Kinsale Capital Group, Inc.

listed in the company's various FEC filings, including the 2023 annual report on Form 10-K, which should be reviewed carefully. The company has furnished a Form 8-K with the Securities and Exchange Commission that contains the press release announcing its fourth quarter results. Kinsale's management may also reference certain non-GAAP financial measures in the call today. A reconciliation of GAAP to these measures can be found in the press release, which is available at the company's website at www.kinselstapitalgroup.com. I will now turn the conference over to Kinsel's chairman and CEO, Mr. Michael Kehoe. Please go ahead, sir.

Thank you, operator. And good morning, everyone. As usual, Brian Petrucelli, our CFO, and Brian Haney, our president and COO, are joining me this morning for the call. In the fourth quarter, 2024, Kinsale's operating earnings per share increased by 19.4%, and gross written premium grew by 12.2% over the fourth quarter of 2023. For the quarter, the company posted a combined ratio of 73.4%, and a full year 2024 operating return on equity of 29%. Also of note, the appreciation of Kinsale's stock price over the course of 2024 exceeded that of the S&P 500 index for the eighth time in the last nine years since our IPO back in 2016. These results largely flow from the Consale business strategy of small E&S account focus, absolute control over our underwriting and claim handling processes, best in class service levels, and risk appetite that we provide our brokers, and technology driven low cost. As we've said in the past, these advantages have real durability to them. Likewise, we are investing heavily in technology, automation, data, and analytics to drive further gains in the years ahead. Progress in these areas should allow us to gradually and continually improve our expense ratio, our customer service, and the accuracy and competitiveness of our underwriting, all to the benefit of our profitability and growth. The Southern California wildfires that occurred in January created considerable insured loss for the PNC industry, with estimates mostly in the $30 to $50 billion range. For ConSale, we expect our pre-tax losses net of reinsurance to be approximately $25 million. These losses arise from a mix of personal lines and commercial property business. The overall ENS market in the fourth quarter was generally steady, but with a continued increase in competition. And with that, I'm going to turn the call over to Brian Petruccelli.

Thanks, Mike. Another solid quarter with net operating earnings increasing by 19.4%. The 73.4% combined ratio for the quarter included 2.6 points from net favorable prior year loss reserve development compared to 2.3 points last year, with 2.2 points in CAT losses this year primarily from Hurricane Milton compared to less than a half point in Q4 of last year. We produced a 21.1% expense ratio in the fourth quarter compared to 19.9% last year. The expense ratio will fluctuate from quarter to quarter And when I point you to the full year expense ratio as a better measure, you can see that our 20.6 expense ratio for the full year compares favorably with the 20.8% last year. That being said, the higher Q4 expense ratio is due primarily to higher variable compensation offset by higher seating commissions. On the investment side, net investment income increased by 37.8% in the fourth quarter. over last year as a result of continued growth in the investment portfolio generated from strong operating cash flows and higher interest rates. The annualized gross return was 4.4% for the year so far compared to 4% last year. New money yields are averaging in the low 5% range and with book yields around 4.5%, so we should see some continued investment income benefit from those higher rates as we move forward. Additionally, we're gradually increasing our allocation to common stock from 8% to 10% of cash and invested assets and will eventually increase the allocation to 12% over the next year or so. Diluted operating earnings per share continues to improve and was $4.62 per share for the quarter compared to $3.87 per share for the fourth quarter of 2023. Just a couple of comments regarding capital management. We repurchased $10 million in shares during the fourth quarter. I would expect similar modest levels of repurchases each quarter on a routine basis with larger purchases made opportunistically from time to time. And with that, I'll pass it over to Brian Haney.

