Brown & Brown (BRO) 29 Oct 242024 Q3 Earnings call transcript

Good morning, and welcome to the Brown & Brown, Inc. third quarter earnings call. Today's call is being recorded.

Please note that certain information discussed during this call, including information contained in the slide presentation posted in connection with this call and included -- and including answers given in response to your questions, may relate to future results and events or otherwise be forward-looking in nature. Such statements reflect our current views with respect to the future events, including those relating to the company's anticipated financial results for the third quarter and are intended to fall within the safe harbor provisions of the securities laws.

anticipated in number are and made of materially those events subject to may as or referenced of from a or factors. a to risks currently a such results -- the forward-looking result subject future -- differ in as Actual any desired of statements number or and uncertainties forth yesterday, results Such in unaudited identified third other quarter, the financial Exchange and results factors in for issued preliminary release the to press filed current company's risks identified that have factors reports the its company Securities the determination time or and differ financial Commission. as not may from numbers the time currently set company's the those it finalizes in the quantified its from and with uncertainties that

these with Exchange and a and forward-looking result in update information events forward-looking additional factors presentation as whether posted company's or with other Commission. statements, well or new company's in revise Securities information, to intention in slide affecting regarding any filings or as of prospects business future the obligation discussion the connection Additional call disclaim any We the otherwise. and of and as statements contained is the this

investor in In found call. then the addition, in measures Investor company's Events. most for Relations the Calendar clicking at on certain press non-GAAP call presentation measures financial www.bbinsurance.com to this company's be this website and financial earnings A or used there are non-GAAP conference measures of on financial the by in reconciliation comparable of can the release GAAP

President and call the turn to Chief now Brown, I'll Powell said, that With Executive Officer. over

begin. You may

our morning, Good Kevin. call. welcome to earnings everybody, Thanks, QX and

to and hurricanes events These hearts communities state impacted resulted impacted these to Southeastern in to recover and and by weeks, throughout return We're death ways unprecedented over the that to United months back-to-back the and Milton. like normalcy coming Helene out destruction committed in those go and many years. States. helping were we'd significant First, our all storms by

the quarter. that, top With bottom and let's line transition outstanding an had our We for performance results. to

to with to lastly, strong organic for I'll along up high-level continues our then some wrap performance insurance growth landscape. regarding market discuss updates performance And expansion. will financial with I'll detail. the the team closing comments on deliver M&A provide customers, in Our new we the net some go resulting and thoughts business, and our margin more before Andy our in Q&A.

let's results. discuss our Now

quarter X.X% nearly Slide X. the over billion of third $X.X organically in revenue, I'm of We total on delivered XXXX. and growing XX%

points margin adjusted improved our XX to Our $X.XX. XX.X% earnings by share basis EBITDAC adjusted to per XX.X%, and grew

solutions acquisitions best another completed was On M&A the X great is million. of focused customers for $X team strong and with on our front, the results. delivering Overall, quarter annual revenues we our as it estimated

I'm on Consumers the demand. changes In major countries in we year. the still driving #X. this versus there where no conditions half Slide of the were and first primarily economic spending are operate,

to the As and to few pace a compared last at moderate hire result, albeit a more continuing as years. are invest, businesses

the seeing the the caution bit in election. Here presidential to more U.S., a due we're uncertainty around

moment. that first of From last but E&S and the change more increase slower we for The to had slightly property, detail many quarter a pace an rates insurance largest year talk a in in experienced just third quarter versus lines standpoint, was the the pricing in at we'll for the what of which continue year. about half line this

lines. to expand health historical and continual benefits our driving complexity Based businesses. employee investments upward was our rate the similar quarters Pricing for we positioned with accounts. our realized any the as of employee care trends states. to down trend navigate cost there was primary medical to benefits decreases X% P&C to for for help of commission-based challenging up on remained, prior and we this moderation most up strong X% and most X% workers' but of are consulting X% pressure are downward capabilities, markets for in X% X% demand and ongoing to were in well The admitted The size market. Rates for companies compensation

the With over to we employment, level coming high range of expect quarters. the continue this

