Kemper (KMPR) 2 Feb 212020 Q4 Earnings call transcript

Company Profile

Participants

Christine Patrick	Vice President, Investor Relations
Joe Lacher	President and Chief Executive Officer
Jim McKinney	Executive Vice President and Chief Financial Officer
Duane Sanders	Executive Vice President and Property and Casualty Division President
John Boschelli	Executive Vice President and Chief Investment Officer
Erich Sternberg	Executive Vice President and Life and Health Division President
Greg Peters	Raymond James
Paul Newsome	Piper Sandler
Matt Carletti	JMP Securities
Brian Meredith	UBS
Jeff Schmitt	William Blair

Call transcript

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Operator

Good afternoon, ladies and gentlemen and welcome to Kemper’s Fourth Quarter 2020 Earnings Conference Call. My name is Matt and I will be your coordinator today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at this time.

As a reminder, this conference call is being recorded for replay purposes. to Kemper’s host Relations. Vice like call, today’s now Patrick, Christine President would introduce for your conference I of Investor Ms. you may Patrick, begin.

Christine Patrick

and discussion and Jim hear Officer; Kemper’s from Division Good welcome Lacher, Chief Kemper’s Casualty XXXX operator. Financial everyone Chief Joe the Executive This of Executive Executive Vice and Kemper’s and Officer; results. will you, Sanders, quarter Kemper’s our Vice and you Thank afternoon, Property Duane President President fourth McKinney, afternoon President. to and President

We a around opening and to our call remarks fourth up results session. for open will year few make provide a question-and-answer quarter context and then the full

Investment interactive we John with this Sternberg financial Kemper’s presentation Officer be earnings of portion After XX-K Life Form intend our afternoon, call, and Executive markets joined We about Vice the or earnings President supplement. Boschelli, issued the quarter presenters our and XX. February Health Vice by published Executive and the Division President. will Chief on our and SEC During our Kemper’s and Erich fourth file the and closed release to President

can of our Investors find the section these kemper.com. at You website documents on

These contain its Harbor future today These results of Securities and forward-looking may the discussion COVID-XX and the but include within statements are conditions. pandemic. Safe also to include, statements the may Our Reform Act of the to provisions outlook company’s meaning Private the impacts XXXX. of statements Litigation of not related financial limited operations

financial differ statements. from may materially condition Our results and actual future these

our non-GAAP measures with meaningful earnings are fourth rules. supplement, SEC XX-K financial accordance also have refer risks as relying measures This the GAAP afternoon’s non-GAAP to Form defined discussion we XXXX to statements, and quarter potential In forward-looking and release. with please to associated on information financial where believe in all reconciled earnings required For well presentation as investors. release, we our financial includes our on

on otherwise period documents at references our of the XXXX website Investors comparative section each be kemper.com. find unless these All stated. corresponding can You will the of to

section that advance question-and-answer practices This social participants We Joe. COVID-XX distancing ask would from disjointed I our for in our is location. same crisis, feel to like in to note I at to turn Finally, following due over the the the our may call times. are response to call not apologize cause the to and of listeners. will now in call understanding Kemper

Joe Lacher

whose performance. I backdrop, net and well XXXX the any like income very and Against challenging was employees thank especially Thank call. nearly who am like $XXX everyone during you, known and joining been commitment our are times. over to By nation acknowledge XXXX million you I us and everyone this would reasons professionalism has this customers measure, why of generated net point. at Christine. across and income. We thank exceptional. these stepped operating our year up adjusted our consolidated challenging Good our with today’s pleased again $XXX to thank I’d million afternoon, for a to of

that metrics management our key highlighted guide and we ago, year a investment importantly, decisions. More capital

operations $XXX these value book believe equity, bottom and both success. great return unrealized on grow per a to generated lines. share long-term top performance XX%, you you continued of tangible to XXXX million increased use cash was when we and continue gains to We and should Tangible We XX%. measure increased do our excluding from

