Good day, and welcome to W. R. Berkley Corporation's third quarter 2024 earnings conference call. Today's conference call is being recorded. The speaker's remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words, including, without limitation, believes, expects, or estimates. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will in fact be achieved. Please refer to our annual report on Form 10-K for the year ended December 31st, 2023, and our other filings made with the SEC for a description of the business environment in which we operate and the important factors that may materially affect our results. W. R. Berkley Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. I would now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir. Krista, thank you very much, and echoing Krista's comments, a welcome to our Q3 call. In addition to me on this end of the phone, you also have our Executive Chairman, Bill Berkley, and Chief Financial Officer, Rich Baio. We're going to follow a typical pattern, and that is, Rich is shortly going to walk you through the highlights. I will then follow up with a few comments, and then, of course, we're very happy to open it up to Q&A and address any questions participants would have. Before I hand it over to Rich, two points that I'd like to make. One, obviously, the third quarter and then, more recently, even in the fourth quarter, there's been a significant amount of nat-CAT activity. And oftentimes on these calls or any industry discussions, as we've flagged in the past, people start talking about estimates and models and numbers, and those are all important and real to consider. That having been said, from our perspective, this has impacted countless people's lives, and that is not lost on us. So while we are certainly focused on the numbers and the economics, my colleagues and I are also acutely aware of the challenges that many people in this country are facing as a result of this cat activity. Further, in addition to extending our concern to all those impacted, I'd like to thank our claims colleagues that are going above and beyond to ensure that we deliver on our promise to all of our policyholders that have been impacted by these events. So again, thinking of those impacted and sending thanks to those that are doing their job and making sure that we deliver on our promise. The second topic I did want to flag, and it really stems from a subject matter that has been getting greater attention, more recently, and that is the growth in the specialty space, and in particular, the E&S market. I don't think it's lost on any of us, the pace of change in the world, how it seems to be accelerating. The level of complexity and risk continues to be on the rise, and certainly, there are many contributing factors, but among those contributing factors would, without a doubt, be climate change as well as social inflation. Both of these items are playing an important role in having a meaningful impact on the insurance industry. Quite frankly, as these two items are impacting loss cost trend, I think much of the standard market or and specifically the admitted market is having a difficult time pivoting. That is creating opportunity for, in particular, the non-admitted market. One of the pinch points that is not discussed as actively in the commercial lines market space as it is in the personal lines market space is the challenges on the regulatory front. There are many insurance departments that are struggling from a staffing perspective, and also, in addition to that, we see the impact of politics creeping in as well. As we look at the circumstance and we see this pinch point on the regulatory front, we think that that is likely to continue. That is likely to continue to drive more business into the specialty and in particular, the E&S market. By extension, we think that that is going to bode well for an organization such as ours, with a particularly large footprint in the specialty space overall, and in particular, the E&S marketplace. With that as a bit of a backdrop, I'm going to pause there. Rich, I'll hand it over to you, please. Great. Thanks, Rob. Good evening, everyone. Our record third quarter net income resulted in an increase of almost 10% over the prior year to $366 million, also contributing to a nine-month record net income of approximately $1.2 billion. We continue to generate outstanding returns on equity of 20% in the quarter and more than 21% year to date. Both strong underwriting and investment income contributed to our operating earnings of $374 million or $0.93 per share. Despite the above average catastrophic activity experienced by the industry, we've once again been able to demonstrate our careful and prudent underwriting discipline, and in particular, stability and earnings. Our calendar year combined ratio was 90.9%, inclusive of 3.3 loss ratio points from several cat events, and 87.6% on an accident year ex cat basis. During the quarter, there were four hurricanes that made landfall, with Helene being the most destructive across several states, and continuing SCS activity that contributed modestly to the total amount of cat losses. Our net premiums written grew above $3 billion for the second consecutive quarter and continues to benefit our record net premiums earned, which increased 10.8% over the prior year. Current accident year underwriting income, excluding cats, increased 13.4% to $362 million pre-tax, adjusted for cat losses of $98 million and prior year favorable development of $1 million. Our current accident year loss ratio ex cat improved quarter-over-quarter by 0.5 point to 59.1%, driven by business mix. We continue to invest in the business to drive efficiencies and better experience for our customers, combined with new startup operating units that we've announced before. The combination of these items, along with the changes in business mix and reinsurance structures, have contributed to the increase in our expense ratio by 20 basis points to 28.5%. As previously communicated, we continue to believe that our expense ratio should remain comfortably below 30%. Turning