Ryan Tunis

Ryan Tunis inquired if Goosehead's 2026 objectives assume a lower take rate on contingent commissions and if margin guidance, excluding contingents, allows for any improvement. He also asked about the confidence in these investments leading to margin expansion in 2027-2028 and the focus on increasing franchise commission rates.

Answer

CFO and COO Mark Jones Jr. confirmed planning for contingent commissions at 60-85 basis points for 2026, lower than recent strong years, to account for potential catastrophic events. He stated that margin guidance, even excluding contingents, implies compression due to investments in Digital Agent and partnerships, particularly in the first half of 2026. Mark Jones Jr. expressed confidence that these investments are accretive to margin long-term and at scale, describing them as 'defined time period' investments. He also confirmed that increasing franchise commission rates is a 'big area of focus,' especially as underwriter profitability improves, noting past impacts from California FAIR Plan, Citizens, and E&S markets.

Ryan Tunis from Cantor asked if Goosehead Insurance's 2026 objectives assume a slightly lower take rate on contingent commissions. He also inquired if the margin guidance, excluding contingent commissions, allows for any improvement and how much the assumed lower contingent commissions weigh on the margin guide. Furthermore, he questioned the confidence in these investments leading to real margin expansion in 2027-2028 and the company's focus on increasing franchise commission rates, which have declined since 2023.

Answer

CFO and COO Mark Jones Jr. confirmed that the initial expectation for contingent commissions in 2026 is between 60 and 85 basis points, a conservative approach given past strong years and potential catastrophic events. He stated that margin compression in 2026 is primarily due to core investments in Digital Agent and partnerships, not contingent commissions, and expects margin to be accretive long-term and at scale. Mark Jones Jr. expressed confidence that these are thoughtful, defined investments, not an "infinite money pit," and will drive significant growth and margin opportunity. He also affirmed that increasing franchise commission rates is a "big area of focus," noting that past declines were partly due to increased business in lower-commission markets like California Fair Plan, Citizens, and Excess and Surplus Lines.

Ryan Tunis questioned why Goosehead's revenue trajectory outlook wasn't more upbeat given market improvements, lack of catastrophes, carrier re-entry, and recent stock buybacks. He also asked about the margin trajectory if the product market fully reopens next year.

Answer

Mark Jones (CFO and COO) expressed optimism, citing the shift to a soft cycle and improving client retention. He acknowledged potential upside to contingent commissions. Mark Miller (President and CEO) estimated the product market is about 80% healed. Dan Farrell (VP of Capital Markets) clarified expectations for accelerating core revenue and premium growth in Q4 2025 and 2026. Mark Jones added that core business should see normal operating leverage, but digital agent investments (an additional $8M-$11M in OpEx) will impact overall margin expansion.

Ryan Tunis questioned why the company isn't more upbeat about its revenue trajectory given market improvements and recent stock buybacks, and asked about the margin trajectory if the product market fully reopens in January, considering the digital agent investment.

Answer

Mark Jones (CFO and COO) expressed optimism about entering a soft cycle, improving agent quality, and client retention, noting potential upside to contingent commissions. Mark Miller (President and CEO) indicated the product market is about 80% healed. Dan Farrell (VP of Capital Markets) clarified expectations for accelerating core revenue and premium growth. Mark Jones added that while the core business should see normal operating leverage, the $8-11 million incremental investment in digital agent operating expenses means margin expansion shouldn't be expected in that context.

Ryan Tunis asked about the timing of a potential drawdown of excess capital for buybacks, questioning whether it would be a 2027/2028 event or if it could occur later in 2026.

Answer

Mark Kociancic, EVP and CFO, indicated that a drawdown later in 2026 is certainly on the table, contingent on claims payouts, the successful transfer of renewal rights, and the fungibility of capital for buybacks. He reiterated a strong commitment to buybacks, given the attractive return profile, and stated that Everest will emphasize buybacks in Q1 and for the remainder of the year, especially as expected benefits from the transaction are unlocked.