expanding for positioned to was and was $XX notable of a It sheet. are income A earnings significant our claim the per share. for Additionally, to well or already to now few Net customer strong of $X.XX a franchise investments items we strengthen to net Page quarter. the Access party. strength further base X were acquisition Adjusted increased grow to and of of operating portion million like have American our support liability a and $X.XX the include specifics geographic levels balance discuss I’d of pension staff per expansion the to Casualty our year an transfer Company, $XXX million we some future or third success. strong turn share. and consolidated made

results, resilient a second position Turning annually growth. been both our specialty periods quarter. across for credits to new and have our slowdowns segment COVID growth drive year. of solid strong. products for auto in we increased in the market new finish portfolio, and were as and our our sales to strengthened premiums business Customer demand related the the Notwithstanding adjusting able and continued base to XX% had Earned the same-store issued customer

which We our share we capabilities, future to specialty expect market in invest drive to continue and gains. platform continue to

Turning roughly earnings. the segment, business positive is what generated to related earnings continue event, has be PNC COVID one by with to our operating to equivalent domestic and impacted Health line year in in a mortality XXX catastrophe trends. Despite Life a

accelerates the policies solid our American The we auto growth Hispanic during scale the low X, Access capabilities under-penetrated a acquisition had specialty on increased network. a further year. reach our Page of with platform The an accelerate limit had to Casualty communicated market. cash deployment of of summary, our expansion our quarter the in new our and with franchise. quarter, aligns to specialty million customer we us expand $XXX and the enhances also gives a AAC Company Turning addition announced and opportunity and we geographies transaction. where guidance. agency In previously the enhances capital acquisition within It focus It

consistently has resilient for and is shareholders. Our returns strategy and generated attractive sustainable

We key ongoing further and performance ratings Best This BBB. Jim holding to over the our detail. more company A are operating to to financial upgraded the A.M. fourth quarter testament is like and full last senior to discuss call to pleased our strong our now results in a rating debt progress. operating week I’d turn strength of year that also and

Jim McKinney

Joe’s to we our financial echo like would I performance. with sentiment pleased are you. that Thank XXXX

our can and of execution results you yielded. Turning focused the to strategy consistent solid and Page the it has results X, see

$X.XX operating of income quarter. $XXX adjusted of highlight the an of produce our the through year million income share, For million On Page net reported increase sources quarter, or This per to we of volatility income. key an over $XX net XX% isolation of prior diluted consolidated business model is impact continues results. illustrated quality high that X, we and operating that quarterly

$X.XX volatility adjusted the had income. a net consolidated on For quarter, items operating impact

previous committed organization. Turning comments, improve X, Joe’s seeking building to ways Page to new are always the to we on

would to pension of $XXX group previously we took already non risk quarter, value-added per highlight included market tangible Notably, some on payments obligation I This $XXX use metrics benefit key million book in This share to actions like to the long-term further strong purchasing from return demand balance contracts. On to These lump-sum reduce sheet. tangible the we of Kemper’s end track annuity equity. our we disclosed million advantage performance, and an capital stated XXXX. of in removed strengthening at Page value to the our targets. outperform including X, continue growth return

with capital positions of Excluding These shareholders. liquidity entities. unrealized and share creation XX% a was intrinsic was decisions gains, tangible strong, value the return on supported healthy for demonstrate in well funded tangible XX%. growth remained our value Page by our capital and insurance efficiency deployment our book and Continuing on balance XX, metrics sheet equity per our

million year ended $XXX a For capital operating XX%. our we and within debt with in XX% of ratio year, generated cash the stated XX% the flow range to to of

business to Our cash generating fund flows growth. as designed, substantial financial model has flexibility performed solid and providing

the income was investment to quarter income Page investment alternative strong for markets XX, rebounded. net financial Turning million reflecting $XXX as

solid deliver industry, some to a alleviated Low but portfolio continues for challenge results. portfolio reinvestment are yields construction well-diversified Our market our has risk. the

volatility. for X% amount of $XXX of thoughtful of the pleased we quarter with the have management Over closing, and In are company’s helps performance we achieved asset maturing minimize XX and the year. maturities roughly for the low portfolio. assets next investment financial months, net the liability through approximately million This income