Thanks, Brian. The fourth quarter saw growth in our gross rate premium of 12.2% consistent with our expectation of 10% to 20% growth over the long term. Our casualty on-roading divisions grew at 15% for the quarter, while property divisions grew at 6%. Rate declines on larger layered property transactions in particular had a dampening effect on the growth rate in the quarter, as that market is normalized after a period of crisis pricing conditions in the prior years. Casualty is still seeing steady growth overall, with excess casualty, commercial auto, and general liability among the fastest growing divisions, and management and professional liability among the most competitive divisions. Our catastrophe losses in the fourth quarter were a modest $8 million pre-tax, and as Mike mentioned, our California wildfire estimate is $25 million pre-tax. As a reminder, we write catastrophe-exposed property business, including wildfire, hurricane and earthquake, and some flood. But in doing so, we always seek to balance the margin in that business with the potential for excessive volatility. In addition to a careful underwriting approach, we employ a sophisticated risk management strategy and a robust reinsurance program to limit volatility. and we've been successful in that approach for many years now. We don't expect recent catastrophe events in the industry will be enough to change the overall market, but it may create more opportunities in personal insurance, which we are already leaning into. Part of Kinsale's growth over the years has been due to a regular expansion of our product lines into adjacent markets. Most recently, we created a new agribusiness underwriting unit that focuses on opportunities in the farm, ranch, and related spaces This is part of our ongoing effort to gradually expand our product line so that we can offer solutions for all tough-to-play CMS accounts across the U.S., no matter what coverage or sector of the economy. New business submission growth was 17% for the quarter, down from 23% in the third quarter. This number is subject to some volatility, but we, in general, view submissions as a leading indicator of growth, and so we see that submission growth rate as a positive signal. Overall, rates for the quarter were about flat. Excess casualty, commercial auto, and construction were up high single digits, while larger layered property accounts were down mid to high teens. All of our other lines were somewhere in between. We are being more aggressive in pricing in some select areas because the margins are so high that the tradeoff between a lower rate and more growth is worthwhile. Keep in mind, our 29% operating ROE would imply that half of our book is producing margins above that. So by trading away some of that excess profitability on some specific lines of business, we can drive better growth and maximize wealth creation for our stockholders over time. Overall, we remain optimistic. The results are good. Our growth prospects are good. And as the low-cost provider in our space, we have a durable competitive advantage that should allow us to continually, gradually take market share from our higher-expense competitors while continuing to deliver strong returns and build wealth for our investors. And with that, I'll hand it back over to Mike.

Thanks, Brian. Operator, we're ready for questions now.

Certainly. As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. Our first question comes from Michael Zaremski from BMO Capital Markets. Please go ahead. Your line is open.

Hey, good morning. Just back to the commentary on the market environment. I think it sounds like larger shared account property had one of the more meaningful impacts on growth this quarter. If you can kind of confirm that, or I don't know, I think that's a way to look for the 10K to see the mix of casualty versus property, if you were able to preview it. And just along those lines too, how is pricing looking in kind of small commercial casualty?

Mike, this is Mike. I think our mix of business generally is one-third, two-thirds, one-third property, two-thirds casualty. The larger layer deals, as Brian indicated, are under some competitive pressure after just seeing a tremendous inflation in rates over the prior several years. So we think that's a normal evolution of that market. The returns have been extraordinary. And it makes sense. A lot of capital has flowed back into that space. Our small property divisions are still growing very rapidly, and we're getting positive rate increases there. So we're upbeat on property. Small casualty, I think as Brian said, it kind of varies by product line. So on construction, commercial auto, access, you know, very healthy rate increases. Other lines like management liability, professional liability. where we've seen some extraordinary levels of profitability, we're trying to be incrementally more aggressive.

Got it. Okay, and that's helpful. Maybe switching gears to the point of excellent profit margins. So, you know, you're saying on this call, and you said in the past, too, that you're willing to trade off less excellent profits for, you know, what sounds like more growth. Is that actually, you know, are we actually seeing, because I know there's, you know, an overlaying impact maybe from large property having a negative impact on overall growth, but, you know, would you say that we might be reaching a trough in terms of the ability to drop price enough to kind of re-accelerate certain elements of growth on the casualty front? Yeah.

I would say keep in mind that the margins on some of our highest margin business is extraordinary. When you lower rates in certain select areas, the effect is not immediate on the profitability and the growth. It takes a little while. So I don't think we've hit the point where we haven't exhausted our ability to pull that lever. I'll just put it that way.

And in terms of the market, Mike, you've got to remember how diverse it is, right? It doesn't move monolithically. Large accounts, small, you know, some states versus others, CAT-exposed versus non-CAT-exposed, clean accounts versus accounts with loss problems. You know, the market's all over the place, but we feel very comfortable with the guidance around 10% to 20% growth.

Okay. Thank you very much.

Our next question comes from Bill Kirkash from Wolf Research. Please go ahead. Your line is open.

Hi, good morning. Mike, following up on your growth comment, you know, after seeing Kinsale grow at roughly 40% clip since 2019 and hearing you talk about it seems like that entire time frame, how that growth wasn't sustainable. We've indeed now seen your growth rate decelerate much more sharply. Is this sort of low-teens growth rate something that you think is now at a level that you would view as sustainable going forward from here? I understand you don't provide specific growth guidance, but I think your investors would really appreciate just hearing your thoughts, particularly those who weren't able to attend the investor day. on whether you see further deceleration from here versus the idea that at some point growth should plateau, and how close are we to that point? And sort of with that as a backdrop, then could you also frame whatever that top-line view is as you move down the P&L? Is it reasonable for your investors to expect that the business model is capable of generating mid- to high-teens EPS growth sustainably through the cycle?

