Aspira Women's Health Inc.
Q3 2015 Earnings Call Transcript

Published: 22 Oct 2015

[Operator:]

Good morning, and welcome to the Allied World Assurance Third Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Sarah Doran, Senior Vice President of Investor Relations, and Treasurer. Please go ahead.

[Sarah Doran:]

Thanks, Allison. Good morning, and welcome to Allied World's discussion of our third quarter 2015 results. Hopefully all of you have seen our press release, 10-Q, financial supplement, and investment supplement which released last night after the market closed. All of these materials can be found on our Web site at www.awac.com under the Investor Relations section. Our speakers this morning are Scott Carmilani, Allied World's President and CEO; Tom Bradley, Chief Financial Officer; Marshall Grossack, Chief Actuary; and John Gauthier, Chief Investment Officer. They will discuss the financial results of our business, and the current market environment. Before I turn over to Scott, I'd like to note that our presentation today may include forward-looking statements within the meaning of the U.S. federal securities laws. The company cautions investors that any forward-looking statement involves risks and uncertainties, many of which are outside our control and is not a guarantee of future performance. Actual results may differ materially from those projected in the forward-looking statements due to a variety of factors. These factors are described in the company's filings with the SEC. We're not obligated to and do not undertake any obligation to update or revise forward-looking statements which speak only as of the date on which they are made. Also, in our remarks and responses to questions, we may mention some non-GAAP financial measures within the meaning of U.S. federal securities laws. Reconciliations are included in our recent earnings press release and financial supplement. And now, Scott Carmilani.

[Scott Carmilani:]

Thank you, Sarah, and good morning everyone. This quarter, Allied World generated an operating income of $51 million or $0.55 per diluted share, generating a combined ratio of 95.8%. In the quarter, we booked an estimated 28.9 million for a cat loss, which is net of expected reinstatement premiums and our taxes. It's from a big explosion in the Port of Tianjin, China. This is a very large loss to that city, estimates coming out in the range of 3 billion to 3.5 billion for an insured exposure due to the damage of an area of around four kilometers in and around that port. Our estimate is based on individuals' treaties that we expect will have some exposure, and those limits that we have on those treaties. And there's of course some direct property exposures we may have in our insurance portfolio. Except for this event, we had a rather mild or quite cat experience for the quarter, and for that matter, this whole year. We are way below our expected losses, and planned reserve estimates for 2015. Our net earned premiums increased by over 20% for the quarter to 651 million as we continue to grow from the execution of our business plans in the areas and ways we see less volatile, including the additions from our primary business acquired earlier this year in Asia. Our gross premiums grew at a slower pace, 7% for the quarter or 754 million. The global markets portfolio more than doubled due to the effects of that new Asian business that we acquired on the primary side. North American business is actually down a point on gross premiums overall, but it's still doing well on a year-to-date basis. The reinsurance segment declined a further 9% for the quarter, as it has throughout the year of 2015. The declines reflect a shift towards lower volatility business in this current rate and market environment, complemented with what I think is better and more appropriate reinsurance buying, and uses thereof, also due to market conditions. We have certainly been reducing our underperforming lines in a couple of specific industries and classes, where I think it's prudent to do so today. While we are still growing in some areas of primary specialty as we see more attractive. The rate environment remains a challenge at this stage in the market cycle and at this point in the year. I think the ups and downs from line-to-line and within the business segments, while a mixed bag, really give some insight to the picture and challenges the industry is facing today. Speaking specifically about the rate environment, property rates are down really across the board and around the globe. This quarter and on a year-to-date basis, double digits. Although at the low end of double digits makes it not only hard to grow in this business, but probably not wise. And if you look at property as an individual produce line, our business is down by more than the declines that we are seeing just in rate, as we dispose with some of our exposures, in addition to better matching our rate for risk across the portfolio. Casualty is all over the place, and net-net we are flat to up [technical difficulty].

[Operator:]

Pardon me, this is the operator. Please stand by while we reconnect our speaker. Thank you for standing by, ladies and gentlemen. Ms. Doran, please continue. Sarah Doran Sure, sorry about that. I think we were just in the process of moving over to Tom Bradley's portion of the script, so we'll put our CFO back on the line.