non-CAT up were quarter, and of X%. third to property the For rate flat the increases range moderated in for

rate experienced year. same properties half zones, in did first For see storm in we the not of convective we increases the the that

the extent, of between continue For even the size or and rates we levels rates X%. rate due few continue instances. lesser judgments last to X% and saw to inflation. some up see in U.S. a casualty more increase in to with quarters, of Professional for for legal higher liability, increases to to XX% flat ongoing casualty, excess primary we layers Consistent

markets. to Shifting E&S the

and year, and carriers to on insurers know, been As this put new you limits business. some facilities existing have incremental up willing

the On as continue in quarter we decreased of quarter last third between While the started the slightly compared later rates see into and to average, and first year, third rates property the this XX% increase quarter. CAT quarter to to year. in decreases of second XX%

As their modified some a result, just and customers capture increase limits the or deductibles some savings.

company across deliver generally line impact order increases in diversification will before, one on coverage, our industry moderate mentioned on In decreases the and we As rate financial lines consistently segment. performance, results of of of customer have and or geography, focus not to total. material business we've strong a for industry-leading

businesses front, M&A the consistent half year. for the On competition remained the of with high-quality first

starting rose, interest decreased to decrease. of are activity beginning number as as the rates we're private levels equity While rates of acquisitions higher backers now to see by interest

with which disciplined makes quarter, on and M&A build remain continue approach organizations, identify and For many the we to financially. great sense focused culturally our companies relationships to align

X. Slide I'm on

new of as for slightly quarter for lines growth but the Let's with quarter rates another of net business most as growth units. to the our of well. organic in well for delivered Retail impact lower segments. performing exposure X.X% had transition most business performance We lines realize X the strong moderating

as certain year-to-date In was as impacted incentive from commissions bps negatively in of organic addition, our or over growth quarterly revenue. well bond XXX by volatility nonrecurring true-up resulting the

really team into has performing good and QX. Our momentum is well going

outstanding new Programs resulting with delivered number of and organic programs expansion of This business from a was of customers. growth by growth XX.X%. result driven an existing

Our lender-placed business programs. well, continue our CAT and programs It great and to another of the captives diversity due performed was very to our grow. quarter

This good another and performance growth organic delivered rate of combination driven increases. brokerage Wholesale net was new X.X%. of with a by quarter revenue business

pace at Our open brokerage but nicely due the CAT decline grow continued slower business in a to property to rates.

performance. by Personal pleased very nicely mix strong authority again Texas. driven and well our We're lines delegated grew continues California quarter. and performed business authority and delegated Our that balanced drive brokerage this to stable between

over I'll Now into more results. to to results our it get financial -- turn Andy

Thank measures additional you, release those of yesterday. an or some non-GAAP Powell. income either margin, detail. to to we be The EBITDAC basis. morning, EBITDAC, net GAAP results financial Good diluted the taxes we're found in or of can on our we issued reconciliation going in refer in everyone. press measures income share, income to adjusted I'm this review appendix referring our presentation When to the financial before per

total as by XX.X%. quarter EBITDAC the delivered We income compared #X. increased Income before of by XX.X%, XXXX. third growing of grew revenues to Slide taxes on over $X.XXX We're billion, XX% and

the margin quarter third Our was points basis XX.X%, prior XX by EBITDAC over the of year. expanding

in per XX.X% decreased the third The the year in market was for impact primarily prior of rate and quarter tax value onetime the or $X.XX by the items quarter share Effective which year, our the income life to decrease insurance. was the net XX.X%. driven to changes of company-owned versus of Diluted certain increased prior XX.X%.

weighted debt. prioritize down to year as average floating rate increased as slightly Our last outstanding shares continue our we to paying compared

projected per fourth the XX% of our increased of represents XXXX. dividend Directors for delivered. we week, pleased XX% our the third the results increase as XXst are a Overall, paid and annual our share to Board dividends by payments for the Our with consecutive increase. This to very approved strong performance quarter team XXXX. quarter our Last of compared quarter our

revenue total The organic #X. over activity year. We're revenues between noncash X.X%. with investments in by stock-based acquisition and organic to lower support as grew as drive our past of and to the driven over by The well due segment teammates X.X%, and Retail was current Slide commissions, difference compensation total revenues on decreased growth higher incentive contingent and future EBITDAC growth. substantially