to investments, pre-tax net investment income increased 20% to $324 million. Fixed maturity securities grew by more than $50 million, with the Argentine inflation-linked securities normalizing to an amount commensurate with the prior year quarter. We do not anticipate much change on a prospective basis regarding these securities. However, do remind you that when modeling out 2025, you should factor in the elevated non-recurring income in the first and second quarters of 2024. Record operating cash flow in the quarter of $1.25 billion contributes to the record year-to-date cash flow of almost $2.9 billion. Combining the increase in investable assets with a new money rate that's higher than the roll-off book yield on our fixed maturity securities, we remain well positioned for further investment income growth. The credit quality of the investment portfolio remains at a double A minus, and the duration is 2.4 years for the quarter. Foreign currency losses in the quarter of $25 million related to the U.S. dollar weakening relative to most other currencies. As mentioned in the past, we actively manage our foreign currency exposure, and you'll note an improvement in our currency translation adjustment and stockholders' equity, which offsets the amount in the income statement. The effective tax rate remains elevated relative to the prior year, and has been the case in the first half of the year due to the contribution of foreign earnings taxed at rates greater than the U.S. statutory rate of 21%. This quarter was 23%, and we expect the fourth quarter will likely revert to the high 23%-24% area that we saw earlier in the year. Stockholders' equity increased above $8 billion for the first time to more than $8.4 billion. Strong earnings of $366 million, coupled with an improvement in after-tax unrealized investment losses of $381 million and currency translation gains of $49 million fueled the increase. The company also returned total capital of $138 million, consisting of $95 million of special dividends, $31 million of regular dividends, and $12.5 million of share repurchases at an average price per share of $52.30. Our total capitalization remains strong, and our financial leverage ratio of 25.2% is at its lowest level in almost two decades. Book value per share before share repurchases and dividends grew 10% in the quarter and 20.1% year to date, and with that, I'll turn it back to you, Rob. Rich, thank you. That was great. Let me just offer a couple of quick sound bites. I think, Rich did a really thorough job in covering that, but a couple of thoughts from me. One, on the rate, the rate ex comp for the quarter came in at eight point four. A little additional context. Auto Liability is leading the way and closely followed by Excess and Umbrella. As we've been talking about for some number of quarters, perhaps at this stage, it can even be measured in years, just the loss trend on the auto line is something that we have been focused on. We feel good about where we are, but assuming this trend continues, we're gonna need these additional dollars to make sure that we're well-positioned for claims getting settled tomorrow. Rich obviously covered the loss ratio. I think, 62.4% with 3.3-ish points of cats. Not a bad outcome, given the frequency of severity for those that are part of the sub-four club, that's the 59.1. That having been said, you know, we've talked about this and talked about it, and I suspect we'll continue to talk about it. In our opinion, it's all about building book value with an eye towards risk-adjusted return and the concept of backing out cats as if they don't exist. You would have thought that would have run its course by now, given every year we seem to have cats as an industry. So again, from our perspective, when we measure the business, it is a 62.4%. Rich also covered the expense ratio. Just a couple of quick comments from me. One, at this stage, we have a couple of businesses that are not at scale, but are in the process to scaling over time. I expect that as they grow, you're going to see the benefit of that increased earned premium, and that will inure to the overall benefit of the group's expense ratio. That having been said, we are actively making investments, as you would expect, on the technology and data front in particular, and that's not cheap, but we believe we will get a good return on the investment, as well. Obviously, Rich talked about mix of business. That can have an impact. I think the other or the last piece that I would flag is the topic of reinsurance. By and large, we are a low limits player, so our need to buy reinsurance is not the same as many of our peers that are far more dependent on reinsurance. We have absolutely no problem with our reinsurance partners making a profit. In fact, we expect and respect their need to make a reasonable risk-adjusted return. But every now and then, if you find oneself in market conditions where people are looking to take a more aggressive position or even gouge, we have the optionality to change our approach to reinsurance buying, and that can impact the expense ratio as well. Lastly, Rich touched a lot on the FX piece and the various ways that it's impacting our P&L, but the punchline for me as far as FX goes, Rich, you'll correct me if I'm wrong, but it was about $0.05 to us on the per share. Let me turn to investments for a moment, and I'm going to take a brief trip down memory lane, so I apologize in advance for that and thank all for indulging me. I think everyone recalls what was going on during the financial crisis, and then again, during COVID, there was massive amounts of economic stimulation rammed into the system. When we saw that occurring, we had a view that there was no way that you were not going to see some level of inflation following that activity. It took a while to come through, but it did come through, and it came through in spades. Ultimately, the government took the action one would expect, and interest rates moved up, particularly on the short end. We found ourselves with an inverted yield curve, and we, as an organization, were