Okay, I'm going to kick things off, everyone. I'm Tracy Dolin-Benguigui, Insurance Analyst at Barclays, and I'm pleased to host fireside chat with Palomar. My esteemed panelists are Mac Armstrong, Chairman, CEO, Chris Uchida?
Uchida.
Uchida, CFO. I thought the best place to start, Mac, is if you could just give some high-level overview of what you're seeing in the market.
Yeah, terrific. Thank you, Tracy, for having us. It's great to be here. I think overarchingly, what we're seeing in the market is, for Palomar, simply put, opportunity. You know, we write 40% of our book is earthquake, and in the earthquake market, we are seeing dislocation on both the residential and the commercial side, in the teeth of a hard reinsurance market and a challenging overall property insurance segment, which is creating opportunity for us. And then additionally, as we look at across our four other product categories, property, inland marine, as well as casualty, fronting and crop, again, opportunities abound. I think what's important for us is to be mindful of risk-adjusted returns, managing volatility in the earnings base, and making the requisite investments in growth.
And so fortunately, first part of the year, we've been able to do that and execute on the plan, and in the course of the year, raise our guidance twice.
Awesome. Okay, you obviously are a growing company, and I'm wondering if you could just unpack for us the key contributor, contributors of premium growth, whether it be rate increases, higher submission volume, greenfield operations, or underlying economic growth.
Yeah, Tracy, that's a great question, and I think it's important for us to look at that again, kind of within those five products segments that I just touched upon. You know, within earthquake, it's driven as much by rate increase as it is by exposure. In commercial earthquake, more of the growth to date has been from rate, where it's been in excess of 20+%. But at 6/1, we did secure incremental reinsurance limit that's going to allow us to grow our exposure in addition. So that's leading to submissions, as well as rate increase to drive the growth.
When you look at the inland marine segment of our book and that's driven combination, you know, stable rate, you know, about 10% increases there, but a lot of more greenfield as we've brought on underwriters to help us expand our geographic footprint. So geographic expansion there, and then there's a healthy economy. Even with the slowdown in the housing market, there are still new houses and start new projects for us to underwrite. So that's, that's a little bit of a different one. And then Casualty, that's really greenfield. You know, we're, we're new to that market. We're growing rapidly in that market. We have added additional talent to come on to the team.
So we're seeing good submission flow, but it's really where we are, you know, planting the flag in a segment like real estate agency, you know, adding underwriters within that segment. Last week, we announced the hiring of a leader in the environmental team, so it's greenfield operation. Crop would fall in that same segment. New market opportunity for us. Large market, we're one of 13 approved insurance providers there, but it's going to be more of a greenfield. And then fronting, that's probably now where we have a handful of clients. It's submission activity. We're seeing good submission growth. Some segments, fronting carriers are seeing rate, others it's more flat, so it's really more submission activity.
It sounds very well-rounded, your sources of growth, but if I'm just thinking about a pricing cycle, it's almost like this many mini cycles-
Yeah
-being property right now. How long do you think this hard market will play out? And, when we do see a turn, do you think it would be more moderated?
Yeah. So I, that's the, you know, I guess the multimillion-dollar question, but a multibillion-dollar question. So for us, what I would say is, we expect the property market on the primary side to persist through 2024 into 2025. I think the expectation right now, as we view it on the reinsurance market, is that rates will be flat to up by, you know, mid-single digits next year, which means that you kind of roll forward another 12 months off of, like, a June 2024 renewal into 2025, because you're going to still want to be recouping your lost costs. You know, I think reinsurers feel that they are at a point now where they feel good about their attachment. It's not at a 5-year or a 3-year, it's at a 10-year. They're feeling good about their risk-adjusted returns.
They may try to optimize that incrementally. We have the opportunity to recoup that on the primary side. So my best sense is that, property market remain at this level, if not increasing through 2024 and into 2025 on the primary side. I do think I'd add, though, that, you know, within property reinsurance, there is greater appetite for single peril exposure than it is multi-peril or, all peril exposure. And so as our book has really transformed back to more of a single peril book, whether it be earthquake or Hawaiian hurricane, I think that gives us a little more confidence that, we will have great stability in our reinsurance renewals and hopefully down the line, some relief to come.
Great. Well, we get to get into the products. You have your bellwether product, California earthquake. Let's start with the residential side.
Yeah.
You guys actually had a really successful reinsurance placement. The CEA, a little bit less successful, and I think you were talking about at one point that maybe you could see some spillover of some business as a consequence.... Did that happen?
