Aspen Insurance Holdings Ltd (AHL) 2015 Q4 法說會逐字稿

Good morning, and welcome to the Aspen Insurance fourth-quarter 2015 earnings conference call.

(Operator Instructions)

Please note, this event is being recorded. I would now like to turn the conference over to Mark Jones, Investor Relations of Aspen. Please go ahead.

Thank you and good morning, everyone. On today's call we have Chris O'Kane, Chief Executive Officer, and Scott Kirk, Chief Financial Officer.

Last night, we issued our press release announcing Aspen's financial results for the fourth-quarter and full-year 2015. This press release, as well as the corresponding supplementary financial information, can be found on our website at www.aspen.co.

Today's presentation contains, and Aspen may make from time to time, written or oral forward-looking statements within the meaning under and pursuant to the Safe Harbor provisions of the US federal securities laws. All forward-looking statements will have a number of assumptions concerning future events that are subject to a number of uncertainties and other factors. For more detailed descriptions of these uncertainties and other factors, please see the risk factors section in Aspen's annual report on Form 10-K filed with the SEC and on our website.

Today's presentation also contains non-GAAP financial measures, which we believe are meaningful in evaluating the Company's performance. For a detailed disclosure on non-GAAP financials, please refer to the supplementary financial data and our earnings release posted on the Aspen website.

With that, I will now turn the call over to Chris O'Kane.

Thank you, Mark. Good morning, everyone. 2015 was a very productive year for Aspen, and we continued to build our position as the leading global reinsurance and specialty insurance player.

We further diversified our business, both by product and geography, expanding our reinsurance operations into Australia, China, and the Middle East. And more recently, adding a diversifying US crop business.

We've been busy on the insurance side too, where we expand into Singapore, grew our property operations in Bermuda and in Chicago, and launched Aspen Starr Property, a joint venture with Starr Companies that began underwriting European property business in the second half.

Later in year, we launched our broadened railroad offering and offered -- and further developed our environment on excess [casualty] business. Late in the year, we launched initiative focused on bringing a global underwriting approach to a majority of insurance lines, while still using regional and local execution skills. This initiative was preceded by introduction of our global accident health business.

Importantly, we also commenced a rollout of our [top] operating model, a program which we believe will allow us to grow our revenues faster than expenses, as we expand. I will talk more about the actions we're taking to enhance business after Scott makes his remarks.

While we made significant progress and achieved much in 2015, we did not meet our 2015 operating ROE target of 11%, ending the year at 10%. We needed a very strong quarter to reach ROE target, and in fact, there was much that went right. However, at Aspen, we pride ourselves on achieving our targets, so it was a considerable disappointment.

So what happened in the fourth quarter? In looking at the business performance, Aspen Re, in particular, had a very strong quarter to finish an exceptional year. While the reinsurance rate environment remained soft all year, with overall rates down 6% on average, in the fourth quarter, we continued to target and found success in the specialty sub-segment, as we have throughout 2015.

Aspen Re continues to be shown opportunities in areas that are attractive to us, and where we can be selective in our growth. In deepening the relationships with Aspen, clients are making clear that they value the expertise and the innovative solutions that our reinsurance team brings to them.

In our insurance business we continue to find opportunities in our property and casualty and in our financial and professional line sub-segments. However, we chose to pull back in some areas, especially in marine, aviation, and energy sub-segments, where returns were not adequate.

Part of the energy business, particularly energy physical damage, were among the softest, as was aviation, for which the fourth quarter is the largest for renewals. So while this impacted the top line, we remain and will remain disciplined in our approach to growth in order to maintain our underwriting margins.

Turning now to the 1/1 reinsurance renewals, the market continued to be faced with pricing challenges, although the impact varied by line and geography. General [rather than] pricing for most lines held up better in the US other than international, and the reason positive movements in some loss-affected portfolios.

Terms conditions remained reasonably stable, while plans continued to consolidate panels, choosing reinsurance capable of delivering a broad range of products with local distribution reach. The strength of our reinsurance planned relationships was apparent again in the 1/1 renewals. Our GWP was up 9% compared to prior year, although about 4% of this assumes timing on significant contracts in our specialty sub-segment.

The remaining growth came primarily from taking increased shares on long-established relationships, in addition to new lines from existing clients. We were able to renew the business we wanted, with pricing down on average just 4%.

