, underlying I the second been we in are the

an at business us commissions a New of of all-time XX%. was percentage year as fees prior on roughly quarterly basis for high and a

We've your to And quarter, seen business flat. of a an been and so when rate it's which about the attrition, year-to-date you a are relatively think new your about In internally organic the that organic growth. basis, of is X.X% impact both levers tailwind never kind exposure. ebbing it's stronger. it was of controllable, growth On and of the

strength the year. so half the of we're the that the through momentum continue expect and And pleased will exceptionally with fundamentals of that back and the

Elyse Greenspan

And then question. final one

you're the we hiring right, the I As mentioned, is a about mentioned past, guys right, you see this helping operational. new year. hires, starting think right, lag of XXXX, to think are in that a there I But from benefit organic had you until fully they know

I on you in new end assume organic in would from there up tailwind So would 'XX a right, greater seeing relative what be hires? to those 'XX,

Trevor Baldwin

has new get of as colleagues And into which our in rate ‘XX of the we product to really, the We business. and that’s breadth rates hires and ‘XX of second will as incredible that moderate overall innovation I and the see that into We expect year a of continued that, in and year-to-date about as driven all growth come XXXX, hires and we the result. is the from the in hiring the expect a normalize developments into and hiring. and tailwind depth about bringing half a high continued both new solutions, results at talent XXX from quarter, back begin XXX, beyond. of new but really hired expect being result we’ll headcount that into momentum

Operator

of question from line next Singzon is Our JPMorgan. the from Pablo

Pablo Singzon

outlook slowdown. provided assuming you you some had if scenario quarter? of outlook? year, strong the softness you assuming this for for a your of Last your Are growth you heightened assumed sort economic quarter are the when And potential of same growth kind outlook higher about in organic the I you organic pretty guess, the year, balance where think

Trevor Baldwin

Great Pablo. question, Yes.

growth not overall and economic continued delivered results our of of past for strength only environment. resiliency segments. unique more organic in the business, and model, contracting our broadly And revenue growth various that elevated and specifically drivers think I the softness GDP implicit kind So the industry the contributions all but of just balance X from of this our levels as in continued the organic exceptional highlights, across quarters, we've that the exist BRP guidance despite in business

Pablo Singzon

Got growth happening but that color notable fundamentally? MainStreet guess, Trevor, that this and it. growth? the provide your I these largest Medicare business, so And can on acceleration in know organic And pretty Any on you point, are what's what's I in not the was driving there, quarter. happening ground that's

Trevor Baldwin

Yes.

first really, So, I in coming mean, and Medicare kind the reflects environment. strong, has second of operating quarter, a COVID and that been of very business both out

As business business much cases you'll doing recall, that community-oriented in often strategy go-to-market very is face-to-face. our

and to normal And kind really bullish more business there environment of so the us much operating enabled of has that drive momentum continuing. on we're resumption very

doing environment. seek in Florida unique really a environment operations performing solutions who a business, MainStreet And to our homeowners and across very market the challenging just turbulent are legacy clients One, challenged well On are combination work to exceptional capacity. our exceptionally in a things. bringing of

pleased a And we're year. uniquely now into that days, us uptick expand scale business a the real of result And of we've success more hired be new with are seeing advisers that homeowners expansion. investments solutions to the business risk we into signs national while we've seeing provider to this that and our that business making early still over we're of a market nationally as XXX results early it's So enables clients. a access with very then to broadly, been MainStreet significant in

Pablo Singzon

in tapping product, expanding distribution you that So, the on to but have you was first think you get but states partners a product? questions, then to perspective MainStreet your MGA XX. more of in I in And homeowners fully a MGA and the beyond And say, I are for sort right? that do you're question who you one own you couple me, the couple, obviously, And one out? when there's this of now product. guess, are to rolled agents, concentrated the Got the is, I Florida? hoping it. first sell you're guess, last be expect the I Are managed

Trevor Baldwin

Yes.

lot So in a there.

that Let real fast, me just try and Pablo. unpack

things. time to our kind national an from suite of we now. few of about fully a So One, with period products over out be rolled expect XX-month

Florida good majority Westwood distribution of still of So build but is Two, and to When concentration, of books as QBE look internal, we that relative a XX% external bit of also inclusive the the which million continue work concentration, in product to then that the $XX on less as distributing managing at well. began that’s at out today, and that launch we the bound as we product. have look we’ve and well we’re you some of book is of as approximately the than our platform, and MainStreet May. business the premium effective represents the premium distribution the how

the so portfolio And building. modestly the across start days. still with that I we’re exceptional that early down an would super ratios ticked pleased type to characterize business year-over-year. is off the we’re balanced have And writing albeit MGA performance-wise, we’re Overall preferred. of very loss we’re

terrific programs continue growth portfolio products we risk-bearing not so of for the exceptional partners And that performance, and across managing. profitability we’re our but see, to only

Operator

Michael next Our Phillips question from of is from Morgan the line Stanley.

