Cincinnati Financial Q3 2023 Earnings Call Transcript

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October 27, 2023

Key Takeaways

  • Cincinnati reported a 94.4% combined ratio in Q3, a 9.5-point improvement year-over-year and a 3.4-point improvement ex-catastrophe, marking continued underwriting momentum.
  • Consolidated net written premiums grew 12% in Q3—driven by significant price increases and higher insured exposures—with personal lines up 29% on double-digit auto and high-single-digit homeowners rate hikes.
  • The quarter showed a net loss of $99 million, including a $362 million after-tax equity fair value decline, though the equity portfolio still carries $5.6 billion of net appreciated value.
  • Despite investment income rising 17% via higher bond interest, large unrealized valuation losses of $463 million (equity) and $369 million (bonds) drove a book value decline of $2.61 per share and a negative 2.6% VCR.
  • The company increased its IBNR reserves by 3.0 points to account for ongoing loss-cost uncertainty, reflecting a prudent reserve stance amid inflationary trends.
AI Generated. May Contain Errors.
Earnings Conference Call
Cincinnati Financial Q3 2023
00:00 / 00:00

There are 10 speakers on the call.

Operator

Good morning, and welcome to the Cincinnati Financial Corporation Third Quarter 2023 Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Dennis McDaniel, Investor Relations Officer.

Operator

Please go ahead.

Speaker 1

Hello. This is Dennis McDaniel with Cincinnati Financial. Thank you for joining us for our Q3 2023 earnings conference call. Late yesterday, we issued a news release on our results along with our supplemental financial package, including our quarter end investment portfolio. To find copies of any of these documents, please visit our investor website, cinfen.com/investors.

Speaker 1

The shortest route to the information is the quarterly results link in the navigation menu on the far left. On this call, You'll first hear from Chairman and Chief Executive Officer, Steve Johnston and then from Executive Vice President and Chief Financial Officer, Mike Sewell. After their prepared remarks, investors participating on the call may ask questions. At that time, some responses may be made by others in the room with us, including President, Steve Spray Chief Investment Officer, Steve Saloria and Cincinnati Insurance's Chief Claims Officer, Mark Shambaugh and Senior Vice President of Corporate Finance, Theresa Hopper. First, please note that some of the matters we discuss today are forward looking.

Speaker 1

These forward looking statements involve certain risks and uncertainties. With respect to these risks and uncertainties, We direct your attention to our news release and to our various filings with the SEC. Also, a reconciliation of non GAAP measures Now, I'll turn over the call to Steve.

Speaker 2

Good morning, and thank you for joining us today to hear more about our results. We are pleased with our operating performance in the Q3 as we again saw improved underwriting ratios for almost every major line of business compared with the first half of this year. The net loss of $99,000,000 for the Q3 of 2023 included recognition of $362,000,000 on an after tax basis for the reduction of fair value of equity securities still held. We continue to believe the value of our equity portfolio will increase over the long term. As of September 30, it had 5.6 $1,000,000,000 in appreciated value.

Speaker 2

It decreased 8% during the Q3, but has increased 2% since the end of last year. Non GAAP operating income of $261,000,000 for the Q3 more than doubled last year's $116,000,000 including a decrease of catastrophe losses of $58,000,000 on an after tax basis. The 94.4% 3rd quarter 2023 propertycasualty combined ratio was 9.5 percentage points better In the Q3 of last year, including a decrease of 4.8 points for catastrophe losses. Our 2023 ex cataxi gear combined ratios are also better than 22, improving 3.4 percentage points for the Q3 and 1.7 points on a 9 month basis. Similar to last quarter, we also see signs of positive momentum in operating performance.

Speaker 2

Price and segmentation by risk and significant average price increases contributed to the increase in our underlying profit, combined with risk selection and other efforts to address elevated inflation effects on incurred losses. On a current accident year basis, measured at September 30, before catastrophe losses, our 2023 Consolidated property casualty loss and loss expense ratio improved from 2022 by 4.3 percentage points on a case incurred Basis. For the same time period, we increased the incurred but not reported or IBNR component of the ratio by 3.0 points as we continue to recognize uncertainty regarding ultimate losses, remaining prudent in our reserve estimates until longer term loss cost trends become more clear. Agencies appointed by Cincinnati Insurance are producing profitable business for us, working with associates who provide outstanding service to agents and their clients. Our underwriters are working diligently to retain profitable accounts while managing ones that we determine have inadequate pricing.

