Cincinnati Financial Corp (CINF) — Q1 2016 Earnings Call Transcript

Hello, this is Dennis McDaniel. Thank you for joining us for our first quarter 2016 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 web site, cinfin.com/investors. 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 Steve Johnston, President and Chief Executive Officer; and then from 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 Cincinnati Insurance Company’s Executive Committee Chairman, Jack Schiff Jr.; Chairman of the Board, Ken Stecher; Chief Insurance Officer for the Cincinnati Insurance Company, J.F. Scherer; Principal Accounting Officer, Eric Matthews; Chief Investment Officer, Marty Hollenbeck; and Chief Claims Officer for Cincinnati Insurance, Marty Mullen. First, please note that some of the matters we will be discussing today are forward-looking. 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 was provided with the news release. Statutory accounting data is prepared in accordance with statutory accounting rules and therefore is not reconciled to GAAP. Now, I will turn the call over to Steve.

Good morning and thank you for joining us today to hear more about our first quarter results. We are pleased to report another strong quarter of operating performance. We continue to see ongoing benefits from executing our agency-centered strategy and working to enhance performance through various initiatives. Underwriting and pricing on a policy-by-policy basis, which requires strong cooperation between our underwriting staff and the local independent agents who represent us, made a solid contribution to our excellent first quarter 2016 results. Our consolidated property casualty combined ratio of 91.4% represented a 6.1 percentage point improvement over last year's first quarter. The combined ratio of four catastrophe effects was 88.3%, 5.1 points better than the first quarter of 2015 and consistent with full year 2015. Each of our segments grew profitably. The performance of our two auto lines of business needs to improve, and we remain confident that all of the actions we are taking, including first quarter 2016 average price increases that were higher than in the fourth quarter of last year, will improve results. Premium growth continues to be a bright spot, as we work to earn quality new business from local independent agencies and expand our reinsurance assumed operation, known as Cincinnati Re. We remain focused on disciplined growth in the midst of a challenging reinsurance market. So far, we have reported an underwriting profit for Cincinnati Re each quarter since they commenced business. Commercial lines premium growth remains healthy in a very competitive marketplace, with net written premiums up 6% over the same quarter a year ago. Strong personalized growth was enhanced by steady increases in the personalized products and services we offer to our agencies, higher net worth clients. Almost all of the first quarter 2016 increase in personal lines new business written premiums came from high net worth policies. While we increased our focus on high net worth personal insurance beginning in 2015, we have written high net worth clients for many years. In fact, prior to 2014, approximately 10% of our homeowners premium was already derived from higher net worth policies. However, we knew that to really grow this area profitably, we needed to have the right talent. The associates we have hired to lead this expansion are highly experienced, with an average of more than 20 years of experience in the high net worth marketplace. I understand its unique requirements for inspection of risks, coverage valuation, and specialized claims service. Those leaders, in turn, have trained staff who can deliver enhanced services and quality underwriting, including local face-to-face interaction with agents and policyholders. During the first quarter, we launched our Executive Capstone suite of high net worth insurance products in New Jersey, and things continue to go well with the agencies we have appointed in New York City and surrounding areas. Turning to renewals, our property/casualty policies in the first quarter of 2016, we were pleased with average price increases that were generally in line with the fourth quarter of 2015. Average renewal price increases for commercial lines continued at percentages in the low single-digit range. That average includes the muting effect of three-year policies that were not yet subject to renewal during the first quarter. For commercial property and commercial auto policies that did renew during the first quarter, we continue to obtain meaningful price increases, both averaging in the mid-single digit range. Our most profitable commercial lines of business in recent quarters, commercial casualty and workers' compensation, had price changes similar to the previous quarter. Commercial casualty averaged first quarter increases in the low single-digit range, while workers' compensation averaged decreases in the low single-digit range. Our personal auto policies averaged first quarter renewal price percentage increases in the mid-single digit range, and the average for our homeowners policies was also in that range. For our excess and surplus line segment, each first quarter 2016 average renewal price percentage increase remains near the high end of the low single-digit range. That segment experienced another outstanding quarter, including a combined ratio below 70%. Our life insurance subsidiary, including income from its investment portfolio, also had a strong quarter of performance. Owned premiums rose 9% and operating profit was 25% higher than the first quarter of 2015. Our primary measure of financial performance, the value creation ratio, came in at 5.7%. Generally higher valuations in securities markets boosted the contribution of our strong operating performance, setting a good pace for reaching our goal of an average annual VCR of 10% to 13%. While we are pleased with the recent good performance, we remain keenly focused on underwriting profitability and growth. We are very confident in our company associates and the agencies they partner with as we seek to continually improve performance. I will now ask our Chief Financial Officer, Mike Sewell, to share his highlights for other areas of our financial performance.

