All right. Guys, welcome to the Arch Investor Day. Creating value through the cycle. Wow. This is like remarkable buzzwords for you guys, so I want you to remember that. And just I asked Maureen to show up. You guys know Maureen, part of my team here? Maureen we have an awesome collector's item that you guys get to pick up at the end of the day. So Maureen, would you just show them what this is? This is an authentic insurance cycle clock, and it works, sort of. So it's not an antique. It's brand new. In any event, thanks much. Thanks for you guys for coming. On this theme of creating value, I think you'll agree with us. We're just incredibly well-positioned for the market that we have today. But also, as we can see, the market and the cycle begin to turn, we've got some neat opportunities ahead of us, and that's part of our objective today. We're going to spend the next three hours, yeah, that's a long time, but in a series of panel discussions or fireside chats, so I've had one of your top research analysts ask about the lack of financial reporting without mentioning her name, but the point of this is to share with you some sense of, A, the strategy at Arch, but also with the next generation of management. We'll at least touch on, probably not to anybody's satisfaction, the departure of Marc, but why we're a nimble organization and we can adapt to this change. We're going to demonstrate that, and I think you'll see this. The more important part of this afternoon is going to be the cocktail reception, where we get to talk further with a drink and maybe go out on the balcony. It's not too cold out there. We're going to ask that you hold your questions to the very end. I'm only going to give you maybe 30 minutes. Heather gets 25 of it, okay? So the rest, this is an inside joke, sorry. The point of this is we'll have part of this is going to be the formal part of the presentation, but a lot of the questions are going to come later on in the afternoon. So we really wanted to allocate plenty of time for you guys to ask questions. We are webcasting. We got a great suggestion from John Armitage. Here he is. We are going to have a transcript. Some of us, my accent's pretty good, but some of the others, maybe not so much, right? Given my personal priorities, we will close off the questions somewhere between 5:00 and 5:15 so I can get to a cocktail and some of the hors d'oeuvres. We're going to set up tables. You'll see we set them up over here with a little label for Insurance, Reinsurance, Mortgage, Investment team. And we're going to have some of the team that you'll see here in the various panels. They'll be up there for you to ask other questions and get to know them better. And with that, I'd like to call up the executive team here, if I could get both François and Nicolas to join me up here. No applause, guys? I mean, what do you think? Where do you want us to sit? In the middle? Good. All right. Hopefully, I'm still on this. Now, I'd like to point out that the photos up here, they were just taken a few weeks before we received the sudden announcement of Marc's early retirement, and we've aged just a little bit, at least I have, in the intervening time period. We've gone through a lot in the last few weeks. We've had our earnings call. We've had a board meeting. We've announced dividend. We've got a number of things to talk about here. I think maybe let's kick it off. Nicolas, if I can ask you just to address this. François, you too. You also go back a number of years with Marc. His early retirement was a surprise to us. Can you help us understand why Marc left so abruptly and then really help some of the investors understand here how you and the rest of the executive team have been dealing with this transition? So Nicolas, if I could ask you to start. Yeah. So the question on everybody's mind. So I don't really have a great answer. I think it was clearly, as I said, on the earnings call, it was clearly a personal decision of Marc to retire. I think, was I shocked that Marc retired? Not, because I think he's been talking about it for a while. And what was shocking to me, at least, was the decision, how sudden the decision was. So he made up his mind and called the board and said he was going to retire. So that's a part that is difficult to explain. I think there's multiple reasons for that that we know because of the discussion we had prior to him making the decision. But there's no good answer for why there's no transition. And this was just Marc's decision that he wanted to move on, and so be it. So I've been with Arch for, those who know me, 23 years. So I started back in the days with Maamoun and David. And so I've worked for Marc, with Marc, for a number of years. And in the last probably three to four years, him and I, we really worked closely together on the strategy, on the operations, on the talent management. I think the only thing that I really didn't work closely with Marc was on investment, but François did. So that's probably the things I have to get more involved in in the immediate future. But I think based on the decision that Marc made, which is kind of bittersweet for me, I think I'm excited for the opportunity the board gave me to lead Arch for the future. So I think that's where I stand. And there was a ton of questions on, is anything going to change? And are you aligned? Are you fully aligned with Marc? And again, a lot of the high-level strategy that we implemented in the last three or four years, the whole executive team, Marc was very much of a collaborative. We pride ourselves to be collaborative, very collaborative managers. And everybody could jive in. And I had a big voice in where Arch was going. And I think if Marc and I disagree, maybe the company would come to a standstill for a little while. So I think I'm actually very extremely comfortable with the direction the company is going and the strategy we have today. And I think for those who know us, it's really about cycle management and cycle management. I think the evolution of cycle management, we can talk about it today. And second is staying core to this principle of being in a specialty business and having a diversified portfolio that allows you to move in and out as the market opportunity presents itself. So no real change as far as I'm seeing in the immediate direction where the company is going. So François, what about you on the transition, executives? What do you see? Anything there? Yeah. I mean, I agree that the announcement and his retirement was sudden, but we didn't miss a beat, right? I think the fact that the succession plan was in place, the fact that we have a very deep bench, the fact that we have people that have been with Arch for 20-plus years just, I mean, is a source of comfort for me and for most, if not everybody at Arch. The board is very comfortable with where we're going. So yeah, I mean, no question that it is and will be a bit different. Nicolas and Marc are aligned in many respects, but there are different people too, and we all will adjust and move on from there. But in terms of where we're heading, I think there's a lot. We have very much a clear path to what we want to do and where we need to get better and what we need to improve on while still realizing that we've got just a terrific market in front of us and lots of opportunities. So I mean, it's almost. I hate to call it a non-event, but it's truly in terms of kind of what it means to Arch. And for the long term, I think people will move on pretty quickly from the change. All right. So yeah, I don't know, again, that we provided a satisfying answer to you. I don't know that we have satisfied answers for ourselves on this. But I think the point of this is that we're quite confident of the strategy, the group of people we have, and you're going to see them today. We have these principles up here that Nicolas, you asked us to include here. And I'm struck, again, I can just hear a certain research analyst saying, "Don, these haven't changed much." So Nicolas, best-in-class cycle managers, I mean, what's changed here? Not just, Don. I think this is more reflection and evolution. I think in the cycle management, I think today you see we have a bunch of panels with each of the individual units. And you'll get to understand, I think what we did maybe 10 years ago where the mindset was the rate goes down 10%, you need to cut your share 20%. I think that has changed because I think we have a lot more insight into the business today. So we can be a lot more granular in figuring out if rate goes down, what's the technical price, really on a very granular basis. So what is a portion of the portfolio that is actually we need to let go, where we should try to grow. So I think the application to the new way we do things, and I think it's true of reinsurance, it's true of insurance, the new way we manage the cycle is going to look a little bit different to you. And I think that has been an evolution that has been going on for probably the last five, 10 years. But ultimately, at core, we're executing on the same principles. So I think that. Nicolas, one of the things that you've talked and investors love hearing about is growth, right? You all like buying and investing in growth stocks. But one of the questions that I frequently get is, is Arch ever at risk of getting too big to execute on some of these principles? And we think of cycle management, specialty underwriting. Are you concerned about getting too big? And what's that look like to you? Yeah. So first, for all of you, if you think about insurance, I think our market share of the lines of business we are actually writing or try to have to be relevant in is probably less than 2%. So it's not like we are not like in MI where we have like a 15% market share. And I think on the reinsurance, I was talking to Maamoun before the call, it's probably closer to 3% or 4%. So I think that's one answer. And that translates into the fact that we play in the B2B business for the most part. I think we have a little bit of a consumer business, but we're not involved in personal line. We have a very limited footprint in the small and medium enterprise business. I think where we play is really in the specialty world or specialty, meaning if you take a broader meaning of specialty, it's a place where we have created a lot of value proposition is different. We have a certain expertise, whether it's underwriting expertise, whether it's a way we distribute the product, whether it's a customer experience that we create that create larger opportunities for larger margin. That's why I think if we with the market share that we have of that business and the specialty nature of what we do, we're only addressing a smaller segment of the entire P&C world. I think we can continue to outperform based on the size of where we are today. So that. All right. This gets us to this third principle. We're not going to let François off on this one. Capital management. François, I was thinking. I mean, we said you joined us in 2011, but the other side of it, I think going back to your first time as an external consultant, one of the big jobs was helping us do the capital allocation, going back to probably 2002 even, I would guess. The Board's announced a big dividend here. Just can you help us understand in this situation why a special dividend, why $5 a share? Yeah. I mean, it was, we think, good for everybody, good news, right? Capital management is something the board and management take very seriously. I think we've said it from day one. Our number one job is to put the capital to work in the business. And we've done that, I think, pretty well, certainly in the last five years where we've grown our premium by 3x. So I think that says a lot about how we saw the opportunity and stepped on the accelerator and put the capital to work. Now we're entering a different phase of the market where the opportunities to grow are still there, but certainly we don't think will be as significant for the three businesses that we're in. So we looked at our capital structure, looked at our capital position, looking at both internal and external kind of views of capital requirements and determined collectively that we had some excess that we probably wouldn't know what to do with. We bought back shares historically, as you know. I think that's been our preferred approach. That's a good mechanism for returning capital to shareholders, but the limitation being that, yes, price is one, but also the speed, the quantity of share buybacks you can do is limiting, right? So for us, the special dividend was the most efficient way to return a meaningful amount of capital, close to 10% of our common equity to shareholders in one kind of one dividend. Nice high-class problem to have here, François. Yep. The other question that a lot of the investors have out here, though, is why not a regular dividend? Well, it goes back to the, I think, the efficiency and the speed at which you can do it. I think doing, obviously, we could have done a regular. But given our philosophy of cycle management, I think if we had done one, it would have been by definition most likely a very small regular because we want to be able to flex in and out of markets, right? I think that goes hand in hand with cycle management. So if we want to, if we see an opportunity come along and we want to put more capital to work there, having a regular dividend kind of could put a little bit of a limiting factor. So for us at this point, again, a regular, it's truly a determination that the capital that we're returning is above and beyond the capital we need to move forward. Will we ever do a regular? I don't know. I think that's always being considered. But at this point, again, the special was the most efficient way to return the capital. So just one follow-up on that then. Can investors expect another special? There's no reason why we won't be able to return capital going forward, right? I think we got a very good market in front of us. We have good visibility into what earnings could look like the next little while. Again, if the growth opportunities remain good but not very high, the answer is that we'll most likely be in a position where we have to return more capital to shareholders. And at that time, when we make that determination, we'll look again at share buybacks. We'll look at special. We'll look at regular dividends. But I mean, to answer your question, people should probably think about, yeah, there should be more capital being returned in the next little while from us back to the shareholders. Nicolas, the one thing I'm hearing from François, does this mean that Arch has tapped out on growth? I don't think so. I think we can do both. I think when I looked at it, I mean, this was discussed. It's not something that me becoming CEO, we decided to do a special dividend. So that was cooked for a while before I got to the kitchen. But ultimately, I think we have a lot of financial flexibility. I think it's not a problem. It's actually a good problem to solve is that we're generating about $3 to $4 billion of earnings a year. So I think we return to in six months from now, we are back to where we were. So I think we have a ton of flexibility. Are you providing forward guidance there? I hope not. No. Okay. Yeah. Just Just making sure. No, no. But we have a ton of financial flexibility. And therefore, I think based on what we knew, we thought it makes sense. It makes sense to do it. And I think our business units have opportunities to grow. And I think if they were able to grow, something would happen. And suddenly we decided to go back and grow at 20% or 30% basis points. I think we can do that. So I don't think there was any real downside to making the special dividend. That's how we looked at it. There might be some other investors with a slightly different opinion there, as I see Dave up front. Let's go back to these principles. This fourth one I thought was interesting, just when you talk about the Arch culture, the Arch team. It raises this other question about Arch getting big. I mean, we are a lot bigger than when you started, obviously, when I started. Is Arch getting too big to be entrepreneurial? How is that affecting the culture? Yeah. So this is something I think that we don't talk enough about, is like the unique culture of Arch is about collaboration, but it's also a culture where we are a collection of small entrepreneurs. So I think the way we describe it, you think of an asset manager and you think of portfolio managers. So within Arch, we have hundreds of portfolio managers. In reinsurance, probably every senior underwriter is a portfolio manager that manages a small portfolio. And in insurance, I think we have VPs that manage sublines of business. And all those people, the mindset of Arch when I started, Maamoun and I and David started, was if you're going to be a senior underwriter, you are the legal CEO of your book of business. So you're not only responsible to bring the business in, but you're also responsible to understand how the business performed. You're responsible to explain the claims. You're responsible to know your cedent, your broker. So you run a little business, and that was how we compensated them. We compensate our people based on the performance of their own little portfolio. So I think that's, and I think as you move up and you take somebody like Maamoun or like David or people that report to them, it's the same for them. I think they are comfortable and they have broad latitude within the risk appetite that's decided by management and some of the involvement of management to decide where we're going and how fast we should be going. The execution is actually left to the people. If you run a business unit, you already have a broad mandate to execute. There's a ton of check and balance. People come to tell you, you should grow more. You should do this. You should do that. But ultimately, you're responsible for what you bring to Arch and you're accountable for what you bring to Arch. And I think that's something that explains why we retain so many of the smart people that we have, because your choice is it was my choice, Maamoun's choice, and David's choice, or many of our choice to, should I do this within Arch, or should I go and fly solo and lead a NewCo or go and work for another company? At Arch, in a way, you have the same fund. You're fully accountable. But you also have the support of Arch. You have the big brand behind you. You have the financial withhold of Arch that enables to get things done quickly. So there is a lot of advantage to be at Arch. That's why I think this entrepreneurial culture of underwriters is. I think it's a big reason why our performance is very different from others. It allows us, despite the fact that we're big, we're actually very nimble. We talk about portfolios of $100 million and how we're going to position ourselves. Because something I should have said is that the market is not one market. The market is a little bit like investment. The market is made of hundreds of markets. And each of those markets, we have teams that are dedicated to take advantage of the market, pull back, accelerate, how we can win. And our job, my job, and the manager's job is to really give those people the tools, the best tools that they need to be able to succeed. And I think that's what we've been doing successfully. And that's why I think we have better results than the asset allocators that actually look to places where