Ryan Tunis inquired about the timing of any potential drawdown of excess capital for share buybacks, asking if it would be a 2027/2028 event or possibly occur later in 2026.

Answer

Mark Kociancic, EVP and CFO, Everest Group, confirmed that a drawdown of excess capital for buybacks later in 2026 is 'certainly on the table.' He noted that this depends on factors like claims payouts, the successful transfer of renewal rights, and capital fungibility. He reiterated a strong commitment to buybacks, emphasizing their attractive return profile for the company, and stated that Everest would prioritize buybacks as soon as expected benefits from the transaction are unlocked.

Ryan Tunis posed a broad question about Everest Group's ROE trajectory, considering the impact of lost premium, reduced investment income, cost reductions, and capital management. He also questioned the decision to pursue a renewal rights deal over a direct sale for the retail business, given its performance.

Answer

Jim Williamson, President and CEO, explained that the rundown of costs and earned premium from the divested business will align, not expecting a long-term headwind past 2026. He anticipates a mid-teens ROE over the cycle, with capital management as a key lever. Mr. Williamson reiterated that the renewal rights deal was the most efficient way to execute the strategic focus on core reinsurance and wholesale/specialty, considering backbook reserves, shared legal entities, and finding the right partner.

Ryan Tunis questioned the decision to pursue a renewal rights deal rather than a full sale for the retail business, especially given its reasonably clean reserve standpoint and sub-100% combined ratio.

Answer

Jim Williamson, President and CEO, explained that the renewal rights transaction was the most efficient way to execute the strategic priority of focusing on core reinsurance and wholesale/specialty businesses, considering factors like backbook reserves, legal entities, and finding the right partner.

Ryan Tunis questioned the flat trajectory of management fee income in 2025 and the Q1 2026 guidance, despite growth in partner capital, seeking an explanation for this trend. He also asked about demand dynamics in the 'other property' segment at 1/1 renewals, specifically if cedents were reducing coverage, and the company's confidence in maintaining a mid-50s margin guidance for this segment amidst a competitive property market.

Answer

Bob Qutub, Executive Vice President and CFO, clarified his guidance was for Q1, and fees would follow significant asset growth. Kevin J. O'Donnell, President and CEO, added that joint ventures are not smaller and fee structures are unchanged, indicating relative stability. David Marra, Executive Vice President and Group Chief Underwriting Officer, stated that terms, conditions, and retentions remained strong in other property and CAT, with clients generally not buying down. Bob Qutub explained the mid-50s margin guidance for other property reflects a mix issue and strong current accident year loss ratios.

Ryan Tunis questioned the trajectory of fee income, particularly management fees, noting a decline in 2025 and flat guidance for Q1 2026, despite growth in partner capital. He also asked about demand trends in the Other Property segment at 1/1 renewals, specifically if cedents are buying down, and sought clarification on the confidence in the mid-50s margin guidance for Other Property given the competitive environment.

Answer

Bob Qutub, EVP and CFO, clarified his guidance for management fees was specific to Q1 2026 and noted noise in 2025. Kevin J. O'Donnell, President and CEO, added that joint ventures are not smaller in 2026 and fee structures haven't changed, implying stability. David Marra, EVP and Group Chief Underwriting Officer, stated that terms and conditions, including retentions, remain strong in Other Property, and clients generally did not buy down Cat towers. Bob Qutub explained the mid-50s margin guidance for Other Property reflects a mix issue between attritional and Cat-exposed business.

Ryan Tunis asked President and CEO Kevin O'Donnell about potential 'red flags' that might indicate less market discipline as the 1/1 renewal approaches, given a base case expectation of a 10% rate reduction. He also inquired about the current status of property segment IBNR for 2022 and prior years after recent releases and RenaissanceRe's exposure to Hurricane Melissa.