Yeah, Bill, I think that 10% to 20% growth is a conservative and good-faith estimate as to where we go from here. I think if you look back over five years when we were growing at a 40% clip, that was driven in large part by our business model. We're the low cost operator. We've got the best customer service in the industry, bar none. I think we've got the broadest risk appetite that we offer our brokers. We've got a handle on technology that I'm not familiar with any company that's in a similar position that we are in terms of low cost, but also data and analytics. So we're very confident in what we're doing. will allow us to continue to grow at that 10% to 20% clip. You know, the 40% growth was driven in part by a level of dislocation around the industry, and some of that's abated. We've seen billions and billions of dollars of new capital come into the industry, and so it's, you know, things are more competitive now than they were, but we're bullish.

Thanks, Mike. And just to be crystal clear, your 10% to 20% growth is in reference to top line.

Correct.

Because you also, in your opening comments, made some comments around expecting to make continued investments that are going to improve the efficiency ratio. And so we should see the rate of revenue growth exceed expense growth with positive operating leverage. You're doing buybacks. So the rate of earnings growth would certainly be much stronger than that.

I think it would be, yes, because of productivity gains. Brian talked about our new money in the investment portfolios being invested at higher rates than the current book yield of the portfolio. Yeah, absolutely.

Okay, thank you. That's very helpful. And then separately, if I may, for Brian Petruccelli and Brian Haney on capital and buybacks. I think investors appreciate that ConSale operates a highly capital-accretive business model that's capable of supporting faster growth environments, but it seems like when growth slows, your buyback capacity increases. So I think following up on that thought, how much capital does ConSale need to operate the business if gross written premium growth remains near current levels? Is the 23,000 sort of shares that you repurchase this quarter a reasonable run rate for investors to expect, like sort of steady state, and then you would be adding additional buyback on top of that? If you want it to be opportunistic, maybe if you could just frame how to think about those dynamics. Thank you.

Yeah, Bill, this is Mike. If you look at our – strategy.

It's similar to our dividend strategy in that it's very modest. And, you know, as Brian said in his comments at the beginning of the call, you know, we expect to make modest buybacks each quarter. I think the fourth quarter is a good indicator of what we mean by that. And then, hey, we're always prepared to move opportunistically if a something arises where that makes sense. The dividend that we have is very modest. It's grown incrementally over the years. I think the share buybacks is also kind of a modest capital allocation strategy. The capital model that we use to manage the business has a fair degree of complexity to it that I don't think it would be prudent to get into that on the call, but in general, you know, we're going to always make sure we have enough capital to maintain our rating and satisfy the regulators, but we don't want to have a super abundance of capital beyond what's required for that. And so we think of the dividend and the buybacks as a way to address excess capital over the years ahead.

Thank you. I appreciate your taking my questions.

Our next question comes from Mark Hughes from Truist Securities. Please go ahead. Your line is open.

Yeah. Thank you. Anything on January results, given that we're midway through February? Anything on January that you would call out?

Well, I don't think we want to comment on January. But, you know, Mark, we've reiterated our confidence in the 10% to 20% growth. And we've talked about the cat loss on the, you know, the wildfires in Los Angeles. But that's probably, you know, where we want to go at this point.

The expense ratio was a little bit higher this quarter. Brian, Petrocelli, anything unusual in that?

You know, as I commented in my notes, you know, it's largely driven by an increase in variable compensation. And as we've talked in the past, that ratio is going to jump around quarter to quarter. So as you're sort of trying to model things out, I think looking at that 12-month ratio is probably what you should be, you know, that's where I'm going to direct you.

Yeah. How about cash flow in a environment where, say, you're in the 10 to 20 range, if you were to parallel, you know, kind of a low double digit quarter, how does cash from operations look? It's been obviously quite strong. It's been helping to support your net investment income. What does it look like in a more modest growth environment? Does that flatten out? Does it go down? How do we think about that?

Pretty steady. It should grow with the premium, I think.

Very good. And then you talked about leaning into personal lines. I know it's pretty small, but what could that mean for the top line if you do lean into personal lines?