rewarded for the decision to keep our duration short. Our investment income increased dramatically over a relatively short period of time. From our perspective, looking forward, it is likely, in our opinion, more likely than not, that yes, while inflation may be coming down, we don't think it is going to fall off a cliff. Our expectation is that short-term rates will come down, but they are perhaps not going to come down as quickly or as aggressively as some have suggested. In addition to that, regardless of who you expect will be in the White House, there is no doubt, if you take them at their word, which is a hard thing to do, but for purposes of conversation, if you take each candidate at their word, they are looking to grow the deficit by what would be measured by the trillions of dollars. With that as a reality, from our perspective, it is inevitable that the federal government in this country, not dissimilar to other parts of the world, but certainly in this country, will be growing its deficit, and there is a real question about supply and demand for government debt going forward. What, what does this all mean? It means from our perspective, we think you're going to see the yield curve take more and more of a traditional shape. We think that is going to create, as we've discussed in the past, an opportunity for us to be nudging out our duration and simultaneously our book yield ticking up. So speaking more specifically to our numbers today, as Rich mentioned earlier, the duration is sitting at 2.4 years. Our domestic book yield is 4.5%. Our new money rate today on that is something north of 5%. We do not believe that we are going to have to give up much on that new money rate. Rather, what you will see is we will be taking that 2.4 duration and nudging it out. As a reminder, for us, if you look at the average life of our loss reserves, it is just inside of four years. So given that reality, we have a lot of room to take that duration out, and that again, will allow us to maintain or actually improve the book yield from where it is today, and quite frankly, maintain that new money rate at levels that I was referring to earlier. So let's get to the punchline, if we will, and then we'll turn this conversation to anywhere participants would like to take it. So what is the story? What is the, I guess, the punchline? The punchline is this: the business continues to grow. The rate increases that we're getting, we believe, is keeping up with trend, actually, probably exceeding trend. So all things being equal, our underwriting margin is likely to continue to improve. In addition to that, when you look at the contribution of the other part of our economic model, that being the investment portfolio, the fact of the matter is our new money rate is and will likely remain above our current book yield. Our cash flow remains exceptionally strong, hence the portfolio is growing. And so, what does that mean? That means investment income is going to continue to increase from here. So more underwriting income, more investment income is ultimately going to mean more earnings for the foreseeable future. And quite frankly, we think the business is as well-positioned today as it has ever been. So let me pause there. Krista, we will ask you to please open it up for questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one. Your first question comes from the line of Elyse Greenspan with Wells Fargo. Please go ahead. Hi, Elyse. Good afternoon. Hi. Thanks. Good afternoon. My first question, you know, just on the reserves, I think the movement was negligible in the quarter. Was there any movement within insurance versus reinsurance in terms of prior year reserve development? To tell you the truth, Elyse, it was reasonably uneventful between the segments. I think, Rich, what was it? It was a couple of million going the other way. Favorable on the insurance and $2 million adverse on the reinsurance in monoline. So, not overly noteworthy. Okay, thanks. And then, you know, the premium growth, you know, did slow, you know, within, you know, insurance, in the quarter. I believe it went from, you know, ex-workers' comp from around 13%, 14%- 9%. So it looks like the implied impact from exposure went from something in the range of 5%-6% to flat, given that you gave us, righ, that 8.4 ex- comp pricing. Just looking to just get some color on the exposure piece or, you know, just went on with what went on within the premiums with an insurance ex comp in the quarter. Yeah, I mean, as you can appreciate, Elyse, there's a lot of moving pieces. Maybe just to call out the big ones, it would really be just referencing my comment earlier around the auto lines in particular, and to a meaningful extent, the excess and the umbrella line. But those product lines are really, no pun intended, being driven by our view on auto. So we have a view as to what rate adequacy is. To my colleagues' credit, they have drawn lines in the sand, and they've been waiting for the marketplace to catch up to them and to share the view. So that had a meaningful impact on the quarter. For what it's worth, this is, like, way under the Safe Harbor comment. When we look at October, there is evidence that would suggest that the world is increasingly coming to the conclusion that we had already come to and is in the process of catching up. So when I look at the growth in the quarter, I would caution you not to assume that that's a new normal, given the evidence we're seeing in October. I think it's likely that, again, the world is quickly catching up to us. So given that comment, Rob, would you expect, I guess-- You know, you've kind of steered us in the direction of expecting, you know, 10%-15% top line growth based on, you know, how you see October, you know, as well as your view for next year. Yeah. Would you expect to be back within the Q4 and then in 2025? You know, I don't have a perfect crystal ball, but I continue to believe, given the breadth of our offering, and I believe that we, as an organization on an annual basis, should be able to grow between that 10% and 15%. As I think I've