Answer

President and CEO Kevin O'Donnell expressed optimism for the renewal, expecting a transparent pricing shift rather than less transparent terms and conditions changes. He stated that the company has strong underwriting capabilities to monitor shifts. EVP and CFO Bob Qutub noted that property reserves are relatively constant, with releases based on evolving information. EVP and Chief Underwriting Officer David Marra stated that Hurricane Melissa's impact is too soon to quantify but is not expected to be an 'outlier financial event,' with limited exposure in the CAT book.

Ryan Tunis asked President and CEO Kevin O'Donnell about potential 'red flags' that might indicate less market discipline as the 1/1 renewal approaches, given a base case expectation of a 10% rate reduction. He also inquired about the current status of property segment IBNR for 2022 and prior years after recent releases and RenaissanceRe's exposure to Hurricane Melissa.

Answer

President and CEO Kevin O'Donnell expressed optimism for the renewal, expecting a transparent pricing shift rather than less transparent terms and conditions changes. He stated that the company has strong underwriting capabilities to monitor shifts. EVP and CFO Bob Qutub noted that property reserves are relatively constant, with releases based on evolving information. EVP and Chief Underwriting Officer David Marra stated that Hurricane Melissa's impact is too soon to quantify but is not expected to be an 'outlier financial event,' with limited exposure in the CAT book.

Ryan Tunis sought to quantify the amount of undeployed capital on the balance sheet, asking how much equity the combined RenRe and Validus business truly needs. He also asked if the impact of recent U.S. hurricanes would be more evident in the June 1 renewal rather than the more Europe-focused January 1 renewal.

Answer

President and CEO Kevin O'Donnell declined to specify an exact amount of excess capital but confirmed the company is in an "above-average period of financial flexibility." Regarding renewals, Group Chief Underwriting Officer David Marra noted that European loss activity is already supporting stable structures for January 1. O'Donnell added that Hurricane Milton is a Florida event, making loss-specific discussions more relevant for the June 1 renewal, and that the market has matured beyond needing single loss events to maintain rate discipline.

Ryan Tunis asked if Chubb is agnostic to the source of GDP growth (e.g., AI infrastructure vs. traditional employment growth) when seeking insurance growth opportunities, and about the sustainability of the upticking acquisition expense ratio in North America commercial lines due to mix shift.

Answer

Evan Greenberg, Chairman and CEO of Chubb, stated that while broader-based GDP growth is more stable, Chubb will pursue growth opportunities from any source, provided an adequate risk-adjusted return can be earned. For the acquisition expense ratio, Mr. Greenberg attributed the uptick partly to fewer one-off LPT transactions in Q4 and the faster growth of middle and small commercial over major accounts, as well as E&S growth (which has a higher acquisition ratio), confirming the trend direction but noting quarter-to-quarter variability.

Ryan Tunis questioned how economic growth, particularly from AI infrastructure buildout, translates into insurance growth opportunities, and whether Chubb is agnostic to the source of GDP growth. He also asked if the upticking acquisition expense ratio in North America commercial lines, due to mix shift, is a steady-state trend.

Answer

Evan Greenberg, Chairman and CEO of Chubb, stated that while broader-based GDP growth is more stable, Chubb will pursue growth opportunities from any source if an adequate risk-adjusted return can be earned. He confirmed that the mix shift (middle and small commercial growing faster than major accounts, E&S faster than major) impacts the acquisition expense ratio. He also noted that writing fewer one-off LPT transactions in the quarter, which have low acquisition ratios, contributed to the uptick.

Ryan Tunis from Autonomous Research sought clarification on whether the commentary about competitive behavior in London was a warning for the broader market and asked for a timeline for the next billion in international life earnings.

Answer

Chairman and CEO Evan G. Greenberg specified his comments were particular to the London market, where he sees behavior that historically leads to underperformance. Regarding international life earnings, he confidently replied that achieving the next billion in operating income 'is not going to take a decade.'

