Heritage Insurance Holdings Inc (HRTG) 2024 Q3 法說會逐字稿

Good afternoon, and welcome to the Heritage Insurance Holdings third-quarter 2024 earnings conference call. Please note, today's event is being recorded.

下午好，歡迎參加 Heritage Insurance Holdings 2024 年第三季財報電話會議。請注意，今天的活動正在錄製中。

I would now like to turn the conference over to Kirk Lusk, Chief Financial Officer for the company. Please go ahead, sir.

我現在想將會議轉交給公司財務長柯克‧拉斯克 (Kirk Lusk)。請繼續，先生。

Good morning, and thank you for joining us today. We invite you to visit the Investors section of our website, investors.heritagepci.com, where the earnings release and our earnings call will be archived. These materials are available for replay or review at your convenience.

早安，感謝您今天加入我們。我們邀請您造訪我們網站 Investors.heritagepci.com 的投資者部分，其中將存檔收益發布和收益電話會議。這些材料可供您在方便時重播或查看。

Today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations and subject to uncertainty and changes in circumstances. In our earnings press release and our SEC filings, we detail material risks that may cause our future results to differ from our expectations.

今天的電話會議可能包含 1995 年《私人證券訴訟改革法案》含義內的前瞻性陳述。這些陳述是基於管理層目前的預期，並可能受到環境的不確定性和變化的影響。在我們的收益新聞稿和向美國證券交易委員會提交的文件中，我們詳細介紹了可能導致我們未來業績與預期不同的重大風險。

Our statements are as of today, and we have no obligation to update any forward-looking statements we may make. For a description of the forward-looking statements and the risks that could cause our results to differ materially from those described in the forward-looking statements, please refer to our annual report on Form 10-K, earnings release and other SEC filings. Our comments today will also include non-GAAP financial measures. The reconciliation of and other information regarding these measures can be found in our press release.

我們的聲明截至今天，我們沒有義務更新我們可能做出的任何前瞻性聲明。有關前瞻性陳述的描述以及可能導致我們的結果與前瞻性陳述中描述的結果存在重大差異的風險，請參閱我們的 10-K 表格年度報告、收益發布和其他 SEC 文件。我們今天的評論還將包括非公認會計準則財務指標。有關這些措施的調節和其他資訊可以在我們的新聞稿中找到。

With me on the call today is Ernie Garateix, our Chief Executive Officer. I will now turn the call over to Ernie.

今天與我一起參加電話會議的是我們的執行長 Ernie Garateix。我現在將把電話轉給厄尼。

Thank you, Kirk. Good afternoon, everyone, and thank you for joining us today. To start, our thoughts and support are with the many people who were impacted by the devastating hurricanes that affected so many communities across the Southeast. This has been a difficult storm season that has left millions with significant damage and loss.

謝謝你，柯克。大家下午好，感謝您今天加入我們。首先，我們向那些受到毀滅性颶風影響的人們表示同情和支持，這場颶風影響了東南部許多社區。這是一個艱難的風暴季節，對數百萬人造成了重大損害和損失。

At Heritage, we are working tirelessly to support our policyholders and communities to ensure they have the necessary resources to quickly rebuild. I am especially proud of our employees from across our company who have been providing a rapid response to our value policyholders, as well as hundreds of adjusters and emergency service providers that we have in the field to support our customers daily. To ensure we are offering the support that our policyholders expect, we track a series of metrics to ensure our operational effectiveness.

在 Heritage，我們不懈地努力支持我們的保單持有人和社區，確保他們擁有快速重建所需的資源。我特別為我們公司的員工感到自豪，他們一直為我們的價值保單持有人提供快速回應，以及我們在現場每天為客戶提供支援的數百名理賠員和緊急服務提供者。為了確保我們提供保單持有人期望的支持，我們追蹤一系列指標以確保我們的營運效率。

As an example, at 21 days following Hurricane Milton, we received 6,352 claims with the average wait time for policyholders calling in their claims of under 1 minute. We had over 230 employees throughout our footprint, taking first notice of loss calls, while we also have over 200 vendors ready and responding to emergency services. I would like to thank our employees, many of whom themselves were impacted by the hurricanes for their incredible efforts during this challenging time. Their commitment to our policyholders has been remarkable and a testament to the culture at Heritage.