we should play and tell their team, take a market share of this. I think for us, it's a lot more granular and a lot more nimble the way we conduct business. Yeah. To add to that, again, at other places, you'll talk to underwriting leaders. They know how much premium they write. And maybe, I'm assuming, they know their combined ratios, but that may be where it ends. I think with our guys, everybody, the discussion is deeper than that, right, in terms of owning the business. What kind of returns are you producing? What kind of capital are you consuming? Those are CEO-level discussions. To Nicholas's kind of point about kind of having all our business leaders kind of effectively behave and think like CEOs would. And then the way we compensate our people, and I'm sure most people here know our structure in terms of incentive comp, goes very much hand in hand with that where ultimately premiums are good. Yes, you need premiums, but what's more important is the returns. And everybody talks the same language. So, there's nobody building an empire. I've got more premium than you do. Ultimately, it's about what kind of returns are we generating for the enterprise. And that, I think, is very much part of the culture. So, I think it's in terms of kind of are we too big to keep this going? The answer is we don't think so because it's what we've done for 20-plus years and there's no changes going forward. One of the things that are undercurrents I'm getting from both of your conversations here is about the importance of data, and you think about the Arch management teams. They've always been very quantitatively oriented, actuarial. Dinos was the one exception. He was only an aerospace engineer, so he didn't quite make it there, but has that really changed anything, Nicholas, in terms of data, data analytics, in terms of what we're doing today versus what we did five, ten years ago? This last point you have, we have data and analytics structure. I think from the get-go, I remember when we started at Arch Re, I think the thing we always did and we hold ourselves accountable is intuition matters. If you're an underwriter, you know your market. So your little portfolio or big portfolio that you manage, you know where the market is and you see the opportunities. And it's very easy to go and say, "Rates are up 25% in this. Let's go and change that business." The thing we did, I think, better back then, 23 years ago, is that we always forced ourselves to have some sort of objective quantification of what the opportunity was. What's the upside? What's the downside? Is there more upside than downside? Okay. If there's more upside than downside, maybe we go. If it's more downside than upside, maybe we wait. So should we go now? Should we go later? So I think we always quantify and strategize around what's the best way of getting into the line of business and what was the risk-reward. So at that time, we had those tools, mostly actuarial tools. I think you fast forward to today, and I think hopefully we can demonstrate that this afternoon. We have many more tools. I think we have much more granular tools and what I call insight. We have much more insight into the business at a much more granular level. And it's true of insurance. It's also true of mortgage, for sure. If you think of risk-based pricing in mortgage, what is that? It's an insight, geographical insight, type of buyer of mortgage or insight. So there's a ton of insight that allows you to manage a cycle at a very granular level. So mortgage is probably the ultimate of what we can achieve. But I think in insurance, we've moved towards this at a very rapid speed. And what's, I think, amazing to me in insurance is also the way we do manage a cycle in insurance, which is portfolio management, is completely different. The tools they have, and Maamoun will talk about that. We have many more tools today to achieve the same outcome than we had before. And data, the importance of data and the importance of being able to have very granular understanding of what's performed, what doesn't perform, how do we select our distributor, how do we operate the business, do we operate the business efficiently, how do we pick talent. There's a lot of application across the enterprise that is supported by data that allow us to make much better decisions than Nicolas on his own or François on his own. Let's do this. No, I think we always ask ourselves, is this data that we can use to either disprove or prove the decision we make? And so the more, and we're going to do more of this. I think there's this evolution where we're going to become a lot more data-driven. And I think it will separate the people that do this in the marketplace and the people that don't have the means to do it or decide that they still want to underwrite the old-fashioned way. So I think that, I mean, that's going to divide the market. And I think in a hard market, every boat rides with the tide. But as the market gets more competitive, I think the significance of data and the granular information that we have and how we make decisions. I think we'll continue to support superior performance in my view. So the note there is we're going to tee up that for a discussion in the various other panels here. So you should hear a little bit more about data and how we're using that. Before we finish off here, Nicolas, one thing that everyone's also interested in, aside from these two big things about the dividend and about Marc's departure, is where are we on the clock today? Where are we in the cycle for insurance? I think we are in a competitive marketplace. On the clock, we'd be between 11:00 a.m. and 1:00 p.m. I think that's where we are. I think there's capacity. Price is not always peak, but in most of our businesses, price is peak. The business is probably close to the top profitability. The business remains very attractive. But because now it's well known that the business is attractive, we get competitors that come in. The goal for underwriters, the message to our underwriting team is we build this big portfolio. I think that's a huge advantage. I mean, Paul Ingrey used to say, once you build this portfolio, you own the renewals. So I think our goal is to really defend our renewal and select new business where it makes sense based on the data analytic advantage that we created for ourselves, continue to grow where we can, but also defend the position that we've created for ourselves. I think I'm really bullish. The thing that differentiates us also, I think when I look at the history of Arch is we tend to make decisions today not to maximize the stock price for next year. I think we kind of have, despite the fact that we are publicly traded, we have the financial flexibility to kind of plan for the future. So a lot of the 2025 and 2026 result, a lot of it is baked in. I mean, there's big catastrophes. There could be dislocation in the market. There could be terrorism events. But in the most part, we say this to our board. They say, we want to compensate you based on the calendar year results, but you should pay me three years ago because that's when I did all the work to get us to where we are today. So I think for me, 2025 and 2026, it's already kind of a lot of it is going to be baked in. I think the work we do today is more 2027, 2028, 2030. That's a lot of the work we do on strategic analytics, positioning the portfolio, working with our brokers is really geared toward. So short way to say, I'm not really worried about it. I'm really bullish on 2025 and 2026. 2027, 2028, 2029, I think those are where we're rolling up our sleeves now to figure out maybe a more competitive environment, trying to understand how we are able to win in that environment. Because one thing, understanding why you win is important because when you get to a competitive environment, a lot of the business you win, somebody let it go. So if Chubb let it go, whether they pissed off the customer, that's a good reason why you would get the business. If they let it go because their strategic analytics models are probably better than ours, so they think this is a bad piece of business, you should know that. If you don't know that, you're going to get all that adverse selection. So, having more insight into why we win the business and our teams having better understanding of areas where we can win and we're pushing to win, that's a challenge that we have probably for the three to five years ahead. So one last thing real quick. If we go to this next slide, this was pricing, which just to show you that we're still bullish about the pricing. But this last one is our kind of proxy for the casualty market, which we actually think is still in the hardening phase. And you could see a lot of red starting to develop. Even back in 2014 is now red. And we might see a few of these other years. You're hearing about some of the pressure on some other companies to strengthen reserves. François, I mean, when you look at the other liability casualty lines, which is what's driving rates up, how comfortable are you? And I think the auditors, we don't have any PwC here, are they? Listen, I mean, that's a great question. I think reserves are something we take a lot of pride in. I think we have a long track record. I think while we will be the first ones to say we're not perfect, I think we've been able to maneuver and position ourselves to be in a place where we don't have to take a reserve charge, right? We've made some adjustments as the data comes in. I think our culture of recognizing bad news early and waiting for the good news to get more comfortable with the good news, I think, has served us well. Is there more pain to come in the market? We think so. I think there's, again, the trends. I think, still going back to 2020 COVID year, really threw a major wrench in the whole actuarial science domain in terms of messing up a lot of diagonals and a lot of indications from the lack of data. So I think people are readjusting to that, maybe got a little bit too optimistic about trends being relatively low at that time. So we see that. We see some of that. Although I think that the answer for us has been if you're underweight when the market is soft, then you also are more prudent with your initial loss picks. I think that minimizes the pain over time, and that's what we're experiencing. So will we see some potential further noise or adverse development in our casualty lines of business? I wouldn't be surprised. But we certainly think that the quantum or the impact of that will be relatively minimal given how we position ourselves. All right, guys. We're going to finish it up here. We're three minutes over. First panel, great. Thank you much. And we're going to start with the next panel, the investment team. Are they the investment team to come up? Here they are. Nicolas, you step down. And François is going to moderate. I'm going to try and be done. It's like. There you go. It's hard to be there. That's a tough challenge. The investment team is our fourth leg here, guys. So they're creating value for us. You guys ready? Hi Yeah. A lot of new faces here, right? So we were talking, we were recollecting. We've had these investor days. We had them for a little while. We haven't had one of these in a number of years. And there are some new faces here. Christine Todd, Chief Investment Officer of Arch, joined us just over three years ago. So before we get going into how we think about the investments, I'd like Christine to introduce herself, tell us what she's been up to, and also introduce her colleagues who are on the investment team. Excellent. Well, it is by far the greatest honor of my entire career to be part of this team at Arch and serving the shareholders and the employees. I have a long history in the asset management business, managing money for institutions, including insurance companies. And so now I only have one client, and that's Arch. But there are a lot of people that we serve in this process. And it's a complex way to navigate a portfolio with all the regulatory and other constraints that we have. But as a team, we've been able to consistently deliver returns that are in line with the expectation, risk-adjusted returns, and superior to that of the benchmark. Nasri, who sits to my left, preceded me at Arch Investment Management. He is an exceptional leader and partner. Really, the buck stops with him when it comes to risk allocation, sector selection, and security selection. And he's been doing an exceptional job at that. And we mathematically have proven that over the course of his career at Arch. William is a new joiner. He's head of our alternatives management. And he is in charge of manager and strategy selection such that he's building and continues to build a diversified portfolio in the private markets, but one that's not so diversified that it's diversified. So it's a tightrope to walk. And he's doing an exceptionally good job attracting new investments, new strategies according to a very well-reasoned target asset allocation. Great. So what do you do on a day-to-day basis? So how do we manage? How do we kind of build a portfolio that is north of $40 billion? How do we set up our allocation to be able to generate these kinds of returns that we think we need to put the money to work? Over the past few years, we've been very focused on, I'd say, four main categories of things, starting with a strategic asset allocation. From the bottom up, we built constraints that Arch is subject to, regulatory constraints, quota shares, trusts, etc., and married that with the potential for asset allocation in the financial markets and identified an efficient frontier. Where on that efficient frontier is the optimal place to be given our risk objectives and constraints? Around that strategic asset allocation, we manage actively where we see changes in relative value. Where we prove our skill in doing so is by mapping that strategic asset allocation to a target allocation index and tracking our total return to ensure that we're consistently exceeding that of the asset allocation index in our active management. That's just an ongoing process. How do we do a better and better job of achieving the goal of exceeding that benchmark return? That is by building a data and analytic framework and team to augment decision-making. And that's been a very intentional process at Arch and at AIM. And we have success in doing that, but it's a never-ending process. The third, I would say, is identifying inefficiencies in the financial markets, capturing liquidity premium in private markets, in public markets, such that we can take advantage of Arch's flexibility with lots of surplus and earnings. And then finally, developing tools and transparency so that we can execute on Arch's primary mission, which is cycle management. And as a team, we've been laser-focused on sort of those four categories: constant process of improvement with milestones of achievement. And it's been quite a journey, and it is never-ending. Great. Going back to the picture, Nasri, I was looking at the picture. You look younger in the picture than you look in person too. And it made me realize, how about I go back to when you joined? And when you joined, the portfolio was only $13 billion. So we're now north of $40 billion. You've seen a lot of growth in the portfolio. On the next slide, we see what's in front of us in terms of fixed income, which you manage. You manage equities as well. So walk us through how do you set up the portfolio? What's your thinking in positioning the portfolio given the conditions we have today? Yep. Thanks, François. I think I would start with that ratio of fixed income to total portfolio, roughly 70%-75%. That's an output of the strategic asset allocation that Christine just mentioned. It's ample enough to cover all of our liabilities and some. You can think of that as the staid portion of the portfolio or the more boring portion of the portfolio. That being said, I believe our differentiated versus certainly our Bermuda peers, but also other peers, in that we're managing the majority of the portfolio internally. We are allocating externally to niche portfolio managers to enhance the return that we can generate internally. What that does, and I was listening to Nicholas earlier, is that we're perfectly aligned with the Arch at large in that it allows us to be nimble in coming in and out of asset classes, in better allocating certain portfolios to certain managers, in evolving the portfolio as our guidelines or regulatory environments change. So I'd say that's one of the distinguishing features of how we manage internally and externally. The other one is that we're very focused on risk. It's always a measured risk in the portfolio. And risk stems from managing the portfolio from the top down. How much risk are we going to take? And that too is very quantitatively driven, more so in the past few years, and we're continuing to evolve that process. The bottom up, meaning how we position for industries, for names specific issuers in structured credit, is very much fundamentally driven. That's the bottom up piece. And we're in the process of augmenting deep fundamental analysis with quantitative processes to enhance our understanding of how we pick our individual securities. The last thing I would say is, as you can see on the picture, it's an extremely well-diversified portfolio by sector, but also at the industry and at the security level. And what that does is it really protects the downside, meaning if one or the other of the securities is not what we think it is, and that happens sometimes, it's going to have a very minor impact on the overall return of the portfolio. So risk-adjusted return in a diversified fashion. And I'd add to that that we're really looking for sector and security selection and risk rotation to deliver the returns from the portfolio. And that anticipating interest rates and manipulating duration is not a big part of the strategy. We de-emphasize that. We manage duration very close to that of the liabilities, understanding that our number one priority is to provide liquidity in case there are claims. On top of that, we want to deliver some total return so that we're contributing to the book value per share growth of Arch. Great. William, let's talk alternatives. I mean, that's definitely your focus area. The slide here is pretty telling. It tells quite a story in terms of growth of assets that we've allocated to alternatives. They performed well. But we've also increased our allocation over time as part of the overall portfolio. As the portfolio has gotten larger, I think we've realized collectively that we had a bit more flexibility to grow and invest more in alternatives. So what do you do? How does investing in alternatives work at Arch? Yeah, so thank you. I mean, so Arch, I joined Arch about 18 months ago, and immediately, I was struck by just the dynamism and how rigorous everything at Arch is done, and that's exactly how I think about our alternatives portfolio, and so we've got, I think, obviously, we're an insurance company with multiple balance sheets and multiple jurisdictions that create some constraints, and that narrows our universe of what we can do, but the really fortunate performance of Arch, which has been incredibly strong, gives us some flexibility, and you can see the growth that we've been able to achieve from that, and so within that, that naturally kind of aligns us to a few key areas of where we like to invest. I think