Speaker 2

They are also careful in selecting risks and pricing new business policies. Estimated average renewal price increases for the 3rd quarter continued at a healthy pace. Our Commercial Lines segment, again, averaged near the low end of the high single digit percentage range, While our excess and surplus lines insurance segment continued in the high single digit range, personal lines for the 3rd quarter included auto rising to the low double digit range and homeowner rising to the low end of the high single digit range. We reported 12% growth in consolidated propertycasualty net written premiums for the quarter. That included an 11% increase in 3rd quarter renewal written premiums, reflecting higher levels of insured exposures in addition to price increases.

Speaker 2

Considering operating performance by insurance segment, I'll comment on premium growth and how profitability is improving compared to a year ago. Commercial lines grew net written premiums Together reduced the Q3 2023 growth rate for total commercial lines by 2 percentage points. The commercial lines combined ratio improved by 3.8 percentage points despite an increase of 2.2 points from higher catastrophe losses. Personal lines grew net written premiums 29% With growth in middle market accounts in addition to Cincinnati Private Client Business for our agency's high net worth clients. The combined ratio was 4.6 percentage points better than last year, including 2.0 points for lower catastrophe losses.

Speaker 2

Excess and Surplus Lines improved its combined ratio by 3.4 percentage points and continued to grow profitably with net written premiums up 6%. Both Cincinnati Re and Cincinnati Global again enhanced our overall combined ratio and continue to demonstrate risk diversification benefits. Cincinnati REIT's combined ratio for the Q3 of 2023 was an excellent 81.0 percent with net written premiums essentially matching last year's Q3. Casualty premiums again decreased as we saw fewer attractive opportunities in certain segments of the market. Property premiums increased 24%, largely due to higher pricing, while specialty premiums increased 31% due to attractive opportunities in pricing.

Speaker 2

Cincinnati Global's combined ratio was an excellent 79.5% while reporting strong growth with net written premiums up 21%. Our life insurance subsidiary Again performed well with Q3 2023 net income up 9% and term life insurance earned premiums growing 2%. I'll conclude with our primary measure of long term financial performance, the value creation ratio. While our VCR on a 9 month basis is 4.4%, Our Q3 2023 VCR was negative 2.6%. Net income before investment gains or losses for the quarter Contributed positive 2.4 percent.

Speaker 2

Lower valuation of our investment portfolio and other items contributed negative 5.0 percent. Next, Chief Financial Officer, Mike Sewell, will add his commentary about our financial performance.

Speaker 3

Thank you, Steve, and thanks to all of you for joining us today. Investment income again contributed nicely to improved operating results, Growing 17% for the Q3 of 2023 compared with the Q3 of 2022. Dividend income was up 5% for the quarter, in part due to net equity security purchases For the 1st 9 months of 2023, that totaled $89,000,000 Bond interest income continued to show strong growth, Up 19% for the Q3 of this year, we added more fixed maturity securities to our investment portfolio With net purchases totaling just over $1,000,000,000 for the 1st 9 months of the year, The 3rd quarter pre tax average yield of 4.44 percent for the fixed maturity portfolio rose 36 basis points compared with last year. The average pretax yield for the total Of purchased taxable and tax exempt bonds during the Q3 of 2023 was 6.4%. Valuation changes in aggregate for the Q3 of 2023 were unfavorable for both our equity and bond portfolios.

Speaker 3

Before tax effects, the net loss was $463,000,000 for the equity portfolio and $369,000,000 for the bond portfolio. At the end of the quarter, Total investment portfolio net appreciated value was approximately $4,400,000,000 The equity portfolio was in a net gain position of $5,600,000,000 while the fixed maturity portfolio was in a net loss position of $1,200,000,000 Cash flow continued to boost investment income, Adding to the benefit of rising bond yields, cash flow from operating activities for the 1st 9 months of 2023 was nearly $1,500,000,000 up $54,000,000 from a year ago. We always strive for our expense management efforts to strike an appropriate balance between controlling expenses and making strategic investments in our business. The Q3 2023 property casualty underwriting expense ratio was 0.6 percentage points higher than last year, primarily due to an increase In associate and travel related expenses, on a 9 month basis, it was 0.4 points lower. Moving on to loss reserves.