Other property and property cat in the US were also down by the same amount, while property cat in the rest of the world was down 7% and casualty was flat. Our growth was primarily in our targeted specialty and other property sub-segments.

In property cat, where we continued to manage our exposure, we reduced our book by 10%. Importantly, we also continued to leverage third-party capital through Aspen Capital Markets, further reducing these exposures. We maintained flexibility in deploying capital regionally, growing faster in North America where rates are holding up better, and pulling back in Europe.

Now I would like to turn it over to Scott for some comments on the financial results, and then I will make some further remarks. Scott?

Thank you, Chris, and good morning, everybody. In the fourth quarter of 2015, we achieved operating earnings per diluted share of $1.21 and an annualized operating return on equity of 10.4%. For the full-year 2015, operating earnings per diluted share were $4.51 and operating return on equity was 10%.

Diluted book value per share was $46 at December 31, 2015, up 2% from a year ago. The movement reflects the positive impact from earnings, partially offset by mark-to-market productions in the fixed-income portfolio.

Gross written premiums for the Group was $635 million, an increase of 3% compared with the fourth quarter last year, and underwriting income was $52 million, despite approximately $46 million of cat losses and $34 million of large losses in the quarter. The combined ratio of 91.8% included 7 percentage points of net cat losses in the fourth quarter.

The accident year ex-cat loss ratio was 55.1%, broadly in line with 54.8% a year ago. Total reserve releases across the Company were $59 million, or 9 combined ratio points in the fourth quarter, reflecting favorable prior-year development across both segments. Approximately $38 million of the reserve releases were in reinsurance, primarily in our short tail lines.

Approximately $22 million of the reserve releases were in insurance, the bulk of which related to a small number of case reserves where we have seen favorable claims development. While we have seen reserve redundancy across a number of lines, particularly as our insurance book is maturing, we are maintaining our historic reserving strength.

In our reinsurance segment, fourth-quarter gross written premiums increased 29% to $197 million. A significant portion of the increase was due to the large provider deals we write earlier in the year and that we called out previously.

While Aspen remains a go-to market for solutions by our clients, these deals are more opportunistic. And as such, we may not see the same level of top-line growth as we've seen in the first half of 2015 -- or in the second half of 2015, I should say.

Aspen Re delivered underwriting income of $70 million in the fourth quarter at a combined ratio of 74%. There were $22 million, or 8 percentage points, of net cat losses, including the UK floods and other weather-related events. The ex-cat accident year loss ratio was an impressive 42.5%.

The 2015 reinsurance gross written premiums were $1.25 billion, an increase of 6% from 2014, with growth primarily in specialty and other property. The combined ratio was 80.4%, compared with 77.6% in the prior year, driven primarily by higher acquisition costs associated with the pro rata business. We have, however, benefited from lower loss ratios for this business. In 2015, prior-year reserve releases were 8 percentage points in the combined ratio, and the accident year ex-cat loss ratio was 49.7%.

Turning now to insurance results, gross written premiums decreased 5% to $448 million in the fourth quarter. Similar to other quarters this year, we saw growth in our property and casualty, and financial and professional lines sub-segments, which were up 6% and 4% respectively. However, this was offset by a decrease in the property elements of our marine, aviation, and energy sub-segment, where pricing pressure and competition remain most acute.

The insurance segment recorded underwriting income of $1.4 million, and a combined ratio of 99.6%. This reflected $27 million, or 6 percentage points of net cat losses related to the UK floods.

The accident year ex-cat loss ratio of the insurance segment was 64.6%, compared with 56.3% a year ago. There were several non-correlated large losses totaling $27 million, or 8 combined ratio points in the quarter.

For 2015, insurance's gross written premiums grew 1% to $1.75 billion, with growth in property and casualty, and financial and professional lines, primarily driven by US [TAM]. The 2015 combined ratio was 96.1%, virtually unchanged from the prior year. In 2015, favorable prior-year releases were 5 percentage points.

If we look at the performance of the insurance business over the year, we see a first-half impacted by a number of large losses, in particular in the energy sector, and we ended up with a combined ratio of 98.5% in the first half. In a second half, the combined ratio improved to 94%, and we believe that the second half of 2015 is a better indicator of the underlying prospects for our insurance business.