you can see private credit's a pretty big chunk of our investments. Secondary is where we do a lot of that. We kind of round out the portfolio with some private equity, real estate, and infrastructure. I think we try to make sure that we're not too long in duration because private markets can tend to be longer duration. We like to be a little bit shorter to make sure that we're as aligned as we can be to Arch's liability profile, but also seek opportunities that have, again, adhering to a lot of Arch's principles, which are very naturally aligned to alternatives, is looking for opportunities that have really strong asymmetric profiles to them, where you've got a lot of downside mitigation, but a lot of upside opportunity. My team, we're constantly in the market looking for those opportunities. And I wouldn't necessarily characterize it as cycle management, but really looking for those opportunities that we think are undercapitalized and provide really strong risk-adjusted returns for us and be disciplined about that so that as you kind of see changes in those different markets, you can position yourself appropriately and make sure that you're taking on the risks that you want to take on and achieve, hopefully, good results. Yeah. And I think that's an important point. I'd say cycle management people associate with the insurance side of the house. But we talk about cycle management both in fixed income and in alternatives all the time. When we have our meetings, it's all about where is there a lack of supply with where is supply and demand out of imbalance, right? And right now, we're seeing a lot of opportunities in secondaries. That's been very much a focus area the last 12 months. Does that persist? We don't know. But for the time being, that's been a really good area. I don't know if you want to add to that, but. I'd say William and his team, I think, have been really impressive in the way they've approached the private markets. They went through an exercise of a strategic asset allocation just in the private markets, and the beauty of the private markets and the challenge of the private markets is that it's very hard to come by data, but they've built a really strong database of our funds and just general market data such that they could understand the characteristics of the different types of strategies within private markets and how to strike a balance such that the risk return was, as William said, asymmetric, so it's really a proactive exercise of seeking out the strategies that align well with the strategic asset allocation and also marry that with dislocations that do appear. So to lean into the current hard market opportunities, always seeing that there's a beacon ahead of us, which is that optimal allocation in the private markets. It means that we've gone from a portfolio that was largely a substitute for public market fixed income, more income generating, to a total return, to an IRR-based objective that carefully balances diversification so that outcomes are still smooth and results are uplifted. Okay. On that note, I think we've got a bit of time, but I think we'll give it back, and we'll try and catch up, so quick takeaway for everybody here, three things I want you to kind of take away from this session. One, investments, as you know, matter a lot to growth and book value, which is our number one metric. It's a big part of what we do. And with $40 billion in assets, we got to put that money to work. And we are. Little reminder, our alternatives are not in operating income. So for those of you that, as you model out Arch's performance, it's part of book value, but not part of operating income. So I think that's maybe a slight difference from many of our peers, and two other things, really. Cycle management, yes, it's insurance, but it's also very much a day-to-day discussion we have on the investment side of the house. And third, data. Data matters, right? And we're going to talk about data in all the sessions today. I mean, the more data we can bring to our teams to make the appropriate decisions and kind of validate their strategies and validate their theories, we'll do better. So those are really, again, the three takeaways from investments. And on that note, we'll turn it over to the insurance team. That's for me, right? Thanks, guys. Let's get the Insurance Group. Do you want to be in the insurance team? Yeah. Want the Insurance Group up. I'm good. All right, Nicolas. Nicolas is going to moderate. I'm just going to stay up here and ask one little question to get things moving, so. Sitting in front of our pictures. Oh, wow. These guys obviously didn't suffer as much stress last few weeks. Pictures look good. Thanks. In order to. Yes. So, Nicolas, maybe first, I'd ask you to introduce the team here from the Insurance Group. And then I'm going to tee it off with one question. But why don't you do the introductions first? Yeah. So here's a team I've worked for the last, I think, seven years. I mean, before this new assignment, I've worked with the Insurance Group. So it's a team that I know extremely well. So we have Hugh Sturgess. You head our International Insurance Group out of London. And under your leadership, we went from like $500 million to $2.5 billion and from, I'm going to be kind, an average London operation to a top performance. So next to you is Brian First. So Brian is the president of Arch North America. I think the CEO of North America, Matt Shulman, couldn't be with us for personal reasons today. So I think Brian is filling in. He's kind. And I'll try to be kind to him. And so Brian, in his new role of President, is really in charge of all the underwriting and all the operations. And there's a lot of work in both that we're doing. So it's a big job. And Jay Rajendra is the Chief Strategy and Chief Innovation Officer. So under Jay, Jay reports to me. But under Jay sits all the analytics and some of the strategy of the group and all the automation. So Jay and I, we've been working very closely together in the Insurance Group. Jay does other things outside the Insurance Group. But 80% of what he does is in the Insurance Group. And he's helped us developing, what I talked about before, more insight and give our underwriter the best information that they can have to underwrite new business or defend their portfolio, so. Terrific. And so when I think about the Insurance Group and just from my time here at Arch, some of the biggest transformation that's happened in any of our units has happened in the Insurance Group. And now you guys have just completed an acquisition of the MidCorp back in August here. So I want to tee this up for Nicolas. And then I know Brian, you'll talk about it in a bit. But is this acquisition a game changer? Does it change things for Arch Insurance? You're leaving now? No, now he's leaving. So it does and it doesn't. I mean, that's the answer. I think we've been in our strategic objective that we set back in North America five or six years ago. They were having a bigger footprint in the middle market. And the reason for that was we think the value proposition, the underwriting expertise that we have resonates better with the second-tier brokers. And a lot of the mid-market is with the second-tier brokers. So we thought like we're going to be a little sideways. And Brian can help, can explore later. If you are a mid-size broker placing a mid-market, you place multiple lines of business with one broker. So by definition, it's a different model that if you're an A to Z broker, specialize in D&O, specialize in property, specialize in GL, where they need the carrier more for capacity or claims than for underwriting expertise. So we thought we could differentiate ourselves and be successful in that space. So it was a little bit of a slow burn. I think we have had some success. But ultimately, the build versus buy looked like the buy. If we could buy something in that space and move us forward 10 years, we should do it because it's going to take a long time. It's going to be very expensive to get to a scale to be able to compete in that space, not only against the Chubb and the Travelers but the Cincinnatis and the rest of the regional carriers. So I think for us, it really ticked a box. I think we were lucky enough to be able to complete the transformation, the acquisition. I think it's going to take some time because I think it's a big book of MidCorp. The MidCorp book is a big book of business, $1 billion worth of business. But it comes from Allianz, which is the shared services. So by the time we transfer it into an Arch platform, it's probably 18 months from now. So I think the impact would be big for Arch. But it's not going to be next year. I think it's probably three, I'm talking earlier, it's probably three to five years from now. That's probably one of the things that we are doing today that will transform insurance, our ability to grow, but three to five years from now. So I don't expect any immediate impact. I mean, we're going to become immediately more relevant to the second-tier broker where we've developed a bunch of solutions. Over time, we'll be able to cross-sell some of the products, some of the specialty products we have with those second-tier brokers. But I think it's going to take time. So that will be my answer. And maybe. Can I expand on that a little bit, so. No, I have a question for you. Okay. I'm used to it. I think we completed the acquisition. We completed the acquisition August 1st. Correct. So you've been heavily involved. I worked on the M&A side. And then Brian stepped in and worked on the transition side and the integration side. So based on what you've seen so far, what do you think? Yeah. Well, I certainly agree with you. It's a transformational opportunity for us to be at scale in middle market and more of an upper middle market, which I think plays to our specialty underwriting culture. To me, that's been really exciting and refreshing to see this experienced underwriting team with this really strong property expertise, which is very complementary for us to pick that up and retail upper middle market property and lead with that product. Also, really refreshing to hear about the producer reception that we're receiving in the marketplace. They were hungry for certainty, like, what's Allianz going to do with this business? Now, Arch has stepped in. We've been really clear about our commitment to it, our enthusiasm to see it grow profitably and to engage with these producers. Many of them had a foothold with Arch with some business. But now we're on their radar in a much more substantial way, too. So our relationship means more together. That's a really great distribution advantage. And you talked about knowing where you want to be in a few years and putting the steps into place to get there. You think about Arch Insurance North America. Five years ago, we wanted to be ready to lean into the hard market opportunities that we have been doing. And we've more than doubled in size during that time. A few years ago, we said we should position ourselves to be ready in middle market to do the same thing when it was an attractive growth environment there. And we've arrived. We're seeing it's really nice to see double-digit rate increases in this middle market segment with property and general liability. We're able to be a real good solution provider right now for these producers who've had a long-standing relationship already on this business. So it's just great timing. But it wasn't by accident. It was part of our strategy. Great opportunity. You couldn't pass it up to buy scale at this point in time. We would have kept building. But I'm more excited about making this transformation work. Yeah. The timing was good. I mean, whether we plan for the timing, we'll let you decide. I was going to say that was planned. The timing is good. And I should mention, too, we did pick up something also important to us with a specialty platform, the fact that there's an industry-leading Entertainment business. That was really nice to just be a part of this transaction, too. And we're catching that at a really attractive time with growth in production business out there, live production business, studio business. And rates have been firming there as well. So that's. Yeah, such a nice. That's a $300 million business we want to grow to— Nice addition to specialty for us that we didn't have. And Brian, I did a few investor calls in the last few weeks, as you can imagine. And the question I always got on the MidCorp business is it's really a middle business. And the perception out there is because it's a middle, the flexibility in terms of rates and forms is limited. And how does that limit our ability to really manage the cycle? That's certainly a fair question. I think you have to look back at this business. It is admitted. But it's larger account size. So I think it's on our slide, $170,000 average premium size. We already write a lot of admitted business today in our franchise leading positions in construction, group captives. It's similar size business. You do have freedom of rate and form for accounts that size. So we do have pricing flexibility. And is it true of the GL as well, or? Yeah. Total account pricing matters to these insureds. We're selling them a package, typically. So between property and general liability pricing, we're getting to a total price of risk for that insured that is palatable. They don't get as concerned about if it's in the liability premium or if we got it in the property premium. They want the total price, so. Can I get one comment? The thing that was attractive to us with MidCorp is because our value proposition, the value proposition of the carrier, just Arch but other carrier is stronger, you see some muted cycles. So there's competition. But the business is, by definition, more sticky. The broker has a relationship, a strong relationship with the carrier. It's not going to unless you do something wrong, you can probably push prices every year. Unless you push the price high enough that you put it to market, it's going to stick with you because he trusts you. He's using your form. He's using your engineering. So it's a more sticky business, which we like a lot. That's an untapped opportunity, too, where with analytics, which will certainly tee up Jay for this, the longer that business sticks with us, the better we're going to get to know it and the more precise we can be with matching the right price to those risks over time. I'm going to switch to you. I said in my intro that we are very proud of our London business, the performance of the London business in the last five years. What's the secret sauce there to go from $500 million to $2.5 billion and combined ratio in the high 80s? So, there is a graph. I think this is the graph that's behind me. And timing has part of it to do with it. I mean, we were good at managing the cycle. You're good at timing. We're good at timing. You make your own luck. You're good at timing. You get it right. We made a couple of acquisitions in 2019, which certainly positioned us well to do what we did next. And we talk about kind of an unofficial mantra of doing both. We grew in this market. But we also did some things underneath this graph that you can't see that includes adding leadership in our lines of business that we never had before. And we weren't even really that close to having it. So if I go back to 2018, roughly, there was a minority of our very small minority, like sort of maybe 18%, 19% of our business that we actually led. And now that's the majority of our policies we're leading on based on the reconstruction of our lines of business, the refocusing into classes that are really specialized into the London market without writing a lot of U.S.-based premium. So not writing a lot of the property and casualty. We leave that, obviously, to our sister company to do very, very well. The other thing about this graph, I think that's interesting, is we grew the entire London market grew during this period. You would get a tailwind of about 100% growth. I think you could double the size of a normal syndicate standing there in 2019. We did more on the basis of really leaning into a hard market and looking for margins, adding teams, adding lines of business that we did not have before, again, to jump to leadership positions. So it's a great news story. As Nicolas mentioned earlier, we're about sustaining some of those renewals. We have some great relationships that we've now held for three or four years. We intend to hold for another couple of decades. These are important integrated relationships. When you are a lead, you're managing claims. You are managing the terms. You are first call. All those features are now embedded into our business and, frankly, more well-suited to the incentive compensation models and into the way that we have people manage their portfolios that was mentioned earlier. What we read, what we know is the London market is a lot more competitive. We see other syndicates advertising. 100% growth. 