suggested to you and others, there could be a quarter where we exceed that, there could be a quarter where we come in below that. But yes, on an annual basis, I continue to believe that we, as an organization, should be running at that level. Thank you. Thank you. Your next question comes from the line of Rob Cox with Goldman Sachs. Please go ahead. Hey, Rob. Good afternoon. Hey, good afternoon. Hey, so I was hoping to dive into loss trend a little bit. I think, you know, looking back a few years ago, you guys might have noted that or implied that it was in sort of the 5%-6% range. So, I was just curious if any thoughts or any color you could provide on the loss trend in insurance today, and is financial inflation coming down a reason to maybe loosen the loss trend assumptions in some places at this point? Well, Rob, I don't remember exactly what we may have said some number of years ago. I don't even remember what I had for lunch today at this stage. But let me give you a little color as to how we think about it. As I said earlier, ex comp, we've got 8.4. I believe that we are comfortably in excess of trend at that level. Obviously, it varies greatly by product line, but. You know, we're very focused on making sure that rate adequacy continues to be the priority for us. So we're not in a position to be able to start giving you what do we use by, at, for trend by product line, or even give you a blended number at this stage. But I think you hopefully can take comfort, as I do, that at eight point four, we are clearing the hurdle by a margin. That having been said, as we've also said in the past, and this I have a pretty clear recollection of, is that we understand the and have a respect for the unknown. And while I think there are others, perhaps in the marketplace, that have a firm view on what loss trend is, and to the extent that they are coming in in excess of that, they will be dropping their pick. And obviously, it's for them to decide how they operate their business. But from our perspective, given the uncertainties of the insurance industry, we are not going to get ahead of ourselves. One would have thought, given what has transpired and how the industry has been impacted by social inflation, people would have learned from that and elected to err on the side of caution. As far as shorter tail lines in your question, clearly, financial inflation was one of the big drivers for short tail lines. We saw it in, obviously, property, and there was a meaningful impact on the auto physical damage line as well. Without a doubt, a lot of the pressure that was stemming from a more inflationary environment has subsided, and that is giving a bit of relief. That having been said, I would suggest to you on the social inflation front, particularly impacting many of the liability lines, I think that is becoming as challenging as ever, is probably the right way to characterize it. Very helpful and very comprehensive. Thank you, Rob. Maybe just as a follow-up on the hurricanes this quarter and into Q4, clearly some really unfortunate losses there on a number of levels from the recent storms. Do you have a sense of how the market might react from a pricing perspective, kind of across admitted E&S and reinsurance and any impacts outside of the Southeast? I think it's a little bit early to reach a conclusion on that. I think we're going to. At this stage, the outcome of both storms you referenced, and particularly Milton, I don't think that has really come into very sharp focus, and we're just going to have to see where things settle out. I think the reinsurance marketplace is doing what it can to position itself, as I understand it, for flat. And my expectation is that unless Milton proves to be uglier, it is going to be a challenge for them to actually achieve flat. As far as the insurance marketplace goes, you know, we'll see how it unfolds, and we're going to have to see what the losses are. I think with Helene, the real challenge there was much of the loss occurred in zip codes where this type of natural catastrophe isn't supposed to happen. So you have a lot of people just taking a very big step backwards and trying to grapple with: What does this mean for exposure? What does this mean for adequate pricing? So that was a long-winded answer. The short answer is, I think it's still in the process of coming into focus. Thanks, Rob. Thank you. Your next question comes from the line of Andrew Kligerman with TD Cowen. Please go ahead. Good afternoon, Andrew. Hey, good to talk to you. So back on the net written premium element. So overall, you came in, I think, close to 8% in insurance, a little shy of the 10%-15%, but as you mentioned earlier, it could bump around Q to Q. What I'd like to get a sense of is kind of the outlook. Am I understanding it right? So short-term premium is up low double digit. It seems to me since- All right. When you say--- What, short-term premium, are you short tail? I beg your pardon? I missed it. I meant short tail. I'm sorry. Okay. Thank you. Short tail is up in low double digits. My sense there is you're seeing a fair amount of PIF growth, where, in contrast, other liability, auto, professional liability, with those lines being up in the low single digits, premium-wise, net written premium, it would strike me that PIF is going backwards. Am I, am I reading that properly? Yes, I think that. How are you moving forward? You are correct. On the auto line, our exposure is shrinking at a pretty healthy pace during the quarter for the reasons that I suggested. Our hope is between now and the end of the year, maybe spilling over into early next year, you're going to continue to see more discipline coming in, and early signs were somewhat encouraging during the month of October. In addition to that, the workers' comp line, which was pretty much flat, please understand part of the exposure is being payrolls and wage inflation is playing a role in that as well. In many cases, our exposure is coming down there as well. As always, you know, we are looking for where we believe the margin is, and we are leaning into that. And