You and welcome. We appreciate you joining us for this latest installment of our National Bank Financial Between Two Firms series. As a reminder, please feel free to submit questions through the Q&A function. I believe on the right-hand side or at the top of your screen, there should be a button to click to bring that up. We will see your posts there and do our best to get to each question as the conversation unfolds. So with that, let me introduce you to Rowan Saunders, President and CEO of Definity Financial Corporation. Rowan, thanks for giving us your time today to speak with investors. Jaeme, great to be with you and welcome. Happy to do it. Great! So why don't we kick off with a pretty straightforward question around what are some of the overall key messages you want investors to leave with here today? Well, I think the macro message that we'd like to share is that things are, you know, going to plan. I mean, things are going pretty well for us. We've now almost two years in life as a public company since our IPO, and I would say when we step back, we're very pleased with the progress that we've been making. You know, if you think about advancing the strategic agenda, there's been a lot of progress there, whether it's shifting the mix of business that we had planned to do. But even in terms of capital deployment, you know, part of our story is we started life as a public company with a significant financial capacity. We've been quite active in deploying that six or seven hundred million so far as we've built out a broker distribution business that we're very pleased with. So I think on the strategic side of things, things are going well. And then I think the other point would be that, you know, the resilience of the business is also quite evident, and I think if you look at a quarter like the one we've just had, which definitely had, let's call it a fair amount of unusual Nat Cat events, you're still seeing the power of the earnings of the business. I mean, it is resilient. And so when we step back, you know, we're very confident about the outlook and quite excited, you know, as we'll soon be turning the calendar into 2024. Okay, great. And, the. I think the way I was gonna set up this conversation was, talking about the operating units, first, and then getting into M&A and capital allocation, and, and maybe some other, other topics after that. So as we kind of go through this, this format to the, to the investors listening in, that's kind of the progression we'll take. So why don't we kick off with, personal auto, of course, Rowan. So on the earnings call, you guided to Q4 and Q1 combined ratio in the high 90s. I think, what investors and myself, what we want to know is, where is that combined ratio going after that, and, and what are the drivers of that performance? Yeah, I think that, you know, as I said on the call, we're feeling much better about the automobile portfolio. And if we just step back for a little bit of context, the last couple or number of quarters has been much more difficult when you've had a period of elevated inflation, and you've had the return to normalcy post, you know, COVID. So what we've seen is definitely a normalization in the trends in automobile, and the pressure that we saw inflationary through 2022 really peaked in the fourth quarter. And whilst year-on-year there still is some inflationary, you know, increases, we're now seeing several quarters where it's, it's flat. So I think that's the good news from our perspective. So that then says your trend, your loss cost trend is definitely flattening, and we've got a significant amount of rating increases flowing through the portfolio. 13, 14 points of written rate in Q3, that translated into 6.5 points of earned rate. That goes to 8.5 points of earned in Q4, and we think double-digit as we roll into next year. We're confident with that because the market's been pretty disciplined, and our retention rates are quite high. You know, the point I made is that, you know, our normal guidance has been mid- to upper 90s for automobile. We guided that to upper 90s, and really, that reflected where we are both with the Sonnet business, but where we were in this inflationary period. The power of the math certainly starts to earn in, in Q4 of 2023, and that's the quarter where we will have crossed the line of earned rate outstripping loss cost trend. So that's the positive news. I mean, I guess, where your question is, well, why don't we see that faster or more significant than the guidance we've said, which we think it'll still be high 90s for the next couple of quarters, and that's really just the seasonality. I think we go into Canadian winter. We know that Q4 and Q1 are seasonally higher loss ratio periods for us, but then that will, you know, improve the earnings power through 2024, and I think we'll then return back to the normal guidance we'll be given, which is kind of mid- to upper 90s, you know, in that line of business. I would, you know, just add to that, that, you know, as we mature the Sonnet portfolio and get that, you know, to its contribution level, our long-term or medium-term targets for personal auto is in, is in the, in the mid-90s. Okay, great. So mid-nineties is where we should be thinking about this longer term. Unpacking some of the dynamics that you talked about there, let's start first on the pricing side of the equation. So how do you characterize pricing right now as a whole for personal auto throughout Canada? And maybe kind of focus in on, of course, on some provincial commentary and then also how competitors are pricing their business today as well. Yeah, so I think that what we would say, and what we're seeing evidence of, is it's a firm market now for personal lines. And, you know, the loss cost trends that I referred to in the last comment, you know, have come up in the last couple of years. And so insurance companies are now trying to, you know, capture that, and that's where you're getting significant, you know, pricing changes. What we're seeing is that with the exception of the province of Alberta that we called out, you know, on the call, which really is an outlier, everywhere else we're seeing pretty disciplined approach from insurance carriers. We're seeing responsible regulatory environments, rates have been approved, and pretty significant pricing power. Our main market, where we have about 70% of our automobile business, is Ontario. And that's been, you know, quite a constructive environment. You know, we've personally had rate increases approved. We've had segmentation increases put through. We've had innovation changes, like launching, you know, UBI or affinity segmentation filings. So we find that that's been, you know, really quite conducive, and we see the whole market, you know, moving as well. I think, you know, as you go outside of that, it's a little different, you know, in