20%, 30%, 40% growth. So what are our growth prospects in international? I read one this morning. There was 72% growth from, I think, 80 million to whatever. These very small syndicates are starting to grow. When you see those, and it's not always true. But oftentimes, when you're seeing those, those are following positions. So those are underwriters who are not setting the terms or fixing the sort of lead positions. That's an important distinction. You have to think more about the category of, say, Beazley and some of the other carriers that have strong leadership traditions and that we're now sort of in a peer group with. So there is growth in the London market. The London market's still increasing its share of wallet worldwide at this point in the cycle. It's inevitable that there'll be more competition because the London market is, frankly, the best place to mobilize capital very quickly. And we're seeing bits of competition. But our playing field is different than it was five years ago. So we don't intend to have anything but a much higher level of resilience than we did five years ago. And our growth opportunities are different because we're a lead market in things like political violence and terror, which is a very specialized class to London. International non-U.S. casualty, we're seeing we're projecting for quite a bit of growth in 2025. We still think we can grow in double-digit percentages into next year and the year after. That doesn't match the growth that we had from 2019 to 2021. But that was cycle-driven. And now we're just in that sort of phase of generating our own growth based on those leadership reputations. Yeah. And I think we never plan for growth. But ultimately, size matters a lot these days. So I think in the London market, we are at scale. And I think we are at scale with the relationship with our distributors. And they are looking to consolidate their portfolio with fewer carriers. And I think my view is that we'll be a beneficiary of that in the years to come. So that's good for us. And I think we're also, based on our track record, able to attract talent that people have seen the success, success after success. So I think we've been able to hire people today because of the track record. People recognize that, again, what I've said earlier, if you come to Arch and you're going to run the political violence portfolio, we're going to support you. You have a nice brand behind you. And you're going to have the financial flexibility. If you need to take big lines, we'll find a way to give it to you. If you start new somewhere else, it's a struggle. You have to build a portfolio. So that's one of the advantages. Underwriters that join a company like Arch want to be in leadership positions. There's no question about it. If you were looking amongst the pool of talent, it's a very, very different demographic, and the broker point you make, if you don't mind, is a wholesale market dominated by eight, nine brokers. If you are at the bottom end of share of wallet, you're going to get cut out of this next market, and we're fortunate not to be in that position. So, quick question for you. Our office in our footprint in international was mainly London-centric for a long time, and again, the focus of our international is a bit different from our competitors. We're really facing non-U.S. for the most part. 80% of our portfolio, we really use it as our international place. So we don't double-dip. A couple of areas we do, but very little double-dip into the U.S. market from London. And remember, half of the London premium is U.S. premium. So I think the ponds where we fish from is half of the business that plays in the London market. And we still created a decent-sized business out of it. And it's really, if you think of diversification, it's really diversifying the rest of our insurance portfolio. So two years ago, we took we were very courageous. And we finally crossed the Channel and decided to go to Paris and Madrid and set up some boots on the ground. So can you explain that strategy? Yeah. And this is going back to your point earlier. And others made the same point. We're building for tomorrow. So we're trying to lock down that sort of four or five-year strategic pathway and trying to figure out where we want to be next. And this is about access to market and access to what, by contrast, I'll call it a retail market. You're closer to the broker. You're closer to the insured. You're operating in their sort of home base. Whereas in London, London only sees about 7% of the insurance premium coming out of, let's say, France or Germany. Italy is a little bit higher. Australia and Canada are much higher. The U.S. is much, much higher. So it's really a fight to sort of try and get market access on the lines of business where we have a high degree of conviction. For us, that's going to be long-tail lines, typically. We're not in it for market share across all lines. The brokers will tell us that we need to be relevant. We need to be doing this multitude of products. We're pushing a bit against it on our own selection. What are the lines of business that we like? Casualty, a bit of the financial lines business, and cyber. Where we started was cyber. That's where we've made the biggest push. We're now sort of opening that up to bigger teams. We're not trying to build massive country-by-country organizations with separate balance sheets or even separate management teams. This is kind of a hub and spoke where you've just got underwriting and claims teams in local jurisdictions. That's what the brokers and what the clients expect you to have. It's a bit of minimalism. But it's never say never. If we see bigger opportunities, we're now much closer to expansionary 2027, 2028, let's say, stepping on the gas pedal and going a little bit further. The margins are very good. The margins in Europe are fantastic for what we're writing today. It's another example of things that we are doing we've been doing for the last two years. It's probably no impact to the bottom line. But this is money we spend because we think, like, three years from now, it could be $200 million that otherwise we've never seen. And the reason the French, the Italians, and the Spanish don't send the business to the U.K. is for historical reasons. Lloyd's isn't that popular in Spain. Sorry. Jay, we're into Jay now. I think we talk about strategic analytics, data analytics. And when I think of this, I mean, the success that we all know, financial success, is Progressive. What's your vision? What's our vision to become more involved or to have a greater impact of strategic analytics in Arch? Yeah. Exactly right, Nicolas. It's no secret that Progressive has built this really unique position for itself by being the best in class at analytics in personal auto. And we've done the same thing in MI. That's what we've done. When we sat down, I think, eight years ago, Nicolas, and you were there, our vision was to be an analytics-driven specialty company, to be the Progressive of specialty insurance and reinsurance. And I know a lot of commercial lines carriers talk about how they're using data and analytics and data science and things like that. But what you might not know is that in the specialty universe where we play, adoption of analytics is actually very low in the industry. We think it's about 20%. What we're really proud of here is, over the last eight years, 100% of the models that we've built for our underwriting teams are now being used. They're all adopted. When we say being used, we mean day to day to help drive decisions. That's what we mean by being Progressive of specialty insurance and reinsurance. Yeah. And I think this is a great example where, when we talk with support, the underwriting portfolio managers, maybe explain how you work with our teams. Yeah. It's super collaborative. I think a lot of the failings that some of the other companies have had trying to do analytics or data science in specialty is they take a personal line, small commercial playbook, and then they try and hire a lot of data scientists. And then they try and apply it to specialty. And as we all know, the specialty market just operates completely differently. The market operates differently. The types of risks are very different. So it's a very we've developed this specialty analytics kind of playbook that's been very, very effective, which is why we have that 100% adoption. It's very collaborative. It's very bespoke and very unique to every line of business and the market and their strategy. Ultimately, it's enabling a specialty market strategy. And how prevalent it is. I mean, I know we're spending a lot of money. But how much of the insurance premium or losses do we cover? We've got, I think we talk about adoption. Brian's team and Hugh's team are actually really fantastic examples of how we've really nailed analytics adoption in insurance. There's probably about 750 employees that are using access to strategic analytics tools on a day-to-day regular basis right now. That's a huge portion of our underwriting and claims teams. If you zoom into North America just for a second, we're nearly at 80% of our submissions going through machine learning triage models as they come into the organization to help our underwriters prioritize their time on the most impactful work. About 50% of North America premium will be around that kind of level as well. And then looking over to Hugh's area in International, those figures are about 90% for our U.K. regional group, 90% through triage, 90% through advanced analytics underwriting models. Now, that's not enough. I know not enough for you, not enough for me either. So we're constantly developing, not just in terms of coverage like that, but also like the sophistication for how we use these tools. Maybe you can. I know there is an example in the deck. Maybe you can quickly go through the example and show some of the granularity and some of the advantage it gives our underwriter in managing their portfolio. Yeah. And I'll frankly try and nail how we're using this to enable our strategy as best-in-class underwriters and cycle managers. So, example up here, one of our large North America businesses sells a variety of different products. They have about eight machine learning models supporting our individual underwriters there. This chart on the left-hand side is a very typical chart for one of our models. This one is an underwriting model. And it helps identify our most and least profitable customers in the market segment. On the bar, the bucket number one, you can see it's got a 20% loss ratio. Let's call that 50% combined for the market. Bucket number five, 115% loss ratio. Let's call that 150% combined for the market. Now, in a stable market condition, we're going to be overweight in buckets number one to three and underweight in four and five relative to all of our peers. But what's really interesting is how we use this tool to navigate market changes, which is what we are the best at. So if you go back to 2018, the chart on the right-hand side of your page is showing that the market was really pricing all of these buckets almost identically across all these different market segments, even though we could predict back in 2018 that they were going to perform very, very differently. But back then, you'll also remember that there was not even a hint of a hard market, quite the opposite, actually. We're thinking we're kind of a little bit depressed in the industry about prospects. But even at that time, with our sophisticated tools, we could identify pockets of change, micro hard markets. So when you look at 2019, you'll see that while the rest of the industry was getting probably flat to plus 10% across that entire market, we were getting 50% increases in bucket number five on new business that we were writing there. Fast forward another two years over to 2021. We're starting to talk about the hard market in the industry. We're already getting 3x 2018 pricing in bucket number five. That is really an example of how we're ahead of the curve. I can't tell you what we did in 2022 to 2024 because that's very close to what we're doing literally right now. Short story, that portfolio is 2x what it was back then, a few years ago. And we have built what we think is a really robust and profitable portfolio that can withstand future market changes. And I know this is a point that's interesting. It's really important to Nicolas. And you mentioned it earlier. That's the hard market. If we get to a point of another market change and a softening market change in this portfolio, A, we've built up this really robust portfolio. But it also means that with these tools, we can be proactive and surgical in how we kind of adapt to that market change. Whereas our competitors are going to be, A, slow to react. They're going to be reactive and much more broad brush. So these tools, this combination of tools enabling cycle management really enables us to kind of outperform in both hard and soft markets in ways that we couldn't have done many years ago, as Nicolas described. I agree. If you go to an underwriting meeting with us, we ask, why can't we write more of the bucket one? Sounds like, and why are we writing any of the bucket fives? And what we learn is, I mean, that's why I think the market is going to really go separate between the people that have the tool and the people that haven't. Because the strategy to write more of the bucket one is really, really hard because other people also know that. So if you try to lower the price on bucket one, competition does too. The people that have the so there's people that have similar knowledge and we do. And when you try to get rid of the bucket five, you need to really hit them hard because they are very sticky. So nobody is willing to pick up. But if you don't have those tools, you see a bucket five coming in. It fits in your underwriting guidelines. It's 20% up. I'm going to bind that. But if you have the tool, you're like, no, it's not 25. We need 40 up before we even look at it. So I think that's my view. That's going to be a tale of two markets going forward. So I'm going to need some of François's time because I'm still halfway through my list. And there is only 1.5 minutes, almost two minutes left. So I'm going to go to Brian quick. On the casualty market, there's tons of questions of the state of the casualty market. So what's your view, Brian? Yeah. Well, I think some of Jay's comments help with our answer here. The tools that we had and were using for insights early, we don't see a lot of surprises playing out in the market right now because we had the insights early on and a lot of segmentation within classes of casualty to know where we wanted to play offense and where we wanted to be more defensive over the last several years. So we still see opportunity with dislocation in the marketplace, especially in E&S casualty. There's still new business moving out of admitted into non-admitted casualty as carriers are waking up or maybe being slow to react and having to adjust their portfolios. We don't want all of it. But we know the segments that we want to continue to lean into. It's a pleasant surprise to continue to see those monthly results where we're growing double-digit in overall volume, but we're also growing double-digit in rate increase. I think Don said earlier, some of the clocks are broken. The casualty clocks seem to be broken. They're stuck somewhere between 10 and 11. I don't know if somebody keeps turning it back. But those underlying factors of social inflation, some fear in the marketplace, those appear to be with us for a while. I think that clock is stuck. We're not afraid. We are being selective. We're going to continue to lean into some growth opportunities in casualty. And the way we do it, again, there's pain in the market. So I think the overall market, we're not convinced you can take a quota share of the casualty market today and make money. But I think based on the insight that we have in more selective classes of business, there's areas that we've built higher confidence that the prices we are getting, and if we continue to get rate increase, we'll be able to grow. And again, the upside is better than the downside. Seven years of compounded rate increase for us and many of those casualty businesses is a good place to be and still getting more. But there's also a heavy loss trend, as we know. Yeah. We feel we're ahead of trend, right? Yes. Does that answer your question? And so the last question for you before we are a bit over time is, I think, North America, we grew organically from like $2 billion to soon to be $8 billion. And were we able to scale? And what are the work that we've done to be able to continue to scale? And maybe I know you've been heavily involved in that. Yes. I—in front row seat. Maybe tell us a little bit of the story and what happened there. Yeah. So I moved out of my role as one of our chief underwriting officers about two years ago to take on the role of president. And one of the first things we did was actually establish a formal standalone COO role for the Insurance Group, which we needed to do to keep up with the growth opportunity and treat that very seriously to have an operating model that would allow us to prioritize our initiatives around what created the most value, would allow us to efficiently move all the opportunities through and focus on the best ones, and create more ease of doing business between us and our customers. So to do that, we really needed to focus. And we did bring in an outside COO, built out an Office of the COO around that with our operating model, engaged Deloitte to make sure we were following best practices for a company that was now our size, which, again, double what we were before. We couldn't keep doing things the same way and still be able to meet our ongoing growth ambitions because we're not done yet. We still want to be able to scale up. So a lot of investments happened during that time. We're reaping the benefit of those now. The idea is, like you said, accountability, both sides of the equation. We've got to have really good loss ratios. And we have to have a really reasonable expense ratio. And we need to create efficiencies there over time. And that's what we've been focusing on. We're well positioned to continue to grow and still have that efficient expense ratio. Yeah. So a few takeaways for you, at least the Insurance Group. Again, I think some decent prospects for growth in a difficult market. But I think we have the tools to be able to navigate that market and continue to overperform. I'm convinced of that based on, again, the work we started five or six years ago. And I think we invested heavily on the operations side to be able to scale. And expense ratio matters when a few points of expense ratio matter when you want to keep your combined ratio in the low 90s. So I think we tackled that aspect as well. Overall, I think the MidCorp acquisition, I think, is a great acquisition for us as it put us at scale in an area where we think our value proposition and doing some of the work we've done in other lines of business that don't exist today, bringing strategic analytics, bringing claims analytics to that platform will help us make it achieve our target profitability. So I need to get the hook out here. You can see we're a little bit passionate these days. We'll keep you here forever, but there's a little bit of break time here, so thank you, guys, and we'll be back in about 10 minutes. All right? So welcome back. The Reinsurance Group at Arch has been a terrific case study in how to cycle manage. You think about the history of this company where we're able to accelerate in post-9/11 into the reinsurance markets and with a handful of people, of which Maamoun was part of that, Nicolas, David, a number of the people you're seeing here today, and then we got a couple of young guys here, like John, which just joined us. Not that young. Not that young. So Maamoun, do us a favor. I'd like you to introduce the panel here. And one of the things that I think would be kind of interesting after, if you could just sort of shed some light on how the Reinsurance Group manages this cycle so well. And we've heard a little bit about microcycles. And I'm just wondering if maybe you could talk about that. So maybe if you could introduce the team and let's get going. Sure. Sure. Thank you, Don. And good afternoon, everyone. We're happy to be after the break, not before the break. So happy to be here with everybody. I'll kick off with an intro here. Next to me is Jérôme Halgan. Jérôme Halgan's not so young either. He's been with Arch 15 years and joined us from Berkshire Hathaway and began as Chief Underwriting Officer in Bermuda and now leads our Bermuda operation and effectively our international operation. And for Arch, that is by far the biggest legal entity. And next to Jérôme is John Schreiber. John joined us just over a year ago from PartnerRe. And he leads our U.S. platform. And it's been a great, great addition to the team, slightly nontraditional for us at Arch to recruit at this high level. But he was a must-have. And he was someone we knew very well in the industry. We felt just was in the wrong shop and needed to be Archified and brought over to the side here to do some great things for us. So lovely to have you. As Don mentioned, I mean, cycle management's the hallmark of this Reinsurance Group, always has been. And I think we will get very much into that in our conversation rather than take time to just address it head-on. So let's get into the topics. And then we'll get into the point of cycle management along the way. So I think there's some thematic things going on in reinsurance. But let's maybe start with this tremendous growth that Arch Re Group globally has had. And the slides behind us here, guys. But Jérôme, if you want to give some comments here to this group, as to how are you able to do what you do that