Our turn a all over the to strength allow us I as results operating source the Duane call stakeholders. segments. would serve our and to now our stable to results strong financial P&C sheet, to like of of balance for of discuss flexibility

Duane Sanders

the afternoon The would operating XX. begin of $XX in perform you, generating well quarter. everyone. Jim million Page with earnings on segment the to and good continues Thank I Specialty segment to like

top earned saw we premiums quarter, year, saw volume. the ratio increased economies that state initial local the this shutdowns, increased will impact like reopen just in We short-term reduced policies underlying In X%. to XX% up the XX% year. for combined a particularly be Turning the line, as were in and and and in this the quarter full shutdowns, new The in to was in rebound. earlier XX% states anticipate we and the force business resulted Similar California.

the in state largely approach in varied experience similar shutdown. response loss along round quarter to with to another to cautious to picks continue We a the COVID-related fourth decreases with initial we our reopens frequency and our of industry the have taken shutdowns

Looking quarter saw at a of couple from coming noise expenses, places. the

are a of mix expense the our largely mix was of These and in comes areas: which from renewable ratio it pricing. few by First, mix and on impacted business anticipated geographic the the new product. impacts shift, state anticipated and

mix, had to commissions due contingent one-time. in than we to an average increase Beyond paid few profitability. a agents was higher There

enhancements this infrastructure, to our quarter. the cost which also made of We was recognized

expands broader model customer in focus American business attractive which Nevada, competitive footprint accelerated sustainable will existing including geographies. systematic similar It specialty, our geographic California. specialty by book and in of footprint customer Illinois, scalable, United that our the providing build limit Access. low geographic Alliance Indiana. The to our legacy in AAC’s growth continued Texas, a opportunities and of We advantages is The profile and Arizona to acquisition new be is to within markets,

to strengthened Hispanic relationships team. to a channel welcoming give We addition, In ties with distribution communities. access network to Kemper captive American deep the in their agency Access and look our us forward

reflected business, Let’s Page the preferred In our evolve in we preferred continue auto product, XX. turn is to results to segment quarter. which this the our on

choppy. results positioned we the business been profitability, As target our for have

in results to taken for million will segment, call of bodily reduction occurred XX% increased full development. and attorney quarter reported the and preferred a us pricing the The involvement improvement demand and that respectively. injury the our actions to The third we quarter. XX% primary Joe. back expected year, other this improvement I results. we underlying has and XX% also in reported quarter from continues as fourth of roughly motorist desired management year closer Additionally, for profit expect of in wildfires the Preferred to underwriting the XX% and in bring adverse from home development continued increase prior over benefited losses to and ratio driver the turn through $XX XXXX from the of Overall, exposure year. of notices quarter combined this uninsured an

Joe Lacher

Duane. you, Thank

Health are million was and in Life our on the segment able to remain we and quarter million P&C catastrophe $XX profitable by to while $X Page increased for that was report Segment to mortality. protracted the Turning segment year, like the is the suppressed which related XX, pleased income observing COVID pandemic.

off in shutting premium. a This to spring able Our grow to sales of line overall proposition. mortality country-wide is further we our response life pandemic, experience with Despite of evidence strength new in business of insurance were trends. this remains largely months for the value the handful life

XXXX. news situation timing While accuracy. elevated remains benefit with with improvement pandemic of the received related the costs related predict COVID vaccines, during believe rollout in we have to the with recent of difficult We will positive weeks continue dynamic

nationwide expect a Life Kemper that business also Long-term, the positive. Overall, strong we delivered remains our line has with year. We Health in outlook remain and mortality. for

specialty customers. to attractively Our products produced sustainable priced delivering while of businesses portfolio our earnings

profile. now advantages us and line to your on top solid to the over build returns to maintaining the this like turn take also our to competitive call to consistent questions. believe continue continue will growth. would long-term, superior allow value our risk and growth which drive while core will We book operator We back shareholder capabilities the I