Quebec, 'cause Quebec isn't regulated. It's open market there. But we're again seeing pretty disciplined approach there. Really the only kind of, as I said, exception would be in the province of Alberta, where the industry is not able to get rates approved in line with what I think their requests, you know, have been. That's a little bit unique, and that's still late-breaking news, and there's a lot of details still to be worked out, you know, with the government and their plans in the next couple quarters. Yeah. Yeah, and we'll touch on Alberta in just a second. I'm curious, you know, of course, I've heard you talk about this, and also your publicly traded peer. You know, your pricing actions were maybe a little bit ahead of the industry, and you're seeing some unit improvement. Is that something that you're building into that near-term outlook as well, where you're seeing unit growth continuing to flow through, even with these higher prices? Yeah, so I think that's exactly the way I would, I would describe it. And I think, you know, what we, what we do realize, and what we do observe, is that, you know, our bind ratio or the level of competitiveness, you know, does ebb and flow a bit based on market movement. If we take our main market, Ontario, we had a second increase this year of 9.5% in the summer. And what you then do see is still pretty good retention levels, but you definitely see lower new business sales for a few months. And in the last couple of weeks, we've kind of started to see that, you know, pick back up again, and so a positive trend there. So, you know, I think our view would be as we go into 2024, we're going to capture more unit count growth in addition to the rate filing growth. And that's why, you know, as part of cycle management, you know, we really weren't looking for a lot of revenue growth in personal auto through 2023. It was almost exclusively, you know, rate-driven or average premium-driven, as opposed to unit count growth, and that starts to normalize a bit as we are more confident and rate adequate. So, you know, that feature of both unit counts and average premium will manifest through 2024. Okay, great. So that's good news for the, for the top line. Moving down one line to the, to the claims side of things, obviously, inflation seems to be stabilizing today. Maybe talk through some of those, some of those trends that are driving, inflation at these levels today and, and how that's affecting your, your outlook for 2024 as well. Yeah, I think on the auto side of things, you know, what we saw is this really, you know, step-up in the price of used cars and the price of new cars and a shortage of parts and some labor pressure, and that really drove a significant, you know, inflationary pressure. As I said, we saw that peak in the Q4 of 2022. There is more availability of used cars today. There is increasing parts. There is less pressure on used cars, and you know, that is now stabilized. We're actually seeing other markets, like the U.S., where it's started to decline, so hopefully that trend, you know, comes to Canada, you know, soon. And availability of new parts. One of the drivers of things like rental car days, as the whole supply chain starts to unlock and perform better, you know, those days, number of rental car days, seems to be reverting closer to what we would traditionally expect than the elongated rental periods. So definitely, you know, that trend on personal automobile is kind of looking pretty attractive to us now. When you dissect that, you know, there's the automobile physical damage, and then there's the bodily injury and accident benefits, and we didn't see anything unusual in accident benefits and bodily injury, and that still looks to be the case. So that's the good news there. It really was all the pressure came on the physical damage, and that's now starting to flatten. I mean, I'd remind us that that's still at elevated levels, but at least it's not, you know, increasing at the pace that it was. And so that just gets us back into we do think the normalized, you know, mid-single digits, slightly better than that, loss cost trend is going to return, you know, in the coming quarters. And that's where we get the margin enhancement from rate in excess of that. Yeah, great. And, one theme that's been, I guess maybe increasing in trend or it's elevated is auto theft. So, you know, how has auto theft changed how you're thinking about underwriting and pricing? And are you taking any other non-rate actions- to counter auto theft? Yeah, I mean, it's actually been one of the disappointing drivers in the auto, you know, portfolio. And it is an industry-wide issue. You know, we do have an industry body, Équité, that's very, very focused on this that we're all contributing to. But there's a number of things that I think that ourselves in the industry are doing. So for sure there is pricing. So we have identified those vehicles that are high theft targets. We've changed our underwriting rules and our pricing for that. So definitely there's a pricing element. An example would be on our most targeted list, there are surcharges that are put into place. The industry and ourselves are likely putting more of those business into reinsurance pools than we would've traditionally done. But there's a number of underwriting actions, you know, as well. We do differentiate based on where you house the vehicles. We know that if it's parked in a garage versus parked on the street, there's a different risk profile. But there's tagging and vehicle recovery devices that we're incenting and assisting customers putting in place as well. So a number of those actions. In addition to that, I think the industry and ourselves are being quite vocal with local police and port authorities, and we are starting to get a sense that you know the government authorities are taking this more seriously. So there's a lot of activity on it. Hopefully, it starts to pay dividends. But in the meantime, you know, part of this is just also the additional funding as we've got to spread the premiums onto customers that have to bear that cost driver. Yeah, good to hear. I guess the third line, maybe if we can call it that, in the combined ratio makeup is reserve development. It has been favorable and maybe a little bit more favorable than historical levels. So how are you thinking about reserve development, favorable PYD going into 2024? And have there been any adjustments in how you're reserving, given the pricing, inflation, and normalizing frequency dynamics that we've seen in recent years? Yeah, I mean, I think that I would say there's nothing significantly different with what we're doing with reserving. We like to be prudent. I think we were early to look for trends, and if you think about even going back a couple of years now, we saw this inflationary trend coming, you know, ahead of the market. We