[Tom Bradley:]

Okay. Thanks, Sarah, and good morning everyone. This quarter, Allied World posted a net loss of $0.57 per diluted share or $51.6 million. Our results were impacted by the net realized investment losses, which were largely due to the performance of our equity portfolio. As you know, our adoption of trading accounting on the investment portfolio is different from that of most of our peers, and means that mark-to-market gains and losses flow through the income statement, not AOCI. This quarter, that mark-to-market loss amounted to $77.8 million. While our investment portfolio lost by 80 basis points during the quarter, that's returned positively for the first nine months of the year, gaining 50 basis points. John will give further color on this in a few minutes. The company also generated underwriting income of 28 million this quarter, compared to 45 million in the prior year quarter. Scott mentioned the Tianjin loss, let me provide some details. We booked a gross loss of 35.5 million, which was split 32.5 million for the reinsurance segment, two and three quarters million for North America, and a quarter million from our global markets insurance segment. These amounts are within our expectations for the event, given the information we have from our assessment of the individual context and treaties in the effective areas, reviewing various modeling scenarios, and current industry loss estimates. The reinsurance segment also recorded the $6.6 million of reinstatement premiums, bringing the net loss on the event to 28.9 million on a pretax basis. This compares to 29.8 million of cat losses from the last year quarter from Hurricane Odile, Windstorm Ela, and PCS45 were 28.1 million net of reinstatement premiums and pretax. The expense ratio for the quarter is 31.7%, which is down from last quarter, and two points higher than the prior year quarter. The acquisition ratio was the main driver of the increase as compared to last year. While acquisition costs are up in all three segments, the increase is primarily driven by the change in the mix of business due to the acquired Asian operations. This business has a higher acquisition ratio, particularly in the retail and affinity businesses, but much of this is offset by a lower loss ratio. Also as mentioned last quarter, the amortization of the value of business acquired from the recent acquisitions or VOBA is included in the acquisition ratio, and accounts for 50 basis points of the increase over last year. That will continue for a couple of quarter, but grade down as the unearned premium is earned out. The G&A component of the expense ratio was flat compared to the prior year even with the on-boarding of the acquired Asian operations. The G&A expense has benefited from a reduction in the stock comp expense due to reduced share price in the quarter. Operating cash flow remained strong at 591 million for the first nine months of the year, compared to 670 million in the first nine months of '14. We did not repurchase any common shares during the quarter. As you recall, we repurchased 4.8 million shares totaling almost $200 million during the second quarter. Year-to-date, we have repurchased over 245 million of our stock as compared to 175 million for all of 2014. Given that, while we may consider restarting our share repurchases during the fourth quarter, we will more likely do so in the first quarter of 2016. We have 173 million of remaining repurchase authorization through May of 2016. We ended the quarter with shareholders' equity of 3.6 billion, down 69 [ph] million from last quarter. Our total capital is 4.4 billion with financial leverage of 18.8%, and net premium leverage of 0.68 times. With that, I will turn the call over to our Chief Actuary, Marshall Grossack.

[Marshall Grossack:]