Operator

We will go Greg question-and-answer ahead. begin Please first with now the Peters from Raymond Our James. question comes session. Instructions] [Operator

Greg Peters

expense top on line focus I Good the then everyone. first some to wanted auto. ratio to preferred and questions areas on and the focus afternoon, three is

any talk was how line, you about information could For ‘XX out at you I looking us and of I look to to and we the any include year wondering the slide rate basis profile growth to on your look compare that ‘XX a we deck. of is on going year top book or provide Slide you your on might as into as And have business? the can XX was your if you answer incorporate over changes effects think

Joe Lacher

wants starting see with a if This is add to at shot Duane I’ll that Sure, Greg. and Joe. anything then it. take to

First, reminder, forward-looking do a we typically quick don’t guidance.

exactly but auto to looking tends So little a you answer will tends you were going seasonally the commentary help. color to specialty quarter, a for, be I to not in business, auto provide seasonality preferred. In I maybe in try it specialty am have it more give the our to than to

see normally in are the slowdown to We down. business in the to that We applications we shutdown has think heavily expect saw related the to little been a is and California less So, we locked particularly Colorado that or COVID. bit starting look quarter there. business in more new shifting behavior quarter a in saw more and quarter like particularly second new

I about it to to what necessarily as saw thinking lockdowns activity. we out, there. guidance, of a kind more people as of unfold go view I would new it, unwind that expect business or but the think are was about back giving see connection not you going you saw and So, some we traditional would If I

– they willing we might of bit be auto driving historically, they that. the take seen not I space to might and think weren’t because a going might see uninsured have specialty they people have little where in

will historic seen way go I they regardless an of patterns perspective. have the economies we of unwind growth the from recession think uninsured that out same don’t pattern or typically

folks the really that’s guess will long-term in over of gets can’t to fast geographies. its at that decreases my once rollbacks But auto. traditional has see to in a to go expect have a and to move level will would going rate have expect a more some vaccinated I expect expectation. out, normal back sort to back back see rate but then we normalized taken not when anything give we That how taken normal state. I’d add? be and back be see or a a you And work a of way would rate averages, hopefully long-term set So function X% environment. you we get what would more status. go certain economy which will perspective, normalized givebacks I are will been you more range the more severity from fast like into Duane, kicks more how that a that’s frequency to level, X%, X%, I point looks a that what great of of for rate point, would it going a

Duane Sanders

some consistent the Yes, in the growth think I have but profile, growing, is it’s the of looking only in to say, in about to belief states. how the again where we are states, thing the you the that would just consistent my asked and footprint fairly terms I expansion certainly with be going today likelihood and is experimentation then the expansion our we accelerate fairly are

Greg Peters

in related a adjusted an Thank basis as quarter. points specialty of your of – to all was basis the think a are maybe forward? could etcetera period on economy about reopens, up looking that tracking, of the it, higher That’s addressed because callout we I fourth you let’s little the sort of just the your ratio expense items color. one-time for or commentary, On some I that going the where Is we call expenses Slide basis adjusted entering on know you the XXX helpful. be the year-over-year a bit is XX ratio issues in presentation expense was and per

Joe Lacher

with Duane, want start you to that?

Duane Sanders

move for fee Yes, some we as unique geographic the one the some mix certain the those underneath components to sure continues of mix, is highlight are of states as think the think them. did I of to on drivers I there, things –

where and not differentiate component it. grow to states more renewal new is on has more me, – move as an impact income fee certainly we fee excuse we where also great, the states hopefully side on will as so business the with themselves have So, and business new expense, has expense

will the start the of COVID with in have growth rates, then our of this normal to some of some throughout to bit there. with see return profitability little commission more. earn move we a component year the allowed did higher the that agents, we as them hopefully, you So And to frequency because

to reverse the into of So, year. that dynamics kind next as look themselves are see we and those move I move would

Greg Peters

Okay, okay.