Turning now to expenses, overall, our general and administrative expenses remained [forwardly] flat year over year at $420 million, and the expense ratio improved slightly to 17.1%. Looking ahead to 2016, I expect the expense ratio to be broadly in line with 2015, although I anticipate the ratio will be higher in the first half of the year. As always, the expense ratio will be impacted by the general performance of the business and the impact that has on performance-related compensation.

The acquisition ratio for the Group in 2015 increased to 19.6% from 18.8%, largely driven by a change in mix of our reinsurance business towards pro rata business that has higher acquisition costs, although expected lower loss ratios. Looking to 2016, I'd expect the acquisition ratio to be broadly in line with 2015, although this will ultimately depend on the business mix.

I'll now move on to investments. Net investment income was flat in the fourth quarter at $46 million, and for 2015 was $186 million, down just 3% from the prior year. For the quarter, the total return on our aggregate investment portfolio was 33 basis points, reflecting the rebound in equities during the fourth quarter, although offset by losses in the fixed-income portfolio.

For the full year, the aggregate turn on the investment portfolio was 110 basis points, despite a volatile investment environment. The fixed-income book yield for the fourth quarter of 2015 was 2.59%, in line with other quarters in 2015, while the duration of the fixed-income portfolio was 3.57 years, including swaps.

Now, I'll make a few comments about capital management. We continue to actively manage our excess capital as efficiently as possible, taking into account a number of different variables when deciding our best to allocate the capital. We recently found an opportunity to deploy the capital at what we believe to be attractive rates return through the acquisition of AgriLogic.

We have also been investing in the next phase of growth for our insurance business. As a result, we chose not to repurchase shares during the fourth quarter. However, we did repurchased $84 million of ordinary shares in 2015 and have $416 million remaining on our current share repurchase authorization.

So what does this mean for capital management in 2016? With the expected continued growth of the insurance and reinsurance businesses, we may be less active in repurchase activity over the next few quarters than we were in the first half of 2015.

Now as you start to think about modeling Aspen for the current year, I'd like to provide some color on the AgriLogic business, which became part of Aspen at the start of January this year. The business, which recorded approximately $185 million of gross written premium in 2015, will report within the specialty sub-segment of Aspen reinsurance. Approximately 80% of AgriLogic's premiums are recorded across the first half of the year but are earned fairly evenly over the year.

We are confident that the combination of adopting a global organizational structure for insurance, adding outside talent where appropriate to accelerate profitable growth, and executing on our target operating model program position us to better deliver revenue growth at a faster rate than expense growth over the next few years. We remain confident about our prospects and our ability to grow earnings and ROE over time.

With that, I will now turn the call back to Chris.

Thanks, Scott. Over our relatively short history, Aspen has been constantly evolving and adapting to changes in the markets. Over the last five years, we have significantly diversified the business, particularly through the growth of our insurance business. We have steadily added lines in geographies, invested in our US insurance platform, and in the international markets in our Lloyd's platform to expand international reach.

Within reinsurance, we have diversified by product line, significantly increasing our specialty and other property lines, while managing our exposure to property cat, particularly through Aspen Capital Markets. We've also diversified geographically through expansion in Asia, Latin America, and non-coastal regions of the US. We're excited by the opportunities ahead for the next phase of growth.

We started 2016 by acquiring AgriLogic, a specialist US crop business, with an integrated agricultural consultancy. We know the company very well from the relationship Aspen Re had had with them for a number of years. They're a very, very strong team, with a deep pool of intellectual capital, technical and risk management expertise, and very strong underwriting skills. This fits very well with the Aspen culture, and with access to a better rating and larger balance sheet, there are opportunities to continue growing this business.

We also see opportunity ahead for Aspen insurance. Both the US and international platforms have matured and have now very well established in the market. However, we had an opportunity to accelerate our growth and become a truly integrated global specialty insurance player with significant scale.

How will we achieve this? We are aligning our organizational structure with the global insurance marketplace, which we believe will lead to greater consistency on how we approach the market, and a superior showing of business from that same marketplace. Clients will find the same products and underwriting mindset regardless of location. A globally consistent approach, while being mindful of local and regional practices will also make it easier to deploy products more widely, increasing the scale of our business, bringing us still closer to our clients and to our brokers.