places where we have a view that a more defensive posture is appropriate, we are not going to compromise on our underwriting. And sometimes there's a lag for the world to catch up to you, and I think that's what we're seeing in the auto line. But again, we're encouraged in this month at least, that the world seems to be waking up to that reality. As far as the reinsurance front, pivoting over to that segment, the growth that you're seeing, particularly on the property, is just a reflection of market conditions, and we still like the trade there. The flatness that you're seeing on the casualty lines is really just a reflection of our, and we've commented for some number of quarters on this, our dissatisfaction with the economics and, quite frankly, the ceding commissions. They need to come down, and that's what's led to our position there. Got it. And just rounding that out, Rob, so it sounds like you like the short tail lines. That's a PIF grower, and then the other liability and professional are kind of dipping a little bit in line with auto, with the discipline you're showing. Is that fair? I think that I would characterize it, Richie, the other liability was-- I don't have it in front of me. I have it must be 9%. Yeah, I think that there's just a lot of pieces that are moving around. The E&S in particular is growing quite a bit. On the other hand, you know, some of the things that we talked about as it relates to the admitted casualty, you know, that is more challenging. Got it. And just lastly, on prior year developments, anything of note in the 2020 to 2023 accident years? Rich, anything that is noteworthy during those years that you wanted to flag? I would say it's consistent with what we've been communicating previously and what you've said in terms of the commercial auto liability being, you know, an area that is a key focus for us. Key focus, meaning that you had maybe a bump or an unfavorable, or just pretty steady? I don't have the numbers exactly in front of me, but we had a little bit of noise coming out of the commercial auto liability. Nothing particularly overwhelming, but certainly evidence that that product line is positioned for a need of change. Awesome. Thanks so much. Your next question comes from the line of Mike Zaremski with BMO Capital Markets. Please go ahead. Hey, good evening. Thanks. My first question, you know, Rob, when you talk about the non-admitted market, you know, E&S, are you, you know, speaking specifically to the kind of the statutory U.S. definition? Or, you know, we can kind of track on a yearly basis how much, you know, U.S. stamped, I guess, E&S you have. Or do you also kind of include the way you guys think about it, kind of non-US, that might not be able to data run or see on paper? So certainly a meaningful percentage of what we write non-admitted is through Lloyd's. So Mike, I guess to your question, you're seeing the U.S. carriers, but I don't think you're picking up the Lloyd's piece, would be my guess. Okay, got it. That's what I thought. And just, you know, I don't know if this has to be that educational, but is the Lloyd's business, is it very different than kind of the U.S. E&S business that makes up the majority of what you do? Is it, you know, in a large account versus small account or anything notable there? The vast majority of what we do in Lloyd's is U.S.-centric, and while there is some, if you will, shared and layered, a huge percentage of it is smaller accounts as well. So it's, generally speaking, a reflection of our overall philosophy, but they do participate in some shared and layered. Okay. Got it. And I think, you know, it was clear, you know, your answers to kind of your view of revenue growth going forward. But just curious, you know, on the Marsh & McLennan, for example, releases an index of pricing by line of business, and excess casualty/umbrella has accelerated meaningfully quarter-over-quarter to maybe + 20% levels. Maybe that's more of a large account phenomenon, which you don't play in as much. But I just kind of trying to understand whether you feel like there's more potential to play offense, specifically in social inflationary lines, to the extent you do continue to see pricing move north. I get the way I would answer that, Mike, is we pay attention to different parts of the market. We have a view as to what the margin is and where we think the opportunities are, we're going to lean into it, and where we think, again, a more defensive posture is appropriate, we will do so, so do I think that there is meaningful opportunity in the Excess and Umbrella space to capture the additional rate? Yeah, I do. Do I believe my colleagues are executing on that? Yes, I do, but please keep in mind, while we participate with some of the larger accounts, again, the vast majority of what we do is on the smaller end of town, and there is plenty of opportunity there to get more rate, and we're doing it. Thank you. That's all I have. Thank you. Your next question comes from the line of Mark Hughes with Truist Securities. Please go ahead. Yeah, thank you. Good afternoon. Hi, Mark. Good afternoon. I think you had mentioned that the improvement in the current accident year was business mix. Wanted to make sure that I heard that properly. And then, Rob, I thought you might have said that with the rates exceeding the loss trend, the underwriting margin should continue to improve. How should I think about those two statements? I think, well, two things. First off, as far as the business mix, we were pleased with the progress that has been made on the property ex-cat front or the attritional loss ratio. I think that's something we talked about. I don't know, I probably lose track of time, but a year, eighteen months, two years ago, and my colleagues have done a great job in getting us to a better place, and that has coming through in the loss ratio. I think, as far as the rate increase and how that's gonna come through, look, we have a view on trend, and we have an understanding of how much rate we're getting, and the delta between the two, in theory, should ultimately inure to the