leaned into that and strengthened, you know, our reserves for that trend, which ended up, you know, being an accurate, you know, call. This is a business where we like to have a confident and prudent balance sheet, and that nothing has changed from that perspective. And we think that we're well reserved. We think we've got an excellent balance sheet. I think the trends that you've seen with the guidance we've given of a couple of up to a couple of points of favorable development is likely, you know, gonna continue. That's, that's, that's the plan. Okay, understood. You know, still in personal auto, but looking at this more from a mixed perspective, the broker business is, I believe, about 85% of gross premiums in personal auto or personal lines in general, so I assume that kind of translates to personal auto as well. You did a good job of discussing Sonnet and some of the headwinds near term there. But maybe talk more a little bit about, you know, are you happy with the profitability in the broker channel today? And are you seeing any, you know, different trends there that you can capitalize upon? Yeah. I mean, I would start off by saying, you know, we're very happy with the performance of our broker business. You know, we have a great portfolio. You know, we've got a mature book of business. Obviously, we've been in this line for a long time. We've got great technology. That technology allows us to not only give a great customer-friendly solution and interaction with our brokers, so we get access to their best quality business. It also allows us to rapidly tweak and adjust our underwriting rules and pricing, make multiple rate filings. Sometimes they're just segmentation, you know, filings. But what we see there is, you know, very strong mid-single-digit, you know, growth, high retentions. We see a profitable portfolio that is in line with our long-term, you know, average, you know, targets. The broker business actually is performing very, very well. We're happy with it, and we want to, you know, keep growing that business. Yeah, of course. If we, if we look at Alberta specifically, and, you know, the rate cap, and obviously there's still some details to be worked out here, but I'm curious to know, is there, is there a portion of the Sonnet auto book that could be open to higher rate increases than what's been capped, to make that more profitable? Are there, are there any areas within that rate cap where you see some opportunities within your portfolio? Or is it something that we should just think of as being maybe more on pause for Sonnet specifically? Yeah, I mean, this is a really interesting one, and I think that it's a little premature to be definitive on this, because this is late-breaking news. We are in discussions, you know, with the government. I mean, if you, if you actually step back, Sonnet had a 20% rate approval rate increase approved, but never implemented because it got caught in the freeze. So we're interested to see what happens, you know, with, with that going forward. We do know that there's this new definition of a safe driver, which is a pretty substantial portion of all drivers in Alberta. What we don't know exactly is what will be the restrictions on the other category of drivers, and how, uh, we can underwrite and price those. So that's, you know, to be determined. I think there are other items on our mind. You know, one of the things we've done with Sonnet in Ontario is we've launched a UBI product. It's gone extremely well. It's a different rating, you know, methodology and, and platform. There are potentially opportunities to take that level of innovation to the Alberta marketplace, which would be at a different set of terms, conditions, pricing, and, and underwriting, you know, appetite. So, you know, I don't think that there's nothing that we could do. I think there's options. How tangible and practical they are, we will find out, you know, really in the first quarter of next year, when the engagement and rate approvals are likely to occur. So, so I think that's our story there. You know, I think if I just step back for a moment, you know, it takes up a fair bit of the management team's time on Sonnet, but for the overall company, you know, Sonnet's Alberta Auto, which is the only real part of the province we're concerned about. We do have a broker business there. You just asked about the performance Canada-wide of our broker business. In that province, it's a good business, and it's doing okay. We don't like this 3.7% cap. We hope it doesn't last, you know, for too long, but that business is fine. It's gonna be just you know, returning reasonable returns for us. It's really the Sonnet, and if I think about the Sonnet portfolio, it's less than 2% of Definity's total revenue. So, not that material for Definity, but significant, you know, for Sonnet. You know, what we have done is we had, you know, when this started, this freeze went in place, you know, we stopped marketing, so there's very little new business being done. We stopped our digital broker innovation. Retention is down. You know, we only renew about, you know, two-thirds of the portfolio. So, you know, it is a contracting portfolio. So that's putting some pressure on Sonnet's top line, but it's the disciplined approach to do, given the circumstances. Yeah, understood. Last one for personal auto. And maybe it's maybe a bit too early, but you know, with Alberta putting in this this government rate cap, do you. What's your sense as to where other provincial regulators, governments, and maybe specifically Ontario, is what I'm thinking about here, like, might they be considering something similar? Or is there a different backdrop there? No, we have no reason to believe that there's any kind of contagion was expected. This, you know, this has been put in place, with a freeze, you know, a year ago, and when we look at the behavior, in other markets, in other jurisdictions, we, we don't see anything like that. And quite frankly, I think when you look around the world, whenever you get this level of, you know, government intervention into a, you know, a free enterprise, it doesn't work well for consumers. And if you look into the U.S., in some marketplaces, there's been, you know, people exiting and withdrawing capacity. So, you know, hopefully, this is not gonna be too long, and I think people realize this isn't the right, way to, to manage costs. There are other solutions, like reforms, that we're, we're advocating. But, I think that we've been actually very comforted by what's actually happened in other jurisdictions outside of Alberta, and see no indication whatsoever of anything like that. Okay, great. Let's shift to personal property now. My base view here is that there's significant upside for this segment in 2024, as price increases flow through, and perhaps underwriting tightens as well to reflect what was