Yeah, so the CEA has gone through, or is still going through a host of changes, and I think we've been a beneficiary of those changes. You alluded to it there, they did not procure as much reinsurance as they had for renewal, and in the process, we saw several reinsurers migrate over onto our program, which again, helped us drive incremental limit that we bought at 61 to call it $500 million. They've also been reducing their coverage, you know, for any structure over $1 billion of limit, they are requiring a 15% deductible. Our average deductible is about 12%, so call it either a 10 or a 15. They're reducing coverage. They've also been downgraded by the rating agencies.
That would, that means certain security committees will approve them for new business or potential renewals. So we have not had a circumstance where there's been... You're absolutely right, like, there hasn't been a step change where a participating insurer has left the CEA and come over to Palomar, but we have been able to sustain high-teens 20% growth in residential quake because of their pullback and their appetite. And we've been able to secure incremental reinsurance limit to support our growth in both residential and commercial because of the changes at the CEA.
Great. And how successful have you been migrating residential California quake to the E&S market at a price, the risk?
Yeah, Tracy, you know, you and I've discussed this in its prior calls as well as some one-off meetings, but we want to see an increasing amount of our residential earthquake on our E&S company. Right now, it's just about 10%. It's doubled from where it was a year ago, but our goal, intermediate goal, is to see that closer to 20%. In doing so, it accomplishes a few things. One, it does exactly what you just mentioned. We can charge more. We're not bound by a rate filing there, so we can charge more than what we can on the admitted side.
Two, it helps us manage the book from a risk-adjusted perspective and from an exposure management perspective in areas where we are have higher concentrations, so think West Los Angeles. And then thirdly, it provides a bit of a stopgap in relief from the California Department of Insurance lack of responsiveness if there is a major event. You know, we want to have the ability to move business onto the E&S company, charge the requisite premium if there was a major event that we would not be able to do because we'd be waiting for rate approval from the CDI.
Great. You know, you recently launched a crop fronting business. You characterize it as a $20 billion TAM.
Yeah.
So a couple questions there. Realistically, how much market share do you think you could grab? Because it's fronting business, I'm wondering who your reinsurance counterparties are.
Yeah.
You know, there have been, you know, some divestments within crop business, and scale has been cited, so I'm curious if you feel like you have the scale in that business to get sufficient terms and conditions with your reinsurer?
Yeah, sure. So, first off, thanks for bringing up. We are very excited about crop. We think, we have the opportunity to build a meaningful franchise. While we are fronting, this year for that line of business, our expectation in 2024 is that we will take a modest risk participation, call it 5%, and then in 2025 and beyond, it will, increase. And so we'd like to see us be a, you know, that, that's going to be a risk-bearing line of ours over time. But, like we've done historically, we want to walk before we run, get the underwriting correct, get the reinsurance in place, leverage our in-house expertise. Both our President and our Chief Risk Officer have extensive histories in the crop market.
So, ultimately, we have a very strong reinsurance panel. We have a multiyear deal, where we locked in reinsurance for both the 2023 crop year as well as the 2024 crop year. It's five reinsurers supporting us there, including, you know, the SRA, so the, the federal livestock. And, what we do think we can accomplish is, you know, building into a several $100 million product for us, with specific targeted geographies, specific targeted crops, and products as well. Like, we, we're excited about PRF. We're excited about regional livestock in addition to wheat and soybeans and, corn and the like.
Fortunately, we have made a strategic investment in Advanced AgPro, who is a distribution expert and experts in the crop market, that we're now on the board of that company, and they're helping us on the distribution side, while we can manage the insurance and underwriting. While scale is certainly important, you know, and some people have said they've divested an asset because of the scale concerns, I think Palomar versus AIG in terms of how they define scale might be a little bit different. So, you know, for us, getting to several $100 million, that moves the dial for us. It may not for them.
Okay, got it. You touched a little bit earlier about greenfield operations. I'll just note that when you started doing this, it was to catastrophe adjacency.
Yeah.
And now you're dovetailing into casualty lines. You know, how do you feel about your underwriting bench strength, and how dependent are you on MGA to underwrite the business?
...Yeah, so we are now, I guess, in two years into our casualty strategy, and we're pleased with how it's going. I think what we're most pleased with is the talent that we've brought on to execute it for us. We have brought on best-in-class underwriters from you know, household name insurers to build out a practice in niche segments within casualty. So professional liability, excess liability, general casualty, but really with a focus within contractors and most recently now, environmental. And so when each of these experts join us, what they are bringing is long-standing underwriting expertise, distribution relationships. What we are bringing to them are reinsurance, actuarial and analytics, and then technology. And so we think it's a nice combination to allow these underwriters to do what they're great at, and that is build a book of business that's profitable.