#X. had XX.X% We're on increasing total organic Slide Programs another quarter XX.X%. revenues excellent with of growth and

within benefited $XX organic associated our lender-placed by of Our growth throughout more be revenue customers evenly new This recognized business. will was with XXXX. onboarding million approximately

was total due revenues than disposition lower contingent lower and as as Growth acquisition activity to net organic commissions. well in

claims of by administration adjusting leveraging Our basis quarter points the EBITDAC and base to margin expense certain XXX by the businesses our fourth services sale of XX.X%, of driven expanded and XXXX. in

of the there hurricanes, Milton. impact lot of are a Hurricane unknowns the associated still with Regarding primarily

we that being in million claims first is hurricanes majority to the the of half flood estimate million then best recent anticipate in with quarter. quarter $XX associated $XX first the XXXX revenue million to of the $XX million Our fourth $XX of approximately the with that processing recorded recording and revenue in

our $X captives of million $XX we're Hurricane As within claims of anticipating associated to million with now, cost Milton.

on over #XX. to We're Slide

and completed of another The by growth higher commissions contingent delivered quarter last the organic in total associated revenues incremental finalizing segment X.X%. XX with XX% increasing Brokerage expansion the Wholesale over in driven great estimates year. months excess of prior in the organic acquisitions and Our total with revenues recorded was

points increased commissions by expense base. and to XX.X%, higher leveraging EBITDAC to due basis our margin contingent XXX Our primarily

in the basis our our second debt-to-EBITDA we trailing issuance bonds our paid as in proceeds ratio of balance this our regarding from In million position XX-year a comments the is few in completed year. continued structure, on inaugural sheet average. and great a a the have XX-month our quarter, quarter cash our is gross our line With off third with with deleveraging, outlook. generation We $XXX capital XX-year of

from generation first this our year, flow cash X $XXX a of percentage ratio we revenue increasing as to XX.X%. the months had strong of cash of of For over operations million,

highlight associated We is year there the with pertains to recent tax it really want we feel hurricanes. that federal As U.S. relief full cash generation, good. to

quarter and revenue our As for to XX% the full ratio XX%. quarters in the third Therefore, of cash a for a year. deferred permissible operations total percentage of this be should until fourth of next of from the range year result, of payments are flow XXXX to second as be year

anticipate over into it the to Helene potential let on XXXX. XXX Powell turn and me we basis strong for as up EBITDAC and Milton, Hurricane least points impacts margin XXXX our that, performance from comments. Based With back consideration closing at year-to-date our be full year taking for compared to will

year. business this economic seem The and biggest From what not election, through material we impact standpoint, report. which timing minds the outcome reductions first here an U.S. months inflation. Great experienced do anticipate of in future investment from geopolitical are the we on and Andy. rate of states of of the leaders that and matters interest magnitude the of be questions Thanks, the to X may their changes presidential level the

timing leaders interest of inflation. the and report. standpoint, on Great of The From material geopolitical biggest may the future their experienced not or the level from and which reductions X year. here rate through this changes Andy. the of to and economic be U.S. the of Thanks, business questions an of we what do presidential outcome in the impact election, we minds investment months anticipate states first matters seem that magnitude

the rate lines 'XX year. versus perspective, or in quarter and downward this slightly fourth moderate admitted an the be we similar to of quarter anticipate rates relatively third From early