a tougher 2023- Yeah environment. So I guess, one, am I right? And maybe two, where could things go a little bit sideways? Yeah, I think you are right. I think that, you know, the way we would look at this marketplace, it's been firm for quite some time. I think when you think about the inflation drivers and this increasing, you know, trend of weather events, that's likely gonna continue. I think when we step back and we look at particularly this summer, we do think this was an unusual outlier period, so we're not forecasting this level of Nat Cat events. We don't think that it's normal to have 10 Nat Cat events, you know, in Q3 of significance. So number one is I think that's gonna normalize. Number two is that there is strong pricing power. There has been rate indexation, and there's been true rates to reflect the risk. I think that's gonna continue, and I think the market's gonna get a bit tighter. There are already changes to underwriting appetite and a number of actions. And so if I think about our portfolio, you know, we've had indexation running through. We've got rates, so that puts us into the low double digit average premium risk. And even now with, you know, these elevated Nat Cats, there's looking at wordings, deductibles by peril, making sure that our aggregation and accumulation management has been optimized. So there are some areas where, you know, we're either putting surcharges in or we've slowed down, you know, new business to make sure that there's a good spread, you know, of risk. And I think that will create capacity challenges into the marketplace, and that'll keep the market, you know, firm for some time. Look, and I think the other part is, you know, when we think about our own portfolio, you know, we grow by good retention, rate changes, but also portfolios, which have been a significant part of our growth rate, and those can be a little lumpy. So you might find a quarter or so where one big portfolio is transferring, and before another one starts. So it's not. There's a little bit of lumpiness to the top line, but I think the story of margin growing and solid growth, you know, for some time is gonna continue in personal property. Okay, great. And, the, maybe something that could come into question is the reinsurance program you have in place. Both an individual event and an aggregate treaty. I think the aggregate treaty continues into next year as well. But is there anything as a result of these, or as a result of the activity this year, that is causing you to rethink how you structure your reinsurance programs, or is it status quo? No, it's not status quo, but I don't think it's really anything new. I mean, if you step back for a moment, you know, we had a CAD 30 million net retention for the last 10 years. Clearly, the company's got much bigger from premium, there's been inflation, much bigger balance sheet. And so we were on a journey of increasing our net retention from a Nat Cat excess and loss treaty. We did that last year, and we plan to continue that. So that's kind of an orderly progression upwards, which actually is in line with what reinsurers are looking for as well. We think the reinsurance marketplace is gonna be disciplined marketplace, so I don't think dramatic changes from, you know, are expected, and I think that'll keep everything, you know, firm going forward. You are correct in terms of the program we have in place. It was a three-year program. It runs until the end of 2024. You know, and I think we were very proactive in putting that into place. Not that we anticipated this level of Nat Cat activity, but really because we knew we would be moving our net retentions up. We knew we would be growing into property, both commercial lines and personal lines, and you know, wanted to make that kind of a smooth and orderly transition. So that continues. But we like the personal property business. You know, the last time we had an unusual quarter like this was back in 2000 and 2013, where I think it was about 6.5 points Nat Cat on our total combined ratio. At this trend, assuming a normalized, you know, Q4 will be at about 6 points. So these don't happen that often, but about every 10 years or so, you do get a bit of an outlier year. That's our business, we're fine with it, and we can certainly, you know, price for that. Yeah, understood. Going back to something you'd mentioned about the top line about portfolios and lumpiness. Yeah, I assume this is like brokers bringing over business- Yeah and, yeah, maybe you can elaborate a little bit on that process. You know, how that business comes across. Is it the Vyne technology that is the key driver? Is it coming from some of your broker acquisitions recently? Maybe talk through a little bit more about that side of the growth equation for personal lines. Yeah. And so I think on that side, one of the things that we're definitely seeing is this trend of brokers requiring less insurance company carriers than they had in the past. So as far as brokers are concerned, you know, they want to optimize their margins. They want to, you know, work in an efficient way as they can. And one of the things in personal insurance that we think is really, you know, critical for brokers, is the efficiency of interaction and the kind of broker management systems interconnectivity. So that was really one of the big drivers of Vyne. So when we thought about launching Vyne, the first thing was, how do we make this better for brokers and customers, which will generate revenue? And then the second thing, how do we make this sophisticated enough so we could, you know, enhance our margins? And that is exactly what's happening. So brokers are finding they no longer need 12, 15 different personal line insurance carriers, and when they move that business, they're moving it to those companies that have leading technology. And so that's actually been one of our, you know, growth drivers. It comes from across. It's not necessarily from the brokers that, you know, we have put into the McDougall network. In fact, it is not coming from them in terms of portfolio transfers. They are continuing to be stable with their insurance carriers markets. But it's many other brokers around the country that have said, "I'm not getting enough support from my existing carriers. I like the efficiency of Vyne. You've got good claims, you've good competitor pricing. Let's transfer those businesses." And we've been doing that for a number of years now. And I think it's likely, you know, gonna continue. So there's certainly, you know, a few points of our personalized growth rate, particularly in property, that has come from, you know, from that activity. Okay, good to hear. Let's shift to commercial. Didn't get any airtime on the quarterly conference call. So maybe you could give us the quick highlights and what is your outlook for this segment in 2024 to kick us off on