例如，在颶風米爾頓發生後 21 天，我們收到了 6,352 份索賠，保單持有人提出索賠的平均等待時間不到 1 分鐘。我們在整個業務範圍內擁有超過 230 名員工，負責第一時間處理掛失電話，同時我們還有 200 多家供應商做好準備並回應緊急服務。我要感謝我們的員工，他們中的許多人本身也受到了颶風的影響，他們在這個充滿挑戰的時期做出了令人難以置信的努力。他們對我們保單持有人的承諾非常出色，也是對 Heritage 文化的證明。

While I am proud of our support to our policyholders, I am also very proud of our financial results, which clearly demonstrates the successful execution of our strategic initiatives that I laid out when I was appointed CEO of Heritage, three years ago. Our initiatives have been focused on achieving rate adequacy, enhancing our underwriting discipline and allocating capital to drive growth and returns as we strive to deliver solid financial results. Through these efforts, we have positioned Heritage to absorb a full retention loss while maintaining profitability and delivering results to our shareholders.

雖然我為我們對保單持有人的支持感到自豪，但我也對我們的財務業績感到非常自豪，這清楚地表明了我三年前被任命為Heritage 首席執行官時制定的戰略舉措的成功執行。我們的措施一直致力於實現利率充足性、加強承保紀律以及分配資本以推動成長和回報，同時努力實現穩健的財務表現。透過這些努力，我們使 Heritage 能夠吸收全部保留損失，同時保持獲利能力並為股東帶來成果。

Looking at our third quarter results in more detail, we have achieved net income of $8.2 million or $0.27 per share, which is a sharp improvement from a year ago third quarter where our results produced a net income loss of $7.4 million or a 28% loss per share. Importantly, our current quarter results include approximately $48 million of hurricane losses from Debbie and Helen. On a year-to-date basis, we achieved net income of $41.2 million or $1.35 per share, representing a strong increase from our 2023 net nine-month net income of $14.4 million or $0.55 per share.

更詳細地看一下我們第三季的業績，我們實現了820 萬美元的淨利潤，即每股0.27 美元，比去年同期的第三季度業績大幅改善，當時我們的業績產生了740 萬美元的淨利潤虧損，即虧損28%每股。重要的是，我們目前季度的業績包括黛比和海倫因颶風造成的約 4800 萬美元的損失。年初至今，我們實現淨利潤 4,120 萬美元，每股 1.35 美元，較 2023 年 9 個月淨收入 1,440 萬美元，即每股 0.55 美元大幅成長。

Our ability to maintain profitability in the face of significant catastrophe losses is the result of a multiyear effort where we have focused on executing our underwriting and rate adequacy initiatives. From an underwriting perspective, we continue to strategically reduce our exposures in over-concentrated and unprofitable areas, while increasing our presence in profitable geographies and products.

我們在面對重大災難損失時保持盈利能力的能力是我們多年來努力執行承保和利率充足性計劃的結果。從核保的角度來看，我們繼續策略性地減少在過度集中和無利可圖領域的風險敞口，同時增加在有利可圖的地區和產品中的業務。

This disciplined underwriting approach resulted in a further policy count reduction of just over 66,000 policies or 14.2% throughout our footprint compared to the third quarter of 2023, while our premium in force increased by $80.6 million or 6%. As we have discussed on prior earnings calls, we expect declining policies to moderate over the next few quarters as we open territories for new business while maintaining our underwriting discipline.

與 2023 年第三季相比，這種嚴格的承保方法使我們的保單數量進一步減少了 66,000 多份保單，即減少了 14.2%，而我們的有效保費增加了 8,060 萬美元，即 6%。正如我們在先前的財報電話會議上所討論的那樣，隨著我們在保持承保紀律的同時開放新業務領域，我們預計未來幾個季度保單的下滑將會放緩。

We have also maintained a stable indemnity-based reinsurance program at manageable costs through our policy count and exposure management initiatives, while also proactively engaging with our reinsurance partners. In fact, we met with 28 of our reinsurance partners just prior to Hurricane Milton making landfall, each of whom reiterated their continued support of Heritage both near and long term.