benefit of the margin. But we are not in a rush to declare victory prematurely. And then, the tax rate for next year, what should we think about that? You should think about it being too much. Rich, you want to comment on it? I would say that based on where our foreign earnings are today, if we continue down that path, I would think you'd expect, we would expect a rate that's commensurate with what we're showing this year, which I would say would be somewhere in that 23.5%-24% area. But as Rob alluded to, we're certainly looking at ways to try and keep that rate down as much as we can. Thank you. Your next question comes from the line of Josh Shanker with Bank of America. Please go ahead. Hi, Josh. Good afternoon. Yeah, good afternoon. How are you all doing? Doing fine, thank you. Hopefully, you're well. Wonderful. Thank you very much. I, you know, Rich may have said it: Where's the new money yield on purchases going on right now, for the portfolio? I think it was me, and it's slightly over five. I'd use more than five, less than five and 1/4. Those are the bookends for you. Is that being purchased at a different duration than? That's, by the way, sorry, Josh. Yep. Just, just to be clear, that's on the domestic. So you would compare that to the four and a half that we flagged earlier. And is the dur-- Okay. I would expect... ...is the duration, are you choosing to-- Is there a lengthening going on given the changes in the yield curve behavior? ...incremental. Yes- Incremental. So far. But we'll see what comes over time. That, that's exactly what I mean. What would we need to see for you to say that longer is better? You know, I think, Josh, we probably don't have a specific answer, but what I can tell you is we're paying close attention to it, watching it every day, and, you know, we'll see how the story unfolds, but I don't have a specific roadmap that I'm in a position to share with you at this time. Is credit at all a concern? I mean, it's always a concern, but given outlook for things, are you incrementally more concerned or less concerned about credit compared to where you were a year ago? I think we are always concerned about credit, and that's why, as Rich flagged, you know, we're maintaining a very strong double A minus on the credit quality of the fixed income portfolio, and you will not see us compromising on quality just to try and fluff up the book yield, if you will. We saw colleagues doing that, quite frankly, during the financial crisis, where they as well as during COVID, where they compromised on duration and compromised on quality, and that's just not something we're going to do. All right. Well, thank you for all the answers. Thanks for the question, Josh. Your next question comes from the line of David Motemaden with Evercore ISI. Please go ahead. Hi, David. Good afternoon. Hey, thanks. Hey, good afternoon. Rob, I had a question just in the insurance business. So the 60.2% accident year loss ratio ex-cat improved 50 basis points year-over-year. It sounds like all that was mix, and some of the, you know, some of the progress you guys have been making on some of those fire losses, from a bit ago. I guess I just wanted to see if there's anything unsustainable in the result as well, that might be flattering things from, maybe, like, a light non-cat property perspective or anything else that you'd highlight. So, look, I obviously will know through the passage of time, but the biggest contributor to the improvement that you're referencing was the attritional loss ratio associated with the property. Do I think we just got lucky? My sense is, when I look at it, I don't think that's necessarily the case. I think we have many colleagues that are working really hard and have improved the situation, and you're seeing it come through. But again, that's my sense based on what I have seen. We'll see more over time. Got it. Okay, that's helpful. And then, I guess, is that something that I mean, is that, like, fully in the numbers now, or is that something like we should continue to see that improvement going forward, specifically on that attritional property book? You know, David, not trying to be difficult, but you know, they are what they are, as we shared them with you, and that's us being completely transparent. Could it get better from here? Yeah, it could. Could it somehow take a step back? Yeah. I mean, I can't guarantee or promise exactly what tomorrow will bring, but based on my look at it, I'm encouraged by the progress that has been made, and I think it's a reflection of the efforts of many of our colleagues. Got it. Great. That's helpful. And then maybe, you know, I saw this in the 10-Q in the first quarter and second quarter. It looked like there was some adverse PYD that you guys had taken on the other liability line of business for accident year 2021. And I guess I'm just wondering if that continued here in the third quarter and also just how accident year 2020 through 2022 and 2023 are holding up. You know, I think it's as opposed to getting into that detail. We'll have a lot of it in the queue and ask that once you have a chance to flip through the queue, if you have any questions, please reach out to us. Okay, sounds good. But- Thank you. For what it's worth, there's nothing, as Rich suggested earlier, there's nothing concerning or alarming from our perspective. Your next question comes from the line of Ryan Tunis with Autonomous Research. Please go ahead. Hi, Ryan. Good afternoon. Hey, Rob. Good afternoon. I guess just the first question, thinking about the 10%-15% growth and, trying to figure out if I'm thinking about this right. So is it what you're really saying is you think that Berkley is a 10%-15% grower, but, you know, you flagged some, risk reduction or remediation or what have you in commercial auto over the next few quarters, and, you know, perhaps while you're doing that, it might be more of a challenge to do 10%-15%? I'm just trying to understand. Am I thinking about that right, that the 10-15 is sort of a, like a longer-term view, Well, let me at least try to answer your question. I think what we