Speaker 3

Our approach consistently aims for net amounts in the upper half of the actuarially estimated range of net loss and loss expense reserves. As we do each quarter, We consider new information such as paid losses and case reserves and then updated estimated ultimate losses and losses Expenses by accident year and line of business. For the 1st 3 quarters of 2023, Our net addition to property casualty loss and loss expense reserves was $655,000,000 including $53,000,000 of property casualty net favorable reserve development on prior accident years that benefited the combined ratio by 2.7 percentage points. On an all lines basis by accident year, net reserve development For the 1st 9 months of 2023 included favorable $123,000,000 for 20 22, $7,000,000 for 2021, dollars 72,000,000 for 2020 $11,000,000 in aggregate for accident years prior to 2020. In terms of capital management, we also have a consistent long term approach.

Speaker 3

During the Q3 of 2023, we paid $115,000,000 in dividends to shareholders. We did not repurchase any shares. Our assessment of our financial flexibility and our financial strength is that both are in excellent condition. As usual, I'll conclude with a summary of 3rd quarter contributions To book value per share, they represent the main drivers of our value creation ratio. Property casualty underwriting increased Book value by $0.56 Life insurance operations increased book value 0 $0.73 Investment income other than life insurance and net of non insurance items added 1 $0.04 Net investment gains and losses for the fixed income portfolio decreased book value by $1.86 Net investment gains and losses for the equity portfolio decreased book value by $2.33 and We declared $0.75 per share in dividends to shareholders.

Speaker 3

The net effect was a book value decrease of 2 point and $0.61 per share during the Q3 to $67.72 per share. Now I'll turn the call back over to Steve.

Speaker 2

Thanks, Mike. I'm proud of the way our associates continue to help the independent agents Cincinnati Insurance navigate this challenging market. We're sticking to our fundamentals, listening, offering solutions and building strong relationships. Because our field associates live in the communities our agents serve, we see and respond quickly to market pressures most impacting them. We are then able to find solutions that contribute to our agent success, leading to long term shareholder value.

Speaker 2

As a reminder, With Mike and me today are Steve Spray, Steve Saloria, Mark Schambeau and Teresa Hopper. Gary, please open the call for questions.

Operator

We will now begin the question and answer Our first question is from Greg Peters with Raymond James. Please go ahead.

Speaker 4

Well, good morning, everyone.

Speaker 3

Good morning, Vic.

Speaker 5

Can we start off with in your press release, you've talked about the 193 new agent appointments this year. How long does it take them once they've been pointed to get up to some minimum levels of premium On a per agent basis or put it another way, what sort of the production targets you have in mind when you appoint the new agents? And

Speaker 6

Can you just

Speaker 5

clarify the comments of the agents that are just doing personal lines only?

Speaker 7

Sure. Yes, Greg, this is Steve Spray. It really depends agency by agency. One thing I think As a company, we've always prided ourselves on as we do business with the best independent agents out there. And we Are very deliberate about the agencies we appoint.

Speaker 7

We spend a lot of time kind of making sure that it's a fit for both us and the agency. So when we go into a relationship, we feel pretty confident that we're aligned and That the future will bear fruit. It just depends on the size of the agency, maybe the state community. But over time, we are the number 1 or number 2 carrier as measured by premium volume In the majority of the agencies we do business with for at least 5 years or more. So that gives you a little just a little flavor Of the trajectory that we have.

Speaker 7

And so, it just depends, but we don't want to be just a consequential Inconsequential player in any agency.

Speaker 5

And the percentage of I think you called out in the press Elyse, a chunk of those were personal lines only. Was that geographically focused or can you add some color on that?

Speaker 7

Yes, sure, Greg. Sorry, you asked that. Typically, personal lines only agencies will be private client or high net worth Focused agencies to where maybe as an example, let's say in the state of California, we're not active there for commercial lines Right now, so if we make an agency appointment in California, it would be personal lines only and it would be high net worth or private client focused.

Speaker 5

Got it. All right. I guess pivoting to the commercial lines side of the business. If we look at new business trends in your commercial, it's kind of flattish the last couple And by the way, we've heard some other carriers talk about pockets of increased competition. Maybe you can give us some perspective Inside your book of commercial, where you're seeing some headwinds from competition and where you're seeing some opportunities?