我們也透過保單計數和風險管理舉措，以可管理的成本維持穩定的基於賠償的再保險計劃，同時積極與我們的再保險合作夥伴合作。事實上，我們在米爾頓颶風登陸之前會見了 28 家再保險合作夥伴，他們每個人都重申了他們對 Heritage 的近期和長期持續支持。

Turning to our rate adequacy initiatives. These efforts have resulted in a significant rate increases, which are earning through our portfolio in 2024 as evidenced by our growing unearned premium balance. Looking to 2025, we anticipate an even more meaningful amount of rate to earn through our portfolio. which we expect will provide a healthy tailwind to our financial results.

轉向我們的利率充足性舉措。這些努力導致費率大幅上漲，我們的未賺保費餘額不斷增長就證明了這一點將在 2024 年透過我們的投資組合獲利。展望 2025 年，我們預計透過我們的投資組合可以獲得更有意義的利率。我們預計這將為我們的財務表現帶來健康的推動力。

More importantly, we have selectively started writing Personal Lines business throughout our footprint as we pivot our strategy to one of controlled growth, anchored by our continued focus on risk management and stringent underwriting. This is an important change in our strategy, given that we significantly curtailed writing Personal Lines new business beginning in 2022.

更重要的是，隨著我們將策略轉向可控成長，並以持續專注於風險管理和嚴格核保為基礎，我們有選擇地開始在整個業務範圍內開展個人保險業務。鑑於我們從 2022 年開始大幅減少個人線路新業務的編寫，這是我們策略的一項重要變化。

Over this period of time, we have been growing our top line through organic growth in our commercial residential portfolio and our E&S products combined with the rate action that we have taken in our Personal Lines portfolio. Additionally, recent legislative changes in Florida are having a positive impact on the economics of writing new profitable business in the state. In fact, we believe Hurricane Milton will further demonstrate that the legislative changes will mitigate frivolous lawsuits, shorten the claim closure cycle and bring more reinsurers back to the market.

在此期間，我們透過商業住宅產品組合和 E&S 產品的有機成長，以及我們在個人產品組合中採取的利率行動，不斷提高我們的營收。此外，佛羅裡達州最近的立法變化對該州開展新的盈利業務的經濟產生了積極影響。事實上，我們相信颶風米爾頓將進一步證明立法變革將減少無意義的訴訟，縮短索賠結束週期，並使更多的再保險公司重返市場。

Taken together, we expect our improved rate to continue to earn-in through 2025 and the headwind from our policy reduction efforts to mitigate through the first half of 2025, and our new business production to continue to ramp up through the year ahead. We believe we have the foundation in place to deliver solid profitable growth in 2025 as we execute our Controlled Growth Strategy.

總而言之，我們預計我們的成長率將在 2025 年繼續獲利，我們的政策削減努力將在 2025 年上半年緩解阻力，而我們的新業務產量將在未來一年繼續增加。我們相信，透過執行控製成長策略，我們已具備在 2025 年實現穩健獲利成長的基礎。

Our EMS business has been a growth lever for Heritage as in-force premiums grew nearly $25 million or 116% as compared to the year ago third quarter as we continue to write this business in California, Florida and South Carolina. What makes this business so attractive is that we can more nimbly adjust our rates and coverages to the changing dynamics state by state to ensure we continue to earn appropriate risk-adjusted returns. Looking forward, we plan to continue to evaluate more states for E&S opportunities as we focus on our controlled growth strategy.

我們的 EMS 業務一直是 Heritage 的成長槓桿，隨著我們繼續在加利福尼亞州、佛羅裡達州和南卡羅來納州開展這項業務，有效保費與去年同期相比增長了近 2500 萬美元，即 116%。這項業務如此有吸引力的原因在於，我們可以更靈活地根據各州不斷變化的動態調整我們的費率和承保範圍，以確保我們繼續獲得適當的風險調整回報。展望未來，我們計劃繼續評估更多州的 E&S 機會，同時專注於我們的控製成長策略。

Importantly, we remain resolute in maintaining a balanced and diversified portfolio as no single state represents over 30% of our total insured value. This selective diversification helps reduce performance volatility and ensures our long-term stability, which we believe will be reflected in the value of our company over time. We remain committed to maintaining our focus on disciplined growth, operational excellence and effective capital management. Importantly, our strategic initiatives are yielding the positive results, as evidenced by our ability to remain profitable to a challenging cat season.