And then it affords us the ability to leverage in-house talent and infrastructure. Where we stand right now, it's going deep in niche segments, like real estate agents E&O or collection agents E&O, environmental, you're talking about, you know, environmental contractors providing what either a combination of pollution liability or standalone pollution liability or combination of general liability and pollution liability, and then it's excess liability for contractors. So these are areas where we think we can build out a nice franchise. Again, be patient in how we go about doing it, so heavy use of quota share, you know, retaining 20%, maybe 50%, but no more than a max line of $1.5 million on a net basis. So it allows us to be deliberate and not burn our way.
To your question on MGAs, you know, if we have a subject matter expert, we're not opposed to working with an MGA that can help us access a segment of the business that we currently don't. And so that might be in the circumstance of, excess liability, some larger account business where we can put a $5 million gross line, a $1 million net line, part of a $20 million participation, something that we might not see directly, submitted to us. So it's a complement, and we will use MGAs, to complement an existing strategy when we have a subject matter expert doing underwriting.
Given the inflationary environment, we've seen more on the property side than casualty side so far, but, you know, does that give you pause at all?
Yeah
-in casualty?
Yeah, I mean, social inflation is something, you know... fortunately, we're not weighed down by legacy experience there, but it is something that we're mindful of. But I think it's, it, it really does start from, having a conservative approach to exposure management and underwriting. And so for this casualty strategy, the first thing that we are going to be doing is mindful of our line. So as I talked about our net limit being $1 million-$1.5 million. Secondly, even when we're writing an E&S business, we're going to be using either ISO or AAIS forms, so court-tested forms for these markets, that will avoid the potential exposure, that you might get from a manuscripted policy.
And then thirdly, you know, it does come down to really being mindful of what you are writing within those segments. So trying to avoid bodily injury and physical damage where you've seen the larger nuclear verdicts in the going to courts. So it's a similar strategy we've done on the property side of exposure management, being mindful of our net line exposed, and being pretty focused on the classes of business that we write that we're employing. But it... yeah, we have to watch social inflation, litigation finance, those you know new I guess real-time scenarios that we're all wrestling with now.
Hey, Chris, and as casualty will grow, you could theoretically hold your assets a little bit longer to match those liabilities. How do you think your investment posture may change?
Yeah, that's a great question. When we think about it, obviously at the beginning, we were very focused on being liquid and having the capacity to pay claims in a large catastrophic event, like an earthquake. The current market and the current mix of business and the changes that we do increased our position to start looking at alternative investments, some of what Mac has talked about on the crop side, we can start looking at things like that. We've been able to get yield right now, just based on the overall marketplace, but, you know, we do see the ability to change the rate and look at some alternative investments. More importantly, you know, we view ourselves as an underwriting company first, so investable. Nice to have, but our key focus is delivering returns to investors based on our underwriting.
I think the good thing is, to Chris's point, you know, we have those options, but we haven't had to. Like, our duration has stayed inside of four years, and we've seen a nice lift on our yields. And then lastly, our investment leverage is 1.5 times, so we can just let the book grow organically, and not have to change it too much, and that will give the lift to complement that underwriting income, as Chris has placed the premium.
Great. We touched on fronting business a little bit in your opening remarks as well as prop business, but holistically, can you just walk us through what type of businesses fall into the fronting business category and those businesses you may want to get into?
Yeah. So we've taken a strategy with our fronting business to be more kind of rifle shot than others. We have, you know, less than two hands full of clients. When you include the crop, it's, you know, it's around eight partners. So we're going deep with subject matter experts that we give our subject matter experts in targeted lines of business. So it's cyber, it's workers' compensation, there are a couple of property programs, and then there's a cross-border transportation programs. Those are a lesser of examples of our fronting arrangements. For all of them, we are actively involved in the orchestration of the reinsurance, certainly managing the collateral, how claims are handled, compliance and underwriting.
We view them, even if we're not on risk, we are on risk, with about a 5% average participation in three of the deals. But even if we are not on risk, we view them as programs and as lines of business that we would manage as if we're taking 20% or 25%. So as a result, I think it's afforded us the ability to have a keen understanding of the exposure. It's afforded us the ability to avoid surprises, and I think it's a line that will continue to grow as we add new partners selectively. But the other thing I would add is, the luxury of our fronting strategy is it's a line of business, it's not the totality of what we do.