Ryan Tunis asked for an 'over/under' on the 2026 EBITDA margins and followed up with a Super Bowl-related question.

Answer

CFO Doug Howell declined to provide a specific 'over/under' for 2026 EBITDA margins, stating that the company aims to tighten the ranges provided in the CFO Commentary document and sees potential upside in synergies and team focus. Chairman and CEO J. Patrick Gallagher, Jr. jokingly suggested calling FanDuel for betting advice, and both executives made lighthearted comments about the Super Bowl and the Chicago Bears.

Ryan Tunis from Cantor Fitzgerald asked for an 'over/under' on Arthur J. Gallagher & Company's 2026 EBITDA margins.

Answer

Doug Howell (CFO) indicated that the company expects to be 'over' the ranges provided in the CFO commentary document, citing potential upside in synergies and the team's focus on continuous improvement.

Ryan Tunis asked Chairman and CEO J. Patrick Gallagher, Jr. why Gallagher is achieving 6% organic growth now compared to 1% in the 2013/2014 hard market, despite his consistent bullishness. He also questioned CFO Douglas K. Howell about recent slight misses on investor previews, given his past forecasting accuracy.

Answer

Chairman and CEO J. Patrick Gallagher, Jr. explained that the market is not declining as rapidly across all lines, and Gallagher is a fundamentally different business now with international presence, reinsurance, RPS, programs, GCOE, and advanced data analytics. CFO Douglas K. Howell acknowledged an $11 million miss on a $3 billion quarter, attributing half to large life sales (which he had warned about) and half to an unforeseen contingent commission true-up.

Ryan Tunis inquired about the mixed investment fund returns, asking if they were specific to individual funds. He also asked about the relationship between workers' compensation pricing and Medicare price indications, given recent news on Medicare Advantage.

Answer

CEO Rob Berkley stated that the noise in investment fund returns was primarily driven by one disappointing fund, which is not expected to be the norm. He explained that workers' comp rates in several states price off a multiple of Medicare schedules, noting that states are starting to review and adjust these multiples due to underlying Medicare rates being below cost, which could make medical trend a bigger challenge for comp writers.

Ryan Tunis inquired about the specifics behind the mixed investment fund returns, particularly the losses, and asked for clarification on the relationship between workers' comp pricing and Medicare price indications.

Answer

CEO Rob Berkley attributed the investment fund losses primarily to one disappointing fund, stating it's not expected to be the norm. He explained that workers' comp rates in several states are priced off a multiple of Medicare schedules, which are often below cost, and states are now reviewing these multiples, suggesting medical trend will be a growing challenge.

Ryan Tunis asked about the low single-digit growth in the casualty side's other liability line, seeking to understand if increased competition or other factors were causing the deceleration. He also questioned the impact of Berkley One and A&H on short-tail lines.

Answer

Rob Berkley, President and CEO, attributed the other liability growth to a combination of the company's rate views, some competition, and strategic portfolio pivoting. He acknowledged that Berkley One and A&H's impact on short-tail lines was consequential but did not have specific numbers readily available, offering to follow up.

Ryan Tunis inquired about the low single-digit growth in other liability, asking if it was due to increased competition or other factors. He also asked for a breakdown of non-commercial property within short-tail lines, given the impact of Berkley One and A&H.

Answer

Rob Berkley (President and CEO) attributed the deceleration in other liability to the company's view on rate and portfolio pivoting, acknowledging some competition. He did not have the specific breakdown for non-commercial property within short-tail lines readily available but confirmed its significance and offered to follow up.

Ryan Tunis of Cantor Fitzgerald questioned why property lines are still showing strong growth given market commentary and asked about the recent increase in corporate costs.

Answer

President & CEO W. Robert Berkley, Jr. attributed property growth to remaining opportunities in commercial lines and strong performance in the private client business. EVP & CFO Richard Baio explained that higher corporate costs were due to compensation expenses tied to a special dividend and incubation costs for two new operations.