commercial? Look, I think we're really happy with the commercial business. And, and again, if you just step back for a moment, you know, this was a massive transformation of a few years ago. Economical used to really be SME. We brought a team in that's built out mid-market specialty in ad- in addition to, to the SME, and there's lots of opportunity there. We've had very strong growth for a, for a number of years. Clearly, the firm market condition has been supportive, where we've got strong rate in addition to unit count. And if I just step back as recent as, you know, this last quarter, we, you know, we're, we're getting upper single digit, you know, rate increases, and mid-single digit, you know, unit count increases. And so that, that is what's driving, you know, good growth, and that's gonna continue. In the SME area, you know, we have digitized that business as Vyne Commercial. Now, a little over 50% of all of that business, that SME business, is broker self-serve. So they really like that. It's very efficient for them to do that. We also think that's important because, you know, through various market cycles ahead. That really makes their business pretty sticky, and I think that is something that's important from our cycle management, you know, philosophy. In mid-market, we've got, you know, great trading underwriters, we've got deep relationships. It's a decentralized model. We specialize in certain verticals. All of those are gaining share as well as, you know, enjoying the trading environment. And then in our specialty business, you know, we see lots of opportunity. That's the one that's kind of grown the most. We've got, you know, 30%+, you know, growth rates in our specialty, you know, lines. Quite frankly, after bringing teams of talent in over the last, you know, let's call it a year and a half, there's some good upside for us there. Our outlook, you know, I think we've kind of said, is, look, this can run in the low teens, you know, for some time, assuming a decent, you know, market environment. The brokers are very supportive, we're gaining share, and we're able to keep, you know, broadening out our comprehensive product suite. I think there's more products we can still bring to market, and particularly in those specialty lines, you know, our natural. We're still well below our natural market share, and so, you know, good growth there. The performance, you know, is good. You know, we did call out that, you know, we were a little flattered in the last quarter by more of a benign cat period. The Nat Cats hit personal lines and not commercial lines. But I think when you step back and normalize for that, you know, our level of confidence for this running in the low 90s, you know, in the year or two ahead, still looks very good to us. Okay, great. You did mention the Vyne as well. I'm just curious, what has been the take-up rate on Vyne Commercial? Is that a key driver of new broker wins, or are brokers using Vyne Commercial in all three segments of the commercial? How, you know, how does that fit into the growth strategy and the contribution to your growth thus far? Yeah, so I think on that one, you know, brokers are really engaged in the small commercial and less so. I mean, this is more internally driven, the technology and the processing on specialty and mid-market, but brokers are exposed to the Vyne Small Commercial, and it is been a game changer for us. One of the drivers, very similar to what we've seen in personal insurance, is that they are portfolios that are transferring into that portfolio. But many brokers are just saying, "Look, particularly for that small market commercial, I only need three or four markets. I really don't need as many as I otherwise do in commercial lines," because you typically do have more carriers, more markets as a broker in commercial lines, just given it's much less homogeneous. And that is one of the big drivers of brokers concentrating. We're gaining significant share of wallets on our leading brokers, small business, you know, portfolios, with more to come. That small business would be the next fastest-growing component, other than specialty, of our, of our commercial operation. Okay, great. The growth has been strong, the profits have been strong across the commercial segments. I guess what I'm wondering is, you know, why hasn't competition become more aggressive to sort of take more share in this market or prevent Definity from taking that share? I think there are a couple of things. One would be, you know, some of the personal lines trends, you know, read over to commercial lines. We've had a period of inflation and rate period, so people are reflecting that. There are elevated weather events and more volatility, and whether people are reflecting, you know, that. And I think that there are other items, too. So, for example, for most of the major players tend to be multi-line carriers. And we've been through a period where you have this lag of rates over loss cost and personal automobile, which has suppressed margins in personal automobile, and I think people take that into consideration in their portfolio underwriting approach. You want to make sure that in a period where you are not getting your normalized earnings from personal lines, automobile, that your other lines of business are stepping up and contributing. And so I think that's an issue there. And then I do also think that the market, you know, has mature data is better. People are better at pricing for exposure than purely just experience. And you know, the perception is that there certainly is risks ahead, whether it's inflation, cybersecurity, Nat Cat, you know, you name it. And so we are seeing more discipline in the market. I think the final point I would add is that in this pressure of servicing customers, not as much remarketing of business has happened. So one of the drivers has been people are quite content across the industry to enjoy higher retention ratios. That doesn't mean that market won't get a bit more competitive, and in some pockets, you see a little bit of more competitiveness on pricing new business. And those typically seem to be in those lines of business or areas that have been the hardest for longest for a number of years now. So, you know, not concerning and no real shifts ahead that we can see. Okay, and maybe last on the commercial, it's given perhaps it's a bit more sensitive to macro. Yeah macro factors. You know, maybe, maybe identify some of those macro risks or, or other risks that, that might be, worrying you in the commercial lines business at this time? Well, I think the two, the two big things that we're, that we're focused a lot on and spend a lot of time with, with our team on, are what happens if we do move into a recession? and what happens if the market does, you know, shift from a firm market to less firm? And how are we positioned to do that, and