© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good day and welcome to the Chubb Limited Second Quarter 2019 Earnings Conference Call. Today's call is being recorded. [Operator Instructions]
For opening remarks and introductions, I would like to turn the call over Karen Beyer, Senior Vice President, Investor Relations. Please go ahead, ma’am.
Thank you and good morning, everyone. Welcome to Chubb's June 30, 2019 second quarter earnings conference call.
Our report today will contain forward-looking statements, including statements relating to company performance and growth opportunities, pricing and business mix, and economic and market conditions, which are subject to risks and uncertainties and actual results may differ materially.
See our recent SEC filings, earnings release and financial supplement, which are available on our website at investors.chubb.com for more information on factors that could affect these matters. We will also refer today to non-GAAP financial measures, reconciliations of which to the most direct comparable GAAP measures and related details are provided in our earnings press release and financial supplement.
And now, it's my pleasure to introduce our speakers this morning. First, we have Evan Greenberg, Chairman and Chief Executive Officer; followed by Phil Bancroft, our Chief Financial Officer. We'll then take your questions. Also with us to assist with your questions are several members of our management team.
And now, I'll turn the call over to Evan.
Good morning. As you saw from the numbers, we had a very good second quarter highlighted by excellent underwriting and strong premium revenue growth globally in constant dollars that is benefitting from favorable underwriting conditions and our various growth initiatives. In fact, the positive pricing in underwriting environment continued to improve through the quarter and spread to more classes and segments of business.
Core operating income was $1.2 billion with $2.60 per share down 3% due to modestly higher year-on-year CAT losses. Book and tangible book value per share were up 3.2% and 4.7% respectively in the quarter, they’re now up 7.7% and nearly 12% for the year. Combination of income and the mark derived from falling interest rates.
Our combined ratio of 90.1%, included 3.8 points of CAT losses, and 2.6 points of favorable prior period reserve development. So, on a current accident year basis, excluding CAT, the combined ratio was 88.9%. Phil will have more to say about investment income, book value, CAT and prior period development.
Turning to growth, P&C premium revenue in the quarter, in constant dollars was quite strong. Net premiums return grew 6% with foreign exchange having a negative impact of 1.8 percentage points.
The pricing environment continued to firm through the quarter and we took advantage of some of the best pricing we’ve seen in years. The rate of increase of prices accelerated while at the same time it spread to more classes of business and more classes of risk. Rates continue to firm in the U.S. for major accounts in E&S specialty to the middle market. We continued to observe favorable conditions in the London wholesale market and in Australia with their early signs, firming conditions are spreading to the U.K. company market and to certain classes of risk on the continent and Europe and Southeast Asia.
Overall, where rates are moving, they’re firming broadly to varying degrees in most all short and long-tail classes. Accompanying price increases, terms and conditions are tightening in certain classes. In my judgment given some of the market dislocation we’ve observed including a reset of risk appetite on the part of some, this firming trend is sustainable and will likely continue to accelerate and spread. It is income and loss reserve driven, not capital driven.
Overall prices increased in North America commercial on a written basis by about 7% in the quarter versus a loss cost trend in aggregate of just 4.5%. Renewal price change includes both rate and exposure; the rate was up 6.3 and exposure a half a point. Pricing improved throughout the quarter in many property and casualty related areas including general casualty, both primary and excess, D&O and professional lines. As more business comes into our underwriting appetite and price range and other carriers take corrective actions, we are benefiting from a flight to quality. All things being equal many buyers prefer Chubb.
New business in our North America commercial lines was up over a 11% in the quarter with major accounts and specialty up nearly 15%. Retention of our customers remained strong across all of our North America Commercial and Personal P&C businesses with renewal retention as measured by premium of 93.5%. In major accounts and specialty commercial, excluding agriculture, premiums were up 7% with major up 5.5 and Westchester E&S up over 9%.
Renewal price change for major accounts was 8.5% with risk management pricing up 6.3%, excess casualty up almost 10%, and property up nearly 18.5%. Public D&O rates increased to 11%. In our Westchester business renewal pricing was up over 9.5%.