Michael Phillips

you Real of of way Can it about the of defined preferred. Trevor. size on as you super that quick of amounts last give follow-up think I terms kind comment, limits there? talking dollar you're you said When like the in

Trevor Baldwin

really to in the today. we're sweet Yes, cost and that, with say And million. USDXXX,XXX call between Schedule is homes USDX A $XXX,XXX general, $XXX,XXX replacement it, value targeting spot in that I'd

Michael Phillips

GDP your hearing businesses the clients curious, that their kind I'm feel they backdrop of I as guess, about recession. fears of Anything confidence in then go just given from and forward there? how you're of from of we all And Okay. own

Trevor Baldwin

Mike. Yes, it's much industry-specific, really very

So life practice, they way employments X.X sciences, our businesses technology, Web were pretty are it's ago. struggling if I rate a have the which serves to companies, anywhere down. down, crypto-type XX innovation that raise near capital look Valuations tough come environment. at and Those months

a construction industry clients -- when business in look recession sub-sector. our busier. example, our other of happening been classes that like an Alternatively, so never at that there And practice, have as is I real

sector exposures and in hearing from and I our clients seeing of pullbacks attract impact it's very we industry revenues inflation, input relative payrolls, also to significant challenged we're client and the inventories. whole, The But a pressures. so dramatic costs, but about And In as much geography-specific. well only would not just environment. creating are both talent operating say, not the ability wages, on as are all to

we In addition on and our a can the advice to that the bring to environment are in clients for has, that, uncertainty solutions of more that frankly, the and creates operating complexity demand of their behalf. bear

the driving is increased demand of pockets And for economic risks and external so increasing. the our we both the that and see may services man-made factors of ultimately a as that of weakness kind natural, while kind are result of

Michael Phillips

Did kind Okay. Is line that one items some fees? of [indiscernible] that Middle consulting could Is your why, see and maybe up? we service of move the that part the continue guess, Markets of that? to to of reasons I within expect

Trevor Baldwin

Yes.

Operator

Our Shields question from is from of the KBW. next line Meyer

Meyer Shields

on product excess or that? there the is there plan a non-admitted available homeowners And surplus and lines So are MGA? any for

Trevor Baldwin

year. states all of in have products live homeowners we to by our of and quarter non-admitted first the the E&S majority have of states next across expect product Yes, live XX homeowners XX E&S

Meyer Shields

not deleveraging. you solve that leverage I hoping M&A. M&A outlook Can pipeline? some more Perfect. you many quickly questions, And jump if us update on aggressive hasn't that more you magically could needs the on could the currently could about I How was back of changed. path? the you And talk understand the

Trevor Baldwin

remains to say, fallen of I of mean we’re And the really M&A the market of elevated of Yes, past somewhat attributes. high. quality result lot I to The – Meyer. I course thinking think have XX so underlying that those of as opportunities months function that’s to a flow here’s kind kind of high-quality just relatively we’re overall a seeing materially. done of valuation businesses about so a have would what of off businesses over XX seems coming kind of that somewhat The the

an quite somewhat regular know with, that are we so still stay well that of underlying few businesses definitely And M&A in that there depth to there the of which they in seen in we a the to breadth go specialization but capabilities and organic standpoint growth high-quality way assets we get market. we’ve very type in communication a lull really and out about attributes, of from relative unique excited

Operator

America. the line Our of Bank from of Josh next from Shanker question is

Josh Shanker

lot year of not the but in go profile it MGA the it's business? margin next tried Elyse of know separating does are And qualitative talk is how don't long-term even margin that we appreciate around that growth X? to can like of little the you I I question, if ask where the or given high, still its But in stages. early even should your really a conversation? the my MainStreet which there, there. think, requires you position guys XX% and about in you now, just us where And maybe investing goals out your growth. Obviously, a quarter, growth Future the But in terms from of quite

Brad Hale

the would investing of to know the growth I aren't we just of as business. the deeply the we the we're that sort than you into throughout margin business better Josh, we seeing now are to business, that Yes. margins the margins give that in specific see the see can technological have capabilities. guidance so and that margin now, margin opportunities lift. even investments than the future we in it of of capability know our the we've rest better business about because of making that stated in rest business long-term capabilities because of you're business, seeing that want that previously, because don't profile I at Right are say, that tech operate

Trevor Baldwin

million to of normal add $XX Of the $XX bit roughly that for just above year, program we there. announced the a Josh, more MGA. million reinvestment little course this color earmarked Yes, was

just can the business largely product and people get talent you talent from that making. range development we're and level teams to to we've been magnitude professionals a of -- the that distribution sense of so adding and a And investment tech of Those into specialists. that's those

And which so as these many any launch of quickly continue we generating to revenue, new incremental scale been products, layered we of not cost that begin are into absorbing that's yet, to these dollars new will into the business products.