Yeah, this is Brian Haney. I mean, if you look at it, you know, the homeowner space is larger by itself than the ENS space in the U.S., and an increasing percentage of it, even though it's small, is moving into the ENS space. So I think there's a huge opportunity for it, especially given, you know, like things like highway homeowners in California. It's like a very concentrated market that's just suffered a giant loss among a small number of players. So I think there's an opportunity there. I think there's an opportunity to expand what we do in the manufacturing space. I think there's an opportunity to expand into sort of adjacent type of businesses like stick-built homes or non-manufactured housing homes. All again, these are hard-to-place, catastrophe-exposed, high-margin business, but there's just a lot of it. And right now, I think there's a lot of it. probably one of the harder areas in the overall P&C industry.

Yeah, and it'll be kind of a gradual expansion over time. So I think it was like 2% of our book last year. But we're optimistic that'll continue to grow quite a bit in the years ahead.

Thank you.

Our next question comes from Andrew Anderson from Jefferies. Please go ahead. Your line is open.

Hey, good morning. Just thinking about the California loss, maybe a little bit bigger than I would have thought just given exposures in the state as of year end 23. Could you maybe talk about maybe the size of the gross loss there, where the losses are coming from and kind of how growth has trended over the last year and maybe how you see it into 25 for California specifically?

The gross was about 45 and the net pre-tax 20. You know, it's a mix of commercial, inland marine, personal lines. You know, I can't really speak to the specific growth rate in California or that area. But, Andrew, I would look at it this way. You know, we've always written cat business because the margins are pretty compelling. And we've always written it with... some degree of conservatism around risk management and making sure that we control for the volatility, whether it's wildfire or coastal wind or what have you. And so I think actually this is a result that's kind of right in the strike zone for us. It's a very manageable loss on business that throws off pretty attractive margins in general.

Thank you. And then on the 17% submission growth, kind of the slowest in a little bit here, but as we turn to 25, and maybe you could just talk about the mix within that 17 if it's more casualty going forward, but I'd also be interested to hear if you're perhaps thinking about you know, kind of increasing your quote-to-submission ratio or your bound policy to submission ratio to be more competitive to a certain degree?

We are definitely seeing a higher quote-to-submit ratio. It's one of the upsides of lower growth is it makes it easier for us to hit our customer service targets, including our quote ratio standards. So, yeah, we are quoting more and we are buying more And then keep in mind that 17%, that number does jump around.

Is it starting to be a bit more casually rather than property compared to maybe the last 12 to 18 months?

Yeah, I mean, it depends on what, I mean, without getting too much into the weeds, it depends on what specific product you're talking about. We are seeing a lot more personal insurance submissions. We're seeing maybe fewer of the shared and layered submissions. But we're still seeing more in the marine submissions. You know, it varies across the book.

Yeah, and just, I think, Brian, you meant we're seeing a lower growth rate in the shared and layered, but it's still growing. Right.

Thank you.

Our next question comes from Scott Helmiak from RBC Capital Markets. Please go ahead. Your line is open.

I think we lost Scott.

Good morning. Yeah, just wondering if you could comment on the Q4, the core accident-year loss ratio there. You saw there was improvement year over year. Anything worth calling out, you know, the tick down year over year? I know you kind of commented before as it sort of improves year-end if loss trends come in better than expected, but anything notable to call out there?

Scott, I would characterize it as, you know, general success across the portfolio. But the impact on that quarter was probably a little bit driven by, you know, some pretty exceptional results in the property area. That's shorter-tail business, so you tend to see those positive results more quickly.

Okay. That makes sense. And then I wonder if you could expand on you – reference the agribusiness, the new product line there. If you can expand on kind of the exposure and geographies you might be planning to go to there. And then also any other new products that you want to call out for 2025? I know there was a lot in the previous two years, but anything else to call out there too?

I'll answer that last question first. Most of the new products we're thinking about for 2025 aren't nearly as significant as, let's say, the personal insurance push we're making in the last few years or the agribusiness. The agribusiness would be virtually everywhere in the United States. The agricultural economy is basically present in every state. That's going to be a mix of casualty and property exposures and some sort of unique exposures relative to farming and ranch. Yeah, so I wouldn't expect any dramatic new product in 2025, just gradual, incremental, moving into adjacent lines, very gradually and slowly so that we don't take excessive risk.

Just the last one, too, on moving up the equity exposure, which you expect to take to 10% and eventually 12%. Is that a similar strategy with using the basically stock ETFs? Is that the way you're going to do that, just up your exposure to the existing investments you have in equities or anything different there?