For should similar the market, during experienced was quarter E&S be to liability professional the third casualty of and XXXX. what

down XX% ultimate come anticipate Helene with associated losses to For cat going decreases will into fourth to property, quarter. We rate down and the paid flat Milton. it from

domestically always On continue of we capital We're to good relationships lot a building have both feel our the with M&A pipeline, position. strong a front, companies, about and we internationally. and

approach continue drive companies enhance profitable help it's and that will as acquire We disciplined growth. worked our capabilities us great our very to well

in closing Quintes excited to & have quarter. fourth the and anticipate Brown we're join the Brown Lastly, a team

into fourth positioned be of team well the As is business. to win leveraging and to net new power we we more quarter, head continues our the

prospects our year We great quarter about and finishing the the momentum company good fourth have across the feel and strong. for

turn and that, With Kevin for we'll Q&A. up over to back open it

from first Our comes Instructions] Gregory [Operator with James. Peters Raymond question

question ran supposed to Andy instruction one I'm Powell so I'm my I through guess variables question, only to said only Retail guess some the segment. I going the ask focus on and we read-through that affected we And detail should thinking wondering in the look any third provide I'm as organic could if about be the forward. some quarter. on there's you if that. more

the Actually, to I nonrecurring Greg, down, incentives specific appreciate didn't there But it about say other said bonds your bit a in details. we're are -- related into as talked commissions growth, we going down we we one and is, that incentive the occur would what and that question. really onetime not revenue break little like matters. is organic and

we believe a So important business, creates that of, from think standpoint not that's Retail feel our good a the do trend. thing. I quarter I one about

And you I think take feel about what but so you that should our Retail good from we really business. want,

was just of grows But and look inside half over historically, in And the and you kind due the first back second, year. thing in of will that is the different mind, of the primarily Retail benefits than quarter. the for the because then, everybody keep a timing grow half in past some grow other the some recorded remember, of faster in half year surety it the guess normally, normally -- faster employee in the that business if work first the to of the we've Last bonds our bit second business Greg, little I said year first of else just to business of there. faster will amount

Rob from comes question next Our Sachs. with Cox Goldman

in appreciate little I is the curious product just that we to show growth organic? that environment? more for XX% property going bit of Or was seeing CAT down wholesale type a up are rates. the flat in if built mix start nice guide sustain to to in I the

on and flat. put and specifically that, right, to is there there rates hold by make There markets, domestically what risk to one going which new that I me other are comment clarifying London, believe is are the particularly aggressive a I on great additional Having that. let All other interest said. participants. very bearers, pressure more said to that's closer

The So and QX interestingly not is of property that, in having season. our quarter. said typically enough, an QX inordinately out is hurricane heavy property QX

And depends mix, the again, brokerage So brokerage, necessarily and it we're about in we balanced talking what businesses. binding. authority on quite have but is in not binding

to of speculative, kind rate and time down say will I a QX, to in So any in is and what XX%. have you But standpoint we're it storms, from we the what I'm would say prior discipline to adhere decreases, to can. is of markets going XX% purely remember, a seeing see about what the were

that, anything but possible. And is so anticipate we don't

I higher think it's X a is probability much XX. to

question Elyse next Our from comes Greenspan with Wells Fargo.

going is Retail the to My question back segment.

like you So sounds of ago. I couple a comp, guess I like quite incentive commission, leaving supplemental years that started which guys organic a it think in

So confirm I just to that. want

for the beyond? make right, way of points, like some Is typically the given doesn't to around was that it And QX but basis XXX kind guide, one X% quarter know then baseline you the one-off think growth I is like that guys about don't say, did Powell, right the of a you it trend. to and

want that? you take to Andy,

Yes.

let pretty the because Yes. hit first easy. me So that's one

the commissions commissions quarters can inside and know, down incentive supplemental like are of so themselves can adjust the by those growth. guaranteed you organic commissions of And GSCs, contingent on just as inside up move the there. So and

you we business. know, growth for give As for don't guidance organic the

good really we rates as we're that But how exposure think happens new come look business. what least is I -- and down to one, and lot the would it the we the and then business we about units into fourth is performance quarter, at in to going A feel economy. net least to of think at for bringing our

expect there, to the would something third those fairly we X be unless unusual quarter. similar So would goes

with from comes question Yaron Kinar Our Jefferies. next

business. So is the programs my in question

portion sold And what captives organic us would adjusted third impact into NCI. in coming that growth the So walk itself, you I Can of through segment party and would think the noncontrolling, for through it's segment? the be now that be? a namely, business, to a programs through back the NCI programs to margin consolidated the where the what maybe you

a the only Yaron, organic basis the it Remember, impact has noncontrolling allocation is on no the on margins. pretax interest or growth over.