have suggested or are trying to suggest today, on an annual basis, we believe the business can grow at 10%-15%. In addition, as we suggested in the past, there could be a quarter where we grow more, there could be a quarter that we grow less. Ultimately, for us, while we certainly would like to grow, underwriting margin is king, queen, whatever label you'd like to use. When we look out at the marketplace during the quarter, we took some action as it relates to auto, the market in particular, and quite frankly, a few other lines related to auto. As a result of that, you know, that slowed the growth. One of the things that at least I was trying to suggest earlier is it would seem as though the issues that we have identified, parts of the market are starting to more actively grapple with those in October, and that would provide some encouragement that you will see what I would view as a one-off quarter headwind, maybe subsiding somewhat. So, as suggested earlier, long story short, Ryan, I am not of the view that we are changing the position that the business should be on an annual basis, able to grow 10-15%. I was merely trying to unpack the quarter a little bit and help you understand what that speed bump is, which I believe is becoming less and less of an issue based on what we saw in October. Got it. Then just a follow-up, just a couple quick ones on cats. First of all, I'd be curious what your loss was from Helene. And then second of all, I know you don't want to give a number for Milton, but if I look back to the Ian quarter a couple of years ago, about $100 million in cats, can you say directionally, like, could it be, you know, could it be that big again, given the growth? Or probably from a dollar standpoint, this is not a- For Milton. For Milton, correct. For- Helene and Milton, both those. For Helene, I think you should assume about half of it, give or take, was Helene-related. Then there were some other cat activity, as Rich referenced, though Helene obviously got all the attention. There were some other losses going on and, switching over to Milton, I think it is premature for us or for them to really give you a specific number. But, as I think whatever the outcome would be, it will be sitting within what you would expect from this organization as far as the size of the loss. And as you've heard from Rich, you've heard from my boss, you've heard from me, we pay very close attention to the topic of volatility... whether it be on the underwriting side or the investment side. So that's probably about as much color as I can give you on Milton, but I, I don't think that there's something that's going to come out of that, that's going to make anyone pause severely. Thank you. Your next question comes from the line of Alex Scott with Barclays. Please go ahead. Hi, good afternoon. Afternoon. Hey, so I wanted to ask you a question about capital. You know, you guys have been growing a little bit less as you're doing some work on some different lines and, you know, externally, it's always hard to sort of judge how much dry powder a company may have and capacity to, like, you know, sort of lean into opportunities as they arise, you know, you have. And so I would just be interested in, like, how do you think about that? And then maybe if you could just refresh us on sort of pecking order at this point with pricing getting better and some good signs, but not, you know, putting it into growth as much right now. How do you approach share buybacks and special dividends and so forth? So, from our perspective, the company has a comfortable surplus of capital plus. And again, anyone who has a real curiosity can go through the painstaking experience of perhaps taking the S&P model and taking our data and running it through, and you will get a large surplus or excess of capital, which is there to allow us to be opportunistic. Arguably, we have more capital than even one would need to maintain that position, and as we see opportunities, we'll be returning that to those that it belongs to, specifically our shareholders. So, you know, long story short, we have an excess of capital, and the company at this stage is generating capital more quickly than we can utilize it. It's a reasonable assumption that we will continue to opportunistically look for ways to return the capital to shareholders while still maintaining a comfortable balance plus. Got it. That's helpful. As a follow-up, I wanted to ask about reserves. I mean, you know, it's no secret that, you know, some external folks struggle with, you know, looking at the disclosures on more recent accident years and, you know, myself included in that. And, you know, it's hard from the outside. So I wanted to ask you, like, what, you know, what are some of the nuances to it? What are some of the things that when you all look at the more recent accident years, and maybe it's, you know, an update on the paid loss ratios you're seeing, I don't know. But what are some of the things that give you, you know, more confidence than, you know, I've had? Well, again, I'm not sure I fully understand all the reservations you or others have, but I would suggest that it's really a couple of things. You know, we've talked about the paid loss ratio in the past, and we're happy to pick up that conversation anytime anyone wishes to. In addition to that, we've talked about the strength of our IBNR compared to total reserves, as well as the strength of our IBNR relative to case, and you can see that trend. And then in addition to that, I think on the last call or two, we talked about our initial IBNR relative to our, what is it, our earned premium, Rich, which we brought that to people's attention because I think there was some question with the other metrics we were putting forth, well, how is that impacted by the fact that the business is growing, so that's why we tried to draw people's attention to the initial IBNR relative to earned, which should take into account growth. In addition to that, I think that there are a lot of folks that before they reach conclusions, they need to unpack our mix of business with greater