Joe Lacher

should as think defined. the kind in that in of is I or geographic that can also in and on normal that, to I becomes And profitability I things, that the Duane And to And trying give short I at could you of levels. at what if I how change of these set this kind then are point time? these about are roll a year-over-year you not plans kind into Duane – of levels type or half about got shift reasonable environment you if think well should would of so expense in or you of terms be base difference trying those book change some think the add us how a a both our number, proxy basis because forward might the what terms contingent might is look kind point be return referencing likely term think of to you think historical think from at are over kind are to of back what kind given you a what the potentially but year-to-date of medium levels through long that as commissions to of then your if guidance, the you might of more profitability think I

Greg Peters

looks looks that provide it’s you pretty you generally so COVID, seeing I am reduced etcetera. And Got ratio just are the it. decline preferred off of perspective implement all I actions. line, top just and improvement the are other sure am on we it it It – question are right frequency is is are for am the the them top whether happy in direction home corrective segments on in miles regarding the with haven’t this seen the happy I posted? searching And entirely your frequency, Slide the am in you information miles we trying of curious I and driven, final not we considering variables like on you to strong. action in what results surprised auto business, side as combined the I some XX. more and the all you the are that sure am trending that underlying

Joe Lacher

and think I of Greg think I historical to comments here great tend so change quarters, bit to to off well with as the that at the a of look item the with I a quarter limited we that that error try we in of to over we no with. would important those terms kept that’s question, XX% the point highlighted a bars very here a assess that things line and we we job increased fourth In Duane little confidence associated about associated things picks. numbers having as nice practices we XX%, kicked would previous of and what some One, of chatted loss dataset and how our I just couple come kind from with level in a seasonality our things the that. did think you have hopefully have UMBI two were at

you monitoring with to us more I best having year as surmise becomes likely we through quarter a that this in you will as fourth think limited that as in about and have we I actually go how roll here essentially work have data that our the give about I data with a saying see we But certainly which – of have for product couple question think time understand we those that some will quarters. of data that there that and but baked am thought enhancements been through the today, trend in for error the forward have get it take guess is had for us – got it continues frustrated, devolve and a bar don’t is again, better have a looked the of all period are elements. kind working kind that thoughts, the the perspective data, always there. but seeing thinking a how will So, little that let’s we recognize data. of of we through is elements but ‘XX/XX additional that We estimate. there little to because I the point we thought would it’s the think and we I very increase there cautious and at progress a have displeased what work as also we I And when that other to give in

Greg Peters

it. Got thanks Well, answers. for the

Operator

question JMP next with comes ahead. go from Our Carletti Please Securities. Matt

Matt Carletti

nonstandard to thanks. on and was a of Good of of terms and There core pieces competitive give in been or afternoon. in just go up kind Joe auto going landscape I hoping kind your might market? the moving of lot you the Hi, us what’s Duane, your able feet has don’t been lots end see at specialty understand competitive XX,XXX large be into, thoughts to acquired us sized going similar you obviously over companies and of private and you the so there how have can smaller get insights competitors are this that what’s we of as a acquisitive know on dynamic market? from we guys good help one years you on the being your

Duane Sanders

in. certainly is would participating jump if are it say let new not kind space in certainly, of adding. I I of And Joe, to a today lot those Yes, me takes the are else that will– do so. that anything worth entrants continuing there this

states across shutdowns actions they of the might some or increased in of You of growth. the negatively line things are as volume for impacting will doing see be the top the terms varying degrees increased

bit, decreases, commission some and incentives you some CSR, which lines see reps some you I will find little taking will your to is types sales of interesting. a write You folks of rate getting agent see different actually will see which move those business, off

and activity closely line we that. you course same participants are the it by to top the largely So, attention of varying see does a vary state. pay degree again, for and and then And of watch it