others can't do, give us some perspectives on the ability to grow in the way that we've done. Sure. I think the first thing that you can see on that graph is, and I won't go over the multiple, but if you look at where we are in 2019, at the time we look at the market, and we are not super excited about the market. So we are very under leverage compared to what we could do. So we are below market share and deliberately so. So if you want to grow, it's good to start from a low bar. And I think what we did is we grew using our cycle management approach and strategy. That means for every line of business that we are participating in, we know where the market is. We know where the competitive landscape is. And we measure that. And we decide, is it appealing or not appealing to be in the class? So what you saw through that increase is, as the market got better, and it got better at different speed in different line of business, we picked up on the opportunity. And we're able to grow selectively each line of business at a time. So really be able to see the market, see when it's time to go, start to push the accelerator when you see the growing getting pretty good. And as the market continues to harden and get even better, accelerate further. And I think one thing that's obviously super helpful along the way is we are really viewed as a solution provider. So even if we are not trading a lot in the soft market, people came to us for ideas, for solutions, for thought. Because we have these relationships, when we said we wanted to go and we did, we are very much supported by our clients. Yeah. No, it's precisely interesting. John, you've been here a year. But your organization has grown tremendously in the U.S. as well. Anything to add to what Jérôme just said? Any perspectives from your end? Yeah. You've heard this a couple of times already today. But as a relative outsider, everybody talks about how they have analytics and everybody's data-driven. The advantage of not being a startup is that you have data. If you're not using data, you're getting selected against. I have worked at several large, sophisticated, top-tier organizations in my career. I've never had the ability to drill down into Jérôme's point. Why didn't this work? Why did this work? Is it time to go? Which of our clients do this the best that we can partner with? I've never had that ability to do that as I do here. So I think that is really kind of a secret sauce that makes the engine go. I'll give a softer angle here. And then I have a point on the slide. I think it's interesting as an outsider. I always looked at Arch as this very entrepreneurial, small, niche player. And a lot of times when companies get bigger and get successful, it's very easy for them to kind of rest on their laurels. And I look at Arch since I've been here. And I think it'd be very easy to do that. I use a lot of sports analogies. I'm disappointed if that doesn't resonate with all of you guys. I borrow a line from the late Kobe Bryant, "Job's not finished." That's the mentality of here all the time. It's what's next? Where are we going? We're playing the long game. And I think that resonates through everything that's on this slide. The point I would add to Jérôme is, yes, our volume's way up. Anybody can write a lot of volume when the market gets better. But we are doing more business with more people because we've invested in broadening out the footprint of who we're trading with. We are trying to make sure that those people that we're trading with are also cycle managing. So you get this beautiful leverage effect of reinsurance where you're doing more business with more people. Underlying market is better. They're cycle managing into the right things at the right time that you end up with a chart that looks like this. And not everybody has one, obviously, to the extreme that we do. Yeah. No, thank you. Spot on, and speaking of not resting on the laurels, so this is what's been done so far. Jérôme, go back to you. Prospects for further growth. I'm sure the Allianz here is interested. Your thoughts of the future on that? Yeah. I mean, there's really a bunch of leverage to go next year and beyond. So we feel really good about that. I mean, one thing, which is, I guess, a pretty easy one. I think we're seeing exposure growth. And it's coming from normal exposure growth in normal economy. But if you look at the inflation, when you put that on top of it, whether it's inflation on the cost of materials on the property side or social inflation on the casualty side, it's kind of, as long as you understand it, it's a good thing for our business because it creates demand. I mean, one way you can see that, for example, in property cat is last year, the property cat business, the limits bought by clients grew by roughly 10%. And the growth last year generally tends to be lagging. So it was a reflection of the inflation of the prior year. So what we see, a lot of good growth in 2024, we expect the same in 2025. And we think that the property cat market is going to grow 5% next year. And if you ask me if I'm going to be wrong, it's probably because that number may end up being greater than that, same as last year. I mean, those are areas where we see plenty of growth. And I think it's a reflection of the good work that we've done in the past few years. There's a lot of clients that we've grown with. And it's been both vertical and horizontal. But there's a lot of clients that we haven't really grown too much with. So we have a lot of people coming to us and having strategic discussion and say, "Look, I look at Arch. We are doing X million of premium with you as a group. We look at your capabilities. And we'd like to trade more with you. So strategically, how do we do that together?" And what I like about the strategic decision is not write everything for us and you'll be OK. Strategy means they want to grow with us. And they understand that when you talk to us, we're going to try to select where we want to be. We're going to be able to put the capacity where we think the attraction is best in terms of rate and be able to execute. So I think the fact that we see this demand is very, very positive. I mean, another way of growth, and I think I'll pass the baton to you, John, is casualty, which is really in our mind. You give the new guy the billion-dollar question. Look, I think we've done a very good job of trading across the piece with a lot of our larger trading partners. And to Jérôme's point, I think we've been able to. We We can't do this, but we can do this. And there's a lot of back and forth. And maybe I'm sure we'll get there on the casualty piece. But I'll take it now. If you look at where we've been, we've been, as you've heard a million times, we've been very underweight the casualty business for a variety of reasons going back a number of years. I think there's a lot of noise in the market about casualties challenging, social inflation. Everybody understands that. I think it's more nuanced than that. I think we've done a very good job of trying to parse out parts of the industry that have done better than most. Look, we're not immune to what's going on. We have our share. But I think if you look at something as simple as, and again, a lot of this isn't rocket science. But the plaintiff's bar isn't going after Joe's Bar and Grill in Des Moines, Iowa. They're going after a large global company that has large limits sitting out there. The easiest way not to get a big verdict against you is not to have the limit out there. Right? So if you look at our history, our history with clients that specialize in small to mid-size end users and buyers is much better than ones that are doing large global kind of corporations. Right? I think we've seen that through the cycle. I think if you fast forward to what's going on right now, we are constructive in the casualty market. Generally speaking, high level is rate above trend. We believe so, generally speaking. Not everywhere, but generally speaking, yes. You still have the bear chasing you of prior year development from the soft market years. Right? You also have limit compression, which I'm not necessarily sure makes the business better. But I think if you told me my average limit was $10 million and I was writing $500 million of premium, and now it's half of that and I'm getting double the premium, that seems like a better bet. My rate per million is up. My limits are lower. My overall premium that I'm throwing that limit against is higher. That's where we see the market continuing to go. I haven't met with a client over the last six months that's told me their retention ratio is dropping, which tells me there's still room in the market to push rate. And I think we're going to continue to see that. I think we're seeing the second derivative of rate. Everybody's talking about that. The rate of rate change is starting to go up. I was with a client two days ago here that was talking about that. They're seeing the last six months that rate has doubled. And their retention ratio is not dropping. So we are cautiously optimistic on casualty for the intermediate term. But again, where we're coming from, I think we're also in a position of strength because we're not going to be paralyzed by doing a lot of, "Oh my God, we just had a bunch of scary losses from things that were written eight years ago." We don't have a lot of that. We understand where we're at. We understand where we need to go. And I think, again, we're pretty positive about the future in casualty. Fantastic. Yeah, thanks, and one question on people's minds with interest rates where they are potentially rising. What are your thoughts on markets, cash flow underwriting, using long tail lines to misbehave on the underwriting side? Anything there? No, I think, I mean, first, the fact that the interest rates have increased is not new. I mean, it's been going on for a couple of years now. And people are really looking for underwriting margin. So we haven't seen people reacting to the rise in interest rates two years ago. And we don't anticipate that to be different going forward. So from that standpoint, I think it's a good thing for us. But the market is not passing that back to the client. Yeah. Don is very flattering by saying we hire these young guys like John. Well, I'm still old enough to remember the late 1990s when interest rates were here or higher. And people were knowingly pricing business at a 110 or 115 because the math worked. And I think in retrospect, what people figured out was that when your best estimate is a 110, it's more likely to be a 130 than a 90. And I think there's still enough people left in the industry that remember that, that I don't think we're going to get back to that level of cash flow underwriting that we saw last time. I think to expand that even further, if you look at what makes the casualty market quite interesting right now, it's very uncertain. I mean, you look at an environment where how to pick your loss ratio pick, the assumptions that you have to do are very varied and very leveraged. If you look at the market, it got a lot better starting in 2019. Then you have two years with COVID where you had very little claims. And now you have claims coming back. So if you're the actuary trying to price that, it's very, very, very hard. And what's really helping the market is people are pricing that uncertainty. And they say, "If we want to get it wrong, we'd rather be on the safe side than the wrong side. Yeah. And this is a market where your underwriters kind of thrive. Right? The markets that there's not a whole lot of convergence. You have fear in the market. You have people pulling out, people uncertain about how to handle it. That inefficiency is a place where our guys thrive. And then the work that your teams do on the databases and all of the data, all of the audit work that comes into it, that gives you the ability to be more selective, more deliberate. We talked about segmentation of data and so on. So it gives you an opportunity to do things that others can't do. Yeah. If you look at, we use a ton of analytics on the reinsurance side. It's different than the Insurance Group because we are one level removed from the original policy. One thing our guys do is when they talk to the client, they get a ton of information from the client in terms of what they write, how much they get, how they think about portfolio management. That gets integrated into our tool or system. We can spot things that are very valuable. We can see when there is original placement, which client sits in a spot in the tower and gets paid less than the other client. We can see who's consistently able to get the best price and who's consistently in the wrong spot in the placement. So we can really differentiate which clients are the better underwriter compared to the other ones. And that's a lot of effort. That's a lot of grind. That's a lot of things that we do that we call underwriting that a lot of other people don't do. And that's really helpful in our process of risk selection. And the one thing that when you think about Arch and our scale, the value of the scale is when you have a lot of relationships with clients, that data comes very, very plentiful. And the more data you have, the more you can leverage it. Well, and I think our clients too rely on us. Like, hey, you guys see a large swath of business, even if you don't write all of it. Right? What are you guys seeing in the marketplace? And I think we have a healthy back and forth on where the market actually is just to make sure we're kind of squaring the circle correctly. Yep. Let's switch to property cat. I have plenty more to say, and we can come back to it if we have time, but property cat, Arch Re's got a pretty terrific record doing that for a company that's known to be a specialty writer. Property cat results are pretty top notch as well. Were you surprised at Arch's losses in cat this year, the overall market dynamics? What can you tell the group about your views on prop cat this year? Yeah. When it comes to the cat activities this year, in short, no surprise from our end. If you look at when you write cat, every year is a random draw. So you put your portfolio, and then losses happen or don't happen. And what matters the most is when the losses come, you don't get surprised when you look at how you performed your performance. So last year was very quiet, and we did very well. If you look at this year, it was a bit more active. And I think if you look at every single loss that happened in the market, where we stand is where we expected to stand. So I feel pretty good about that. Now, there's one thing that's kind of interesting. If you look at this year, we are on track to have globally about $150 billion of cat losses. If you had told me that number seven or eight years ago and said, "Hey, you're going to have $150 billion of global losses," what does that mean? I would have said, "Oh my God, that's going to be a disaster for the primary guys. It's going to be a disaster for the reinsurers. And that's going to be very hard to think about what's next." Fast forward to today, you have $150 billion of losses. And it's a normal year. I mean, if you look at reinsurers, if you look at Arch from our point of view, we're going to be very close to our cat load. The clients have done a really good job at remediating their portfolio. A lot of them will do fine. It tells you that if you look at cat in general, the way it's done today is very structurally sound and, from our point of view, very attractive. Yeah. The only point I would add to that, I think if you look at this from a Florida perspective, that obviously gets the lion's share of the attention. Everybody, I think, breathed a sigh of relief given where both events made landfall. The interesting part to me is one level deeper. I don't think there's enough focus spent on what kind of risk loss, individual risk losses do you get? Everybody's focused on where's my footprint of homeowners or whatever. For the commercial guys, if you look at where Helene was and where Milton is, you've got everybody's looking at landfall for Milton. Yet a lot of the larger risk losses I saw were on the backside, like the eastern coast of Florida, due to tornadoes spawned by the storm. Right? It's not necessarily where the footprint of the storm was. Everything was hundreds of miles away. Right? I think that is something that has kind of shaken the property risk market a little bit as we head towards 1/1, some large events that have gone through some towers there. But generally speaking, I mean, I think we're still constructive. The market is adequate or better in most areas that we look at. And we have plenty of room to deploy if we see the market where we want it to be. And by the way, structurally, from a reinsurer's perspective, where retentions are, they're sort of set to the things that we normally would hoover up as reinsurers, particularly at this end of the year, particularly on aggregate structures, are now left on balance sheets of insureds. I think the environment's healthy. And I would say this as a reinsurer. But the primary market has rate to handle what's left on their balance sheets. And we have a chance to make a margin, a pretty good margin, after a year like this. So now, what does it mean for 1/1? Jérôme, what's your thought on prop cat and your views at what you're going to expect to see at 1/1? Sure. I think, I mean, a couple of things. I think the reinsurance market as a whole really appreciates how good it's been for it in terms of the structural changes that we just mentioned, and there is very strong will from reinsurers for that to stay, so we don't expect significant change on the structure of the programs, especially when it comes to attachment. Now, when it comes to pricing, I think we think the market is going to be pretty much stable. I think if you look at the components of what makes the market, as I mentioned, a bit more activity this year than last year. There's going to be pockets of opportunities where there's been losses, and we are seeing that already in a few markets, so we'll be able to grow there and grow with rate increases and exposure increases, which we like to do. There are other pockets where it might be a bit more competitive, especially around top layers, where the price might go down a little bit. But when you use some product, all of that, I think the market next year will be pretty stable and very attractive. Yeah. And you didn't grow net prop cat this year relative to some growth in the prior years. Yes. 30 seconds. Why? We didn't grow. We grew in some places in prop cat. But I think back to our view of, and I think Nicolas mentioned before, of risk and reward. We looked and we always pay attention to the weather forecast. And when the predictions came out that it was going to be an elevated wind season, especially for U.S. hurricanes, we took a pause and we said, is the price in the market going to adjust for that? And the price from the earlier indication didn't look like it was. And it did not. So from our point of view, we're like, you're going to get paid the same price, a bit more exposure coming for more frequency of events potentially. So the risk of reward is not as good. So we're going to ease off on the portfolio a little bit. We deliberately decided to tone down or to not grow as much as we planned in terms of U.S. hurricane exposure. Yeah. Let's switch to the last topic on specialty. Ultimately, this