Turning to our middle market and small commercial business, premiums overall were up over 4.5%. Renewal retention in our middle market business was 92%. Middle market pricing was up over 4.5% and if you exclude workers' comp, it was up nearly 5%. Again, this is the best we've seen in a number of years. The middle market pricing for primary casualty was up 4.5%, property 6.5%, excess umbrella up over 6% and public D&O rates were up 18%.
In our North America personal lines business, net premiums in the quarter were down 2%, but adjusting for the expanded reinsurance that we have discussed in the past and an accounting change that impacted growth prior year, net premiums written were up about 2.5. Retention remained strong at 96% and for homeowners pricing was up nearly 10% in the quarter.
Turning to our international business, growth accelerated in our Overseas General Insurance operation. With net written premiums and constant dollar up [Technical Difficulty] had a negative impact of almost 6 points. Net premiums for our London market wholesale business were up over 24% while our retail division was up 7.5% with growth led by Latin America up almost to 11% and Asia up about 9%.
In our London wholesale business, we continued to see a reduction in capacity and rates firming across multiple lines of business. We are also seeing a significant increase in submissions to Chubb, as brokers worry about the continuity of markets as they look to us as a preferred carrier of choice. Overall rates in our London open market business were up over 9%, property was up 23.5%, marine cargo almost 7.5%, aviation was up 12 and onshore energy was up 15%. D&O rates in the London wholesale market were up 20%.
Our life insurance business had a strong quarter and half year with a contribution to earnings of 76 million year-to-date. John Keogh, John Lupica, Paul Krump and Juan Andrade can provide further color on the quarter including current market conditions and pricing trends.
In closing this was a good quarter for Chubb. We have momentum from affirming market, flight to quality and our various global growth initiatives. We're achieving rate which is supporting margins and helping ameliorate exposures we observe on the loss side. In some we have some wind in our sails and we're taking advantage of it. Our organization is focused, energized and hungry.
With that I'll turn the call over to Phil.
Thank you, Evan. Our balance sheet and overall financial position remain quite strong. We have a $107 billion portfolio, cash and high quality investments that is well rated and liquid and we are generating substantial capital, a significant positive cash flow. Cash flow in the quarter was $1.4 billion.
Among the capital related actions in the quarter, we returned $720 million to shareholders including $344 million in dividends and $376 million in share repurchases. Year-to-date through yesterday, we have repurchased over 800 million in shares at an average price of $140 per share.
In June, we paid off $500 million of debt that matured and issued $1.3 billion of 8 and 12 year debt in the European market. The net proceeds will be used to repay our $1.3 billion senior debt at maturity in November 2020. The debt was issued at an average rate of 1.14%.
We grew tangible book value per share by 4.7% in the quarter and 11.9% year-to-date. Since the close of the Chubb acquisition in 2016, tangible book value per share has fully recovered from the initial 29% dilution even excluding the favorable impact of unrealized gains.
Our annualized core operating ROE in the quarter was 9.3% and our annualized core operating return on tangible equity was 15.2%. As a reminder, Chubb records a change in the fair value mark on its private equity funds as realized gain. So therefore, it is not included in core operating income. Other companies record the impact of the mark as part of their investment income. This quarter we had after-tax realized gains of $237 million which would increase our core operating EPS by $0.51 and our annualized core operating ROE to 11.1%.
Adjusted net investment income for the quarter was $902 million pre-tax which was higher than our estimated range and benefited from a one-off accrual adjustment of $9 million and increased corporate bond fall activity.
During the quarter, interest rates continued to decline as financial markets anticipated a shift in Fed policy towards monetary easing. This favorably impacted our portfolio mark-to-market resulting in an after-tax unrealized gain of $1 billion. Although market yields have declined significantly in recent months, we will remain conservative in our investment strategy and do not contemplate any significant shift in asset allocation. Our investment income going forward will continue to benefit from growth in our invested assets and will be impacted by the level of market interest rates. Despite the negative impact of lower rates, we expect net investment income to grow moderately due to our growth in invested assets and strong cash flow.
We now expect our quarterly adjusted net investment income run rate to be in the range of $890 million to $900 million going forward. Adjusted interest expense was $145 million pre-tax in the quarter. Factoring in the debt to mature and the new Euro debt issue in June, we expect our quarterly adjusted interest expense to remain the same for the balance of the year. Pre-tax catastrophe losses for the quarter were $275 million principally from U.S. weather-related events.