Thanks, Tom. Our reported loss ratio for third quarter of 2015 was 64.1%. This includes 1.3 points or 8.6 million of net benefit from reserve releases and 5.5 points of adverse impact from catastrophes for the quarter. The current accident year loss ratio excluding these items was 59.9% for the quarter, and this compares favorably to the 65.2% in the third quarter of 2014. Breaking down the 8.6 million of positive reserve development, all three segments contributed to it with reinsurance contributing 4.7 million, Global Markets 2.4 million, and North American Insurance 1.5 million. North American Insurance had net favorable development of 1.5 million, which has decreased compared to the prior year's quarter of 16.1 million. This decrease was driven primarily by strengthening in the causality line of 12.3 million, much of which is our U.S. primary causality business. We have seen heightened frequency in this line for the past few quarters, and we are working to address this by non-renewing subsections of the book as well as structural changes. While we expect our re-underwriting process to continue, we are seeing continued positive rate for this line, 7.9% in 2014 and 7.2% year-to-date for 2015. Although our reserve position for the North America healthcare medical malpractice was unchanged in the third quarter, we did see a slight addition to the healthcare management liability line. While we are encouraged with this quarter's results, we believe that there remains potential for volatility in our healthcare reserves. Business continues to be a large focus of ours. Our total healthcare premiums were down again this quarter, almost 10% as compared to the prior year quarter, and over 80% as compared to two years ago. Turning to Global Markets, net favorable development of 2.4 million was also lower than the 12.6 million in the prior year quarter, and was driven largely by 6.3 million of reserves strengthening due to claims activity in our trade credit book. This had a 5.7 point impact on the global markets loss ratio. Market conditions in this line continue to be difficult, driven by the deteriorating commodity prices. We continue to take underwriting actions on the book such as including credit and collateral monitoring as well as via portfolio construction, but given the uncertainty in emerging markets where our trade credit line has some exposure, there remains potential for volatility in line. As of the end of the quarter, our reserve position sits at 3.5% over the midpoint of our actuarial range, which compares to 3.6% in the prior quarter. Let me now turn the call over to John Gauthier, our Chief Investment Officer, to discuss our investment highlights for the quarter. John? John Gauthier Thank you, Marshall, and good morning everyone. Allied World's investment portfolio was down 77 basis points for the quarter, losing 68 million on a total return basis. During the quarter, net investment income grew to 46 million, a 5% increase in the prior year quarter and almost a 7% increase in the second quarter this year. Year-to-date, our portfolio has returned positively with a total return of 50 basis points of 44.2 million. The return consists of investment income of 133 million, and realized and unrealized losses of 88 million. Of our non-core portfolio, our hedge fund private equity, bank loan high yield, and securitized credit portfolios have been meaningfully positive contributors year-to-date. For additional context on the quarter, it's important to note that risk assets traded down across the globe. Investment grade credit spreads widened by 23 basis points during the quarter, while high yield spread widened 154 basis points leading to a negative 5% return for the broad high yield market. Global equity markets also declined with the S&P down over 6%, Euro stocks down 9%, and the Nikkei and Hang Seng both down double digits. As you all know, market volatility have continued to persist into the fourth quarter given the concerns about oil, the timing of the fed, as well as the growth in China and globally. For Allied World specifically, investment results were largely affected by the mark-to-market losses within our $660 million globally-focused equity portfolio, driving the majority of our total net realized investment losses. For the past few years, Allied World has had a sizeable allocation in equities as much as 10% of our portfolio. Excuse me. Our equity portfolio has been a meaningful contributor for total return for many quarters, but was a distracter in this past quarter. Although we've earned approximately half of the equity mark-to-market loss back in the fourth quarter, given the increased volatility in outlooks for growth and earnings, we have trimmed some of our positions to better allocate risk in our portfolio. The asset class represented 7.4% of our portfolio at the end of the third quarter, and is lower than that today. Turning to Allied World Financial Services, we finished the quarter with approximately 124 million invested in minority stakes with our partners. These strategies generated [technical difficulty].

[Operator:]

Pardon me, ladies and gentlemen. Please stand by while we reconnect our speaker line. We apologize for the inconvenience. Ms. Doran, please continue.

[Sarah Doran:]

Sure. Thanks, Allison. I'm just going to hand the call back to John Gauthier, who was just going through some of his closing remarks.

[John Gauthier:]

Yes. Turning to Allied World Financial Services, we have 124 million invested in minority stakes with our partners at the end of the quarter. Those strategies generated 1.8 million of net investment income. This quarter, you saw a modest increase in duration up to 2.2, which we have moved up earlier in the quarter, as compared to two-year duration in the prior year quarter. We continue to be short versus our peers, but we believe this positions us well in the current environment. And I'll turn it back to Scott.

[Scott Carmilani:]

Thanks, John. Let me close by saying, despite the minor cat loss and some investment losses in the quarter, I'm still relatively pleased with the current year end earning results and the actions we've been taking in the current environment. The stronger underwriting current year performance reflects the actions we've been taking on the businesses that we have, and that we've had some trouble with, and volatility with earlier -- in the earlier years. And we will continue to work to improve our overall portfolio as we move forward, and create value for our shareholders as we move on. And with that, I'm going to open it up to questions for the group. Thanks.

[Operator:]

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Amit Kumar from Macquarie. Please go ahead.

[Amit Kumar:]

Hi, thanks and good morning. Two, I guess, unrelated questions, maybe for Marshall. Going back to our -- the usual topic, our results; one of the question I was getting last night was how comfortable are you with, I guess, the 2015 loss picks of the reserves in the North American insurance segment based on the noise we have seen in, I guess 2012, 2013, and 2014?

[Marshall Grossack:]

Yes, I mean -- if we see losses emerging we'll react to them. We clearly haven't seen any losses hitting our 2015 book yet, so there's really nothing to react to. We have, as Scott mentioned, in some of the lines have been problematic here. We have taken underwriting actions and gotten some rate. So we're hopeful at this point that that has put it to bed.

[Scott Carmilani:]

Amit, considering the '12 and '13 years and the experience, I think it's prudent for us to have a conservative view in the current period, and while we've had relatively benign actual known loss events, we are taking a conservative position right now. And that's built into the loss picks.