Ryan Tunis from Cantor Fitzgerald asked why property lines continue to outpace liability lines in growth and requested an explanation for the increase in corporate expenses.

Answer

President & CEO W. Robert Berkley, Jr. attributed the strong property growth to remaining market opportunities and significant contributions from the private client business. EVP & CFO Richard Baio explained that higher corporate costs were driven by compensation expenses tied to the special dividend and incubation costs for two new business units.

Ryan Tunis of Autonomous Research asked for clarification on the 10-15% growth target in light of near-term risk reduction in commercial auto. He also inquired about the loss from Hurricane Helene and the potential magnitude of the Hurricane Milton loss.

Answer

Executive W. Berkley reiterated the 10-15% annual growth target, characterizing the Q3 slowdown from commercial auto underwriting actions as a temporary 'speed bump' that appeared to be subsiding based on October trends. He stated that Hurricane Helene accounted for about half of the quarter's catastrophe losses. For Hurricane Milton, he declined to give a specific number but assured that any loss would be within expectations for an organization that manages volatility closely.

Ryan Tunis inquired about the one-point deceleration in Business Insurance renewal premium change (excluding property) from the prior quarter, asking how much was attributable to rate versus exposure. He also asked about overall rate adequacy in national property, given a challenging year in the large account space.

Answer

Alan Schnitzer (Chairman and CEO, Travelers) and Dan Frey (CFO, Travelers) indicated that the deceleration in Business Insurance RPC ex-property was due to a combination of both rate and exposure. Schnitzer stated that the pricing dynamic in national property reflects the business's strong profitability, which has achieved rate gains over a long period. He acknowledged some surprising terms and conditions in the market but maintained that overall returns were strong.

Ryan Tunis inquired about the deceleration in Business Insurance's renewal premium change (RPC) excluding property, specifically the split between rate and exposure, and the company's outlook on rate adequacy in national property for 2026.

Answer

Alan Schnitzer, Chairman and CEO, and Greg Toczydlowski, President of Business Insurance, confirmed that the deceleration was due to a combination of both rate and exposure. Alan Schnitzer added that the pricing dynamic in national property reflects strong profitability, and the company maintains discipline on risk selection and terms and conditions.

Ryan Tunis asked about Business Insurance incurred losses, specifically whether attritional losses in National Property ran better, worse, or in line with expectations so far this year.

Answer

Dan Frey, EVP and CFO, stated that the quarterly results for Business Insurance were strong, with weather generally leaning favorable. He indicated that the attritional losses were within the normal realm of variability from quarter to quarter, leaning towards favorable, and not significant enough to warrant a major adjustment to the clean jump-off point for Business Insurance.

Ryan Tunis from Cantor Fitzgerald asked if the slight downturn in exposure in Business Insurance fully captures the macroeconomic impact on the business. He also inquired about the pro forma impact of the Canadian business sale on the company's combined and expense ratios.

Answer

Greg Tislowski, President of Business Insurance, confirmed that the exposure trend is aligned with broader economic activity and moderating inflation. CFO Dan Fry explained that the Canadian sale is not expected to have a significant impact on margins or ratios due to its small size relative to the overall business, leading to only a modestly favorable EPS impact.

Ryan Tunis asked about the macroeconomic impact on the business, noting the slight downturn in exposure in Business Insurance. He also inquired about the pro forma impact of the Canadian business sale on the company's combined and expense ratios.

Answer

Greg Tislowski, President of Business Insurance, explained that the exposure trend aligns with broader economic activity and moderating inflation. CFO Dan Fry stated the Canada sale is not expected to have a significant impact on margins or ratios due to its small size relative to the overall business, projecting a modestly favorable impact on EPS.

Ryan Tunis asked how the macroeconomic environment is impacting the business, noting the slight downturn in exposure in Business Insurance. He also inquired about the pro forma impact of the Canadian business sale on the company's combined and expense ratios.