So, say them guess unusual based time would it’s across, actions this or consistent at the where guys on hard to I of are. but in some highly say I unexpected nothing point

Joe Lacher

seeing a Yes, entrants small point Duane’s answer, I And you a are that maybe to one that’s them Duane. there. There the echo players great XX,XXX there. you lot would view. sort add Matt, know of add do asking a foot are I it, not new for I of thought will Really, premium is none of a of lot saw you giveback. more

got their positive frequency, for good which what a was probably So was news little they some results. COVID

are people they a would and driving dynamic news create is formed we – to let’s and expect normal. and it little business pandemic I new good stronger, the unwinds business now will was market which period back that, models and about competitors the market more still of at little any short-term the in again, that in are put fully I pressure that bit so are And whatever are moves as they where more to back will how So around as a expect as the dissipates. attractive win effective enthusiastic pandemic probably are time, a we growing.

Matt Carletti

for for color good adjusting Is was on a the was ratio kind of where of ‘XX how get to year color Great. helpful. do was prior a that, give benefits kind we there. numbers get same little Can look very bit I Duane, real in the gave was underlying quarter? ex-COVID ended loss for read full That little some Great. I auto, feel on pulled the trying the of a questions a kind on preferred in year to it you the as adjust are go kind picked jumping bit the trying couple of you similar stuff forward? as accident year of it off year and the personal trends? of the the point you And a the we I

Jim McKinney

Hey, Matt, this is Jim.

think tried and about to all kind inside commentary if think I providing I the to provide off ahead before the that to to that’s it, we from development were probably that So, at intra-quarter I for jump go to understanding some likely lead good not elements again, a there. things looked that but UMBI guidance, try I some mentioned some of of

want get to is a would you look to would loss good average off what And the pace, of be four-quarter I do kind at look So, building at ratio. if I XX ago. that to enhance today months that X than – the than we we the understanding we of and feel ago we about and better continue did mix business did months

you Duane, we Sorry, that connect might wanted sure to couple add, things. make want I but these to in of

Matt Carletti

little there ratio, bit, come you what’s that Is frequency auto that I or going is sort .And good uptick can, still Very helpful are number commercial line, loss miles Perfect. one there? commercial more if seeing activity to auto space? It’s a last something the then year same back of thing see in on and a accident else? the

Joe Lacher

again other Again, the More units. and with bit some results business underlying kind baseline curve, the that. seasonality there just full little change but a I of just about of think off do of get not as be as year over kind the across of a thanks. No, that year bit of yes, building really those – difference or inside a we a significant you seasonality little of

Matt Carletti

upgrade. great. Best the A.M. and for makes congrats on sense. Thank Okay, color It you

Joe Lacher

it. Appreciate Matt. Thanks,

Operator

with Please ahead. Our Paul Piper Newsome Sandler. from next go question comes

Paul Newsome

Congrats year. evening. quarter the and on Good

On in it was neutral? the expense buyouts the pension a there with pretty is or returned XXXX was that change, that be might not

Joe Lacher

our think audio lost was I on Something little a we it end, you this bit Paul, our room. in

the about asking question I pension, are the part. You missed just but

Paul Newsome

an there might XXXX? not the pension buyout in given the for Was occur that really expense

Joe Lacher

would really the traditionally through wouldn’t has a rate I high our other changing risk from level, redeployment standpoint investment non-strategic over dollars you that. result of crediting exceeded the the the up performance will line as change earning that’s this, results the at going any in get of so last we to think essentially reduction things a higher that’s think a assets effectively, few years economic couple as recent And down to relative capital pension to thinking of reduce decisions benefit Yes, it capital inside an support our the wouldn’t years us. I about and risk. expect for as about, we or I in are would bottom results maintain are a look million and the as result essentially that