minority record we back below. the above gross all up So and interest the out then of

Right.

would segment be level? would NCI what question adjusted my that the we at So be, segment of had the the impact

it's I irrelevant rules to following We're it of do anyway. the say I the don't guess are. would rules accounting you kind because allow what

You have to bring it in on a gross basis.

comes next question with from Our Michael BMO. Zaremski

has the maybe years I And X my to now quarter's from segment. been programs want exceptional Growth some guess the outsized catastrophe color on too, for one that in growth programs. question, think segment. I you this was gave for coming I focus

like there than marketplace, faster kind about to is when that marketplace of time, But periods market curious, secular of maybe standard bit just underlying of a think -- over some due wholesale we growing long think factors. we the the typically

curious, there this secular? your just standard is or is should at markets -- a Or business, in the grow over Just of programs time. multiple anything structural you think

right. All

Most say -- So of about that admitted, most, market shouldn't to that. I let's as traditional our or So opposed are of non-admitted admitted programs think market. of many, an the extension specialty the think as wholesale okay?

I That's important upfront. one. distinction number that's think an

billion there programs Number program interest believe two, space continue in what United read and the States. on somewhere and the business be is going Depending on you I emphasis of believe, premium to you what and forward. $XXX the between will billion $XX

to so nicely And see that into do the future. continue growing we

are sometimes here, because from underwriters a fostered on underwriting to have a are either great with very of. environment there bearer is And join risk we want partners. relationships dynamic talented our or we programs from And that where there a number us of remember, behalf carrier other

States. entity it, understand delegated largest we underwriting as in are, United authority the the We

which we carriers they authority seriously. of And in our very -- take enormous place hands place so

XX% But results a is continue period the going in would space of that time, would So of Let's say a right? our a believe grower what that's I time, such. nice it is That's is long we growth consistent -- the indicate long range? is. and very to call high, period quite over what over it programs the as all

know of interesting, understand out us some I you, think, it's than performing with the other give of Mike, there revenue. know, are is And for which really you And I is that business, but because XX% it people the isn't nicely. fully credit very don't this or don't, our the -- and there part Retail case as

want if if Pretty at and a on at impressive. perspective, slightly know this, of to it different XX.X% QX. programs but in thought already look the look and So you performance XX% I wholesale grew together, that about you've at you

mean -- a my look say to topic. can wholesale, stick Brown come same comp. than question, at -- more on I be think broker-owned the when valuation assumption I pay can can as just a programs Orion are look business do carrier to on one it underwriters that programs given a dynamics? that they a a highly do Would I'll -- answer but and I people at they But your follow-up to fair compensated or what be

to plus is bonus cash, I many in mean be different plus You a Well, instances, a base compensation because the it individual, typically the compensation? the equity. think can

think I generally, -- probably you broad So could statement, as yes. it's a say that

question from with next Mark Our Truist comes Hughes Securities.

there give evenly, the in can And of revenue say we million spread think be or business? onboarding nonrecurring? are bumps evenly XXXX. that that programs, of from Is $XX lender-placed million about when that XXXX as sense comps generated had $XX us and tough spread a and you in customers you kind you more Andy, new would of you any any more mentioned throughout

we or we normally, the customer So sending a get XXX of quarters actually pick that quarter a out to X from in I notifications. that that first from of happens servicer is portfolio, how buys think anywhere when is a account have what XX them. there lag new kind so onboard to up you a generally will days of And previous of we revenue is X works the

that we're that in will first the Then be the or of that of And spread Does works? saying, ex to of seeing would revenue when year, then the will fall not it accordingly. we is the it of explain but help that's $XX kind next third million during that comes half date, really that around how in anticipate what renewal with out kind most 'XX year. quarter,

does. It

question The the the on seen one is Have advocacy little of on second my active anything be Social more claims. a business? you Security half Administration adjudicating

we've of years. what back to the the business, similar been good funnel. of pretty our comes but got so We've has into only out last Everything inflow much the over seeing No. few