Answer

Greg Tislowski, President of Business Insurance, said the exposure trend is aligned with broader economic activity and moderating inflation. CFO Dan Fry explained the Canadian sale will have a minimal impact on consolidated ratios due to its small size, resulting in only a modestly favorable impact on future EPS.

Ryan Tunis asked about the Florida market, specifically if tort reforms making it more insurable could lead to increased competition, potentially impacting Progressive's dominant market share. He also inquired about the impact of customers replacing existing policies with new Progressive policies on new issued application numbers.

Answer

President and CEO Tricia Griffith acknowledged that tort reform in Florida will likely increase competition, but Progressive, as the long-standing market leader, is well-positioned and intends to continue growing there, believing the changes benefit consumers. Regarding policy replacements, Griffith confirmed a meaningful impact on both new issued application numbers and policy life expectancy (PLE), describing it as an unusual dynamic driven by customer sensitivity to rates. CFO John Sauerland clarified that while these are reported as new customers, the ultimate metrics for growth and market share are policy-in-force (PIF) and vehicles-in-force (VIF) counts.

Ryan Tunis with Cantor Fitzgerald asked if Florida's tort reform, by making the market more insurable, could lead to increased competition, and if there are unique aspects to Florida. He also inquired about the impact of customers replacing existing policies with new Progressive policies on new issued application numbers.

Answer

Tricia Griffith, President and CEO, acknowledged that tort reform will likely increase competition but emphasized Progressive's strong, long-standing position in Florida and its commitment to growth there. On policy rewrites, she confirmed they impact new issued application numbers and policy life expectancy (PLE). John Sauerland, CFO, added that policy in-force (PIF) and vehicle in-force (VIF) growth are the ultimate metrics for assessing market share.

Ryan Tunis asked for a geographic breakdown of the Risk and Broking segment's 7% organic growth, specifically how the U.S. performance compared to international regions, and followed up to confirm if the U.S. was running near 7% organic growth.

Answer

Andrew Krasner, CFO, stated that growth was seen across all geographies, with the U.S. being less than half of the total R&B portfolio, emphasizing diversification. Lucy Clarke, President of Risk and Broking, clarified that the U.S. was not necessarily running near 7% organic, noting particularly strong performances from the UK, Great Britain, and other international regions.

Ryan Tunis asked for a geographic breakdown of the Risk and Broking segment's 7% organic growth, specifically comparing the U.S. performance to international regions.

Answer

Andrew Krasner, CFO, stated that growth was seen across all geographies, with the U.S. representing less than half of the total R&B portfolio. Lucy Clarke, President of Risk and Broking, clarified that the UK, GB, and international regions showed particularly strong performances.

Ryan Tunis questioned the drivers behind the 17% decline in Arch Capital's facultative property reinsurance, asking how much was due to cedent retention versus Arch proactively walking away or rate changes. He also inquired about specific pockets within the transitioning market that are particularly challenging to underwrite and require advanced data analytics tools.

Answer

CEO Nicolas Papadopoulo clarified that Arch is not cutting back on facultative property; the decline is primarily due to clients retaining more business and revising their growth forecasts downwards, in addition to rate decreases. CFO Francois Morin emphasized that any reduction in exposure is generally due to cedent decisions, not Arch walking away. Mr. Papadopoulo stated that the entire market is competitive and prone to anti-selection. He highlighted Arch's reliance on data analytics tools to segment portfolios and provide granular information for risk-based pricing and limit management, which makes them bullish on writing profitable business in this environment.

Ryan Tunis asked about the decline in facultative property in Arch Capital's reinsurance segment, questioning how much was due to Arch proactively walking away versus cedent retention or exposure decline, and how much was rate-driven. He also inquired about particularly challenging pockets to underwrite in the transitioning market and the role of data analytics tools.