Paul Newsome

if days of life couple from last selling be of to companies, about Kemper ask companies companies, or don’t life you last obviously and cons company, and fairly talk their have cons with us view pros about maybe the but [indiscernible] announcements with disagree relationship? do pros not, sort in just maybe And or getting with motor the want unique line companies not you would they specifically a questions your and life that long-term with a to since could fee Kemper the whether of just what week you makes

Joe Lacher

sure to. I happy am about not –

would it use a a has and context multi-line people. First of you I when it as all, it, not describe for

of portfolio businesses. we realized specialty a I are We lines. have multiple

break their they portfolio, able are part enhanced our competitive If capital one of you sustainable each on them a the it, as for decades are they advantage now spot advantage, an our are apart, are why adds a speak and can’t appropriate just errors folks they a a correct completely same business we the for separate were and It where were two and and would having two if rest done of be And that either sale specialty us different deployed And need better the incremental systematic to capital we we being companies in be I it get portfolio take is businesses that. The had that’s them it require part business, inside produce organically dramatically and businesses these to wound, by having assume portfolio somebody we as dollar than other I enhance be maybe on are to value to great wouldn’t it, a because the systematic but grow significant. then we businesses. be them. examples doing of it So, it multibillion it the in the makes competitive to and but a the why There have to and the we to competitive returns write-off had because benefits of had if look to which plus sustainable the would have those where wasn’t to advantage. actually of life diversification was or of insurance example, or they of place, a portfolio and problems portfolio. now. from a cauterizing that auto us they is own. of have

it’s I focus. think So our

Paul Newsome

the much. quarter. it. Great. Thank Congrats you on very Appreciate

Operator

UBS. comes ahead. Meredith question with Our from next Brian Please go

Brian Meredith

possible all Yes, thanks. here, but in quickly in already, is quarter? mortality what Most the just have it COVID to insurance been business quantify asked was at negative the the life

Joe Lacher

are neighborhood XX% I something. going U.S. at probably that’s it, every trying know that don’t I not in are it. to that XXX,XXX the number let or might And somewhere be think but enough bar what look lives going that’s bars do what breakout looking me this zone, for. is a perfect mortality a in you not you check I lost the what is typically But and rate there We some to U.S. is million to probably minus plus XX% close around it’s error are you there do, Brian. get you, perfect. the on and second, error to in for Hold of $XX for around or

Brian Meredith

it. Got

Joe Lacher

a cash people becomes not amount at net the face you risk, full realized because not a income unfortunately, the away, the the statement the amount. charge issue pass but question, is to it’s And

a who So ages, gives what and the a little moves where it bit, around and depending on little which volatility. is it

Brian Meredith

Got it. Interesting.

could great. have on sequential back a enforced just drop specialty just a quickly in policies go anything was was Okay, have just drop you drop, or while? to then I business in in time that surprised any there And big seen well, retentions the I that first in I want just the as

Joe Lacher

retentions, we are the up. In actually

This here pushed of shopping seasonally business business period new Florida, going have pushing of us, period saw that like so those you have believe couple things And in we upticks those auto. be low The tends more bit blowing created got California shopping that retention by well. and couple in periods. that we seasonally anomaly been saw had we had and down and – have years little The what which is in market We in competitors as fourth shopping a an for Windhaven the time of last year, would stay-at-home. into for reduction lower up on. COVID have the definitely COVID to specialty quarter periods we the saw to Access

Brian Meredith

Helpful. Thank Appreciate it. Great. you.

Joe Lacher

Sure.

Operator

from [Operator Instructions] with question comes go ahead. Blair. next Our Schmitt Jeff Please William

Jeff Schmitt

questions ratio, the guess expense Hi, year, for answered. elevated obviously how afternoon. pretty to on from you it’s the just I of were Yes, my XX% overall the most close mean, But get still good that synergies impact excluding there? run-rate there credits American and there have the are that? premium but flowing I much what’s the impact through, I Access guess will on one

Joe Lacher

Jim give Yes, Jeff and you work the components. I comment, let overall will then an

Looking at the I that for looking ratio entire at? the the old you is you are at company, are expense overall – what think looking

Jeff Schmitt

Right, yes.