重要的是，我們仍然堅決維持平衡和多元化的投資組合，因為沒有一個州占我們總保險價值的 30% 以上。這種選擇性多元化有助於減少業績波動並確保我們的長期穩定性，我們相信隨著時間的推移，這將反映在我們公司的價值中。我們仍然致力於維持對規範成長、卓越營運和有效資本管理的關注。重要的是，我們的策略舉措正在產生積極的成果，我們有能力在充滿挑戰的貓季保持盈利就證明了這一點。

Looking forward, I remain optimistic as we pivot to our Controlled Growth Strategy designed to prudently accelerate premium growth while maintaining our margins. To conclude, I would like to reiterate our dedication to navigating the complexities of the market with a strategic focus that prioritizes long-term profitability and shareholder value driven by our dedicated workforce.

展望未來，我仍然樂觀，因為我們將轉向可控成長策略，旨在謹慎加速保費成長，同時保持利潤率。最後，我想重申，我們致力於駕馭複雜的市場，其策略重點是優先考慮由我們敬業的員工隊伍驅動的長期獲利能力和股東價值。

Kirk, over to you.

柯克，交給你了。

Thank you, Ernie, and good afternoon, everyone. As Ernie highlighted, our results this quarter reflect the success of our strategic initiatives. Starting with our financial highlights.

謝謝你，厄尼，大家下午好。正如厄尼所強調的那樣，我們本季的業績反映了我們戰略舉措的成功。從我們的財務亮點開始。

We reported net income of $8.2 million or $0.27 per diluted share compared to a net loss of $7.4 million or a loss of $0.28 per diluted share in the prior year quarter. The increase in net income was driven by the positive impact of our rate actions, our underwriting actions and our targeted exposure management taken over the last several years, which continue to favorably impact our results.

我們公佈的淨利潤為 820 萬美元，即稀釋後每股收益 0.27 美元，而去年同期的淨虧損為 740 萬美元，即稀釋後每股虧損 0.28 美元。淨利潤的成長是由過去幾年我們的利率行動、承保行動和目標風險管理的正面影響所推動的，這些影響繼續對我們的業績產生有利影響。

Demonstrating the improvement to the portfolio and to put that into context, in the third quarter of 2022, with Hurricane Ian, we incurred a full $40 million retention loss and reported a net loss in the quarter of $48 million. In 2023, with the Maui Fires and Hurricane Idalia, we also had $40 million of cat losses and reported a $7 million net loss in the quarter.

2022 年第三季度，由於伊恩颶風，我們遭受了 4000 萬美元的保留損失，並報告了 4800 萬美元的淨損失，這證明了投資組合的改善。2023 年，由於毛伊島火災和伊達利亞颶風，我們也遭受了 4,000 萬美元的巨災損失，並報告本季淨虧損 700 萬美元。

While this year, we sustained $48 million of cat losses in the quarter with Hurricanes Debbie and Helen and reported net income of $8 million. Our total revenues for the quarter were $211.9 million, up 13.7% from $186.3 million in the prior year quarter. This increase was driven by the increase in net earned premiums and investment income. Gross premiums earned rose to $354.2 million, up 5.1% from $337 million in the prior year quarter, reflecting our strategic focus on rate adequacy and organic growth in our commercial residential line.

今年，我們在颶風黛比和海倫的影響下，本季遭受了 4800 萬美元的巨額損失，淨利潤為 800 萬美元。我們本季的總營收為 2.119 億美元，比去年同期的 1.863 億美元成長 13.7%。這一成長是由淨賺保費和投資收入的成長所推動的。毛保費增至 3.542 億美元，較去年同期的 3.37 億美元增長 5.1%，反映出我們對商業住宅產品線的費率充足性和有機增長的戰略重點。

Net premiums earned increased to $198.8 million, up 12.6% from $176.6 million in the prior year quarter as the growth in gross premiums earned outpaced the increase in ceded premiums. Our strategic focus on expanding profitable products and markets includes the organic growth of our Commercial Residential business for which we selectively increased the premium in force by 23.6% compared to the third quarter of 2023, while the total insured value only increased by 9.5%. The Commercial Residential business tends to have lower attritional losses while generating material higher average premiums. This segment now accounts for 21.4% of our total in force premium compared to 18.4% in the prior year period.