Speaker 7

Yes. Again, Steve Spray, Greg. It's that new business that you're pointing to is all around Underwriting discipline and pricing segmentation and just discipline from our field underwriters On the pricing front, so it's a very competitive it's always a competitive market and it varies by state, it varies by territory on who we're competing with. But we have just over the years, our proven model of appointing the best agents, Assigning field associates to those agencies, making decisions locally, that has served us really well over the long pole. In the last 10 years, the pricing precision, the pricing segmentation, the tools that we have Have really been what's driving, quite frankly, the profitability that you see that we're producing.

Speaker 7

Our new business underwriters working with our agents out in the field are executing on that disciplined strategy. And it's put pressure candidly, it's put some pressure on the new business this year. But I can tell you Each quarter of this year as that commercial market has gotten a little more disrupted, we are seeing more and more opportunities At the underwriting terms, conditions, quality and pricing that we feel are adequate.

Speaker 5

Okay. And then I guess the final question would be on personal lines because if we look at your results For the quarter actually, you're doing pretty well in the context of how the rest of the market is And you're also reporting some substantial growth in new business written. So Maybe give us sort of an updated view on the trends you're seeing inside your personal lines business. And I'm thinking about auto and property So if you could separate the 2, that would be great.

Speaker 7

Sure. First of all, I might comment just, we're pleased And encouraged by the improvement in ex cat, actually the core loss ratio that we're seeing in personal lines as well, certainly had some pressure with inflation And with increased cat levels, but feel like we are I shouldn't say feel like, we're confident that we're getting The rate on a prospective go forward basis that's adequate. The fact that about 55% of our personal lines today Would be what we call private client, 45% roughly middle market. We think that is a key for us with our agency model in the marketplace That we can be a go to carrier for our agents on regardless of the size of the home And the way we handle claims locally, FastFair, with empathy, we think puts us in a really good position going forward On all personal lines. Yes, it's the loss ratio has been has certainly been under pressure with inflation And the increased cat activity, but we're confident in where it's heading going forward.

Speaker 7

We've seen a lot of opportunity out there. A lot of disruption in that personal lines market. Candidly, I've never seen A harder market than the personal lines market we're seeing today. And we think with our balance sheet, again, our agency strategy, The way we're approaching it, the expertise, the pricing precision, we think it's going to bode well for us in the future to grow that personal lines book.

Speaker 5

Great. Thanks for the detail.

Speaker 7

Yes, absolutely. Thank you, Greg.

Operator

The next question is from Mike Zaremski with BMO. Please go ahead.

Speaker 6

Hey, thanks. Good morning. I guess maybe going back to kind of the topic of growth and Risk selection, and maybe just sticking with commercial lines. So if I kind of just step back, Cincinnati Financial's pricing power levels are fairly similar to a number of your peers. Yet your growth rate, just overall growth rate is much lower than your historical growth rate relative The industry, which you've been talking about this about changing your appetite a bit every quarter.

Speaker 6

This isn't like a surprise. But just kind of curious like our I would have Thought it doesn't seem like you're losing business because of pricing if I'm because your pricing levels are similar to peers. So is it Or maybe I'm wrong and in just certain lines actually you're actually you're we're looking at all in rate and certain lines you actually are casualty raising a lot more than the average or Is the has your fundamental like risk selection process changed that you're just not willing to Take on certain risks or you're trying to shed certain risks and trying to just kind of see where we are in this kind of journey to whether the your historical Growth rate will get back to what used to be historically relative to the industry as if your appetite decides to change.

Speaker 7

Yes. Mike, Steve Spray again. Steve Johnston commented in his opening remarks on the net written premium Piece of commercial lines, I might start there in that we've got a 2 full point drag on commercial lines from workers' compensation and umbrella or access you could call it. Both for different reasons. Work comp about a point drag, that has been going on now for several years.

Speaker 7

Just simply The rate decreases that are being pushed through really for the industry. On Umbrella, That is deliberate. It started probably a little over a year ago here in Commercial Lines. In Certain jurisdictions, certain states, we really took aggressive Appropriate underwriting action on our umbrella book, reducing limits, maybe shedding some of that business. So that's putting the weight On the Commercial Lines growth as well.