Great. Thank you, Steve, and thanks to all of you for joining us today. I will start with some key points about our first quarter investment results. It was a great quarter for investments, in part because we reported our 11th consecutive quarter of year-over-year investment income growth, with an increase of 4%. We also had increases in the fair value and unrealized gain positions of both our equity and bond portfolios and ended the first quarter of 2016 with a net unrealized gain of more than $2.3 billion before taxes, including over $1.9 billion for our common stock portfolio. Our bond portfolio's interest income again rose, despite declining average yields, in part due to first quarter 2016 net purchases. The bond portfolio's pre-tax average yield reported at 4.65% was five basis points lower than a year ago. Taxable bonds purchased during the first quarter had an average pre-tax yield of 4.77%, 43 basis points higher than what we experienced a year ago. Tax-exempt bonds purchased averaged 3.03%, 10 basis points lower than a year ago. Our bond portfolio's effective duration as of March 31st was 4.8 years, up slightly from 4.7 years at year-end. Cash flow from operating activities continues to fuel investment income growth. Funds generated from net operating cash flows for the first three months of 2016 rose 20% compared to a year ago to $257 million and helped generate $111 million of net purchases of securities for our investment portfolio. As always, we work carefully to manage our expenses, at the same time, strategically investing in our business. Our first quarter 2016 property/casualty underwriting expense ratio improved slightly compared with a year ago. Our loss reserves experienced another quarter of consistency, both in our approach to setting overall reserves, ending favorable reserve development on prior accident years. For the first quarter of 2016, favorable reserve development benefitted our combined ratio by 5.6 percentage points, better than the 2.2 points for the first quarter of last year, and more in line with the 5.0 points for the last three quarters of 2015. Reserve development so far in 2016 had a good spread over most of our major lines of business and over recent accident years, including 63% for accident year 2015 and 27% for accident year 2014. Overall reserves, including accident year 2016, rose $99 million in the first quarter, including $95 million for the IBNR portion. Even with a prudent increase in IBNR reserves, our first quarter underwriting results were very good, as our combined ratio nearly matched the 91.1% full year 2015 ratio. We remain in excellent shape, regarding our capital strength, liquidity, and financial flexibility. Cash and marketable securities for our parent company at the end of the quarter totaled just over $1.9 billion, up 9% from year-end. Our capital is well positioned to support future profitable growth of our insurance operations and other capital management actions, such as returning capital to shareholders. As I usually do, I will conclude my prepared remarks with a summary of the contributions during the first quarter to book value per share. They represent the main drivers of our value creation ratio. Property/casualty underwriting increased book value by $0.38. Life insurance operations added $0.06. Investment income, other than life insurance reduced by non-insurance items, contributed $0.41. The change in unrealized gains at March 31 for the fixed income portfolio net of realized gains and losses increased book value per share by $0.46. The change in unrealized gains of March 31 for the equity portfolio, net of realized gains and losses, increased book value by $0.93, and we declared $0.48 per share in dividends to shareholders. The net effect was a book value increase of $1.76 during the first quarter to a record $40.96 per share. And now, I will turn the call back over to Steve.

Thanks Mike. I'd like to take a moment to thank our associates who are stepping up to increase expertise, innovation, and efficiency. The positive impact of their efforts is evident in our results. But we aren't doing it alone. We enjoy working with the most professional independent agencies across the country. As we continue to meet with them during our sales meeting tour, we are hearing great examples of our agents and associates working together to be everything insurance should be – for the people and businesses in their communities. As we work together with our agency partners to maintain this momentum, we continue to seek incremental operational improvements to produce value for shareholders in the near term and for the long term. We appreciate this opportunity to respond to your questions and also look forward to meeting in person with many of you during the remainder of the year. As a reminder, with Mike and me today are Jack Schiff, Jr., Ken Stecher, J.F. Scherer, Eric Matthews, Marty Mullen, and Marty Hollenbeck. Jessa, please open the call for questions.