Scott Our Alex next question from with Barclays. comes

could in I down equity growing opportunities around about pipeline, size wanted talk to comments color those you're interest come on inorganically? where the from M&A ask you beginning to to you focused particular, more and more of private provide interest rates the players. potential the on and And

Sure.

of account first private part the as they slowed being in and then comment, it look involved So that of obviously, involved Then a expressed as of number initially, have might were that manner interest. -- as were those firms think it of little to rates at so interest XX interest relates there up, have the interest X rates typically just they the lots And the and to terms an different to ticked prior been as in up, equity might example. investments. going way for there firms rates firms. -- it And that

what in X term interest there These I'm are are short that of you trying in And more situations. might interested sense as view that hypothetical rates very down, it, nature to there terms i.e., private the so X are be a way or then parties of they equity. firms give today, is go

international we're the basis. as that anticipate we a Quintes currently fact excited another on look about there closing in and good participating quarter that the to the this us markets the in market by in here some that here in continue very go-forward for we domestically, us, which opportunities both in are think and we to relates it As evidenced operate future we Netherlands that's

We to to stress a with economy. about one of countries So understand which or cultural law, geography of about new fit. the want like think make consistent it's environment financially. sense capabilities core, capabilities, existing typically importance their adding currently we capabilities. over think maybe that as fit There's enhancing long there's that generally in. the is, operate We we there's new either one, we're it culturally we another, stable not And very pleased And rule a we with and in governments. two, operating a the we're as

Our with next comes KBW. Shields Meyer question from

I just want to go a XX I was back to the lender-placed that XXX-day insurance in said program. million $XX there to Should you lag. we think -- of think

the $XX So equivalent the is segment? like impact in that And year? that of a X/X is of the million margins revenue? Or did full

it about Meyer, represents So let's the revenue just or in -- more The again, a that, half primarily first on see. of little X XXXX. bit of months over

then year will the reach margin, it year And it kind a as taking the just from it from normal fourth of of processor. into full no, Some full previous just impact the margins. quarter it in quarters. comes processing, over It's around doesn't lag between

question next Carter Grace comes with Our of America. Bank from

and from loss carrier The at some on ratios XX-Q contingents higher pressure partners. mentioned retail

for is Could on will of just I lines you row few an XQ in the elaborate this moving caused pressure we've think kind quarter compares seen thoughts the think any in that quarters? this that be And on next XQ? this how to forward whether that and you which that. that a recurs issue second the

last on the least. yes, probably auto 'XX. side, starting about saw quarters we've the this We personal on over back the at talking well commercial. few on both It's as as Grace, primarily been in

I severity the there, pressure is that and because just on out frequency profitability. you overall putting think, have pushing that carriers in claims are rate space as well, of know which of for been

And we that trend right is guess that changing now, see this driver. stage. the marketplace we that main at I anything yet in that's -- the don't so would say

those. pressure So would to continue we expect on some

comes Our Markets. next with Scott from RBC question Capital Heleniak

that. Just like gave could seeing some on you're I benefits trends expand on the you some care. on wondering commentary if positive business. sounds health know employee It you

and half business? versus just So you that trends just if just through the opportunity in QX talk and about the M&A wondering can first the and XXXX, for seeing you're just organically in what

would handle Scott, us in a the years, benefits. any employee back taking basically I So additional in size but the customer what as which has have while, last remember, XX -- capabilities, and an little last say you organization enabled we consciously is, invested I'm to in

can And And that if XXX,XXX employees. means employees, start-up. what them to is at a grow we actually one handle so we day write they can XXX,XXX