Joe Lacher

would I not useful particularly a at. to to that’s you number that, look suggest

the at because and them you think one businesses shrinking, change and to them were separately, them expect it specialty one expense you be need would that of up break of the would and if I answer. right could growing were exactly look ratio

that inside apart, matters them businesses. to lot need break because of You these a

Jim McKinney

terms distort things. is if underlying that through understand those about years would that there been are $XXX that outcomes that effectively of company, what associated think a are prior than there commissions mean, ratio with what right, right, any little we fundamental I change products, One you three any or changes the there what different expense million premium big be. wonky of really about I really this Yes, in about are you or that financial and true asking that, really are is the rolling are intrinsically the totality of kind happening, change associated there big picture, inside whether is items, to which is that When results think as are with I the not? not is or change. ratio It’s not

was do. to right we that and chose thing that thought something the So, was

to again and but the of little through traditionally environment as kind So offsets of systemic of got the is more bit a largely what things is bit that you we got environment, COVID short-term in anything, and I with and have, in have pressure, bad company in kind you are long-term you’ve run-rate which going insurance, is the and that of continue If of indications change competitive are environmental elements the kind are related. right of right the just the to little right it’s that across about some but advantages Duane to think of in free the our mix associated the of long-term way have your that then of was would to where Then and of disciplines going noise more of aren’t that to have line bit pressure, referenced. it’s forward be These get environment a building to the answer kind things don’t fee again or to occur just the not some related the them. environment what are business, providing with our think customers. we debt a comes that of what provided. little do, you regulatory on navigate lead us for environment again subject move these you And kind you we and got that that income a the

thinking but here So or I months don’t some this we continue have be to could would change no in know, whatever should noise remain for real XX tell that mind, kind next, of we their and about you work you I it. the positioning or you environment long-term as other in my through

Jeff Schmitt

the seems just as majority on of mean, the others it’s is the Is to losses higher heard say, those it from XX% would the think you that mortality you And couple could I pretty have Okay. a as expected next have be X it years? say in X it would years? safe maybe book where I years, benefit in losses, years, see guess the high case X I I anyway payments of lower life call like

Joe Lacher

acceleration I perspective accounting you There the good or this point, benefits of at glib, some I die don’t Yes, process. an but those the in out if to they sooner model next what figure try the an if definition be to are some not And move to everybody died guy question. as so when but is by mean is I from understand I to going probably do the know in sure, what I assume you up, trying put to couple of am know to years. trying is

Jeff Schmitt

Yes.

Joe Lacher

are going you think mortality between offset costs. those have I to an

not You going over around will of little I underlying those am quite sure or those businesses just it there measure a be to yet. are are to – a but the from that have getting offset years, an we bit we profitability couple how know

Jeff Schmitt

Okay.

Joe Lacher

the that by am that I going enough And and don’t million the wouldn’t then to comes to to driver. big be into going say divide I roll and to that it’s ultimately take big XXX,XXX I X out XX a whatever be. am three I or back think years per two take following.

a estimate doing get that. I from think you bad

Jeff Schmitt

it. Got

Okay.

Joe Lacher

I investment the off probably working think those at for better would pre-COVID looking and run-rates more around environment. I be our adjusting income different

Jeff Schmitt

you. Thank helpful. that’s Okay,

Operator

This I would turn closing back concludes like Lacher our any question-and-answer remarks. the session. to Joe for over conference to

Joe Lacher

and Look speaking to for interest questions. operator you, call with forward your your today the everybody on Thank next for you and thank you quarter.

Operator

for concluded. you presentation. attending now has conference The today’s Thank

disconnect. now may You

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