Yeah, good morning everyone.

Good morning Josh.

Good morning. I think my first question is for Marty Hollenbeck; want to know what your equity view is and then how you are positioning the portfolio, with thoughts over the next six to twelve months and rates and so on?

Good question Josh. As you know by now, we don't do a lot of short-term manipulation of the portfolio. We try to build a solid foundation and let it go. Our investing style, particularly in the equity front, didn't hold up all that well last year; non-dividend payers, non-quality names kind of ruled the day. First quarter clearly went our way, worked out our style and with a few names, and particularly that caused us a couple of issues last year, really nicely rebounding. So I'd say, in the next six to twelve months, you will probably see us more or less pulled in there; I think the equity allocation is going to hover in that low to mid-30s range for a while here. On the fixed income front, we still tend to see value in municipals, an area that I think we have got room to put some money. Energy names had taken a bit of a hit; we've seen some rebound there both on the equity and fixed income front. So to answer your question, obviously a lot of large-scale restructured portfolio.

Okay. And if you look at the E&S segment, obviously you guys don't have a big presence there. But there were a lot of favorables involved in that category. Are you at a point where you have a big enough data set where you can rely on your own data? Was that one large case that proved particularly favorable? How should we think about such a large relief in such a small segment?

This is Mike; that's a great question and first of all, we remain very excited about the progress we have been making and the growth that has occurred since we started. In the E&S segment, as you saw, the net written premiums increased by 7% for the quarter to $45 million, and the combined ratio is performing well, with the prior year development and so on. We have been consistent in our approach to setting reserves in recent years. Although we don't have many years of paid loss data and given the high growth rates in insured exposures, which is reflected in the premium growth, the increased uncertainty regarding the estimated ultimate losses has led us to take a conservative stance in setting E&S reserves due to the lack of a long history, but we are making progress. Currently, our process is consistent with the prior year, and only time will tell, but we aim to maintain consistency in our process, and we believe we are on the right path.

So this was an IBNR release, not a case release – is there any way to understand it better?

That's exactly right. It was really more of an IBNR release, and when you consider the prior year development we had, out of the total 5.6 points, about one point was related to E&S. So we ended up with a 4.6 for the rest of the book, but that's a good way to look at it.

It wasn't due to any one claim, as Mike mentioned, it was an overall IBNR.

Yup. That's perfect. And then just one more, I think it's early days; there are a lot of moving pieces we are going to be seeking; you talk about the high net worth homeowners market; your entry into it, and what your agents, who are seeing changes with ex-Chubb, what their demands are and how we can think about this over the next three years, maybe?

Josh, this is J.F.; yeah, you might recall, that Will Van Den Heuvel joined us several years ago and so we were pleased that he did join us. But as Steve mentioned in his remarks, we have been writing high net worth, and on a smaller scale, about 10% of our book of business in the past. But Will has joined us; he has recruited some very talented, very experienced people. Our entry into New York, Long Island, New Jersey, and later this year in California has been met with a lot of receptivity by agencies in those areas, as well as obviously, our agencies throughout the country. Obviously, there has been a little bit of disruption in that marketplace, the realignment has had an effect. Agencies do want to have a choice, broad choice to provide to their policyholders. And so between Will's experience and credibility in the marketplace, as well as his teams, and our good reputation with independent agents, we are pleased with the response we are getting. We are getting a decent flow of business; it's not in our intent to explode onto the scene, though we have had good success. So overall, we are pleased with the progress, steady as she goes. We think that we are going to be pretty successful in this area.

Historically, obviously legacy Chubb was very large in this business, and they have said that the real growth in this business comes from finding homeowners who are potentially high net worth individuals, who currently have traditional levels of coverage and are being ill-served by the market. Do you find your growth is coming from expansion of the percentage of high net worth individuals seeking out a better class of insurance? Or do you find it's market share transfer among the players, who particularly look to themselves as high net worth underwriters?