is an organization that's very well known for being a specialty shop. And that segment remains and historically has been our biggest line. So John, I'm going to go to you. What is it that allows Arch to continually outperform in specialty? And what can you tell us about what's attractive to us in that segment? Yeah. I mean, there's a lot that goes into the bucket that we call specialty. And one of the, well, the good part about it is that's usually where the margin is in our business. Right? To capture that margin, you need specialty underwriters. You cannot dabble in this space like a lot of people do. We have invested in a lot of these areas. And I think when you do that, your clients recognize that you have also built expertise. And they seek you out to be a thought partner as opposed to just a capacity provider, which we don't want to be, especially in this space. And I think when you look at how we've built out over the cycle, the beauty is every one of these products has its own cycle. So it may be a situation where three of these are working and this one product isn't working. But net net, you always end up like there's something that's growing and building. Right? And I think we've been able to grow with other specialty lines that are clients of ours that are doing the same thing across the board. I think from a cycle management perspective, I think the chart on the left is great. I mean, you see, yeah, we won't identify what's in here. But you can see back in the day, we wrote none of the dark blue. Right? And I think that's what you see in some of this space, the ebb and flow of the different specialties and the expertise that's required. If you have it, people seek you out, and that's what's happening with us, and it's allowed us to broaden our footprint with a lot of clients. We're trading broader with people, and I think it's been net net a more than 1 plus 1 equals 3 kind of situation in aggregate for us. I just want to thank you, John. I just want to accentuate something on this slide just to make sure that you guys know what you're looking at here, what we're trying to show you. Within specialty, John mentioned there's plenty of product lines. We talk about, and our peers in the industry talk a lot about cycle management and what it means, and everybody talks about doing it. What this is, is one subclass within specialty, and what we're trying to show you is even with that micro level, the extent to which the portfolio is constantly moving to kind of really optimize returns. This is a subline within specialty. On the one hand, you see the mix change, and on the other hand, you see the growth orders of magnitude. So you've got two dimensions that can be done within small sublines. And that's really the art of cycle management. It's not, oh, I'm growing in property. I'm growing in casualty. I'm growing in specialty. It's really nuancing down to very, very, very detailed subclasses. OK. We've got three minutes. Folks, looking ahead, Arch Re's ability to continue to outperform, some parting thoughts here for this group. Anything comes to mind? Sure. I think, I mean, feel extremely good about that. If you look at all the momentum that we've had, I mean, we see that continue. Again, the clients really want to trade with us. And we don't see that change over the near future. I think one thing that's very important to us is with our footprint right now, the information that we get has never been as high as it is today. And what we can do with that information to leverage it into the decision making for underwriters has never been as attractive to us. So if you look at what we've done over the past few years is really develop analytical tools to organize that data, make it more digestible in form of dashboards for underwriters to help there with decision making. As the market continues its trajectory and at some point will be maybe not as good, we'll have the tools to be sure that we can navigate very safely going forward. Yeah. And from my standpoint, just to add to that, I think we're very happy with where the portfolio is. We're trying to use those analytics to decide where to grow with our existing client base as well as who we can add to that client base. I think we've done a very good job of being a first call for a lot of areas within reinsurance. I think while the market may overall be constructive, there are pockets that aren't working. That has created stress for some of our clients. One of the other areas that I think I'm personally excited about for next year are the one-off structured deals that I think they don't usually get marketed widely to a lot of different people. They don't want a widely syndicated program. A couple of people get that call. We're on that list. We have a good practice in that. It's a lot of my background. And I think we are seeing a good flow of that business. And I would expect that to continue, especially in 2025. Yeah. No, thanks, guys. Parting thought here from my end. You guys who know us well know this. We hold ourselves to a standard. We exist to the obligation we have to each other, to the team, to the shareholders, is to maximize every opportunity that's in front of us, and some of those opportunities that have been in the last handful of years is just maximize the growth. We exist not to miss inflections. Our analytics team is constantly monitoring opportunities well in advance of our action of stepping in or stepping out, those decision points. That rigor is constant. Those analytics, those thinkings, those investments are happening in the background continuously, so we view ourselves as the shop that when the going for it is good, we're going to go for it more than others. And when the market actually turns the other way, it's optimizing within that change and inflection in the market. So we're constantly thinking of outperformance and optimization of what we can do. And as you've heard from the team here, our size, our capabilities, our analytics today give us optionality that we've never had in our history. The connectivity that we have with clients, again, on programs, we talk number of programs. We think of it horizontally in size. We think vertically. The connections with clients, the strategy is ironclad in the company. It's steeped through our employee base. That hasn't changed. What's changed is our capability, our optionality, our connectivity, and then our analytics. So we're optimistic about our ability to continue to come out here and talk to you about good things happening at Arch Re's, certainly relative to our peers. Thank you. So, one of the things I think, hopefully it's a takeaway, is you're seeing that not only we're still a growing but very talent-intensive organization. And we are hiring. So if you speak French, that's a talent that's very helpful here. So let me invite the Energizer team up here. Where's Greg? I was going to have Greg put the bunny up here. But I didn't get him in time for that. So David, please introduce the panel. And I want to kick off with one question after you introduce the panel, if I could. Sure. Thanks, Don. Hey, guys. I'm David Gansberg, newly named President of Arch Capital Group. Going to take over responsibilities for insurance. But as we make that transition, I've been leading the mortgage group for the last five years or so and been involved with the mortgage group running the U.S. mortgage operation since we first got into that business. So kind of a labor of love for me, kind of bittersweet that I'm going to be moving on to other opportunities, which I'm very excited about. But we'll definitely still keep a watchful eye on what happens in the mortgage group. And I know it's been a day of accents. And we've got a new one up here, so something for you guys to look forward to. So I want to first introduce Michael Schmeiser from our U.S. mortgage insurance operation. Michael, you want to give a quick background? Yeah, sure. So I run the U.S. mortgage insurance operation, as David said. I've been in the role since 2019. And prior to that, I was the chief strategy officer for the mortgage group. I came to Arch at the end of 2016 through the acquisition of United Guaranty. Yeah. My name is Seamus Fearon. I run our international mortgage group. I'm with Arch now for 12 years. Mr. Morin hired me to the actuarial function. I was the chief actuary for the mortgage group for a number of years before transitioning into a business role. Should we read anything that we had to introduce ourselves? The other panelists got introduced. Does that mean anything? No. I think that just says more about my style than yours, r ight? Fair enough. You guys are quite capable. I don't need to introduce you. You guys are up for the task. I thought maybe you didn't know these guys. I haven't worked that close— I used to know, I forgot them already. Forgot them already. Right? They're history. So look, mortgage insurance, as you guys have all known, it's been a phenomenal contributor to the Arch story and value creation. It's done just phenomenal. A lot of investors and Vinay and I constantly are getting questions that investors don't really fully understand that mortgage insurance and why it's a terrific complement to a multi-line insurance company. And we're talking a lot about cycle management. We're talking about data analytics. But the question I'd like to kick it off to you, David, is does the mortgage insurance industry still have a cycle? And why is a mortgage insurance company better as part of a multi-line? Let me leave it at that. Thanks, Don. I think the short answer is absolutely yes, and mortgage still has a cycle. Tough crowd. Yeah. Yeah, definitely still a cycle. And I think we're seeing a cycle now, but a bit of a different flavor. Right? We're seeing a volume cycle now. Whereas typically when we say cycle management, cycle means losses. Right? Losses, ebb and flow, rate levels go up and down. We're seeing it with a little bit of a different flavor now. But that plays really well into the multi-line approach. Right? I think Arch has demonstrated through our past history that you can run the mortgage insurance business differently than it had been run in the past. Right? We want a fresh approach of risk-based pricing. Right? That didn't exist in the past. The purchase of reinsurance, ceded reinsurance to eliminate volatility. Again, that's an innovation that didn't exist in the MI industry. It's something we can learn and bring over from P&C, but as a way to manage the business differently. And there's analytics approach that can be brought in to make us learn more about our business, help tell us when we should be writing, what we should be writing, where physically we should be writing more and doing less. And when you're a multi-line, you don't have the ability to react. I'm sorry. When you're a mono-line, you don't have that ability to react to manage your business in that same manner. And in fact, what we've seen in the past with mortgage insurance, I'll call it almost reverse cycle management. At the time you should be writing less business, you're writing more business. That's the reason that half of the industry went bankrupt last time we had a deep cycle of loss activity. So we're in a much better place today. I think Arch has been at the forefront of improving that industry. And I think that improvement comes because of our different ownership structure and our different focus that gives us the ability to write business. So we saw that great chart before about the P&C market and casualty long-tailed lines. And when you get adverse development, when you get positive reserve development, you look at that last cycle where we saw those red bars for adverse casualty development. That's exactly when we were leaning most heavily into the MI business. And so we're able to do that. Then when the P&C hard market came, we can flex downward. We allocate less capital to MI and more capital to the P&C business, and we're very unique in our ability to do that. I guess maybe that begs the question of, well, how come no one else is doing that? Why are we the only one, and I've got lots of theories. Right? No answers, but lots of theories, and happy to discuss them over cocktails later, but let me get into the team here. I want to start out with Michael. Question for you. How do you feel about our portfolio now, the in-force portfolio that you have on the books today? Yeah. So the way to think about USMI is our portfolio is really the earnings engine that's going to drive future profits. And right now, it's incredibly healthy. So if you just look at delinquency rates in the portfolio hovering around 2%, that's close to historic lows. There's a lot of embedded equity in the portfolio. In fact, more than 90% of our delinquencies have at least 15% embedded equity. You look at labor markets, they've been resilient. Home price appreciation right now in the U.S. is growing about 4%-5% per year, which we think is very sustainable and supportive to the portfolio. The housing supply situation is tight, which constrains the new business opportunities, but also provides a floor in case there is any pullback in home prices. You look at the credit mix in our portfolio, and it's very attractive. We are underweight the market in low FICO. We're underweight the market in high LTV. We're very geographically diversified across the portfolio. And then more than 90% of our borrowers have a note rate that is significantly below the current market note rate. And so you put that all together, and we've got a very high-quality portfolio that should be very sticky. And what that means is significant amounts of embedded value. And the interesting thing about that is that's not counted in book value. Right? This is just high probability earnings, sustainable earnings for years to come in the future, regardless of how much new business we write that's already on the books. So overall, I think we're feeling really good. Yeah. Michael, as a follow-up to that, there's a lot of attention paid to market share in the MI companies. Right? Every quarter, market share comes out, and people are very quick to react to that. Right? Who gained market share? Who lost market share? And I think we've gone from a period in the past where a large increase in market share would be praised as, wow, you guys are doing really great things. You grew your business. Awesome. Now, it's questioned. Right? Now, the analysts seem to come from the perspective of, hey, your market share went up. What's going on? Did you lower rates? What are you doing differently? With a kind of a healthy skepticism. So what you described is a lot like cycle management. Given the focus on cycle management from a market share perspective, can you talk about cycle management from a dollars of volume perspective as opposed to cycle management and how shifts in the mortgage origination market because of interest rates play into cycle management beyond just quarterly market share? Yeah. I think it's a little bit of both. So over the last few years, I think is another great example of cycle management in the mortgage group. So if you think about what happened when interest rates started rising in 2022 and for the last couple of years, obviously that shrunk the mortgage origination market. But at the same time, we had significant periods throughout the last few years where economic and housing uncertainty were elevated quite a bit. So if you remember the second half of 2022, nationwide home prices were actually falling for the first time in quite some time. In early 2023, you had obviously Silicon Valley Bank. You had potential for a regional banking crisis, a lot of concerns about commercial real estate. The number of economists forecasting a recession was at record highs. People were concerned about whether a soft landing was really achievable. There's a lot of uncertainty. What did we do? We just raised rates. We didn't know the answer more than anyone else, but we raised rates. We were willing to raise rates and pull back our market share into what was already a smaller origination environment. That is a perfect example of cycle management because we didn't have to deploy that capital into mortgage. We had attractive other places for Arch to put that business. The reason we do that is because we're very return-focused. Right? My compensation has nothing to do with how much new insurance I write in the mortgage group. We're very return-focused. The way I always think about an MI company is you're not going to get in trouble by not writing enough new business. Where you can get in trouble is writing too much of the wrong type of business at the wrong time, and so that's something that with a diversified platform and with our cycle management philosophy, I think is less likely that we would do. Thanks, Michael. Seamus, let's pivot over to you. I know oftentimes when we talk about our MI business, we're hyper-focused on U.S. We don't always talk as much about the international, which is becoming an increasingly significant piece of our book and also giving us some good growth opportunities. Can you talk about the international book? Give us an overview of what's in there and where you're seeing these opportunities. Yeah, sure, David. I think, as you said, growing international and in particular diversifying beyond USMI has certainly been a key objective of ours. We've grown the platform from representing about 15% of mortgage underwritten income in 2017 to representing 36% today. I think it's been a very successful, strong growth story, which has by and large been organic. It speaks to the entrepreneurial culture that Nicholas talked about, the culture of innovation with respect to growing into new markets. The business has three separate components. Firstly, as you see in this slide, there is credit risk transfer from the GSEs. These are the risk transfer programs from Fannie and Freddie that we write out of Bermuda. We've been a real market leader in this space now for over a decade, having been the first and only participant in the inaugural credit risk transfer insurance transaction back in 2013. And we really helped lead the development of that market in tandem with both enterprises. And although the underlying risk of CRT is U.S.