We had favorable prior period development in the quarter of a $188 million pre-tax or $152 million after tax. This included $48 million of pre-tax adverse development on prior year catastrophe losses principally for hurricane Irma and typhoon JV primarily in our assumed reinsurance operation and $25 million pre-tax adverse development related to our runoff non-A&E casualty exposures.
The remaining favorable development of $261 million is split approximately 90% from long-tail lines principally from accident years 2015 and prior and 10% from short-tail lines.
Foreign currency movement adversely impacted core operating income by $23 million in the quarter. On a constant dollar basis, net loss reserves increased $831 million reflecting catastrophe losses in the quarter and the seasonal increase in our crop reserve offset by favorable prior period development.
A paid-to-incurred ratio was 87%. Our core operating effective tax rate for the quarter was 15.3% which is in line with our annual expected range of 14% to 16%. Through six months, our core operating effective tax rate was 15%.
I'll turn the call back to Karen.
Thank you. At this point, we'll be happy to take your question.
Thank you. [Operator Instructions] And we'll take our first question from Mike Phillips with Morgan Stanley. Please go ahead.
Thank you. Good morning, everybody. First question on Evan on your comments of what's driving the rate activity. I believe you said something like its income and reserve driven not capital driven. So, I guess want to know if you can expand upon that kind of implies there's going to be some timing of reserve issues and maybe what you've seen and why you mentioned are reserve driven?
Well, just simply the rate has not kept pace with loss cost trend and that puts pressure on income and it puts pressure ultimately on reserves. You're either I think that it just imply, it shows what it implies the balance sheets over time, and have less redundancy in them.
And for some are adequate, for others and become negative for others. And you have a loss cost environment that in many ways in the headlines is stable. But you have areas of casualty and catastrophe's and other areas within the business where there is volatility. And there is trend pressure.
And so, my comments meant to imply all of that. What I was saying to you is income and balance sheet not capital driven that there was a dearth of capital. There is plenty of capital around and but it is more disciplined at this moment and it comes to its deployed with the rate and terms are more adequate.
Okay. Well, thank you, that's helpful. I guess if I could turn specifically to North America commercial lines, where I guess dependent on what you use for 2Q '18 with your comments from last year, the structure settlement term had some impact there.
So, the core loss ratio deteriorated about a 70 bips or a 170 bips dependent on how you adjust for that. Our set looks like kind one of the highest core loss ratios that's seen in a while. We heard Trevor just now talk about non- CAT weather, I'm not sure if any of that came into play here for that segment for you or what else truly uptick and maybe has your view of loss trends and that segment -- since last quarter?
Let look at North America commercial P&C that's looking on a current accident year ex-CAT. Last year ran an 80 74 combined ratio. This year ran an 80 79 combined ratio. I mean, simply outstanding world class and in the 80s. So, let's have that perspective.
We wrote the same volume of LPTs this year that we did last year and so no impact from that. It was simply rate and trend naturally, not a non-CAT weather or any of that, just simply rate and trend something I've been saying for many quarters. Thanks for the question.
Alright, thank you.
You're welcome.
We'll take our next question from Elyse Greenspan with Wells Fargo. Please go ahead.
Hi, good morning.
Good morning.
My first question, Evan, is also just going back I guess to some of your comments to the previous question on just what you're seeing with loss trend. You guys seeing any trend changes and that TOD environment. And I know there is a lot of different classes that went together but that 4.5% of trend that you said in the book for North America commercial.
Can you give us some perspective on how that would compare and maybe it's not number, it's just for qualitatively to what you're seeing in some recent quarters?
Sure, Elyse. In the aggregate in the round, it's a loss cost trend is stable; we haven’t seen a change in it. As you rightfully note though within that, it varies by class of business and area of business, we've talked for a number of quarters for quite some time now about professional lines D&A in particular and I won't repeat or go into what we've talked about.
But simply about the increase of frequency and in some areas severity in that. In the TOD environment, generally there has been less of an increase of frequency but and in there had been headlines of increase in severity during of what's paces in here, see it from commercial lot owed to products liability that is chemical related.