A key benefit of this approach is underwriting consistency. We've brought in David Cohen, as I mentioned last call,as President and Chief Underwriting Officer of Aspen Insurance in November. He's been working with Mario, with Ann, with Bob to communicate and execute the strategy.

To date, we have announced global head for accident health, for cyber risk, for environmental, marine, energy construction, professional liability, and railroad. In the future, we will make further announcements of new global heads.

The global heads and the teams that support them are being drawn from our existing deep talent pool in the Insurance business, and where additional resources and skills are needed for the next phase of growth, we're also adding outside talent. Aspen remains a very attractive home to talented people who are seeking an underwriting-centric culture at an organizational very focused on executing its strategy.

So while there are some near-term challenges from the stage of the insurance cycle, we have begun to execute significant plans to drive growth and increase profitability in the coming years. We're confident that our global organizational structure will enhance revenue growth and that our target operating model will result in business processes that are robust, cost efficient, and supportive of substantial additional scale.

Overall, we remain excited about our prospects and confident that we are on a clear path to enhance long-term growth and profitability.

That concludes our prepared remarks, and we're happy to take your questions.

(Operator Instructions)

Amit Kumar, Macquarie.

Thank you and good morning. Just maybe a couple of quick questions. Number one, going back to the discussion on AgriLogic and their $185 million premiums, you said that now that they have access to a bigger balance sheet there is possibility of greater growth. Can you just maybe sketch that out a bit, how are you thinking about the premiums versus the return metrics for 2016 and beyond?

Hi Amit, good morning to you and thanks for the question. Let me, it is Chris, let me kick off and Scott may want to add a little bit to this. Okay? AgriLogic is a bit like a young, smaller version of Aspen. It's full of very bright people, exceptional quantitative skills and analytical capabilities, and a great marketing team. There's one guy there who is just one of the best marketing guys in the whole of the crop business. So what excites us is the combination of having really bright, motivated people; some great leadership in there; some great tools on the analytical side; and then a bigger balance sheet for us. The market share -- this is a young operation, AgriLogic. Their market share is very, very tiny, and I don't think we're talking about doing anything radically different from what they've been doing before. It's just that they've built a pipeline and that pipeline is going to start delivering to Aspen on an enhanced scale.

I think you asked for a view on the returns, and clearly, there is going to be lower premium this first year and that's going to reflect in the ROE. But for the years two to three, we see it fully ramped up as a business that actually going to enhance our overall Group ROE, i.e., a business that should be producing comfortably in the double-digit ROE on the equity that we deploy in this area.

Sorry, Amit, Scott here. I completely agree with Chris. I fully expect it to be an enhancement to our ROE, 2017 go-forward, we will be embedding the business during 2016. Sorry, I didn't mean to cut you off, go ahead.

Just asking what's the combined ratio businesses running at? And --

Sorry, it is Scott here. I can't give any details of that as yet. We'll be embedding the business through 2016, and we'll have some more information for you throughout the year.

Okay. Fair enough. The only other question, and hopefully I did this math right, if I look at the underlying loss ratio of the reinsurance business, and if I exclude the cat and the notable non-cat, there was an uptick, a decent uptick in Q4 [AYLR], ex-cat and non-notable losses. Can you talk about that a bit?

Amit, can you just run that by me again? You're saying there was an uptick in the underlying loss ratio?

Yes, if I exclude the ex-cat and non-notable losses, the non-notable losses for -- in the reinsurance segment for Q4 2014 was 23 points, and this quarter was 7 points. Just trying to figure out what is the cause of the uptick?

Nothing too much going on there, Amit. You're right, we did have a few losses that we announced as part of Q4 2014. We had some small agricultural losses and a fire in a meat-packing plant in Spain. But nothing too much going on this year in terms of that uptick. I think it is probably just down to a little bit of business mix going on there, but nothing underlying or systemic.

Maybe I would add, this is reinsurance, substantial chunks of excessive loss reinsurance. And both from an earned premium standpoint as well as from a loss standpoint, you're going to get decent quarter-on-quarter volatility, and I would probably want to look at it slightly longer term. If I look at the overall year that reinsurance has had, I think it's nothing short of spectacular. It is a 45%, 46% loss ratio per year and accident year is better than 50, so we're very happy with that business and the direction it is taking.

Got it. Okay. That's all I have for now. Thanks for the answers and good luck for the future.