I think it has been mixed. Some real great examples we have are policyholders that have been with direct writers, or companies that might not necessarily have been described as having an expertise in the high net worth area. We have seen some business from some of the bigger players. So it has really been mixed. I can't really tell you exactly what the policyholder is thinking. We are more in tune with what the agent is thinking about how they want to position their service to people. We are getting opportunities across the board. We got 1,500 agencies in the original 31 states of first lines for us, and because of the increase in our appetite for high net worth, the experience we are bringing to the table, they are more comfortably going out and soliciting high net worth business. Where in the past they may have isolated their submissions to other carriers, they are giving us a shot as well. So it's not any one thing, it's real variable across the board. We are pleased with the kind of receptivity we are getting.

And Josh, I'd like to add that the infrastructure we have is important. When we made this decision, we focused on our claims department, which is strong and treats every client like a high net worth individual. We believe our infrastructure is excellent. Our technology is impressive, and when I spoke with a new agency appointment, she mentioned that our diamond personal lines system is highly efficient and enables them to conduct business smoothly. I think that infrastructure is beneficial. Additionally, our expense ratio for personal lines for the quarter was 29.2, which is promising for us. I also want to emphasize our respect for all players in the high net worth space, including other carriers, who are very talented. We want to make this point clear as we discuss our entry and renewed focus in this area.

Well that's very succinct and thank you and congratulations on a very good quarter.

Thank you.

Good morning, and congratulations on a successful quarter. Could you explain the decline in the accident year, especially in the personal lines? I would like to understand the reasons behind the significant drop and how sustainable this lower figure might be.

Maybe I will start out, and Mike can jump in here. We did see improvement; we think there is a lot of hard work that's paying off. We did have favorable development in there. Part of that had to do with how we allocate our DCCE reserves, and I think probably Mike might be the best to cover that at this point.

Great, thanks Steve, and thanks for the question. So on the personal lines side, we did have $18 million of favorable development between the personal and homeowners, which is primarily where it was at. Personal auto was $9 million, and homeowners was $8 million. First, what I will start off with is to say; again, we do follow a steady and consistent methodology in saving the reserves, and we do look at that process every reporting period. So from time-to-time, we make refinements to better the estimates, based on changing trends, cost indicators, and the efforts applied, etcetera. As we stated in our 10-Q, we didn't need a refinement during the quarter to our expense reserves, which is also known as AOE, which are an estimate for the costs related to our claims department associates as they settle claims. That estimate includes assumptions of varying labor intensity by type of claims or line of business. So this refinement, while I mentioned, is it moved AOE reserves among all the lines of businesses that we have. But in total, it had a zero effect on all the lines for the company in total. So on a given line, by personal line to auto, you can actually see the refinement a little bit better. So all of the $9 million favorable development in the personal lines auto was really related to this refinement, while there was virtually little to no effect on the personal lines homeowners. So had we not reflected this refinement, personal line auto prior year development really would have been flat or about $1 million adverse. So when you pull all that together, there was a little something special in there, but we are constantly looking at our processes, how we set our reserves, and from time-to-time we do have refinements, and so you are seeing a little bit of that in personal lines, and you may or may not be able to see refinements in the future, but they do occur. Sorry for the long answer, but I hope that got to the basis of your question.

I think so. So that affects the reserve development, but does it affect the accident year number?

For the most part, really, all of that occurred in accident year 2015. So when you are looking at the refinement, we are looking at the different accident years. Personal auto, being a little bit shorter-tailed, is going to affect really the recent year, more so than going back prior years, predominantly 2015.

Would it affect the 2016 first quarter?

The refinement is already included for 2016, so you will see that in the initial reserves as they have been set.

Okay. I don't want to beat a dead horse. Thank you. Congrats on the quarter.

And I guess, maybe to make sure we are addressing it, you're probably looking at the current accident year, 51.5 in the supplement, relative to where it was at 55.5, and I just think there is going to be a blend there. We do feel very confident in the work that has been done in personal auto, in terms of what we mentioned. With the rate increases, the underwriting, and renewed emphasis there. But we also know, it’s a tough line, not only for us, but for the industry as well.

Hi, good morning. Thank you. I would like to begin by asking about the recent conference calls where many have mentioned significant disruptions in the market. I understand that some of the companies you've referenced operate in different sectors, but could you share your thoughts on this situation? Additionally, what trends have you observed in the marketplace over the last couple of quarters?

Scott, are you talking about the merger activity?