And then, the trend from of TOD from #MeToo and molestation and the specter in the future of the reviver statutes which is unknowable at the time. There is and then the Australian market behaves a certain and TOD and the London market U.K. where D&O had deteriorated.
So, you have it varies by area and by class of business, comp on the other hand behaved very well. General liability behaves in a steady way, reasonably steady. So, I hope that helps you.
Yes, that's helpful. And then, on you said kind of and talking to the core margin within North America commercial that the delta between this Q2 and last Q2 is really just to rate versus trend. You see, in on your comments this quarter and also last quarter pretty bullish on pricing and the fact that you would think it would continue.
So, do you think where reaching the point where obviously it takes a while to earn in the rate but if you keep getting this rate and accelerates, do you think as we get into 2020 you can think about that being an environment where there will be come core margin improvement?
We're in the risk business, so I can project the numerator reasonably well to you. I can't reject and prognosticate the denominator. The denominator I can project, I can't quite project the numerator the same way to you because we are in a risk business.
And so, look rate exceeding trend is a simple statement, it's an ameliorating factor and that's a good thing. We'll see what its impact is on margin in the future.
Okay, thank you. And the, one last quick numbers question. You guys mentioned you've added a little bit to your Debby last in the quarter. What are you guys taking that as for ensure loss for the overall industry right now?
I don’t have a number in my head, my colleagues around the table don’t but will we'll take it offline with you, we'll give you a number.
Okay, thank you very much.
You're welcome.
We'll take our next question from Yaron Kinar with Goldman Sachs. Please go ahead.
Thank you. Good morning. Going with the North America commercial, so Evan, you're talking about world class margins there and loss trends that are stable. I guess, do you need more rate in that segment today or is this maybe an opportunity to try and take market share or others are still pushing free?
It varies by class of business and there is no general statement. Some classes are adequately priced, some classes need rate and terms and conditions changes and some classes need substantial rate. And so, it varies, it's there is no other simple box for that.
But as I think you can see our new business is up, our renewal retention is high or in a more favorable underwriting environment and where it make sense to us and we've got a lot of data and a lot of experience, we're leaning right into it.
Okay, thank you. And then, I guess if I shift to the investment portfolio. So, it sounds like apart from comments that you're not really looking for any change in direction here even with the change in monitory policy. One thing I did notice was an increase in duration sequentially. Is there a strategic move or was that just of normal quarterly noise or movement?
It was simply tactical, at the end of last year we had a decrease to duration because we were getting paid to take duration risk. And with the course of this year it's drifted up slightly but to the extent it's within half a point or half a year or four years, we don’t think there's any material impact on our investment income.
Okay. So, you're not necessarily looking to extend duration here?
We're not.
Okay, thank you.
Welcome.
We will take our next question from Ryan Tunis with Autonomous. Please go ahead.
Hi thanks, good morning. So, clearly in terms and conditions, rate have accelerated improved throughout the year. Evan, would you say on the other side that loss trend today is it' some more challenging environment in over six months ago?
No. Let's say its if I compare six months ago to today, it's stable.
Fair enough. And then, I guess I'll be the annoying one to ask about the crop but just curious what the thought process was in and how you're thinking about the planting, so it didn’t look like you put up a loss taking agriculture, I'm not sure if you did but just in your thoughts there.
Sure. Let me make just a couple of comments about that. And it's not an annoying, I would be surprised if when you didn’t ask about it. First of all, we did put up the loss ratio about 2.5 points this quarter. So, but what you have to recognize it's on a low earned premium base at this time of year.
And it is not signaling at this point what you should imagine for third quarter or for fourth quarter at all. Given the weather conditions this spring and potential impact on prevented planting or delayed planting along with the volatility that in commodity prices, impact by trade and other factors, its natural the questions raised about what kind of year we're anticipating for crop.
So, in a word it's "unknowable." Our modals under various scenarios moving toward roughly average year. However, the actually tally or prevented planting claims, the summer growing season conditions and therefore the result in quality of the crop commodity prices and then the full harvest weather conditions are rolled to play out all of that's in front of us.