Speaker 7

To your comment of returning to historical levels or walking away from Other business. Like I was saying before, I think we've got a winning strategy. We've got a winning model, Doing business locally with the best agents in the business face to face that has served us well For many, many years and our risk selection, our claims handling, our loss control, those things have all improved On a linear basis, since I've been here, I think 32 years ago, our pricing precision Segmentation has improved exponentially over the last 10 years To where we just didn't have those tools, say, when I was a field rep 15 years ago and the look Into each individual account that we do and price them on their own merits. So yes, our field underwriters And our renewal underwriters have those pricing precision tools that they use to where if we don't feel like we Get an adequate rate on a risk adjusted basis. We're yes, we'll walk away from an account and we'll wait it out.

Speaker 7

1st and foremost is we need And underwriting profit, we've got 11.5 years in

Speaker 2

a row

Speaker 7

now, 11 years 9 months of underwriting profit And we want to keep that rolling. I don't worry about growth over the long pole at Cincinnati Insurance Company. We are talking about agency appointments. We have plenty of runway to continue to do that. We're growing our E and S company.

Speaker 7

You see what's going on in personal lines. Well, I'm not I don't worry about growth prospects for the future.

Speaker 6

Okay. That's thorough and helpful answer. And my follow-up is, You've been deliberate in your actions to kind of increase IBNR, and You've talked about uncertainty in terms of more uncertainty in terms of the loss cost trend environment. Growth is obviously you just talked about maybe a little bit slower too. So would it be fair to characterize that Cincinnati is taking a view that loss cost trend is a bit higher on a go forward basis than it has been a year or 2 ago.

Speaker 6

Is that a fair characterization?

Speaker 2

Greg, this is Steve Johnston. And I think what we've seen was kind of a rapid acceleration Of inflation starting at the beginning of 2021, it is now in the last several months Moderated, still going up, but moderated. I think just with the way that we time Our rate increases and rolling on to the book, it takes a little while for them to actually reach all the policyholders. But the key point I think is that we are very prospective in terms of the way we look at inflation. The most important thing we can do is to look out into the prospective policy periods that we're pricing for right now, do our best to estimate The loss cost and the inflation impact on that prospective period and set the pricing right and do it on a Individual policy by policy basis, the best we can.

Speaker 2

I think we're in a good position to continue doing that.

Speaker 6

Okay. So you clearly feel it sounds like pricing is in excess of loss trend, knock on wood if everything plays out, If you don't agree

Speaker 5

with that. Yes.

Speaker 2

I would agree with that.

Speaker 6

Okay. Thank you very much.

Speaker 2

Thank you, Greg.

Operator

The next question is from Grace Carter with Bank of America. Please go ahead.

Speaker 8

Hi, everyone.

Speaker 6

Good morning, Chris.

Speaker 8

Good morning. Looking at kind of results line by line in the Commercial segment, it seemed like quite a few saw year over year But the workers' compensation line sticks out a little bit, kind of the 2nd quarter in a row where we've seen A decent bit of pressure on the underlying loss ratio. I was just curious if we could get more color on what's going on there. I mean, obviously, you all have referenced the Pricing pressure for that book, but we've also heard some other peers talk about concerns regarding medical inflation. And if you all could just give us some more color on What's happening there?

Speaker 7

Yes, great. Steve Spray. Thanks for the question. The accident year Combined ratio, loss ratio for work comp is yes, it is it's under pressure. Calendar year is still performing quite well.

Speaker 7

It is I hate to keep saying the same story, but it really is Simply just pressure downward pressure on the rates that are put out by the rating bureaus. And fortunately, I think for Cincinnati Insurance Company, we've always been conservative on the workers' compensation line. We've got tremendous expertise. We're ready to grow that Business when we think that the pricing is at an attractive level, but right now it's Again, we're doing it risk by risk and we are running new workers' compensation business. But just it's a line that as you mentioned, Medical inflation can impact it over time.

Speaker 7

I can't say that we're seeing anything out of the ordinary with The medical inflation at this point, but that line of business is definitely under pressure on

Speaker 8

And I guess, on Cincinnati Re, you all have mentioned, kind of reducing casualty premiums in that book for a couple of quarters now. And we've also heard some more players in the market start talking about concerns over casualty loss cost I mean, I was just curious if you think that there's anything particularly new going on in casualty reinsurance or If the recent comments are surprising to you all at all or and I guess next year just if you think opportunities from property, specialty, etcetera will outweigh any sort of ongoing pressure on the casualty piece of that book to allow it to inflect back to growth. Thanks.