Amit, thank you very much.

Vinay Misquith, Sterne Agee CRT.

Hi, good morning. The first question is on the global organization structure. Chris, if you could help me understand what's changed? Are you hiring new people here because we've heard some press-related for some new people or are you just reorganizing the Company along different lines?

Actually, the short answer, Vinay, and by the way, good morning, Vinay. The short answer is a bit of both is going on. Where we've managed the business, we've thought about it two ways in the past. One is the UK platform and that needs local entity management, and there's a US platform, that needs US entity management. But then, in addition, we thought about product grouping, but we really offer this product via New York or via London principally, sometimes Atlanta, Zurich or something, but in general, I don't think our distribution approached -- reflected the way the brokers like to do a lot of the business.

I take this with energy, and energy is a tough place to be. Only the very best are going to make good money there. The brokers are completely globalized. The risks around the world; the clients are very often very large, global companies, and you need to be able to offer the products and the services that those clients and brokers need right around the world on a global basis. They think globally, they will place the business in any market that looks weak, relative to another market, if they can do that. So you need to be very joined up internally. So this is something that Mario and I have been thinking about for many years, but hats off to David Cohen, who has arrived a couple months ago and said, guys, you better get on and do this, there's no reason to delay.

We have said something 12 or 13 products we sell are our global products, and therefore, we have global heads. Now, in some cases, for example professional liability, I think we got one of the best professional liability leaders in the business, and he's been with us five or six years, he's called Bruce Eisler, so we appointed Bruce as Global Head of Professional Liability. Meaning previously, he was running US, but now he's got the worldwide [room] to do that. In another case, we got a guy called Peter Slot in Accident and Health, also a very good guy, fairly new to us, but always saw Peter as a global head.

In other cases, I think we had great capability to execute regionally, maybe in the US market, maybe in the London market, but we didn't necessarily put people with a global profile, people who have worked in Singapore or worked in South America, as well as the US, as well as London, and we've hired a bunch of people. As a matter fact, we have hired something in excess of 30 people. Some of these guys are some of the best underwriters of insurance, specialty insurance, that I've met in my life. And you know how long I've been doing this and how many people I've met, so I don't say that lightly. I think they are going to change the profile for Aspen in insurance in a number of ways. They are going to be -- they are bigger people, they know more brokers. They understand some of the areas of the technical complexity in the business better, and they're used to thinking globally.

So three good things are going to happen here. In my opinion, their knowledge is going to look at our existing book of business, and there have been some pockets of volatility. We're not especially happy with our first half last year on the insurance side. I think we made that clear at the time. And if you actually look at that, it is couple of things -- that I think the risk retention wasn't quite right, the retention was a little too large. So it was a risk a little too large. So we're going to be ironing out those pockets of volatility. That's a follow-on, which is a lower loss ratio for the business.

And I think some of that can come through quite quickly. David is very energetic, busy guy. He's going around doing these things. We may changing [a gross line size], he may be changing our reinsurance structure, but we want to drive down volatility; that'll get you a better loss ratio, is the second thing. The third thing, and the third thing is maybe more of an issue for let's say 2017 than 2016, is there's going to be better expected, bigger, stronger business. And that's why we've been talking in this call a little bit about growth.

To make that answer complete, and apologies, it's rather a long answer, but there are two other things. There are other parts of the world where you need to be regional. A lot of what we do in US is US property; it doesn't get placed much outside of the US, and especially in the UK, we have a very nice team offering a property and liability package; we have another team doing UK property; another one doing UK engineering, and these guys really operate locally. Their risks are situated locally, their brokers are locally, and there's no reason to bring them on a global management.

So a lot of what we do we will classify as global, and then we will have US regional, and we will have UK regional alongside that. And I think that's an [org] design that matches the market. There is an upgrade of our underwriting talent going on, that means we match the market but we improve our delivery and execution, and I think that says we'll deliver better results and superior growth.

Okay, that's helpful.

You can say it was far too long.

No, that is fine. The second question is on the flood losses in the UK. From my understanding, I believe most of the cat losses, the $46 million, came from flood losses in the UK, am I right? Given that, just curious about how you look at that risk, because it just seems higher to me then I would've normally thought.