Yeah, AIG and Zurich and people falling back in lines in M&A; I don't know if there is any read around that for you guys specifically?

You know, honestly, no. I don't think we have seen an awful lot of it in the lines we are playing and the size of accounts that we generally go after. In all honesty, we have been to 16 sales meetings this spring, talking to agents from around the country, talking to all of our field underwriters. And I can't say that it's really been brought up at all as an opportunity or something that they are seeing a lot in the marketplace. So I don't know that we have much comment there.

Okay. And then, just on workers comp, you guys have had really good margins there for a while; looks like you pulled back a little bit this quarter. I know some of the other company that they are still pretty aggressively growing in this line. So just wondered if you could just talk about what your appetite and kind of what you are seeing out there within workers comp specifically?

We see ourselves as a market for certain agencies, but we are not as aggressive as others in the industry. Our approach is quite conservative. For instance, we generally do not write mono-line workers' compensation policies; instead, we focus on package business or accounts. When we are writing a package that includes auto and umbrella coverage, and we feel comfortable based on our underwriting practices, we may pursue workers' comp. However, we would not describe ourselves as an aggressive player in that area. While our performance has been decent, we believe there is room for improvement in our loss ratio and the services we provide. Workers' compensation is simply a line of business that we believe requires a lot of caution.

Okay. Good answer. And you guys announced entering New Jersey, and then later on this year, California. Is that going to be personal lines only, or is that going to be eventually commercial line as well?

It is personal lines only, and both of those states, we would anticipate sometime in the future, that we will probably go in from a commercial line standpoint, but not any time in the near future.

Okay. And then just one last question on, I guess this question is for Marty, just on some of the new securities you purchased this quarter off the higher yields; can you just give just some commentary in what areas specifically you are talking about, and would you continue to do this in the next few quarters assuming these securities are at similar levels, just to get their higher yield?

You're talking fixed income or equities or both?

Fixed income. Yeah.

Yeah, I think in the quarter, you saw a clear widening of credit spreads on the corporate front, particularly in the first half that moderate quite a bit. Munis tended to track treasuries; as I mentioned earlier, munis, just because of our profitability, continue to be attractive on that front, as well as just on an absolute after-tax risk-adjusted basis, we continue to find them attractive. We also lost a lot of munis in the last several years. As you might expect, due to calls. So we continue to just grind away; we are primarily new issue buyers; that's almost exclusively the case in munis, and predominantly the case in corporate. So part of it depends on the calendar. So we will continue to do what we have been doing, just looking for after-tax risk-adjusted opportunities.

Okay. So mostly the higher muni purchases and corporates is what drove the average yield a little bit higher then?

Yeah, typically corporates.

Corporates? Okay. Thanks. That's all I have.

Thank you. Steve, I joined a bit late, so I may have missed some information you discussed earlier. Could you provide some insights on the reinsurance business for the quarter? Specifically, which lines of business were involved, and was it mostly quota share? I’m also curious about the mix of quota share and XoL.

Good question. It hasn't come up yet, Ian; and I think it’s just a measure we are using to very opportunistically allocate capital approach. So we are really not focusing on particular lines of business. And so, we are just looking at them account by account; trying to make sure that we understand each one, both quantitatively and qualitatively. And since we are, I think, in a pretty good position as a startup, we can be very selective. But it is not driven by any particular line or coverage type.

Okay. I just want to know if you can share any information about the division between property and casualty reinsurance.

I don't really have a precise number. It was a good mix, in that 50-50 range, give or take. But I don't think you should read anything into that in terms of run rate or anything, as we do look at it opportunistically.

Got it. And the comment about the AOE update, is that also the explanation for the big release in the other commercial, or is there something else going on there?

No. I think that issue is a little bit separate. So again, just looking at the reserves, following a consistent process and looking at it from a quarter-to-quarter basis. So that was a little bit different.

Okay.

All in the normal process. But mostly case in the D&L.

I understand. I would like to follow up on Josh's question regarding the E&S releases; this marks the second consecutive quarter where they have been quite substantial. They have been strong for an extended period; in fact, I believe they might be double the run rate of the past two quarters. Is there a reason for this? Could it be due to the business aging, allowing more to come through? Or is it due to greater confidence in your own data? I'm curious if there's been a process change, or perhaps a mechanical change, that contributes to the maturity of that business, leading us to anticipate more trends in the recent quarters compared to what we saw in the past.