Just on, sense XX and the working have working next quantity the the to XX that opportunities scale give a over of to XX launch you new of the months. we're over in course we pipeline to of we're on products that

Josh Shanker

And the the is so business the Future produce term a of the to risk short the MainStreet because the margin profile business its business headwind is yet margins? fast? is so is that much And of fastest-growing for MGA actually different growing that one than near-term becomes there margin the a doesn't that

Trevor Baldwin

earlier, still To expect that of produces tell growth, this all elevated provided margin. improve business making business year-over-year. be that into level we we're clear, what is, the overall per I to drive to guidance of the margin the investment Brad would for you the business despite And

Josh Shanker

versus on where are now? variable coupon And on unrelated, debt thoughts coupon right markets what are given your debt fixed the

Trevor Baldwin

how interest think time. the of would over the cost versus the I variable the fixed is, what rate curve and the about what’s of a Yes, function what’s say we all cost it’s of

we hedged know instrument fixed converting that So forward And capital got and compares ¾ sold mean, of fully equity far you that’s today’s I at very of to that market the debt we’ve favorably basically balance quite and hit X%. it, our kind think cash costs call last in sheet. for which market. our fully around were that effectively. rate borrowing quarter debt those our We fixed us, the of our borrowing debt of over our able fairly at fairly costing variable even peers one into out been had our a hedges purchased and they in loaded we what when on pulling about recently are to manage cost stack protection X%, similarly-sized private the had I until the we’ve peers was levels, rate rate when

So manage leverage we’re well really about being able cost still that south to to feel good that of of and continue effectively.

Operator

the of line Yaron comes question next Jefferies. Kinar from from Our

Yaron Kinar

And have connectivity issues. advance, some in I I apologize

So asking answered. I already apologize that I'm was if something

to you a wanted the for housing we other profile bit the see considering there, On Westwood housing. the that of inflation regards higher the How Just may go second. market, to one hand? with in a a on you and to rates slowdown have growth rates, do see hand, P&C

So your outlook to any changes revenues? for Westwood

Trevor Baldwin

Yes.

question, Yaron. So, great

for First, answer in in outlook is the change no. Westwood. kind of short No growth

We out continue to expect strong growth of that business.

rate in the the and to sales by overcome than in business we we're expect the book. at come overall be that look seeing capture and more you while of half year, we're expect that in As there, activity the slightly back kind to of that the getting rates expansion the takes in underlying exposure and puts improvement on home we the

I'd more and largest homebuilder. is, remember -- thing They tend say we do business homebuilders so new your the other insulated with be average the to there. to of country And and the a across kind bit

with saw business. so closings down June rates the And we in the the in we capture work our down broadly. that. were flow XX% while than The that saw less improvement by down lead we more new builders overcome than think in And I was home

going in confidence is and part that lot of excited the a continue there entire be going deliver to that pleased despite exceptionally is team of challenging we're BRP the we're more performance what could the we're family. over and really have seeing excited about with about more the results environment. not homebuilding there So be a they're to definitely And Alan having to Westwood,

Yaron Kinar

my question then second one. is broader And it. probably Got a

lessons think travails as learned past what the other given you the from insurtech company in the the And of you insurtech kind see seeing you what I said insurtech in being have your that? platforms positioned an from industry. is to the of that platform how industry, one relative of And just premier the insurtechs? had do you see we're

Trevor Baldwin

Yes.

distribution there, So couple of building a way a characterize an solutions platforms capabilities and interact us enhance to I and more insurance very brokerage say, us leveraging our would as characterize think platform. is insurance would clients investments I'd we Yaron. as distinctions tech-enabled I of don't technology the One, know and broker deep and broadly. the We're with innovate insights future insurtech. in deliver and to the important and there that I I

the there think them community distinctions the have risk. important many of and the from do balance do number business how X particularly is challenges very of I those go-to-market We that we one. take of how insurtech about a kind companies, sheet listed between in of broadly,

an We are insurance not company.