由於毛保費的成長超過了分出保費的成長，淨賺保費增至 1.988 億美元，較去年同期的 1.766 億美元成長 12.6%。我們的策略重點是擴大獲利產品和市場，其中包括商業住宅業務的有機成長，為此我們選擇性地將有效保費比 2023 年第三季提高了 23.6%，而總保險價值僅成長了 9.5%。商業住宅業務的自然消耗損失往往較低，同時產生較高的平均保費。該細分市場目前占我們有效保費總額的 21.4%，而去年同期為 18.4%。

Overall, we are in a strong financial position and backed by a $1.3 billion reinsurance tower for the Southeast. We experienced the Hurricanes Debbie and Helen during the third quarter with a combined loss of $48.7 million with Debbie being a much smaller storm. We expect gross losses from Hurricane Milton to possibly reach into the third lay of our reinsurance tower, which starts at $450 million and goes to $914 million. We continue to maintain a robust level of reinsurance coverage through year-end 2024, while the strategic actions we have taken over the last three years have helped to mitigate our losses from significant events like the three recent Hurricanes.

總體而言，我們的財務狀況強勁，並得到了東南部價值 13 億美元的再保險塔的支持。我們在第三季度經歷了颶風“黛比”和“海倫”，總共損失了 4870 萬美元，其中“黛比”的風暴規模要小得多。我們預計颶風米爾頓造成的總損失可能會達到我們再保險塔的第三層，從 4.5 億美元到 9.14 億美元。到 2024 年底，我們將繼續保持強勁的再保險承保水平，同時我們在過去三年中採取的策略行動有助於減輕我們因最近三場颶風等重大事件造成的損失。

Our net investment income, inclusive of realized gains, losses and impairment for the quarter was $9.8 million, an increase of 42% from $6.9 million in the prior year quarter. This increase reflects our actions to align the investments with the yield curve while maintaining a high-quality portfolio of short-duration assets. The net loss ratio for the quarter improved to 65.4%, an improvement of 9 points from the 74.4% in the same quarter last year, reflecting higher net premiums earned, coupled with slightly lowered net losses and LAE. The reduction in net losses in LAE was driven primarily by a reduction of attritional losses, which was partially offset by higher weather losses and adverse development.

本季我們的淨投資收入（包括已實現收益、損失和減損）為 980 萬美元，比去年同期的 690 萬美元成長 42%。這一成長反映了我們在維持高品質短期資產投資組合的同時使投資與殖利率曲線保持一致的行動。本季的淨虧損率改善至 65.4%，比去年同期的 74.4% 提高了 9 個百分點，反映出所賺取的淨保費較高，加上淨虧損和 LAE 略有下降。LAE 淨損失的減少主要是由於自然損耗的減少，但天氣損失增加和不利的發展部分抵消了損失的減少。

Net weather losses for the current accident quarter were $63 million, an increase of $11.4 million from $51.6 million in the prior year quarter. Catastrophe losses in the quarter were $48.7 million compared to $40.1 million in the prior year quarter. Other weather losses totaled $14.3 million, an increase in the prior year quarter amount of $11.5 million. Additionally, the net loss ratio was impacted by net unfavorable loss development of $6.3 million during the third quarter of 2024, compared to net unfavorable loss of $800,000 in the third quarter of 2023.