Certainly, there was nothing particularly special in our normal process. The spread was actually pretty even across the accident years, with about $4 million for 2015, 2014, and 2013, and $3 million for 2013 and prior. We were just following our standard process. As we grow, it's still relatively young, but we have a lot of new policies coming in, and we are being conservative in how we set our reserves.

Got it. I hope I’m not reasking, but I don’t think I heard much about market competition. It seems relatively stable compared to last quarter, but I’m curious about some anecdotal observations. We see various market reports, which may not be the best indicators. However, they suggest an increase in competition, and I believe Brandon Brown mentioned that as well. It doesn't really show up in your results or those of the other companies that have reported so far. I'm wondering if the market feels stable, or if you're noticing some regions where competitors are becoming more aggressive on pricing while you’re trying to maintain your margins. Any insight you can provide would be appreciated.

Yeah, I think that's a good way of describing it. There are some competitors on the margin that kind of distinguish themselves as being out there. But anecdotally, the feedback we have gotten from both agents and field underwriters is that it’s a competitive market, but it's stable and that the field reps have felt very comfortable that we have got good submission flow, and that we had to pick our way through things. I think the concerns that are out there at the agency level, is that there is competition, so there are probably more accounts that are being shopped. Just to protect and make certain that they are comfortable with the pricing. One of the areas that we are pleased about is our three year policy strategy. That keeps, because of the commitment we make to policyholders, and with the three year guarantees, we think few of our policies are shopped through soft markets and hard markets. But particularly right now, it's attractive from our standpoint. The one area that I would mention, is that we are seeing a conspicuous amount of competition would be in the E&S side. We have a fairly conservative underwriting appetite in E&S, so I guess it's fair to say that we might be a little bit on the margin between standard and non-standard, and a lot of the business that we write. But we are seeing some larger E&S accounts that are being taken into the standard side. And that’s probably a little bit of why the E&S growth rate wasn't as robust as it has been in the past. Is that we have seen some larger accounts leave us. And so once a standard market carrier is willing to take the account, there is no amount of pricing that we can apply, if we wanted to, to retain it.

Exactly. Do you have any ability to move it among your balance sheets, because it could transition from an E&S account to a standard account if you wanted to retain it, or is it just not the same?

Certainly. We normally write accounts in that area, which is typical for us, making up about 40% to 50% of the E&S policies we handle. We are also involved in the standard side of that business. There is ongoing communication between our access and surplus line subsidiary and our standard side regarding accounts we’ve managed on the E&S side for several years that we believe are operating profitably and could be suitable for writing under Cincinnati Insurance Company. We actively consider that option. However, we are quite aware that the accounts we lost to the standard side have raised our concerns about whether a standard market would have accepted them.

Understood, understood. Very helpful. Thank you so much.

I want to express my gratitude for what you all have done for stockholders over the past 15 years. Many people reach out to me and ask for the secret behind our success. I tell them that it doesn't require any special credentials to bring joy and happiness to others. The team at Cincinnati genuinely engages with customers and agents to understand their needs. They foster a positive culture and promote internally, which is part of their price-conscious philosophy. It's been fantastic, so please keep up the great work. Additionally, Fireman is exiting California and has canceled my coverage, which creates an opportunity for your services. What share count are you using for your financials for the first quarter?

In terms of our share count, it's about $166 million Fred.

$156 million or $166 million.

$166 million.

There you go. Thank you and thank you gentlemen and ladies.

Thank you, Fred, and thank you so much for your comments regarding us.

You guys deserve it.

Thank you. That means a lot.

Okay. Thank you, Jessa. Before we end, I did want to correct one set of numbers that I gave in the answer to Paul Newsome's question; I picked up the wrong line. In terms, Paul, the auto current accident year combined loss ratios before catastrophes, it's 79.1 for the third quarter; 81.6 in the same quarter a year ago. But my comments reflected the auto. And with that, I'd like to thank all of you for joining us today. We hope to see some of you at our annual shareholders meeting Saturday at the Cincinnati Art Museum. Others are welcome to listen to our web cast of the meeting. It's available at cinfin.com/investors, and we look forward to speaking with you again on our second quarter call. Thank you very much.