And we see opportunities and is opportunities bring the so we remember, capabilities table, the excited our lots very about for and and the middle core growth market the market. upper today And that to of middle in future us. are business

and are been about care it's cost differently prospects something every customers them talk potentially bring CFO enable they will And we that our think have able that so versus and experiencing. in outsized different performance to care. some are to of positive -- to wants that health their to realize health And and there what lots things instances, of

firms our way, shape employee very our changes to very, we them with or acquisition ability in if Andy do XX sizes. and business to So join benefit any are in about months, think light of all I employee on I in of operating did service an actively form in are and capabilities But additional excited even next very quite for the entire write don't opinion we pleased team the that not customers and existing looking benefits. honestly, team. and and the

Brian from UBS. question comes with next Our Meredith

you Milton one quick me. anticipate from Do on quarter? a fourth any for and contingent impact Just commissions the Helene in

be best third the based Milton. dissimilar earlier on some 'XX quarter Ian. can moving parts adjustments comments, of we to said the In the still not determined. we on that kind estimate our for a what think we Helene, know where to at there's we're take did I back in lot Brian, of have still We We time. with in

So probably it will the would occur. quarter? adjustments -- would expect Yes, in some fourth we that

low the of positively we activity, Now and did that's mind that in claim have of primarily -- QX we had adjustments in space. because again, year program in -- keep so last

don't So some there. magnitude meaningful some you see change it year-over-year know of we probably occur. in I will development just to claims need the now, right

two to Brian, might losses one, and out of a point saw as I'd Number auto lot we the see things not well. like Milton storms, in that to immediately comes continue just be particularly Helene, to but as mind.

that. and distinct saying is residential you've commercial just So and anymore. very flood it That's got of a that I'm garage okay? the I'm car not correlation XXXX the talking very, amount about and one. Number dies, and doesn't where you up there car number electric And built two, come So loss. even between in depending a vehicles, are, a work structures, are on after waters

as in So it there of quite with that are And upped put Hurricane then XXXX you of new seems if them. years, honestly, couple codes, you every Andrew. place, back kind to were go that know, they've

losses the But talk typically 'XXs. people to about 'XXs are are the the if in on on you 'XXs, those losses properties, market the in and in the and that 'XXs structures there

maybe of having very middle stringent. But solid stuff homes You kind the in and XXs building weren't very ones not the XXs, losses. They're structures. actually they're into older the get the it's they're where codes that as --

question. little a your just So a around give kind aside, little you color of to just

next Our Peters question from with Gregory James. comes Raymond

for deferred follow-up payments rate of because 'XX and flow be get cash I cash free additional help to Should tax on the will you're just my Okay. 'XX your 'XX on that flow, payments that 'XX. the from you talked going cash conversion top commentary tax on result flow the the we lower? free about 'XX question. that have will anticipate free some In

right And correct. Yes, quarter. be be in those the the the Greg, second of IRS rules paid is now, would as need by to that

on you you're working So per when your get quarter $XX pretty run our of a and somewhere good projections, there. to $XXX can idea million they in between million taxes,

put So make those second the quarter. in just sure you

the the for will why of made ratio that conversion that deferral. down raised that And 'XX. pull our up comment that's because we for So conversion 'XX we

'XX is you -- from rate remind conversion for the me? raised just And can

previously. Yes, we XX% said to XX%

we business, path But when back That of the of through. continues forth, itself, we and and a talking that look talked look But up to was ratio, prior business we kind margins business just at to a XX% feel clear said about the we free it range. growing the really we flow couple strong. and about take generate will you we and But this to really, it were and be timing is the conversion, we're points. years. storm business we items It's at coming very So how very, our trajectory. overall if underlying by to of the back when a recall back about and very when percentage XXXX, conversion saw XX% cash the the between good the sometimes business, awhile we

question with Fargo. next Wells Elyse Our comes Greenspan from

NII that That actually up level the investment is -- quarter. amount the level QX going rates went follow-up good that? I income. expecting about move, like forward? guess, on by drove is how My we of you're and as that a think Andy, what And in in the should then

Sure.

So mind, to the issued of the remember, quarter. keep that second back one thing $XXX we in in bonds million

until holding had were we the off we paid September that money So bonds.