目前事故季度的淨天氣損失為 6,300 萬美元，比去年同期的 5,160 萬美元增加了 1,140 萬美元。本季的災難損失為 4,870 萬美元，而去年同期的災難損失為 4,010 萬美元。其他天氣損失總計 1,430 萬美元，比去年同期增加 1,150 萬美元。此外，淨虧損率也受到 2024 年第三季 630 萬美元淨不利虧損的影響，而 2023 年第三季淨不利虧損為 80 萬美元。

We have continued to see favorable trends in the current year loss costs attributable to the legislative changes made in Florida and the improvements in our underlying portfolio across all 16 states in which we conduct business. We continue to evaluate each state on an ongoing basis to make adjustments as necessary to maintain rate adequacy and improved underwriting results. Our net expense ratio for the quarter was 35.2%, a decrease of 1.2 points from 36.4% in the prior year's quarter. The decrease was driven primarily by the increase in net premiums earned, which offset higher policy acquisition costs. The net combined ratio for the quarter was 100.6%, down 10.2 points from 110.8% in the prior year quarter, driven by the lower net loss ratio and lower net expense ratio.

由於佛羅裡達州的立法變化以及我們開展業務的所有 16 個州的基礎投資組合的改善，我們繼續看到今年損失成本的有利趨勢。我們將繼續持續評估每個州，並根據需要進行調整，以維持費率充足性並改善承保績效。本季我們的淨費用率為 35.2%，比去年同期的 36.4% 下降 1.2 個百分點。這一下降主要是由於所賺取的淨保費增加，抵消了較高的保單購買成本。由於淨虧損率和淨費用率下降，本季淨綜合成本率為 100.6%，比去年同期的 110.8% 下降 10.2 個百分點。

Turning to our balance sheet. We ended the quarter with total assets of $2.4 billion and shareholders' equity of $279.3 million. Our book value per share increased to $9.10, up 61.1% from $5.65 in the prior year quarter. The increase from the comparable quarter of 2023 is primarily attributable to net income, as well as a reduction in unrealized losses on the company's fixed income securities portfolio. The remaining unrealized losses are attributable to interest rates and not to credit risk.

轉向我們的資產負債表。本季末，我們的總資產為 24 億美元，股東權益為 2.793 億美元。我們的每股帳面價值增至 9.10 美元，比去年同期的 5.65 美元成長 61.1%。與 2023 年同期相比的成長主要歸因於淨利潤以及公司固定收益證券投資組合未實現損失的減少。其餘未實現損失歸因於利率而非信用風險。

The reduction in unrealized losses is correspondingly driven by the recent decline in interest rates. We expect unrealized losses will continue to decline, as bonds mature but recognize that changing interest rates will impact unrealized losses or gains.

未實現損失的減少相應地受到近期利率下降的推動。我們預計，隨著債券到期，未實現損失將繼續下降，但我們認識到利率變化將影響未實現損失或收益。

The average rating of our portfolio is AA- with a duration of 3.19 years, as we have extended the portfolio's duration to take advantage of higher yields further out on the yield curve, while still maintaining a short duration, high credit quality portfolio. Our annualized return on equity for the quarter was 12.2%, an improvement of 31.2 points from a negative 19% in the prior year quarter, reflecting our improved profitability and effective capital management.

我們投資組合的平均評級為AA-，久期為3.19 年，因為我們延長了投資組合的久期，以充分利用收益率曲線上更高的收益率，同時仍保持久期短、信用質量高的投資組合。本季我們的年化股本回報率為 12.2%，比去年同期的負值 19% 提高了 31.2 個百分點，反映出我們盈利能力的提高和資本管理的有效。

In terms of capital management, our Board of Directors has decided to continue the suspension of the quarterly dividend. This decision aligns with our strategy to support our long-term growth initiatives with related robust returns on equity. We will continue to value dividend distribution and stock repurchase strategies on a quarterly basis.

在資金管理方面，公司董事會決定繼續暫停派發季度股利。這項決定符合我們支持長期成長計畫以及相關強勁股本回報的策略。我們將繼續重視每季的股利分配和股票回購策略。

Looking ahead, we remain focused on executing our strategic initiatives and to driving shareholder value. We believe that our proactive approach to managing exposure, enhancing rate adequacy and investing in technology and infrastructure will position us well for continued success. Lastly, we are excited to embark on the next phase of our strategic initiatives as we initiate our Controlled Growth Strategy and begin writing Personal Lines policies in the Southeast and Northeast. We expect these to have a positive impact on our earnings as we look to the year ahead. Thank you for your time today.