Speaker 2

Thank you, Grace. Really good question. And I think it boils down to our model at Cincinnati REIT and that we didn't really actually form a company Cincinnati REIT. It writes on Cincinnati Insurance Paper, so there's an A plus quality there. And then it's an allocated capital model.

Speaker 2

So what we try to do is just look at every contract as it comes up. We don't Try to do things this much in property, this much in casualty, this much in specialty. Just look at each contract that becomes available to us On its own merits and if we can get the target hurdle rate that we're looking for and feel good about How it fits into our overall risk model, we'll go ahead and write that. So I would think that we will see movements In the various business lines that reflect that. I think right now, just what we're seeing is certain lines like professional liability, transactional Liability and so forth are areas where we felt that the pricing and sometimes the opportunity are not As good as they've been in the past, where we are seeing really good opportunity in the Property and Specialty So we'll just go at that contract by contract and very bullish with everything that Cincinnati is bringing to us in terms of Profitability and diversification.

Speaker 8

Thank

Operator

The next question is from Meyer Shields with KBW. Please go ahead.

Speaker 4

Great. Thanks and good morning all.

Speaker 6

Good morning, Matt. Two quick

Speaker 4

questions on personal lines. First, Is there any appreciable difference in the profitability of private clients and middle market?

Speaker 7

Meyer, Steve Spray. We don't right now, we are disclosing the difference in loss ratios For our specific book between middle market and high net worth of Private Client, but I can tell you over the long pole, The industry, private client has outperformed middle market by a pretty good margin, and We feel like we can create those same results over time as well. Not that We want to subsidize middle market. That middle market book needs to stand on its own. We've got the pricing precision there.

Speaker 7

Again, we've got the agency force. So we expect both segments to be profitable, but we do think over the long pole, The high net worth of private client will outperform.

Speaker 4

Okay. That's very helpful. I completely understood. Second question, a couple of companies have talked about moderating grain cost inflation specifically for auto physical damage. And I was wondering whether you're seeing that the Q3 as

Speaker 2

well? We have seen it in just certain areas within physical damage. As we look at Replacement vehicles, rental cars, that sort of thing. But again, we're still kind of looking at inflation on How it's been cumulatively since 2021 is we Use that data to forecast the loss cost in the premium needed in the prospective periods. So we're being cautious, I think, in terms of where we are with our inflation rates, but we do feel that We're getting ahead of our loss cost trends.

Speaker 2

We are ahead of our loss cost trends with our pricing. And I think we benefited that Well, we had a stay at home credit during 2020. We did not actually we ran that through the expense ratio. We did not actually decrease The auto rates, and I think that's helping us now as we contemplate inflation in our pricing.

Speaker 4

Yes, totally agree and that's very helpful. Thank you so much.

Speaker 2

Thank you, Meyer.

Operator

The next question is from Fred Nelson, a Private Investor. Please go ahead.

Speaker 9

I got a call last night from a lady pushing Nandi thanking me for Cincinnati Financial and I told her that I would repair that today on the phone on the conference call and she didn't even know you had one. But the question is Battery operated vehicles of all types, has that changed the pricing of insurance, replacement costs and accidents? Do you have any comments you can share?

Speaker 2

Yes, Fred, this is Steve Johnson. I think what we just have to do is make sure that we Contemplate the costs involved. As we go to having more electronic vehicles in the fleet, There will be more of that cost in the battery. They are less complex, I believe, in terms of all the Parts that are involved, so it is different. It will create a challenge to stay on top of as We contemplate those costs and price, but we feel that we're up to the task.

Speaker 2

And please thank your friend that called us. We appreciate your comments.

Speaker 9

Well, thank you. The battery operated calls, I have people in the farming business with pickup trucks and other machinery and they say it's not an easy thing To work with and ask the question about insurance. And so thank you for the best you do. I really appreciate it.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Steve Johnston for any closing remarks.

Speaker 2

Thank you, Gary, and thank you to all for joining us today. We look forward to speaking with you again on our Q4 call.

Operator

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

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