granularity, and there are some people that have offered a view on the more recent years and how we've thought about those reserves without having a full appreciation for, in some cases, where we're using a claims-made form as opposed to an occurrence form or among other mixes of business. You know, we look at our loss reserves very regularly. Every quarter, we look at it at a very granular level by operating business, by product line, and we look at it at the aggregate, and we look at it in between the two. From our perspective, you know, ultimately, we respect the fact that everyone's entitled to their opinion. At the same time, while we're doing the best we can to try and help people understand, but there's also a reality, and it's going to be hard for us to prove it other than through the passage of time. You know, I think, the last point that I would raise as it relates to just the topic of reserves, I think that the world oftentimes paints with a very broad brush, and when they see other market participants having to grapple with some challenging circumstances, they look at the product line, particularly when it's casualty or a liability exposure, and then they'll extrapolate, and they'll say, "Well, this company over here had problems with this product line. So let's go out and look at who else would potentially have that exposure," and then they'll make this leap that that is going to be an issue for everyone. I think that that can be a very slippery slope and would encourage people to invest the additional time and perhaps use a finer brush in recognizing that there is a greater distinction than perhaps they appreciate at face value. Got it. Very helpful perspective. Thank you. Your next question comes from the line of Brian Meredith with UBS Financial Services. Please go ahead. Yeah, thanks. Thanks for fitting me in. Two questions here for you. First one, you know, Rich and Rob, you talked about some of these businesses that are kind of new and incubating right now, but should help the expense ratio, you know, as they kind of come online, and you put them into your results. Is there any way you can kind of give us some quantification about how much premium is sitting in these businesses and, and, you know, what benefit they could potentially have from a premium perspective looking over the next twelve months? Rich, I don't know if you want to speak to that. I mean, it would be back of the envelope. Brian, we can sort of. That's fine. Just back of the envelope. Now, or if you want something more specific, you're welcome to give us a call. Rich, what was your comment? Go on. There's four operating units that we've moved over from, I'll say, our corporate expense category into our underwriting expense category in the first quarter, and, you know, round numbers, $25+ million in net written premium in the quarter. In the quarter. So that was the benefit in the quarter. Gotcha. That's the premium that they contributed to the quarter. But I think maybe picking up on the point and taking it a step further, those businesses, by and large, are, you know, very much in the early stages of scaling, Brian. So as they scale, you will see them become less dilutive to the expense ratio and, you know, hopefully sooner rather than later, neutral, and perhaps at some point it will become accretive. Great. And then my second question, I think you may have talked about this in previous calls, but, your investment funds, you know, they've been, you know, for the last, I would say at least eighteen months, going, kind of below what your historical kind of returns on that--- those funds have been over time. Is it- is that something we should expect going forward, kind of lower returns there, or is there something unusual going on right now? Should that kind of snap back here at some point? I think that we're gonna. We book on a quarterly lag, and it's actually at times surprising to me how long it takes us to get the visibility. But I think the number in the short run that I would encourage you to consider is probably $10 million a quarter, and hopefully, over time, you're going to see that make its way back towards $20 million a quarter. But in the short run, I would encourage you to pencil in $10 million. But again, Brian, waving my arms, trying to offer the qualifications. You know, we believe in the returns over time, but in the short run, it can be lumpy, as you know. Understood. Thank you. Thanks for the question. We have no further questions in our queue at this time. I will now turn the conference back over to Rob Berkley for closing comments. So, yeah. Before we say goodbye, actually, I don't have anything to add at this time, but I think our chairman may have a few thoughts. I would just like to add one comment that went along with the investment income question, and that is our goal is to take advantage of the changing shape of the yield curve and move the duration of our portfolio out. On the other hand, if you looked at the level of leverage in the world, there's not a rush to do that. At the same time, we have no interest at all, as Rob said, of lowering the quality. If anything, the kinds of things we bought in the past quarter have been probably average of double A, not double A minus. It's an opportunistic strategy that's geared to the view that we don't think rates are going to go down a lot, especially on the longer side, and therefore, we can continue to invest. And it's not only reinvesting the money, but we're going to probably have $4 billion of cash flow. That's a lot of money to invest. So we're quite optimistic about our investment income, let alone our operating profit margins from underwriting. So we continue to see the quality and duration improving and the yields concurrently going up. Okay. Krista, thank you very much, and thank you to our participants. As suggested earlier, we think the business is well-positioned, and we look forward to catching up with you in about ninety days. Thank you. Have a good evening. This concludes today's conference call. Thank you for your participation, and you may now disconnect.