what do we think? So there's lots of leading indicators, lots of attention on that. I think on the first one, you know, should we go into a recessionary environment, there definitely would be a headwind on the revenue, less so on the bottom line. Again, when we think about that, it's not dramatic when we've looked at past cycles, and particularly relating to Definity's portfolio. Because our portfolio is less exposed to some of those economically sensitive areas of tourism, and entertainment, and segments like that, that typically have a harder time in a recession. But it's something, you know, that we, we pay attention to. And then the other one would be, you know, if we get to a less firm or a softening in the marketplace, that clearly would have more impact on the margin of the business. And so we think about that, and we've been disciplined, number one, in terms of, you know, how we keep pricing new business and how we keep pricing our retention portfolio. But also, not to chase segments that we think look good in the short term, but in a different market cycle are really problematic. And so we passed up on some opportunities, because we know that those segments or portfolios are more likely to be problematic in a different market, you know, environment. But back to the comment I made just a minute or two ago, you know, even if the market starts to taper off, there's still a lot of power in terms of earn rate to come through. Currently, we're still pricing at prices above the loss cost trend, so we're actually building or maintaining, you know, that margin, and we're really not seeing any undisciplined behavior in the marketplace. So, you know, our outlook looks pretty consistent with what we shared before. Not to put you on the spot here, but do you care to be specific on certain lines where you've maybe been a bit more cautious, and not stepping into what might be a trendy piece of the commercial segment? I mean, I think some of the areas are this. It's often, you know, segments that come with, like, a big premium attached. They are things like long-haul trucking, you know, into the U.S., that comes with big premiums, small policy count, can help move your top line. But are the first segments to start, you know, seeing price reductions and being cut. There is residential realty programs, which, you know, the market does tend to move quite quickly up or down, you know, based on the cycle. And so these are big programs where you could write tens of millions CAD of premium, but the rates get cut pretty quickly, and they're the first to go in a soft market. And so when we think about where we expose our capital, we would rather avoid that. As opposed to making good margin for two years and losing margin for the next couple of years, you know, we just step aside from those type of segments. Okay, great. And before shifting to the M&A, just wanted to address a question coming in, and I think it applies to all three business lines. And it's just a curious question as to how the market has perceived the brand Definity compared to the brand Economical. And have you seen any adjustment periods, or is there anything of note to mention on that type of theme? Look, I think when I think about that, you know, the market, the insurance market, we today, you know, trade on our Sonnet brand for direct. We still trade on Economical for the broker business as a subsidiary of Definity, but I think it's gone very well. I mean, in one way, you know, it's a representative of the transformation we've done. You know, Economical, the mutual, to Definity, the public, you know, company, and the cultural shift we've been to, the business transformation that we've made. I would say there's a couple other areas which were very pleasing to us, and one of them has to do with talent. I think, you know, since becoming public, that Definity brand has helped us retain top talent and, very importantly, attract top talent that perhaps wouldn't have thought about Economical, a mutual company, as a destination for them. So, you know, by and large, it's been a, you know, a positive transition for us. Yeah, good to hear. So let's talk about M&A here for the back part of this conversation. You know, our view is that M&A is going to drive a couple of points of ROE whenever it does come in that first year or so. Is that about the right way to think about it from your perspective? Is that the math that you guys are running on your end, when we think about M&A and driving that ROE accretion story? Well, I think what we've said in terms of, you know, the, the guidance of, you know, upper single digit to below teens, that's an optimized balance sheet, and that's all organic kind of growth. And we do have some, you know, improvement, just natural improvement as Sonnet gets more profitable, you know, as we get more investment income, as we get more distribution income. And then certainly this year, you know, after a heavy cat season, we'll have more underwriting income. That's our, that's our forecast. So, so that's all the direction of travel. But what we are doing, and what we do believe, is that as we optimize our balance sheet, and the happy path for us is actually deploying that excess capital into M&A, that does drive a few points of, of, of ROE, you know, in the years ahead. So then you get down to timing, and that's, you know, the one that's more difficult to say. But we clearly do believe that as we deploy the excess capital, there is, you know, another couple, few points of ROE enhancement with that optimized balance sheet. Yep, yep, exactly. So maybe just stepping back in terms of the overall market for deals in this environment, what is the competition like as you're looking at potential targets? And, you know, are there certain conditions today that need to change to drive perhaps a more attractive market for Definity in terms of M&A, and thinking more on the manufacturing side than- Yeah on the distribution side, where you have been active? Well, I think that's a good point, and I think that firstly, what we see in distribution, it is a very active marketplace, and there is consolidation going on. So lots of opportunity there that I think is gonna continue for a while. On the carrier side or manufacturing side, you know, there really have been just a few deals in the last, you know, several years now, which is unusual. You know, normally there is one to two points of market share that changes hand, you know, each, each, each and every year. And we do think, our thesis is, that that trend, you know, will, will come back. I think that people are realizing you need significant scale to afford the technology and the branding, the data that's required. Customer and broker expectations, you know, keep, you know, being, being elevated. You know, when you combine that with the fact that the operating environment has got a little bit