there you're sheet the are to wholesale. MGA. sheet with fundamental But when we We're the stakeholders, leverage the We and policyholder, risk. and has manage both arbitrage support to equilibrium behind take that there. proprietary provider. on And all transfer people to an we people a is sit time we have a capital take risk to Two, viewpoint risk your recognition not a insurance product risk product. that just business, We product. meant of focus to an But and and some build retail it's broker, We and be to needs the don't associated growing source permanently It ultimately to capital it. third-party. make way balance have the both be loss that a don't balance you of be the hold That's cost can or is to function. meant a client that to loss. unexpected risk there Insurance at level not meant of permanent

way still broadly partners. it building they distributing we be approach And in product acceptable product over claims rooted that so and focused in insurance sustainability to to occur, the on delivering withstand because persist and priced our capital while an return which building time to the able it's paying is when can risk

Yaron Kinar

brokerage clear, to And don't Policygenius comps balance guys sheet. in you thinking space? of like just I be I [indiscernible] an as was take the example, recognize

Trevor Baldwin

front-end when growth not model business we I think way the kind distribution-oriented compared lead our are it businesses, of “insurtech” by to say, a of I’d this and many model. Yes, about driven call

the are a seamless, convenient more constituents. more inside a purchasing experience for more transaction and enabling enjoyable insurance third-party ecosystems We those powering insurance a

worry CAC inherent for result to look we doesn’t I hold of period so the the need what’s it’s do that, and a and second long we about it them you We to when when is of to and on as business breakeven. minute, payback have bind a economics the client, policy the matter. LTV our how on platform. model And the profitable our new at to a the bet don’t

spending money a not lead ton flow We’re of on lead and volume.

ultimately delivering We’re specific and innovative to a a ecosystems those embedding profitable we’re that’s proprietary and purpose-built in for insurance an point-of-transaction, pain point, ecosystem, an we’re that’s solving ourselves outsized us importantly solution enabling built growth. drive

Operator

Our next question Singzon comes JPMorgan. of from from Pablo the line

Pablo Singzon

given expense perspective couple cash might Thanks where the will could one or accommodating I of in go provide if interest some follow-up. next This for I hoping quarters, quick. you the I be was rate. exposure down? quarterly as thoughts it guess, you to What just of manage you'll on cap a guess, and the hit level sort floating how any think you do

Brad Hale

best other capital into the say be cost rates capital to every the of basis look we basically per of of the mentioned, to month. Trevor fixed as evaluate it, and effective efficient continue cost to or to I'd think is costing And And XXX floating leverage our us instruments point is about continue possible. in the hedging for rate best as at the Yes. cap future. increase one we'll $XXX,XXX as swaps, Pablo, way market

Kris Wiebeck

the just on we sell did cap. add caps, when X.X% I’ll retain there, we did the Pablo,

only the the we capped paying today, be Fed is is still one that would actually us. one actually the where funds So

that can ago. offset interest as – We our we is, watch going time we The other were balance able margin of more back out with ones million it, would slightly sheet. math are or cash a XX a the reality other of money. be to And X% on And even point, [silver] lower about been to the by Brad’s a benefit have interest. XX or put margin. increase still rising than the in increase thing we also onto $XX remember carefully. out, we Brad Trevor the pointed we months interest rates fairly about we’ve mentioned running this our as of Every is, at

margins that other be So have. more we peers have some mature at wouldn’t levers versus may they running that

Operator

of from next line comes Our the question UBS. Weston Bloomer from

Weston Bloomer

thoughts I what margin into what you and the baked kind trying kind was XQ of the view mid-XXs could the runs XQ? you you on the is get kind XQ. get once margin is if a million of there? range. spend what disclose rough of Curious My just and much view timing the business, Kind of in core your million in I'm off? the math wondering to is Because to $XX and dollar then how much the profile investment investments saw ex core of of how the in

Trevor Baldwin

XXX specifics, about but investment going can in into think the about right, on margin program not being you the that's I'm basis Yes, we're about get to a Weston. making year. quarter-by-quarter point drag

those as take past, we've case. and still investments XX don't years the in be earn going in shared And months. expect fully to X to margin into It's about for that the so we mature

Weston Bloomer

Got it.

August? additional follow-up based any and the XQ. what plug off for M&A did provided a you you of to growth assume you've of that off Does from Just disclosed guys just it Or guidance organic for is here? deal the based in then revenue

Brad Hale

from the It It’s not revenue the in Weston. we just assumes August. significant a deal did plug,

Operator

[Operator Instructions]

Trevor Baldwin

right. All

all to executing taking time of dedication I up. to think evening to this I in their wrap earnings. we everybody just the I thank want our for thank our colleagues for to can stakeholders. listen want our for QX on

you is position be hard their of I would business incredibly Our all it with not care. dedication favorable next to look today an and talking all without work. forward Take in quarter.

Operator

you, Thank you participation. conference of for has BRP concluded. now your The Thank sir. Inc. Group,

You lines. may your disconnect now

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