Answer

Nicolas Papadopoulo (CEO) clarified that Arch is not cutting back, and the decline is mainly due to clients retaining more business, falling rates, and cedents revising growth downwards. François Morin (EVP, CFO, and Treasurer) confirmed that any reduction in exposure is typically the cedent's decision, not Arch's. Nicolas Papadopoulo described the market as competitive with anti-selection, emphasizing Arch's bullishness due to its data analytics tools that provide granular information for pricing and risk segmentation.

Ryan Tunis from Cantor Fitzgerald asked about potential underlying combined ratio pressure in business insurance, particularly in middle markets, based on supplemental data. He also inquired about any new trends in group disability, specifically regarding paid family leave compensation.

Answer

Chairman and CEO Chris Swift attributed the pressure in middle markets to a strong national accounts quarter, which tends to have a slightly higher booking ratio, and minor non-cat property favorability. President Mo Tooker confirmed the slight non-cat property favorability. For group disability, Mr. Swift noted encouraging trends in leave products and responsive pricing actions due to their fast-cycling nature. Head of Employee Benefits Mike Fish added that increased utilization of leave benefits is being priced into renewals and new business, and the long-term disability loss ratio is seeing a normalization after favorable incidence trends in prior years.

Ryan Tunis asked about the underlying combined ratio pressure in business insurance, specifically in middle markets, and if case value was a contributing factor. He also inquired about new trends in group disability, particularly regarding paid family leave compensation, and the performance of long-term disability.

Answer

Chairman and CEO Christopher Swift attributed the sequential pressure in middle markets to a strong national accounts quarter, which tends to have a slightly higher booking ratio. President Mo Tooker noted some slight favorability in non-cat property. Regarding group disability, Christopher Swift mentioned encouraging trends in paid family/medical leave products, with increasing utilization leading to pricing actions. Head of Employee Benefits Mike Fish added that increased utilization of leave benefits is being priced into renewals and new business, and the overall long-term disability book is performing well within pricing expectations, with a normalization of the loss ratio this year.

Ryan Tunis from Autonomous Research asked about pricing expectations for the upcoming Q1 Group Benefits renewal season in light of the competitive market. He also inquired if any new claim trends have emerged in group disability this year amid the volatile macro environment.

Answer

CEO Christopher Swift indicated that the 1/1/25 national account renewal season is largely complete and that the company competed effectively while remaining disciplined, particularly on multi-year rate guarantees. He stated there are no significant new claim trends in group disability, describing it as "more of the same," though he noted the growth of complementary paid family and medical leave products.

Ryan Tunis from Cantor Fitzgerald followed up on the underlying loss ratio, asking if the two-point year-over-year increase implies pressure from commercial property lines. He also questioned whether the improved property pricing environment is merely a function of seasonal mix, with fewer Florida shared and layered renewals in the third quarter.

Answer

Michael Kehoe, CEO and Chairman, clarified that Kinsale is not seeing pressure on its loss ratio from property lines, as property has overperformed, contributing disproportionately to reserve redundancy. He explained that conservatism is maintained on long-tail casualty due to higher uncertainty, past inflation, and supply chain disruptions, ensuring reserves develop favorably. Regarding property pricing, Mr. Kehoe reiterated that rates are deteriorating at a slower rate, not improving. Brian Haney, President and COO, added that the faster rates decline, the quicker they normalize, suggesting the inflection point is not primarily due to seasonal mix.

Ryan Tunis asked if the two-point year-over-year increase in the underlying loss ratio implied pressure from commercial property lines and to what extent the improved property pricing environment was a function of seasonal mix.

Answer

Michael Kehoe, CEO and Chairman, clarified that there is no pressure on the loss ratio from property lines, as they have overperformed, leading to disproportionate reserve redundancy from short-tail lines. He explained that conservatism is maintained on long-tail casualty due to higher uncertainty and past inflation impacts. Michael Kehoe corrected that property rates deteriorated at a slower rate, not improved, and Brian Haney, President and COO, added that this normalization is due to the rapid rate declines, not primarily seasonal mix.