-based, it has a very different risk profile than Michael's business. Right? We provide protection on pools of mortgages with less than 80% loan-to-value or on pools of mortgages with greater than 80% LTV, but after the enduring MI cover. And in addition, both Fannie and Freddie typically retain quite large retentions within the structure. So very different risk profile. We've grown a very mature portfolio to around $6 billion. It has performed and continues to perform really exceptionally well and has become a real stable source of earnings for us. And then within credit risk transfer, in 2018, we set up a services practice in Bermuda where we earn fees by providing analytical and underwriting services to other reinsurance companies who want to participate and deploy capital in credit risk transfer with a trusted advisor. And between ourselves and our clients, we can typically represent anywhere between 25% and 35% of the insurance credit risk transfer market. Secondly, we have Australia. And in Australia, we have a mortgage insurance company that provides similar cover to the cover we provide in the U.S. under Michael's unit. And our history actually in Australia predates our history in the U.S. as we started writing mortgage insurance in Australia on a reinsurance basis in 2011. Over the subsequent decade, we really grew both our knowledge and our reinsurance capacity into the Australian market, which really culminated in us then purchasing the mortgage insurance captive of Westpac Bank, who are one of the four major banks in the Australian banking market. Right now, we have seven years remaining of a 10-year supply agreement with Westpac, where we are their exclusive provider of mortgage insurance in that market. Then lastly, we have Europe. In Europe, we have been providing capital solutions to European banks, mortgage portfolios in similar structures to credit risk transfer. These are called significant risk transfer or SRT transactions, where the European bank can get Basel capital relief by transferring risk to either capital markets in funded form or insurance markets in unfunded form. And the bank adoption of SRT as a source of capital has really grown, particularly over the last three to five years. And again, and this may surprise people, but our history in Europe actually predates our history in both the U.S. and Australia. We started writing a small number of flow mortgage insurance contracts in 2010 in that market. It has been a very small operation, but we've really leaned into the significant risk transfer market. Again, we were the first and only participant on the inaugural SRT transaction in Europe. We've leaned into that market over the last three years. We're now active in over 13 European countries with around a 50% market share of European mortgage SRT. I think the European story has been a really good marriage between the analytical depth we've built across the mortgage group, the structuring expertise we've garnered through credit risk transfer and our Bellemeade platforms, and also just the patience within the market. Right? We've been patient in that market. We've developed a lot of relationships directly with European banks that we're really starting to leverage now as we're doing large bespoke transactions on a bilateral basis. And then with respect to growth, David, I think we see growth coming in both Australia and in Europe. Volumes have certainly been challenged in Australia, much like in the U.S., because of the higher rate environment and also because of the establishment of a government guarantee scheme in that market. But we have some opportunities to grow our client base beyond our anchor client, Westpac, and that's a key focus of the team in Australia. And then in Europe, we do see the bank adoption of SRT continuing to grow as banks make SRT a permanent and material source of their capital base. And our participation in that market will grow in tandem with that underlying growth. Yeah. That's great. Thanks, Seamus. One of the things I want to pivot to now is ceded reinsurance, which is something we all know and love, and it's such a big part of our business on both the assumed and ceded basis in the Insurance and Reinsurance Groups. But it's a reasonably new innovation in the MI world. Right? You hear people say MI in the GSEs used to be in the storage business. Right? They take in exposure and they store it. Right? Now they're in the moving business. Right? You bring it in, you move it around, you ship some here, you put some there. Right? You optimize your portfolio, which has led to a significant reduction in the volatility of our business, allows us to manage the tail to continue to deliver those smooth earnings. So I was wondering if you could each take a minute to talk about how you're using ceded reinsurance in your businesses through both the traditional reinsurance markets as well as the capital markets through our mortgage insurance-linked notes, the Bellemeade programs, and what you're seeing in the market now from our reinsurers. So you want to kick us off, Michael? Yeah. So, I mean, to your point, there's a lot of differences, obviously, in the mortgage market between 2008 and today with credit policy and underwriting quality and housing supply and the use of risk-based pricing. But towards the top of the list of most important is the use of reinsurance today. To your point, buy and hold is dead. Ceded reinsurance is a big part of our strategy going forward. And so what we've been doing over the last several years is really developing out the traditional reinsurance market as well as the capital markets. And we use it for a variety of reasons: for capital management, we use it for risk management, we use it to reduce earnings volatility, and just as importantly, we use it to get feedback from independent third parties of what is their view of credit risk. And then we can take that feedback and roll it back into the front end in our risk-based pricing engine and incorporate it there. So it's a big piece of what we do. What we're seeing right now is very favorable conditions in the reinsurance market, where there's a lot of capacity at very favorable terms. And that capacity is willing to go forward and out two to three years, which is really important for us because if you think about the importance of reinsurance for mortgage, you really want it on the newly originated loans where they haven't seasoned, there hasn't had an opportunity for home price appreciation to build up that equity. And so when you can capture forward reinsurance, it's very valuable. On the flip side of that, we have some older reinsurance treaties back pre-COVID that have seen significant home price appreciation. So we've been looking at those recently and actually having the opportunity to terminate some of those treaties because we weren't getting much in the way of capital relief. There really wasn't much risk management benefit anymore, but we were still seeing premiums out the door, so that didn't make much sense. So conditions are very favorable right now, but yeah, it'll be a big part of our strategy going forward. What about— just briefly touch on the mortgage insurance-linked notes and how you're seeing our volume of traditional and mortgage insurance-linked notes ebb and flow over time? Yeah. So we have really kind of three parts to our program. We've got a quota share program with traditional reinsurers. We've got a forward XOL program with traditional reinsurers. And then our mortgage insurance-linked notes primarily are the capital markets, but also reinsurers play there as well. The main difference is both the quota share and the forward XOL, we're getting coverage forward. With the capital markets mortgage insurance-linked notes, we're generally originating somewhere between six to 12 months of business and then putting on the reinsurance once it's been a little bit more seasoned. And it's important still to develop both of those markets. And so that's kind of how we're thinking about all three of them. Yeah, and I think maybe just to add the different dynamics in those markets, capacity ebbs and flows differently, spreads move differently. Sometimes we're going to be heavier in the capital market transactions, sometimes heavier in the traditional reinsurance transactions, but both very important pieces of our program, but Seamus, same question for you. Yeah. I mean, just building on what Michael said, I mean, if you think about the reasons why we've seen a lot of plentiful reinsurance support at attractive terms supporting our U.S. business, I say those conditions are also present internationally, so firstly, we've seen pristine credit quality post-GFC. Right? That is also true in Australia and in Europe, where we've seen a tightening of credit and an improvement in underwriting standards, and by the way, if you think about the experience through the crisis in the U.S., we've seen underwriting year loss ratios during the GFC close to 200%. The equivalent in the Australian market was 30%, so there's huge diversification benefit there, which reinsurers really like. Secondly, I would say the macroeconomic conditions for mortgage credit have been very favorable. We talk a lot about the supply side situation in the U.S. and the shortage of supply. It's not a U.S. problem. That's a global phenomenon, and we're seeing those factors of production that are constrained on the supply side and the increasing on the demand side also prevalent in Australia and across many of our key European geographies, and again, labor market conditions internationally have also been healthy, and then lastly, I would say when we talk to reinsurers, it's clear that we are a very respected underwriter of mortgage credit, very respected steward of capital, and a trusted partner, and I think for those reasons, we've also been very successful in the international segment, being able to place reinsurance, which manages our tail but leverages our return, and we've been able to place reinsurance on both a quota share and excess of loss basis in both Australia and Europe on a forward multi-year underwriting basis. Yeah. Seamus, maybe Australia is becoming a more significant piece of the portfolio for us. Maybe you can just briefly touch on some of the key differences between mortgage business in Australia versus the U.S. Yeah. Well, I think one of the key differences is just the procurement. Right? So in the U.S., you have six mortgage insurance companies competing for each and every individual loan. In the Australian market, there's a kind of a one-to-one relationship between the mortgage insurance company and the bank. So for example, our key anchor client, Westpac Bank, we have an exclusivity where we provide mortgage insurance for them across all of their production in the high LTV space. So there's much more onus for client relationships, I think, in the Australian market, both your existing client and your prospective clients. And then with respect to the risk side, I would say two things. Number one, the Australian market is a fully recourse market, which is obviously credit positive. And then what could be potentially a credit negative is it's a variable rate mortgage market. So we are exposed to interest rate increases or decreasing the debt serviceability of our borrowers in Australia. But we just went through a use case of that. Right? And over the last couple of years, we've seen increases of interest rates in the Australian market. And it was a great validation, actually, of our interest rate modeling because the actual performance and the slight increase that we're seeing in the delinquencies in the Australian market is just below our expectations there. Yeah, and maybe just one last very, very brief comment on recourse in the mortgage lending space. So as I mentioned, the Australian market is a fully recourse market. So we have recourse to the borrower to deleverage the debt that we have. Lots of incentive to keep paying your mortgage when you can't escape it. You can't turn your keys into anyone. I want to thank you guys. I think there was a good discussion. A couple of points I just want to emphasize too where we talk about cycle management being a critical piece of what we do in the mortgage business and not just in the mortgage business itself, but how that ties into the P&C business and really gives ours a structural advantage compared to the monoline MI guys in the business. And then also we touched on innovation in a number of places, both in the way we operate our product in terms of purchasing reinsurance, in terms of risk-based pricing, in terms of analytics, but also in terms of creating product. So Seamus mentioned internationally two prominent places where we participated in the very first insurance transaction, right, both in GSE CRT. Right? GSE CRT existed as a capital market-only execution until we brought the innovation of an insurance trade that replicated effectively the economics of a bond. And then secondly, European SRT, same way. That business existed only in a capital markets form. We executed the first insurance, which is now one of our kind of bright spots and great growth opportunities in the MI. So I see Vinay is standing, so that probably means we're about to get the hook. So thanks, everyone. I appreciate it. Michael. Thank you very much. So we move on to the final segment of the Investor Day. If I could request the senior management folks to come up on stage. So just for logistics, this will last for about 30 minutes. And in the interest of time, our request is to keep it to just one question. And for the follow-ups, we would request you to do your follow-ups at the cocktail reception. In fact, I think that that's going to be better, because given the liquid encouragement, you may get more colorful answers at that forum. So raise your hands to ask a question. We'll provide a mic to you because this is being webcast. First, no. We're not going to Elyse first. Let's be honest. She's not getting the first question. Well, you can try, but don't do it. We must. Just keep the tradition going. Come on. Okay. Elyse has to be first, c ome on. Fine. Okay. I lose. Thank you. So my question, post the special dividend, can you help us think through how much excess capital Arch still has? And then I guess there's a second part to my question, right, François? No, no, no. no, no. Only one question. That's it. I'm sorry, I'm sorry, Elyse. You said that the reason you guys weren't going to do share repurchase or a quarterly dividend, right, is because you can get the capital out quicker with the special dividend. But there are mechanics to accelerated share repurchases that also would have accelerated any kind of buyback. So help us think through kind of why you chose a special dividend over perhaps an ASR of some sort? Yeah. I mean, ASRs are, I mean, are a vehicle, but you end up paying for it a little bit too. So I think that was something that we thought about. In terms of excess capital, I mean, no secret here, we still have excess capital. I mean, we maintain some buffer above what we think to be or what we perceive to be our range of reasonable kind of capital levels. There could be some incremental M&A. There could be a hardening market in some places. So we like optionality. That's been a mantra of ours, and that's true in all our segments, and it's certainly true on the capital base. We've walked with some of you in terms of big picture, how do we think about capital requirements? P&C is you can assume one-to-one premium to capital, premium to surplus. I think that's in the ballpark. Obviously, if you write more cat, there's PML considerations that kind of draw a bit more on the capital. Mortgage is roughly 0.3-1 plus or minus, so big picture, $1 billion of premium is $3 billion of capital. And that's how we kind of keep it very high level. There's, again, nuances on how much reinsurance we buy, et cetera, et cetera, but just trying to give you kind of a big picture number here. And then investments. Right? Investments come with additional capital charges. Obviously, we think we're getting very good returns on our alternatives, but those come with higher capital requirements, and that has to be factored in. So hopefully that you put it all together and you get to a number that tells you that we still have some excess, but definitely less than a couple of weeks ago. Yep. Mike. Hey, thanks. Maybe a reinsurance question that also has a capital element to it. So I think year over year, you've mentioned that you weren't kind of trying to max out or take incremental hurricane risk because of the weather patterns. La Niña, maybe. There's probably a lot more to it, but we don't have time to go through it. But so should it be if the weather pattern changes this spring, should it be thinking that might influence the market as well, like maybe move the market down, but you'd be willing to take more risk? Well, yeah. So just to touch on that, the beauty of Florida is you've got some time to think about it. And when June came around, we had done a lot of work. CSU and all these guys come out with their predictions. Our meteorologists and our analysts do the validation of it. And it just speaks to what we did in this year, just speaks to our cycle management. Right? We got a draw that looks to be a worse draw than the pricing would validate. So we decided to not grow where we could have. Next year, we'll have views. And the thing that's important for you to take away from this is this is not a game that you play in material terms. Right? You've got client relationships. You set your bets longer term. But where you have a chance to maneuver in the short term, we take it. And you can also hedge. So all these tools are at our disposal. If we find that the dynamics are different next year, the capital is there. The client desire for more Arch capacity is there. So it speaks to my point of optionality. It'll be a dynamic portfolio management that we do. But if the dynamics are such that the climate outlook looks favorable relative to the pricing, yeah, we'll lean into that. Yaron? Yeah. Thank you. Yaron Kinar with Jefferies. I want to turn to slide 9 with the U.S. industry other liability lines where we see the reds and the greens. I think one of the concerns the investment community has today is that maybe 2020 through 2023 will end up having a little bit of red in it. And I think that's actually a period where we saw Arch grow in casualty lines. So can you maybe talk about how comfortable you are with that book and why you still see that as an opportunity of growth today? Yeah. I think we leaned maybe at the end, I think. I think going to 2017, 2018, at least in the insurance, and I think our insurance was saying we were clearly underweight. I think starting 2019, 2020, 2021, I think we grew. Honestly, I don't think based on and again, we spend a lot of time. One of the things we do and they do in our insurance and we do in insurance as well is we have what we call performance tracker where you don't need to wait 10 years to find out if you made money or not. I think very early sign of things that don't work out, you can probably see after 24 to 36 months. So I think what we see is that it's still a decent bet, probably not as good as the bet that we may have anticipated at that time. I think we are talking maybe a differential of 5 or 6 points on loss ratio, but the bet is still worthwhile making. So I think directionally, I think what I always see when I see those graphs is the 2015, 2016, 2017, 2018, 2019; they're not going to get any better. They can go one direction. They're going to go up. If you go the green, the green can continue to improve. But once you miss the side of the bet, it only goes one way. So I think for us, I think we, again, came from a position both in reinsurance and insurance where we are underweight. The markets swing our way. We look at the upside versus downside. We can't guarantee we always get it right, but I think we get it directionally right. I think we thought the asymmetry of the bet would work in our favor. So there's always a possibility that we don't get it right, but we're not going to get hurt a lot. That's a view. And I think in that particular case, I think it's going to work out, not probably as good as what we would have anticipated at the time. But again, it opens up the possibility to do more. And again, if you think of where we take the bet in the Insurance Group, we take the biggest bet was the E&S casualty. And this is not like across the market bet. It's a bet by industry where we have actually historical data to really view how the severity works for those class of business. And the bet we make, I think, is smaller limit. Somebody said earlier, I