Yes, Scott, this is Mike. We have a portfolio that we manage internally. It's kind of a value-oriented, large-cap, mostly dividend-paying, kind of a buy-and-hold strategy there. And then we've got the two ETFs, you know, with the passive strategy.

So it's a mix. Okay. Yeah, we'll do both. Okay.

Our next question comes from Michael Phillips from Oppenheimer. Please go ahead. Your line is open.

Thanks. Good morning. I'm curious if you'd provide any updated thoughts on what you're seeing in your GL book, Lost Trends. And then, I mean, I think your commercial umbrella in excess book isn't that small relative to the overall book. So I'd be curious if you could even go deeper and just say what the trends are seeing in the umbrella piece as well.

I don't think we've got a lot of specifics. You know, there's a lot of industry data out there. I think our Lost Trends would probably conform to what you're hearing. I didn't bring that information.

I would say just on an absolute basis that the margins in our umbrella book and our GL book are really strong. And unlike, I saw an interesting chart the other day, our development has been consistently better than the industry's reserve development. So I think we are doing a better job staying on top of those lost trends in the reserving process. I do think that's going to be maybe a problem for the industry going forward.

Okay. Yeah, thanks, Brian. And maybe one more on California. I mean, given the news that we're kind of hearing about the Eaton side of the losses there, any chance you'd take your 25 and split it, Eaton versus the Palisades?

It's 101 and zero. It's all Palisades. Okay, perfect. Thank you very much.

Our next question comes from Pablo Singzon from JP Morgan. Please go ahead. Your line is open.

Hi, good morning. As you're lowering prices in exchange for growth, is the trade-off confined with a specific line or are you willing to cross-subsidize across lines, like using more profitable lines to support less profitable lines? Or maybe you're looking at dollar profitability more holistically on an account level basis instead? So just some perspective on how you're carrying out the strategy would be helpful.

Well, I would say we don't cross subsidize anything because we don't have loss leaders. Every division, every product is supposed, it has to be able to hit our profitability targets. It is a calculation we are kind of doing at the individual division level. Obviously some divisions, all of our divisions are doing well. Some of our divisions are doing remarkably well from a margin perspective. And those are the ones where we're looking at sharpening our pencil and

getting a little more aggressive in places. Gotcha. That makes sense. And then second question, I was hoping you could comment prior to your development this quarter. So, but would be curious about the breakdown of positives and negatives, you know, are you still adding to construction defect research from older years and where are you getting the releases?

Well, we talked about property, you know, as a short tail line of business, you see those results more quickly. And, you know, we've pushed our construction-related book loss ratios, you know, they're well into the 80% range. And that's largely because if you go back to accident years, I forget where it starts, maybe either 15 or 16, 17, 18, 19, you know, we did see the impact of inflation in particular on those lines where, you know, the cost of repair, labor costs, et cetera, you know, jumped pretty dramatically in a couple-year period. So, you know, we've raised rates dramatically. Our coverage is a little bit tighter than it used to be. Made a lot of adjustments on the underwriting that gives us confidence that, you know, the results for the, you know, say 20 through 24 are going to be quite a bit better. But we don't know definitively. It's a long tail line. And so we, just like we do across the whole book, we set aside what we think are very conservative loss reserves. And if there's good news in the future, that'll be great. If not, we're prepared, you know, with our current reserves to absorb that.

Gotcha. Thanks, Mike. And then speaking just last one, as a follow-up on the question about the attrition loss ratio, Would it be reasonable to assume flat to higher attrition loss ratios just, you know, given the more competitive pricing environment and your strategy of trading off pricing and growth going forward? Thank you.

Well, you know, it's a broad price line with a lot of different component pieces. But, you know, in general, as Brian, I think, said earlier, rates are flat for the quarter. So, you know, I would make some assumptions based on that.

Thank you.

Our next question comes from Andrew Kligerman from TD Securities. Please go ahead. Your line is open.

Hey, good morning. Just a little nuance on some of the prior questions. I guess tacking on to the loss ratio question, I mean, you came in at an exceptional 73.4% combined. I mean, I would Any other company, I would have thought it was their loss ratio, not their combined. But if I look at a chart and I go back 10 years, I see that you've kind of, you know, maybe closer to 10 years ago, you were in the low 70s. One year you were at 60. Maybe in the middle years that you were in the low to lower mid 80s. So, you know, given that the environment is getting a lot more competitive, various areas. Any sense of the cadence of what could happen going forward? Could we see kind of a gradual drift into the low 80s over the next few years?