tougher, we've had to deal with inflation, we've had to deal with Nat Cat, tighter, you know, global reinsurance structures. We think all of this is going to bring some deals to the marketplace. So that's kind of, you know, our thesis. It's not that you need more buyers. I think there are buyers, there is capacity, you know, in the marketplace. We just need, you know, more sellers to come to the marketplace, and I think, you know, those points that I mentioned are all, you know, directionally gonna driving more opportunity. Of course, it's really difficult, as these are opportunistic, to predict exactly when that's gonna happen. Yeah, so of course, very difficult to predict timing. Difficult to predict what it would look like. But one of the areas where maybe we can get a little bit of insight on is the potential integration of a transaction. So maybe, maybe you can sort of discuss what sort of infrastructure you have put in place today to manage the integration process of what could be a larger scale acquisition. Yeah, and I would say that this is our strategy, right? So we have a strategy for organic growth, and we built these growth engines, and then we have an inorganic strategy. This is what we're working on. This is what we spend time talking to the, to the board about. And we have built a platform for a bigger business than Definity is, and so I think that is a really important, you know, point. We've, in a, in a way, overinvested for the size that Definity is today, so that it puts us in a position to be a legitimate buyer, to be able to take somebody else's business and improve on it. Run it better than it is being run today, enhance margins, and do so in a very efficient way. So if you think about our technology stack as one example, Vyne, in personal lines, you know, is a system that could handle a much bigger business than we have today. If we bought CAD 1 billion or a couple billion dollars of revenue, put that onto Vyne, really, we don't need many people in personal insurance. Of course, there's more people on the claims side of things to service claims, but that's a good example of significant synergies that we would have. And the same thing we're building across, you know, commercial lines and our claims transformation. You know, we're probably halfway through our claims transformation today, and that's significant because that helps with leakage, it helps with efficiency, and it helps with customer satisfactions. So we haven't got to the end of the journey, even of our transformation, albeit mostly, you know, we're a good way through that. The other things that we're doing, we have built a very experienced, you know, corporate development, you know, team. We have executives that have a lot of experience in M&A and integration. At the next level, you know, down, we've specifically hired people that have track records of integration, that you know, when we are successful in landing something, could make sure we can deliver on the synergies and the commitments, you know, that we make. And the other final point I would make is that when you go back to the transformation that Definity's been on, we've done some pretty complicated things. And while Economical hasn't itself bought a significant insurance company, just taking the various brands of Economical, consolidating them into one, building the Vyne platform, dealing with all the regulators, all the brokers, all the pricing dislocation, systems and data conversions, all of that was done through the period leading up to IPO. And in a way, that's actually more complicated than simply just acquiring a business and integrating it. And so I do think we've got the skills and experience required that gives us confidence, you know, to do that. Yeah, great to hear. Moving to the broker side of the M&A strategy, you know, we've had lots of conversations with investors as well on the merits of that strategy. You know, is the strategy to continue to push further into that broker channel and drive distribution income higher? And what is the strategy in terms of, I guess, say, going about that? I've seen a couple smaller deals through the industry newsletters that come through, but you know, is that the move, or are there other larger opportunities that are potentially available as well? What do you need to continue to bolster that business? Yeah, I think the opportunity is there. We wanted to, you know, build a platform, and that platform really was, you know, landing McDougall, and then McFarlan Rowlands, which gives us an excellent Ontario platform. Drayden, which we closed in the fourth quarter, now gives us an access and a leading broker, you know, in Alberta. And so what we'd like to do is kind of round that out. We'd like to see this as a national platform, and once we've done that, then it's much more programmatic or M&A. So we're not waiting for that. You saw, as you've just mentioned, you know, McDougall's had done a couple of small deals in the quarter, and that will continue. We like that because, you know, the valuations are lower, the synergies are higher when you do smaller, you know, kind of transactions, but that will continue. You know, we quite frankly have been delighted that we were able to build such a substantial broker distribution business so quickly. When we acquired McDougall, it was about CAD 500 million of written premium. We're almost at CAD 1 billion, you know, today in just over a year. And, you know, we'll look to refresh that kind of guidance at the end of the fourth quarter as we update, you know, general guidance for next year. But I would say, you know, we're seeing lots of opportunities. It's a great model people really resonate with. And we do like more bolt-ons because they're really. Brokers do benefit from scale. That generally drives much higher margins internally for them, and that's important. And so when I step back and I say, "Well, like, look, this is really accretive to our Operating ROE. It's stable and predictable, you know, good margin, high margin revenue," and in addition to that, it's strategic because it gives us access to a high-quality portfolio of business, of which we could be one of the leading underwriters. So we get two sources of income: We get the distribution income, and we get the underwriting income. I mean, you put that together, it's a pretty compelling story. Yeah, absolutely agree 100%, and it certainly seems like that billion-dollar premiums objective or target is gonna be moving higher with the success so far. As I think about, like, capital allocation, distribution versus manufacturing, or maybe even overall, like, is there a target level of capital deployed that you're looking to achieve in the next year, or is there a timeframe? Have you set any sort of objectives around capital deployed from that perspective for the company? Yeah. I think what we haven't done is, like, earmarked