think it was John, he doesn't know if it's going to happen. The market, nobody has $25 million today. People are 5s and 10s. So the frequency, the severity doesn't impact as much. It's more a frequency bet. So I think we're still comfortable about it. To add to that, I mean, here, it's a combination of claims made in the current business. I think we grew aggressively in professional lines in 2020 and 2021 when the market really corrected. Since then, it's been coming down. But that growth, I think, is and the loss picks that we have up there, I think, are doing very well. Same in cyber, massive growth in that line of business. Those years, we think, are going to perform very well. I think the noise or the pressure, even though this does not include commercial auto, we all know commercial auto has been a difficult line for the industry. And I'd say the excess layers, right, umbrella business on the occurrence book, on the broader scale occurrence has been more difficult for the industry. So we got to be thoughtful. We are thoughtful, but I think we got to recognize that there's nuances across different classes of business within this big chart because it's a broad spectrum of classes here that we think we can outperform still within that. Meyer. Pardon me. Meyer Shields, KBW. This is an inconsistent question. But as Arch adopts data and analytics, how do you ensure that that doesn't atrophy the judgment of the underwriters? And how are you seeing data and analytics improve the underwriting capabilities of your competitors? Yeah, so I had a question. If I go through my list of questions for Jay to answer, it's about, is data analytics, do we still need underwriters once we have, there's automation in insurance? A lot of the work that the underwriter, the non-value added work that the underwriter was supposed to do, moving data from right to left, combining, now it's in a perfect world will be done for them. So the only thing we need the underwriter to do is value added, making a decision, is that risk worthwhile or not writing and why? And all the comparables against the industry, the target class, where they fit, as well, be given to him. I think my view, and I think we made that mistake, if you just rely, you don't know, you don't take an underwriting mind, and you don't really know the background of how the models were developed and for the specific class that they are developed. And you take a blank pool of data and you put an analytic model or an actuarial model through it with no real underwriting guidelines, the result doesn't turn out to be good. You first have to have an underwriting structure around the data. And then within that underwriting structure, you do first actuarial analysis, segmentation to the wazoo, and then you bring a second layer of strategic analytics. And then you can lower your loss ratio by five or six points. So I think it's never going to replace the underwriter. First, I think the clients that we talk to, they are brokers. They're not going to go, I mean, the same way that digitalization can work for personal line. It doesn't really work when you talk to a mid-size risk because who's going to decide what limits they buy, who's going to decide what risk I should buy. So the interaction to the broker has to be a human being. So that human being now with strategic analytics is much better equipped to answer the actual needs of the broker. So it brings more value to the brokers than if you don't. So I think you need both. In our world, I think you need both. If I can add one thing there, i n its more simple form, when you think about segmenting business, it actually empowers underwriters and accelerates their ability to make better decisions because all it's saying to you is, hey, all these files start here and start there, and so it collapses time and just improves capabilities of people who do great work anyway, but in a compressed period of time. Alex. Hi. Alex Scott with Barclays. Question I had is on property in the primary markets. I guess we heard from a number of companies this quarter that it sounds like things have gotten pretty competitive there, particularly out of the Lloyd's market and so forth. I just wanted to find out, how do you all feel about price adequacy there? How attractive is it to still grow in property in the insurance business? And has behavior changed at all post these storms? Again, I can answer that question. The I can answer that question. The property we write today, I mean, not talking about the cat-exposed business that's placed or the more difficult risk that's placed in the E&S market, the surplus and excess lines market. That market post-Ian, I think, was completely underwritten, I think, and higher deductible, higher pricing, small limits. We believe that that business is very attractive. What happened is last year, we had one year without any storm. The fear of missing out came back. Lloyd's, which was really muscled by the regulator to abide by the Lloyd's position to stop writing property, reopened the floodgates. Lloyd's came back. MGAs came back with bigger capacity supported by reinsurance. There's more capacity in the marketplace. The price hasn't really moved. The price hasn't really moved. The price has really moved. The price has stopped growing. The price has stopped going up, but the price has stabilized. Effective return is probably flattish. The business is really, really good, but it's really, really hard to grow because there's too much capacity, and I think the clients, they got squeezed so much that one of the brokers was telling me every single retailer is upset as his wholesaler because he thought he got a terrible deal a year ago, so a lot of the renewal business come back to put back into the market, and so we write a lot of renewal, but through a different wholesaler, so that dynamic is not great, but I think the business, in short, the business is still very attractive. It's just the ability to grow the business is hard because there's just a lot more supply and the demand is pretty much the same, so. To add to that, I think we're seeing better opportunities in secondary perils. In terms of growth, I mean, that's more high-hazard stuff, kind of primary hurricanes, et cetera. Secondary perils, we're seeing still good opportunities to grow and good pricing. Yeah. That's what Brian was saying earlier. The MidCorp business, which is half of their portfolio is really property. There, I think we're getting double-digit rate increases. We're getting on the casualty, but on the GL, but we're also getting on the property because the perception out there is that there's not enough rate to cover the secondary perils, so. Josh Shanker with Bank of America. Successful M&A that you've done in the past has been often a distressed seller selling an attractive asset below fair value because they need to get rid of it for some reason. MidCorp feels more like a business owned by the wrong owner that you're buying at a fair price that you can improve. Is the characterization correct? And if you can talk about improvements, is this a business that sees a lot more business than it quotes and quotes a lot more business than it binds? Is this a business that you've put your analytics on it and can immediately see that we could have improved the underwriting by 4,500 basis points with the way we operate it? What are things that you see in this business that tell you that we are the right owner for this business compared to the previous owner? I cannot talk for the Allianz. They sold the business for them. For them, it was non-core. Their explanation to us, they write a ton of large accounts and ultimately they underinvest. Again, in the MidCorp business and mid-market, you need to sell, you need to have a value proposition to your and to get a value proposition, a lot of it is also the customer experience, how quickly you can answer, how flexible you are to offer a multi-line product, whether it's GL, auto, workers' comp. They were extremely rigid. They did a really good job on the property side, which I think is a huge asset for us going forward. But they were inflexible. For instance, the workers' comp, very inflexible on the GL. They transacted business, but I think we can do better in that respect. We can provide better solutions to the agent. We can do some of the work that we've done in other lines of business, aligning better which are the clients we want to pursue and be more flexible with which are the clients we want to cede. So I think there's an opportunity for us to really, yeah, improve over time the margin to where we want them to be. I think the business. They've done some remediation on at least the core of the business, the MidCorp business that we think are working. I think they have a program book of business that is a sizable book of business that we think has underperformed, and we're doing a ton of remediation there. So we think it was the right fit for us. It certainly fit our strategy. What we saw, we did a ton of due diligence on the book. We felt pretty good that we could improve the portfolio over time by being more customer-friendly through the customer experience. Their platform was very rigid, and second, I think adding a lot of strategic analytics and improving the portfolio is running probably, we said, close to 100 combined, maybe a bit better than that. That's where strategic analytics can be really helpful, and actuarial segmentation can be really helpful. We can probably drop that. We expect to drop that by 300 basis points or maybe more, so I think that was the strategy. Thanks. David Motemaden, Evercore ISI. François, you had talked a little bit about how to think about excess capital. One thing you didn't mention was any sort of diversification benefit you get from the collection of businesses. Was that included in some of those metrics you gave? If not, maybe how should we think about that? And then relatedly, you did mention M&A, so maybe that's more for Nicolas as well. Any sort of spots that you think are attractive now where M&A could be more part of the strategy going forward? I mean, the numbers I gave you are kind of high level. So yeah, they're intended to be kind of net of diversification, but there's, again, I'm oversimplifying the big picture here, no question. But yeah, the numbers are kind of net of that diversification benefit. That answers the question. And I think on M&A, we're not going to share any secrets in this room, but we have a list of targets and metrics by geography, by line of business, of where we could find some accretive, some underwriting capabilities that we don't have that we would like to bolt on. So I think when we looked at MidCorp, clearly we had identified the middle market in North America as one of the areas that with the occasion arise, we should really look at it not only based on price, as you said. I mean, if it's maybe the price was fair, but I think our strategic view is that it really moves us forward probably 10 years in our ability to develop that portfolio. So I think that's how we look at it. We have strategic areas that if something we see pretty much everything that comes based on our financial side. So I think when those things come in, we screen them through various criteria. And if one hits an area that we have identified as an interest for potentially build versus buy, and we prefer buying, we're going to spend a ton of time figuring out if we can get it with an acceptable range of price. So that's how we look at it. So that's continuing today. The special dividend doesn't change any of this, so. Hey, Andrew Kligerman at TD. So I heard a lot of great stuff about data and analytics. I think in insurance, you talked about being the Progressive of analytics, and the charts were very compelling. And then I think I heard also that maybe only 20% have it. And then in reinsurance, the gentleman who came from Partner Re said it was nothing nearly as good as what he's seeing. But basically, I don't mean to be overly skeptical, but I think every company that I cover has said that they're great at data and analytics. And it kind of reminds me of the discipline word. I always hear that too. Now, your performance definitely speaks to that, but I'd like a little more color on what exactly how do you know that the competition is so far behind? What gives you that confidence on data and analytics? What do your reinsurers think of your data and analytics, and what is your? Wait, I thought I was asking the question. Finish mine, and then get to HT. I'm sorry, the first question from you. You can, I'll finish mine. So how are you different? How do you know that? So, my view, and if you want to take a conservative view, which is the one we have today, I think we're better than that is to tell a true story. The people that do it and the people that don't do it. And I think, as I said earlier, every time we roll out a model, and as Jay said, we have probably 50% of our premium that goes through these Quintile models. What we discover is some of the findings in America have already been discovered. It's like some of the findings, in fact, we're catching up with Chubb or Travelers or Hartford. So, I think my view of where we are today is we probably catch up with the people that are best in class when we develop those models. But that's like a huge advantage compared to not having caught up and being anti-selected by underwriters. So I'm not saying we're pulling off the pack. I think we are now. I think our capabilities put us probably fairly close. Maybe Chubb is still ahead of us, but fairly close to others in the line that we've developed those models. And I think the advantage of the model, it's also, again, efficiency. The underwriters, as Maamoun was saying, the underwriter comes in, a lot of the pre-work that so you get efficiency. You can look at first, you can help the underwriter looking at the risks that you really want to target. And second is a much faster analyzing those risks. So your propensity to bind those businesses is much higher. And we've seen it in U.S. casualty. In U.S. casualty, we're binding a lot more $100 million more premium. We haven't added any underwriter. It's just the system is generating the leads to the underwriter, the underwriter business. And then our propensity to bind is higher than if he was looking at something else. So that's how I think about it. I think it's more the tail. If you don't have this, especially, I mean, as I said earlier, if the market is going up, having strategic analytics is helpful, probably help us on the loss ratio. Others are going to be able to compete. As the market becomes more competitive, understanding why you win becomes a bigger answer. And I think providing clarity to your underwriters why you should be chasing that new pieces of business or which business you should let go. That's, in my view, it's a really good insight that if you don't have those, you're kind of operating the same way you're operating five years ago, knowing that, oh, that's a good account, that's a bad account, and things are a lot more dynamic than you think in insurance, that's my view. Heather, do you have a follow-up? Well, yeah, I was on this topic. Yeah, can you use the mic? Yeah. So in the judgment of your reinsurers for the insurance business, how would your reinsurers rate the data and analytics they get from you guys compared to others? And then also, I'd be interested in how your own reinsurance business thinks the insurance business's data and analytics are compared to what they see from their cedents. Because maybe you get a selection advantage or you're able to drive adverse selection onto others if your data' s superior. So first, I'll let Maamoun answer the question on insurance because the information will go one way. So it doesn't come the other way. We don't take data. No, no, I know. I I understand. I understand. But sometimes you're wrong. We don't take data from our reinsurers, or from our cendents and then compared to what we have at our side. We don't do that. No, I understand, but maybe you get feedback. I hear from some of your insurers, then the insurers tell them. The reinsurers will tell them. They'll give them feedback. The only way I can measure effectively the value that the reinsurer brings to our analytics and our underwriting is through the ceding commission they are willing to pay. And I think we do pretty well in terms of ceding commissions in the marketplace, whether it's on professional lines or on casualty. I think we, and our ability to place the business, we want to see it at the terms we want to see it. So I would say that's the best objective measure that if we had terrible data and people didn't think the market is whatever it is. For instance, on professional line, the D&O market is pretty tough. We didn't have much issues to renew our program last year. We gave commissions on the program is probably one of the highest in the marketplace. Because people knew that even in D&O, we had tools that allow us to underwrite new submission on a pretty commoditized book of business that differentiates us from the rest of the market. So I think, I mean, I can't talk for them. You should ask them. But I think we have a pretty good reputation overall on underwriting and data. That would be my guess. All right. We have time for maybe one more question, or am I just okay? Great. Jimmy. I'll ask a six-part question. Listen, you're the one that's holding us all before the cocktail, so. All right. Thank you. right. Thank you. right. Thank you. François, on the special dividend, how much did the stock price and the multiple play a part in doing a dividend instead of a buyback? And if it did, at what multiple would you be leaning into buybacks more going forward as you generate more capital? Yeah, I mean, it certainly plays a part, no question. I mean, we know our philosophy has been pretty much the three-year payback of any premium to book. We don't hold it as a black and white kind of, we don't go above three years, but that's a starting point. So three-year forward look of how we think we can grow the book value. Because ultimately, we get paid on book value growth per share, right? That growth in book value per share. I mean, EPS growth is others do that, but for us, book value is what we hold as a key kind of the most important factor. We got a good market in front of us. So no question that we could go north of one and a half times book. Do we go to 1.7, 1.8? At two times, we felt like that was probably a bit rich to get to a three-year payback. But in that range, I'd say we can start having those discussions. And then it's a function of, okay, do we think the market's going to be with us for the next two to three years at a good, healthy level? Do we think we have other ways to deploy that capital? Those are all considerations, obviously, but just hopefully to help you out. I mean, and again, we got excess. So if we don't expect it, but if the market, the stock price kind of goes a little bit sideways on us, we'll be right back to buying shares without hesitation. All right. Thank you very much. Nicolas, do you have any concluding remarks? Otherwise. I've talked a lot already. All right. All right. Thank you very much. More than I expected. As you can see, we are excited about the business, and we're very happy to have you here. We'll have a short break of 15 minutes, and after that, we'll have the cocktails in the reception area. Thank you very much for attending.