So somewhere income that incremental $X of million to the quarter. interest an drove $X for million

we in it or fourth a second in so the that the or will use rate, $XX don't and -- definitely quarter... then quarter million come in run back excuse me, So the the as had down quarter

growth you clarify organic I'd guidance you're in as Elyse, that we would like something. like earlier. correct know. asked that to clarify something do give And to I saying you not

said were we that in you made, was, I starting And look you place to was the that was what we that trying good and believe However, Andy say a QX. sure performance QX. a is to implying the make at asked wanted clear if in I and make QX note we number adjustments about Does what sense? or for that, you. had you for that

Yes.

point XXX So points the basis X% the starting is X.X% Retail. or around plus the for QX

just I I was the and guidance, math, we going to to don't wanted clarify. allow you do but to give

Got it. Okay.

mean important get drop X%, in Elyse, income. by talk kind of kind the probably side you on -- about investment then could kind can income it And And the again, it's an modeling, the because other investment a of idea if just of for to on net feel that rounding I also rates out think as what that. of we net

fiduciary organization, to there's Now again, more an we grow keep as in as mind cash. that continue

So assets right? that to other got that, you our an fiduciary is of then you're rate the going ratio to floating on side mind do that not debt. it you also exact grow. But to see assume if on Because will continue keep in

of XX% extremely shareholder built organization, structure for rate. an over as to floating around value debt have be It's our beneficial somewhere we our many extremely, creating been years. to capital So

-- had just so of at on million when debt. $XXX rate end floating under the we X/XX, And we

if interest, So sure you're doing ups you equation, on the on just that your and of okay? make the other grab side downs

from comes question Securities. next Hughes with Mark Truist Our

You impact from in the teammates. mentioned margin investment

Given more your deliberate a been, money that Is that was to at teammates? has Or lower. market M&A activity bit in on least more QX, a little opportunistic? the plan spend was that

to And is as reason it right Mark. more people, we're we at them. look find going the when I that opportunistic, invest I in the say

years And doesn't that's that will say quarter quarters in and And -- try investments ahead. we anticipate make when we so I to those a coming we trend. or those why grow make the that fully X investments, into always

It's we competitive, to something people a very call We're not looking opportunistic for not always if want will And and standpoint, But give we've is going organization. a investing. on. say like so this drum certain of that for don't were But would group of number, normal call I and there's initiative some high-performing that. service believe not talk secret program. this to I would some we like it significant it -- about that sales not there's got in and some you we -- culturally, something to out We're beat to it. That's work good terms a We -- collaborative, that impression. what going attract from people. you

from Our last BMO. Michael comes Zaremski with question

Great.

a last you that on follow-up know in you what think I teasing a terms or are seeing -- out all of kind pricing Just I projecting E&S or all? know side power on versus quarter, trends? of all And casualty that the don't admitted bifurcate move you and at thought pricing others if to maybe bit. between non-admitted. that would changed I many Has want up

All Sure. right.

remember, in to underlying that in the So discipline by my Mike, have been to that I carriers. there's there's of number you past, around think pricing is XXXX sort it said the career, seems back one, in tone which underpriced, has an don't been only I been be Today, if but the different. casualty a insurance business, always

So seems a to be that. there discipline around

believe And primary so I believe in I admitted and it's in the it's non-admitted. both also the excess, and

we so that not more it's versus not in So seeing case. bifurcating the are the other. That's you're that one something

And in pressure and continue liability think see so excess commercial going general automobile, so auto. to I and that casualty, liability, said as personal rate to both we're on Andy earlier,

being, see there For the all carrier, changing. But books. pressure don't to Depending trends they're tell time on you seeing they're to on be going segments. of I that the their different in those yes, continues

to Q&A to does today's the portion Powell call. this like I'd turn remarks. of conference gentlemen, back over and any Ladies closing conclude for the

really Thanks, Kevin. appreciate today. everybody's Sure. time We

year QX. ending performance strong about are into and with QX, excited We're We in the XXXX. going the very pleased

all you have day. a Thank You for time. your wonderful

today's conclude presentation. does this gentlemen, and Ladies

You and may disconnect, wonderful now have a day.