So, we simply raised our loss ratio modestly in the second quarter as a naturally conservative action very little bit that we can say.
Thank you.
But it's unknowable when if you know, then I'll tell you what but and we're going to make a lot of money in hedging in commodities. Thanks.
[Operator Instructions] We'll take our next question from Paul Newsome with Sandler O'Neill. Please go ahead.
Good morning. Congrats in the quarter. I want to ask, if I make my own assumption about where we are from pricing versus loss cost spread. Is there anything in either the North America commercial or the overseas more business mix and that this is exchange, they would affect though that sort of simple calculation for me?
You have to explain. I'm not really sure what you're asking me Paul.
So what I'm asking is, is the natural business mix all things being equal going to be for a business that has lower or higher combined ratios because I think we're all making an assumption of whether or not Chubb hit a point where the earnings or the price increases are above claim costs inflation that gives us an estimate of where we think we're going to see the inflexion margins. But that calculation assumes basically that the business mix is the same in the various segments?
The business mix within the segments is reasonably steady. There's a big book of business. So there is not big shift taking place. There's always, every quarter it changes is jittery, but in the round at some, the mix is quite steady.
And then, I'm sorry I'm going to beat on crop a little bit, but is there a chance that given the delay in the harvest, we could see a change in the premium recognition from mainly in third to more in the fourth?
No.
Okay, thank you.
It's formulaic. So, no.
We will take our next question from Brian Meredith with UBS. Please go ahead.
Yes, thanks. A couple here for you. First, I'm just curious in the overseas area Evan, reserve releases kind of really slowed down on year-over-year basis, were there any kind of one-timers there that was going on?
No, there was not.
And then, the growth you're seeing. No, one timers, got you. And the growth you're seeing in that overseas where's it coming from? Is that some of these new distribution relationships you have, other things going on?
Brian this is one on dry day. The growth is actually pretty broad based as Evan said in his opening remarks, we certainly are seeing a pretty good growth coming out of our London wholesale market operation as we see the market continuing to firm and we see contraction and capacity there. But underlying all of that and particularly for our retail businesses, it's really our strategies continuing to gain traction and I'm talking about our strategies in the small commercial, the middle market, accident and health personal lines on a global basis.
The distribution agreements are certainly doing well. We are getting good traction on all of that so I would say it's really a combination of our organic strategies in addition to the right that we're continuing to see now.
Great, thank you.
We'll take our next question from Jay Gelb with Barclays. Please go ahead.
Thank you and good morning. Given the ongoing shifts we're seeing and tightening in the commercial property casualty insurance market, Evan I'm wondering if in this environment it might shift your thinking on mergers and acquisitions at all?
No. Steady and it doesn't shift with the times that way. So we know, I've been very consistent in when I ask this for many years now. We are builders and we're a company of builders and we have a strategy to grow our company organically. And acquisitions complement that strategy. They help to advance it or improve upon it in any and the strategy is product segment of customer distribution and territory oriented.
And when we identify the right target or partner and financials and we judge it to advance our strategy and in a positive way and will be accretive to our shareholders, their capital then we know our minds and we will pull that trigger.
That's helpful, thank you. Just a follow-up on that with the potential for acquisitions to complement organic growth, is that imply you're more focused on bolt-on acquisitions as opposed to something larger or transformational?
We're agnostic.
Understood, thank you.
I am sorry, there's not really more to say there.
We will take our final question from Meyer Shields of KBW. Please go ahead.
Thanks, good morning. And I was hoping you could talk about what you're seeing in reinsurance. We're getting a lot of commentary that's very positive especially on the CAT fee side, didn't see tremendous amount of growth in global reinsurance this quarter?
Yes. The reinsurance market is, I think modestly tightening. I think for the most part reinsures are riding on the backs of primary riders and if they feel pressure in their own income or balance sheet statements then they're more taking action by seasons they select and they're banking on seasons to get better rates and terms that ultimately feed into their results.
It's more unusual than we've seen in the past typically we would have seen a change in market pricing cycles more reinsurance led that doesn't happen. And I think in many cases reinsures their results are inferior due that of insurers’ results and other than Chubb, I'm surprised they don't take more action in their underwriting positions on reinsurance. And that they don't drive higher pricing, better terms themselves. I can't prognosticate the future, but so far I see it's relatively modest, the changes, the terms and conditions and pricing in the reinsurance market.