[Amit Kumar:]

Sorry, go ahead.

[Scott Carmilani:]

And that's built into the loss picks.

[Amit Kumar:]

I guess people are wondering if there was enough, I guess, level of conservatism for 2015 based on the past several quarters of a noise we have seen, but perhaps you can take this off line. The other quick question I had was, do you have any exposure I guess to the -- how do I say this, the diesel engine software issue? Do you have any exposure to that?

[Scott Carmilani:]

Sort of, we do have a high access professional liability [technical difficulty].

[Operator:]

Ladies and gentlemen, we've reconnected our speakers. Please continue.

[Sarah Doran:]

Great. I think we had just heard from Chuck Sebaski on his question, and Marshall was beginning to answer that. So, we will pick up there.

[Marshall Grossack:]

Yes, so sorry about that, a little awkward. But -- so I'll just start from the beginning, I guess, the question was related to the fact that our overall loss ratio pick for 2015. And I mean, property does come in at a slightly lower pick at least on an attritional level than our casualty line. So, all else being equal, you might expect a little bit higher loss ratio. But there's a lot else besides the property in 2015 that we view as attractive business. And then, you need to think about some of the older years. We have some events there that we viewed as one-time events, and that kind of inflated the loss ratio, and in the couple of those years, things that we've cleaned up, and don't expect those going forward. So when we put together our loss ratio picks for 2015, we're doing -- and in for 2016, right now as a matter fact, we do a highly detailed analysis of trends, frequency and severity trends, where rates have gone, and what our mix of business is going to be like going forward.

[Charles Sebaski:]

I guess what I'm trying to get to understand is, if I think of the mix shifts with decreasing property, if I think of the reserve development in the first nine months of this year relative to last year being net favorable, but less conceptually and some recent year strengthening, and then the general pricing pressure in the market, is it wrong to think that 2016 loss picks would just be net higher than 2015 from these multitude of changes? Should there not be just general deterioration in the current '16 loss pick?

[Marshall Grossack:]

Yes. I don't know, we generally give guidance, but I mean kind of mathematically you would think that if rates were kind of flat, and with inflation loss ratios would go up.

[Charles Sebaski:]

Okay. But I guess on the global business, obviously there's a change coming in there with the RSA integration, I guess just trying to understand -- I guess I would have thought -- I know there's change to the combined ratio, but when you think the kind of integrations going to get through, and you see that business back to underwriting profitability?

[Scott Carmilani:]

I'm not sure what do you mean by that. I mean we're well through integration, the company…

[Charles Sebaski:]

All right. So, I look at the business, and it's you know, 111%-112% combined ratio in the quarter, is that a reasonable amount to expect the business to continue? There wasn't much cat activity, is that going to run -- is the run rate of global markets going to be at an underwriting loss?

[Scott Carmilani:]

Yes, I think that the 111 in global markets for the quarter does include probably three points for the VOBA amortization I mentioned. It does include the trade credit losses, which Marshall discussed earlier. And it's still -- that business we've made investments, both in Asia and in London, still has an expense ratio that we'll rationalize down going forward. So [technical difficulty].

[Charles Sebaski:]

That's what I was kind of getting to is, as the expense ratio come down and how that comes through, and kind of what I meant by the integration. That's normalization I guess.

[Scott Carmilani:]

Yes. So it's one of them just Asia. It's partially Asia, but it's also partial investments we've made in the London business in terms of bringing on new products and teams as they ramp up.

[Marshall Grossack:]

Real estate.

[Scott Carmilani:]

Yes, so don't see the 111 as a run rate for that business, and we do expect that that business to run profitability over the intermediate term.

[Charles Sebaski:]

Okay. And then I guess finally, as we're getting closer to year end, and reinsurance discussions are well underway, as you see pricing going on for 1/1 renewals, what's your guys' thoughts on capital deployment into that business going forward at current pricing details? Is it something that -- is it still attractive to deploy the same levels of capital you've done in '14 and '15, or is it somewhere where it's pulled back the reins a bit more?

[Scott Carmilani:]

For catastrophe business?

[Charles Sebaski:]

For catastrophe business on the 1/1 renewals.

[Scott Carmilani:]

Yes, we'll be looking to reduce volatility. Uncertain as to what that means at this stage.

[Marshall Grossack:]

But we would expect to have lower peak PMLs next year than this year, but how we get there is not baked yet.