Yes, hi, Vinay, it is Scott here, and you are absolutely right. The bulk of the cat losses this quarter were from the UK floods. I think the distribution of that is probably slightly different. Quite a small number in reinsurance we had looked at that losses as a factor of the overall loss for the UK floods, so well within line there. The other side of it is insurance. What -- we take exposures, individual exposures across a wide range of areas in the UK. In fact, those flood losses related to a relatively small number, so low in frequency, losses, a couple of factories that were underwater, and that's what's resulted in the floods this time around

And this time, Vinay, I will be brief. Because our UK operation, I talked on the UK regional. It's run by a guy called Clive Edwards. Clive and I have worked together about 16, 17 years. He's one of the best we've got. Typically, Clive delivers a combined ratio of 80% plus, in the better 80%s. There's a little bit of fluctuation, but that's what he's done for us over the years. So this year, the UK book has produced a few cat losses. I think our UK operation has earned the right to have a few cat losses; we don't like it, but it's okay. We will be looking at those exposures. We will be looking at the risk management, we'll be looking at the line side, we'll be looking at the flood models. And I'd be very disappointed if I'm sitting here in another year's time saying that we had another one of those. Because we learn from experience. But I agree with you, it's a little bigger than we expected, but I don't think it's a big problem.

My only point being, I don't think that individually the flood losses were high for the insurance or the reinsurance, but I guess once you add them up together, maybe what we should be thinking about is the reinsurance and the insurance speaking more to each other about the aggregate losses, that was my question really.

A concentration.

Yes, okay. That's fine, that's all I have, thank you so much.

Vinay, thank you.

(Operator Instructions)

Josh Shanker, Deutsche Bank.

Yes, good morning, everyone.

Good morning, Josh.

I want to talk about your insurance expenses for 2016, particularly the non-acquisition expenses. Given the continued growth in AgriLogic and whatnot, I realize you didn't want to talk about combined ratio targeting, but can we talk about the planned expense growth or maybe can you have the same amount of expenses over a larger premium base? How should we think about the non-acquisition expense trend coming into the coming year?

Sure, hey, Josh, it is Scott here. Just to clarify, AgriLogic will be actually reported as part of our specialty sub-sequent within reinsurance. So you're not going to see the impact of that on the insurance side. To give you a little bit more color on 2016 and how I'm thinking about insurance, Chris has talked about some fantastic opportunities we've had to bring on some new underwriting talent, and that's been led by David, and I think that's a great story for us. It's always -- the challenge is how you on-board these new underwriters and the teams they potentially bring with them and how that reflects in the top-line growth.

Obviously, we're expecting top-line growth. That's probably more going to bleed through in the second half of year. So I think, in my own view, I would be expecting that the overall expense ratio for the group remains pretty much in line with where we were at the end of 2015. But given the onboarding process, given the way the premium comes on board, I'd expect that might be a little bit higher in the first half of the year than it will be in the second.

Okay, and when we see the 10-K, can you preview a little bit what we're going to see about PML information, given the renewals that have already happened?

Yes, thanks, Josh. Actually, we've got some PML data right now in our [fin supp] -- sorry, in our slide deck that we just released. So towards the back -- there's no great change in the overall exposures there, a little bit of redistribution between a couple of the peak zones, but nothing material going on there.

One thing, Josh, I might draw your attention to is the Florida southeast. On the reinsurance side, that's actually down a little bit, but on the insurance side we changed our reinsurance arrangements from substantial quota share to substantially excessive loss. This has produced a slight increase in the insurance side, Florida southeast. What we disclosed is combined, but what's going on is a bigger appetite for that risk on the insurance side subject to a different kind of reinsurance program, while on the reinsurance side, overall cat is actually down. And then if you look at the blend as being, as Scott said, you will see it flat everywhere but Florida.

Is it wrong to assume that [excess source losses] is cheaper than quota share? Hello?

We buy some quite intricately designed reinsurance programs, and I think it is probably wrong to make that assumption, yes. I think it is often correct, but I think depending on program design it is possible to buy better on an excess source basis than a quota share basis.

Okay, well good luck in the coming year. Thank you very much.

Josh, thank you very much. Thanks for your questions.

This concludes our question-and-answer session. I would like to turn the conference back over to Chris O'Kane, CEO, for any closing remarks.

Thank you, everyone, for your time, your attention this morning. I wish you a very good day. Goodbye.

Thanks, everyone.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.