I think that's certainly possible. You know, we want to maximize wealth building for our stockholders. And I think you do that by balancing profitability and growth. And I think that's what Brian's trying to address earlier with his comments around fine-tuning our pricing on certain ultra-high margin lines. But in general, I think what we're going to maintain is best-in-class profitability, very strong growth rates, and we expect concelled stock price to appreciate in value in the years ahead.

Okay. And maybe on the verticals, could you remind me of how many segments that you have right now, you know, similar to the ag segment? And I know you mentioned in an earlier question that, you know, this year is going to be big in personal lines and ag for growth. You know, maybe thinking out to 26 or 27, how many of these verticals would you like to add each year? And again, how many do you have right now? We have 26 now.

I would look at these verticals as a judgmental way to divide and organize our underwriting teams around industry segments and coverage. So we want experts at the desk level, and so you have to have some degree of focus to really be an expert at the underwriting and understanding the businesses we're insuring and all the characteristics of those businesses that drive loss exposure and and trends on the legal side, and who are our competitors, and how do they segment in price risk. So there's no magic number. It certainly may incrementally grow over time. And then just a quick correction on the new business lines. I think Brian said earlier, we don't expect extraordinary growth from our new business. We expand the product line over and over again over the years, and we get incremental growth. You know, it's part of our strategy to roll out new products in a methodical fashion to, you know, really increase the probability that we're getting things right.

I see. When you say... When you say, Mike, expanding incrementally, that would mean within a vertical maybe adding a new product line?

Yeah, incremental expansion of the product. But if we roll out a new underwriting division, you know, we might write, you know, several million dollars. We're not going to go corner the market the first, you know, year we're in business. Right. That's been a good strategy for us. This is our 16th year in business. I think it's worked well for us over time.

Super helpful. Thanks a lot.

Our next question comes from Michael Zaremski from BMO Capital Markets. Please go ahead. Your line is open.

Okay, great. Just a couple follow-ups. In terms of employee growth, I know the 10K is not out, but Would you just say kind of high level as the company gets larger that the employee growth rate has been decelerating a little bit or any color there?

I think we've gotten incremental gains in productivity every year. If you measure that by gross written premium per full-time employee, I think it's gone up every year. And, you know, with the work we're doing in the technology area, you know, we certainly would expect that to continue.

Got it. And lastly, going back to kind of lost cost trend and reserves, tell me if I'm crazy, but given how robust your concealed reserve releases have been relative to the kind of the pricing stats you all give out, it kind of implies that your lost cost trend is closer to zero than to the high single digits lots of companies talk about on the casualty side. Any comments?

Yeah, our loss trend assumptions would definitely not be zero. It would be somewhere in the high single digits.

There's some variability by line of business, but

But the fact of the matter is that there's a lot of investors who look at the price to book value, and it just slows them down in terms of whether or not to invest in the company based upon the valuation. So I'm curious why the share repurchase program is sort of an on-the-run thing that actually is dilutive to your book value concept. when you could easily take some of that capital and better devote it to the dividend, which wouldn't have necessarily the same level of impact on your book value and would still be a positive way of returning capital to shareholders and thus leaving the share repurchase program for periods where there was really excess volatility in the market. I'm just curious.

Yeah, so number one, the share repurchase program is very modest. We bought $10 million worth of stock on a market cap of somewhere north of $10 billion. The second point I'd make is we respect the fact that a lot of people look at price to book. It's just that you have to remember we are a very capital-efficient company. So we have enough capital to operate our business, and then we have some extra because there's some – variability in our business, and we have to be able to absorb that. But we have competitors that have tremendous amounts of redundant capital beyond what they need to operate the business. So someone that has a very bloated capital base and can sell that has a very efficient capital base, and if you're comparing our respective price-to-book multiples, you're comparing apples and oranges. Whereas if you look at forward earnings or last 12 months earnings, I think it's more of an apples to apples comparison. And the last point I'd make is we think our stock price is really driven by expectations around future earnings. And we think most investors don't value us on our assets or our assets minus liabilities or our book value. So that's the rationale, basically.

Thank you for taking my questions.

Okay, you bet.

We have no further questions. I'd like to turn the call back over to Michael Kehoe for closing remarks.

Okay. Well, we appreciate everybody's time this morning. We're optimistic about the future and look forward to talking again here in a couple months. Have a great day.

That concludes today's conference call. Thank you for your participation. You may now disconnect.