That's very helpful, thanks. And second, Chubb came out with a fairly strong statement on climate change in the context of which entity you're willing to underwrite. Has that changed, I guess loss trend assumptions for property risk?
No. You're referring to the decision we took on coal.
Yes.
And it's a de-minimis portion of our writings.
Okay, perfect, thanks so much.
You're welcome.
And ladies and gentlemen, we will take our next question from Greg Peters from Raymond James. Please go ahead.
Good morning. Thanks for squeezing my question. Evan in the past you've commented on the impact of the tariffs and trade wars that seemed to be evolving from quarter-to-quarter and I wanted to give you an opportunity to give us an update on how you think the current environment has affected your business and what we should be thinking about in our calculus about the results going forward?
Yes. We grew our overseas business by 9% in the quarter and you see it broad based. So I don't see a linkage between tariffs and the health of Chubb's business and our business is more idiosyncratic. They are active in local markets around the world where you're impacted by their local economic plus their trade and their trade related economic invention. So, yes both.
Look when it comes to, I'm not in favor of tariffs as a strategy and I'm not in favor of putting the walls up and bring in your supply chains home. This is a globalized world in terms of trade and world led by a vision, America's vision of global trade. I continue to stand behind that and think that's the best path to peace and prosperity for the citizens of our nation. And so, I hope that we will engage more in reaching conclusions to trade agreements than imposing further tariffs.
Obviously, the degree that the tariffs and other actions, other protectionist actions taken slow down economic growth around the world, this country is not immune and the insurance industry is then not immune because we grow, we're exposure driven, not about premium, premium is a proxy for exposure, we grow based on growth of exposure globally. An economic activity grows or contracts exposure.
Speaking about industries, one of the themes that has emerged for I guess, a couple of years now is pricing, price increases in commercial auto and I'm trying to reconcile the desire by the insurance market to raise prices on the trucking industry with the news it seems like every other week we're hearing about troubles in the trucking industry whether it's LME or Timmerman Starlite. And so, I'm curious what your perspective is on the balance between rate and fiscal survival of an industry?
We are not responsible for the fiscal survival of any industry except our own and I know from my perspective, I'm a fiduciary of shareholder capital that expects a reasonable return if we deploy that capital towards the trucking industry to take insurance risk. I can tell you that Chubb writes a fair amount of trucking related long, medium and short haul exposure.
We work with clients who are embracing modern technology and that exists today and they've got strong balance sheets to lower their loss costs, to reduce their exposures, to police driver behavior and that results in amelioration of lost costs rises and therefore the premiums we charge, it's a pretty rational circle of life there. And for those who simply operate in a less professional manner and can't police their loss cost will be to buy insurance the price is going to be reflected, that's it.
I'm not trying to suggest that you have financial responsibility for the trucking industry. I just realized that everyone wants to raise prices on long-haul trucking, etcetera and yet it seems like a lot of the long-haul truckers are having a lot of headwinds and their survival is in question. So there's a balance to be had exposed between charging higher prices and actually not being able to have a customer insure at all?
Yes, but if it was and I understand what you're saying. If it was to raise prices to earn unreasonable margins were to earn any margin. I mean, right now the trucking business is not, that's never been an easy business and to make any money in trucking. So is it better if you can't make any money to just say then I won't insure it at all. They are uninsurable. They can't buy insurance.
Now you go out of business instantly versus you're going to work with those who can work with themselves and help to reduce loss costs and ameliorate price and so I tell you there's not a one-size-fits-all in trucking. There are those who are quite professional and we work with them and they have far more modest price increases than say those who don't have the wherewithal or capability or desire to embrace technologies that will help to ameliorate that rise in their loss cost. The best they can do for you.
Okay, great, thanks for your answers.
You're welcome.
And this does conclude today's question and answer session. I'd like to turn the call back over to Karen Beyer for additional or closing remarks.
Thank you all for your time and attention this morning. We look forward to seeing you again next quarter. Thanks and have a great day.
And this does conclude today's conference. Thank you for your participation. You may now disconnect.