展望未來，我們仍然專注於執行我們的策略舉措並推動股東價值。我們相信，我們主動管理風險、提高利率充足性以及投資技術和基礎設施的方法將為我們持續成功奠定基礎。最後，我們很高興能夠開始下一階段的策略性舉措，啟動控製成長策略並開始在東南部和東北部製定個人保險政策。展望未來一年，我們預計這些將對我們的收益產生正面影響。感謝您今天抽出時間。

Operator, we are now ready for questions.

接線員，我們現在準備好提問了。

(Operator Instructions) Mark Hughes, Truist.

（操作員說明）Mark Hughes，Truist。

Thank you. Good morning, good afternoon. The loss ratio, excluding the weather, excluding the cats, was really striking, and particularly when you take into account the value of your development, you talked quite a bit on the call about the initiatives that you've undertaken to help achieve that and the regulatory help. Is this level -- is this sustainable? Is this a new normal? How much of this was just a -- had a pretty good quarter aside from the major events? Or is this kind of the starting point that we -- think about other factors that might drive it going ahead?

謝謝。早安，下午好。不包括天氣、不包括貓在內的損失率確實非常驚人，特別是當你考慮到你的發展價值時，你在電話會議上談到了為幫助實現這一目標而採取的舉措，並且監管的幫助。這個水平可以持續嗎？這是新常態嗎？其中有多少只是——除了重大事件之外，這個季度表現還不錯？或者這是我們思考可能推動其前進的其他因素的起點？

Yes. Mark thank you, great question. I think it's a little of both -- I mean, when you look at -- I mean, it was typically -- the third quarter is a pretty good quarter followed by the fourth quarter, which is typically our best quarter in the year. But we are seeing some very favorable trends on the attritional loss ratio -- the underwriting actions we've taken, the rating actions we've taken over the last several years on top of the legislative reforms are having a very favorable impact on our results. So we think that there is a bit of favorability in the third quarter, but it is more close to a new norm, I think, as we go forward as far as kind of how we're looking at it from a profitability standpoint.

是的。馬克，謝謝你，很好的問題。我認為兩者都有——我的意思是，當你看時——我的意思是，通常情況下——第三季度是一個相當好的季度，然後是第四季度，這通常是我們一年中最好的季度。但我們看到損耗損失率出現了一些非常有利的趨勢——過去幾年我們在立法改革之外採取的承保行動、評級行動正在對我們的業績產生非常有利的影響。因此，我們認為第三季有一些有利因素，但我認為，隨著我們從獲利能力的角度看待它，它更接近新常態。

Right. Okay. How about -- you talked about the rate momentum as you earn that or continue to earn that through. How much more of a tailwind is there? You've taken a lot of rate actions and considering the trajectory of those and how much has already been earned through? Where are we in that process of -- having a flow through the P&L?

正確的。好的。怎麼樣——你談到了當你賺取或繼續賺取利息時的利率動量。還有多少順風順水？您已經採取了很多利率行動，並考慮了這些行動的軌跡以及已經賺取了多少？我們在損益表流程中處於什麼位置？

Yes, Mark, this is Ernie. So there's quite a bit still to come in 2025 that we plan for. But the one thing I'll make a comment about is we're always looking in each of the geographies and products and make sure they're rate adequate. So that's always going to be an ongoing effort.

是的，馬克，這是厄尼。因此，2025 年我們還有很多計劃要做。但我要評論的一件事是，我們一直在尋找每個地區和產品，並確保它們的價格足夠。因此，這始終是一項持續的努力。

And again, we've said this over the earnings call, we're going to aim to be profitable in every single state in which we do business, and under the products that we offer there. So there's a constantly looking at those rate adequacy products to make sure they are adding to the bottom line.

我們在財報電話會議上再次說過，我們的目標是在我們開展業務的每個州以及我們在那裡提供的產品下實現盈利。因此，我們不斷關注這些利率充足性產品，以確保它們能夠增加利潤。

And Mark, to give you an idea just as far as the tailwind, we are expecting more earned rate coming through in '25 than we had in '24.

馬克，為了給你一個關於順風的想法，我們預期 25 年的殖利率將高於 24 年。

Right. More on an absolute basis coming through in '25, right?

正確的。更多的絕對基礎將在 25 年實現，對嗎？

Correct.