[Charles Sebaski:]

Okay. Thank you very much for the answers.

[Operator:]

Our next question comes from Bob Glasspiegel from Janney. Please go ahead.

[Bob Glasspiegel:]

Good morning there, Allied World. The casualty frequency increase, which you highlighted in the 10-Q in your comments, Scott, any more color on what specifically is driving this? Is it an industry issue or something company-specific?

[Scott Carmilani:]

Yes, I could give you some color. And thanks for the question, really. It's been zeroed down to a couple of habitational risk on the primary casualty side, and some noise on the older accounts that were adjusted in more recent times in the DBA book, as some of those contracts wound off, and the U.S. pulled out of certain places. But they've been fixed on the DBA side.

[Bob Glasspiegel:]

Thank you.

[Scott Carmilani:]

And primary casualty side had some issues with a few habitational type real estate accounts.

[Bob Glasspiegel:]

Got it. On trade credit, is there a specific currency or commodity that stabilization will be most helpful to get the results stabilized?

[Scott Carmilani:]

I think emerging markets in general, particularly Latin America, as that stabilizes will help going forward, and we're also taking some other corrective actions in the portfolio in terms of liquid credit. I was saying including the length of time credit is exposed.

[Bob Glasspiegel:]

Length of time credit is exposed, I'm sorry. I'm not following that one.

[Scott Carmilani:]

Doing more short-term deals.

[Bob Glasspiegel:]

I got you.

[Scott Carmilani:]

Where currency fluctuation isn't an issue.

[Bob Glasspiegel:]

I got you. RSA, now that you've had some time to absorb it, any positive/negative surprises, or changes in how you are going to integrate that?

[Scott Carmilani:]

No, I'd say there has been not much that surprises us. It's all going as according to the plan.

[Bob Glasspiegel:]

Thank you, Scott.

[Operator:]

Our next question comes from Ian Gutterman from BAM Funds. Please go ahead.

[Ian Gutterman:]

Hi, thank you. Before my questions, Scott, can I make a request maybe? There was a lot of -- your comments that you -– where the call cut out, you were still talking about pricing. So I think a lot of your comments got lost, and I think some of Tom's. Is it possible, maybe after the call, you can put it on a website or put on AK with just the published scripts so we can see what we missed?

[Sarah Doran:]

I think we prefer not to do that, Ian. We're happy to address questions, and take that offline if you want to follow-you, or do it while we're on right now, but…

[Ian Gutterman:]

Okay. It's just hard to know what Scott talked about that we didn't hear. Do you know what I mean?

[Scott Carmilani:]

Well, we don't know where we got cut off either, but…

[Ian Gutterman:]

Okay.

[Sarah Doran:]

Yes, maybe you could tell us where we got cut off either, but…

[Scott Carmilani:]

If you know where I cut off, I can finish it.

[Ian Gutterman:]

Yes. I mean Scott was talking about casualty pricing, and that was the last I heard.

[Scott Carmilani:]

Okay. Well, you didn't miss much then. So I have about a half a page of notes here, I can re-emphasize this. It's DBA and primary casualty rates are up double digits, and need to be. And Mr. Glasspiegel pointed to that a second ago. Excess casualty rates, not so much, but it's still up over a point quarter-versus-quarter. Professional liability, I'd said was up and down by size and shape, it all depends by line of the business, and the size of insured, which is I think is a reflection of market. Net-net, we're up 1.5% on rate on a quarter, but I can't even tell you what that means, because there's a lot of moving parts to that. And I said –- lastly, I said, which I think, if you didn't catch, I want to make sure everyone hears, that I'm still confident that the marketplace will catch up on healthcare, and not only be increasing rates, but rein in some of the overblown coverages that are out there. So I think that needs to happen, and I think that we're starting to see that a little bit, but not demonstrably, at least in the quarter. And I think programs are seeing some good positive rate movement wherever they need to be, or wherever it's necessary without much trouble, and that's where I ended.

[Ian Gutterman:]

Perfect. That's helpful. Okay, so a few things. First, John, you mentioned, in October about half the mark-to-market came back on the equity. It looks like credit spreads have improved a lot. So, is it fair to assume something similar on the credit side or not as much?

[John Gauthier:]

On the investment grade credit, yes, right. And we don't have a lot of direct high yield exposure. So we didn't have the negative impact in the third quarter and haven't had a positive return in the fourth quarter, but you're seeing some positive movement in the mark-to-market of the investment grade portfolio.