or limited opportunities to say, "Well, we'd only spend so much on distribution or so much on manufacturing." The capital is available. You know, if you look at what we expect our financial capacity to be, it's something like CAD 1.2 billion. Then you've got to adjust for the Drayden acquisition of CAD 200 million. So there's about CAD 1 billion, you know, that we think is available to us in the short term there. And we're happy to deploy all of that. I mean, if we find the right opportunity, there's no reason why we couldn't lean in and deploy that, you know, next year, if the opportunities, you know, were there. Yeah, absolutely. The other side of capital allocation, I mean, there is the dividend is in place. I think the cadence would suggest that we should hear a little bit more about that in the next quarter. So I'm just curious how you're thinking through dividend growth and how that fits into the capital allocation strategy. Yeah. When we think about, you know, our capital management, I think we've been moving nicely on all of that, and, I mean, it's something that's a high priority for us. You know, we, we want to invest it. I mean, what we've said is we want to invest it in organic growth, keep building the business. It's important for us to have a growing, and consistently growing, you know, dividend. So we expect that, you know, to, to continue. From there, we get into M&A, and then lastly, you know, capital return of some sort, which we, you know, don't see as imminent because of the opportunities we think will happen in the short term. you know, to your question on dividends, I mean, we will update it at the end of the year as we talk to our board about it. But our intention is, you know, we've got a lot of confidence in what the earnings profile looks like, you know, going forward, and we expect that to continue to be a consistently, you know, growing part of the story. Yeah, and just to refresh, is it a growth with earnings strategy, or is it a payout ratio? I just... Forgive me if I'm Yeah. I mean, I think we can- We must. I mean, I think we can, these are the points of consideration, and so for sure, something like the payout ratio, you know, we would take into consideration in terms of what, thinking about what that, what that would look like. All in mind of, you know, being competitive and, and demonstrating the confidence we have for earnings growth ahead. Okay, great. Only a few minutes left, but maybe, maybe we'll touch on one part that's been obviously a tailwind for all insurers, and that's the investment portfolio. You mentioned on the call the investment yield is still far in excess of the book yield of the business- Yeah so there are more tailwinds there. Is there anything else that your team is looking to do to enhance yield, whether it's you know, extending duration or looking at alternatives? Like, what else is there to continue to enhance that yield, or is it really just enjoying the benefits of the rate environment today? Look, I think that to answer your, the question directly is, you know, there are some opportunities that we consider more in the line of, you know, private debt, where we haven't allocated a significant amount, but we have an allocation that we could do that based on what we see as an attractive, you know, when we see them as attractive returns. But I would say nothing kind of material should be expected, and certainly nothing kind of exotic here. You know, Phil, on the call, guided to we're now at CAD 170 million of net investment, you know, income. There is about 100 basis points between, you know, new yields and book yields. You- Our investment team has traded to capitalize on the better returns, and so I think that, you know, gives us some confidence for some years ahead in terms of what that net investment income would look like. So definitely we're seeing a trend of increasing net income that's very supportive to Operating ROE. But I wouldn't expect anything significant in terms of a portfolio allocation. Yeah, understood. So why don't we take the last minute here to get any of your closing thoughts? And if I could, maybe just direct you to what aspect of the Definity story in general do you think investors you know maybe not noticing today with all of the upside we're talking about? Like, what is the aspect that you think might be missing in an investor's thought process at this point, just to close it out? I mean, I think one of the points in our mind is we do spend, and we have lots of discussion about excess capital and how much capital we have kind of remaining, and still opportunities to raise more and move forward. But I think sometimes we forget that we've actually been pretty proactive in our two years of life as a public, you know, company. We have deployed CAD 600 million or CAD 700 million of excess capital. Because we've been, you know, generative, we've now still got a billion, you know, billion or plus of financial, you know, capacity ahead. I think that the investment so far in terms of the inorganic plans is really working quite nicely on track. I think that the significance of building a broker distribution platform is maybe not fully reflected as broadly yet by, by all. It is very strategic to us. It's operationally helpful for revenue generation and good underwriting profits, and of course, you know, the lift to operating ROE, you know, given the margins that come out of a brokerage, and significant time, you know, ahead. So I think that when we think about we've demonstrated that we can deploy capital inorganically, the next thing for us, which is the more opportunistic thing, is the carrier M&A. You asked a question about it, I think we feel very, you know, good about our abilities to do that. Hopefully, that's the next leg of the story for us. And that's kind of, you know, I think is still, you know, what's ahead. So, you know, I believe we've got a good story to tell on deployment of capital, what we've done so far and what's ahead. And then the second part of that is I think that we believe our culture, this innovative attitude we bring, whether it's Sonnet's or whether it's Vyne- or whether it's Vyne Commercial, or whether it's UBI, we're disruptive, we're a bit more innovative than the market, and this all powers our organic growth story. So I, so I think I step back, I feel pretty good about our... Not just our inorganic story, but also our organic story. And you put that together, you know, that's why we're pretty, you know, confident of, of the couple of years ahead of us. Yep, I, I agree. The growth story and the ROE expansion story is still very much intact, that underpin what is, what is our favorable thesis on the company as well. So, Rowan, thanks again for spending the hour with us today, and we look forward to catching up again soon. Great. Thanks so much for having us. Bye, Jaeme. Bye, Patrick. Thank you.