正確的。

Not necessarily a rate of change or just on an absolute basis?

不一定是變化率或只是絕對變化率？

Correct. Yes.

正確的。是的。

And then what do you see as the more attractive geographies at this point? You've got a lot to choose from seemingly -- how do you view Florida versus the Northeast or other markets?

那麼您認為目前哪些地區更具吸引力呢？看起來你有很多選擇——與東北部或其他市場相比，你如何看待佛羅裡達州？

So we do take that floor again with the legislative changes and then -- the rate adequacy is attractive to us. But again, we look at the Northeast as well. The Northeast has been taking rate in New York, New Jersey and other states are there. So those are getting closer to rate adequacy and then looking at doing -- bringing some more business up there. But again, the overall theme is looking at rate adequacy and having a managed diversified portfolio across, and that gives us plenty of options.

因此，隨著立法的變化，我們確實再次採取了這一立場，然後——利率充足性對我們來說很有吸引力。但同樣，我們也關注東北地區。東北部一直在紐約、新澤西等州採取利率。因此，這些公司正越來越接近利率充足性，然後考慮採取行動——帶來更多業務。但同樣，整體主題是關注利率充足性和管理多元化的投資組合，這給了我們很多選擇。

Paul Newsome, Piper Sandler.

保羅‧紐瑟姆，派珀‧桑德勒。

I was hoping you could give us a little bit more details on the reserve development -- just exit year sources, it's a little bit -- I think, in contrast with the fact that looks like -- [in total function] maybe reserves go the other way potentially -- additional color would be fantastic.

我希望你能給我們更多關於儲備金開發的細節——只是退出年份的來源，有點——我認為，與看起來的事實相比——[總功能]也許儲備金會去另一種可能的方式是——額外的顏色會很棒。

Yes. I appreciate that. And that actually has to do with Irma, which, I mean, again, we only have a couple of hundred claims remaining to basically get that thing completely sold. However, just due to the legal environment that those fall under that there is some volatility still associated with some of those. So that is really the biggest driver of that -- actually it's almost all of it is -- just hurricane Irma.

是的。我很欣賞這一點。這實際上與艾爾瑪有關，我的意思是，我們只剩下幾百個索賠，基本上可以完全出售該東西。然而，正是由於這些法律環境，其中一些仍然存在一些波動性。所以這確實是最大的推動因素——實際上幾乎是全部——只是颶風艾爾瑪。

Is there any concern or should we be watching for any potential reinstatement premiums related to (inaudible) if it creeps into certain layers?

如果它蔓延到某些層，是否有任何擔憂或我們應該關注與（聽不清楚）相關的任何潛在的恢復保費？

Yes. We've actually already included that in the latest estimate there as far as when we indicated the -- we anticipated about $57 million for (inaudible) -- type of stuff. That included kind of the retention and then plus reinstatement premiums.

是的。實際上，當我們指出（我們預計（聽不清楚））此類內容的成本約為 5700 萬美元時，我們已經將其納入最新的估計中。這包括保留，然後加上恢復保費。

And then so -- also, are there any potential for unrelated claim management fees related to the hurricanes that become -- more in the fourth quarter?

那麼，與颶風相關的無關索賠管理費是否有可能在第四季度變得更多？

Say again -- can you repeat that? The claim management fees --

再說一次——你能重複一遍嗎？理賠管理費--

Sometimes the other income includes revenues and gained off of fee management claims, essentially you're doing it for the reinsurers -- that can be a little bit of an offset. Is there anything in there potentially for the fourth quarter?

有時，其他收入包括收入和從費用管理索賠中獲得的收入，本質上你是為再保險公司做的——這可能是一點點抵消。第四季有什麼可能的嗎？

Yes. Paul. Good question on that. I mean there could be some, but it's not going to be material.

是的。保羅.很好的問題。我的意思是可能有一些，但不會是實質的。

(Operator Instructions) This concludes our question-and-answer session. I would like to turn the conference back over for any closing remarks.

（操作員說明）我們的問答環節到此結束。我想將會議轉回進行閉幕式。

Thank you again for joining the call today. We hope everyone has a great afternoon.

再次感謝您今天加入通話。我們希望每個人都有一個愉快的下午。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。