[Ian Gutterman:]

Got it. Okay, great. On Tianjin, is there anything where you can tell us about sort of how much -- I know it should be one policy-by-policy, but how much limit is left on may be not across the board but at least on some of the ones where they are more likely to have losses? Is it quota share? Is it XOL, sort of a little bit more color on what exactly the exposure is and why you think you think you got it right? We are not going to have to readdress it?

[Scott Carmilani:]

What I'll tell you is we've have booked for the quarter the net near the high end of our range of where we expect it to be.

[Ian Gutterman:]

Got it. Okay. I assume it is mostly XOL type treaty, so it just would have remaining limit that is left on those layers?

[Scott Carmilani:]

Yes. It is a very difficult loss to adjust given the situation there in both from a government and a logistic standpoint, but this is our best estimate for now.

[Ian Gutterman:]

Got it. Okay. I just wanted to make sure that we understood that. Okay, great. On the development, there is one I don't think has come out yet is on reinsurance, you've had a fair amount of releases out of the property segment for quite a number of quarters and that largely went away this quarter, is there anything unusual there?

[Marshall Grossack:]

Nothing really unusual, I mean you should keep in mind property is a relatively short tail line. So when we are talking about prior year releases, I think you'll see more typically in the first and second quarter than you would see in the third and fourth quarter.

[Scott Carmilani:]

As rest of the premium earns out for the current year, we will -- we are looking at that next year. I did made commentary that from a planned and expected basis, our cat losses year-to-date this year are well below what we planned for.

[Ian Gutterman:]

Right. And so that would show up then as obviously '16 releases as opposed to '15, right?

[Scott Carmilani:]

There will be some current year release, but yes in terms of prior year…

[Ian Gutterman:]

Current year release too, okay.

[Scott Carmilani:]

Yes.

[Ian Gutterman:]

Got it. And then just in general can you remind us, Marshall, how you just sort of what the process is I guess? Do you -- or most of the updates we have seen this year, are they sort of actual versus expect deviation? Is it sort of Q1 we do a big review on the healthcare book; in Q2, we do a big one on professional lines or whatever it is, and that leads to thing? Sort of like what are triggers I guess that have led to the volatility in certain lines during the year?

[Marshall Grossack:]

Yes. I mean it depends a lot by line of business, but if we are talking about the lines that are a little more frequency-driven just as the healthcare or primary casualty, some of the lines where we have been seeing some issues, there it is exactly as you said, kind of an actual versus expected type of analysis. So we…

[Scott Carmilani:]

Every quarter.

[Marshall Grossack:]

Every quarter. So when we see the actual losses coming in higher than expected, that's more likely we will be increasing our ultimate projections, and conversely, maybe going the other way if things coming lower. For the longer tail casualty line, so it's our excess casualty lines and some of the lines with high attachments out of Bermuda or out of London, there not so much, we actually go in and do a claim-by-claim analysis, and we are also very slow to recognize any favorable moves. So we may wait three, four, or five years before we can do anything taking down.

[Ian Gutterman:]

Right. Okay, okay, but the year-to-date -- okay, go ahead. Yes.

[Scott Carmilani:]

Again, that's every quarter. It's not like we are just doing healthcare in the first half and professional liability in the second half.

[Ian Gutterman:]

So -- I am sorry. Go ahead. Sorry.

[Marshall Grossack:]

I will just kind of reiterate it. It is kind of a total ground-up review quarter of all lines of business, and it's not like any business gets -- it's not like we have a healthcare quarter or something like that.

[Ian Gutterman:]

Okay. That's kind of what I was wondering. So Q4 isn't necessarily different. I mean obviously it's year end, but aside from a being year end, it's not a different deeper process than the other quarters?

[Marshall Grossack:]

No, not at all.

[Ian Gutterman:]

Okay. Got it. Okay, great. And then just maybe last thing is, I know you said earlier, Tom, about repurchase probably being more of a Q1 thing, but how sensitive is that to the stock price with the stock down again? Does that make you more likely to start earlier?

[Tom Bradley:]

That's obviously a factor, but we'll continue to assess it daily.

[Ian Gutterman:]

Got it. Okay, great. Thank you.

[Operator:]

[Operator Instructions] And having no further questions, this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Carmilani for any closing remarks.

[Scott Carmilani:]

I just want to say thank you very much for everyone's patience. Sorry for the technical difficulties. We are not really sure what happened or how it happened, but we will make sure -- try to let it not happen again. Thank you, and have a good day.

[Operator:]

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