It's, call it, 10%-12% of our adjusted net income. So, we don't have to try to boil the ocean and find every deal because it's all that we do. It's just, again, it's like a builder's risk or in the marine line. It's a nice contributor to the bottom line, but it's not the sole driver of profitability.
You know, sticking with fronting business, you have plenty of underwriting capacity. I think you like to manage, you know, below 1.1 times, and you're well below that. Why is it appealing to cede the risk versus net participate in these programs?
I think for us, it's, we're viewing, these programs right now as, newer lines of business that we can do R&D on and learn more about them. So we have the opportunity to participate over time. As we see the underwriting results come to fruition and they become more seasoned, we develop more in-house expertise on those lines of business. It does afford us the opportunity to take on risk and potentially convert them to products.
That being said, you know, and Chris talked about it, when we introduced Palomar 2X, like, if you just look at the existing lines of business that we underwrite in-house and control the claims in-house, we are much better served potentially taking our risk participations on those lines of business, like we've done with flood where we went from 10% to 50%, or we are dealing with professional lines in general casualty, where we've gone from 20% to 30%. We think there's a greater driver of incremental income and capital utility with those lines than fronting, per se.
Well, going to Chris. You know, given your dependence on the insurance, do you have, like, a maximum insurance recoverable capital metric in mind, particularly as you're scaling up fronting business?
Yeah, we don't necessarily have a specific number that we're trying to manage to. We do know that when you look at some of the competitors that are pure play fronting companies, we are significantly below where they are. As Mac talked about a little bit earlier, our key goal when we're looking at the counterparty risk. So we evaluate that closely. We collect collateral, and above regulatory requirements to make sure that we are protected. So our main goal there is, managing that collateral, managing the counterparty risk, but also, as Mac talked about, thinking about the fact that this is a line, this is something that is, nice to have, nice diversifying line for us. It is not the totality of what we do. So we do not necessarily have to be specific looking at that from other, pure play fronting companies.
When I'm just thinking about how large fronting business could be, it was just under 30% of your premiums, gross premiums in the second quarter. What percentage of your gross premiums do you target in the near to longer term fronting business?
You know, for—I don't think we've put a target on it, but I would say is, you know, it's, it's grown faster, obviously, over the last two years, and it continues to have nice growth behind it. It's not one, though, where it's going to be the, our largest line of business, and certainly on a, from a net income contributor perspective. So I would expect fronting premiums to still re- growth remains strong. It will slow and probably start to index year while growth rate of the company, especially as lines like crop and casualty accelerate their growth.
Got it. On the second quarter earnings call, you mentioned you're being approached by dislocated MGAs as a result of collateral crisis for our fronting there. Has that interest actually translated into any client adds?
We've got a pipeline of them, but there's a lot that we've just kind of categorically killed because of the line of business. So you know, with the best to shake out, there was a lot of wheels business that was looking for a home, both commercial and private passenger, and we said that that's not a class that we want to write. So there are a few that we are in various stages of diligence, but we're going to deliberately run normal due diligence to determine if we want to take on those clients and those partners. I think the other thing, Tracy, though, that is fundamental to that exercise is right now they're probably potentially looking to backfill a 10%-15% reinsurance or risk participation. So that elevates the sc-...
So, you know, for us, like Chris was just saying, you know, a normal client comes over, we're going to look at their underwriting and, and the performance of the book from a sustainability standpoint, from a reinsurance execution standpoint. But we're more focused typically on the counterparty risk and the collateral. In this circumstance, where it's a 15% risk participation that needs to be assessed, it's a longer diligence. And so therefore, it's not like an overnight if we're going to convert these and bring these on. But we do have three or four that are in various stages, and we'll see where they shake out.
I'm wondering if you'd be willing to offer any color on Maui fires?
Yeah.
in terms of potential losses. I mean, even thinking about your allied lines, where you're at, like, just under 10% market share.
Yeah. So it's, it's interesting, you know, the what's categorized as allied lines in Hawaii is broad. And so we write in the state of Hawaii, a Hawaiian hurricane policy. And so the way that policy works is you have to have an attached homeowner's policy, and then this policy will cover you for damages caused by a hurricane. If there is a named hurricane watch or warning for any of the counties or islands. So wildfire is not covered, and in fact, the underlying coverage is in place for us to even be at risk for hurricane. So you know, you look at our 10% share, 98% of that was going to be from these Hawaiian hurricane policies that were not on risk.
As it relates to the residual business that we write there, that we do write flood, and we have a handful of commercial business there, builders risk and some all risk, none of those were impacted.
You said, like the hurricane fire would be excluded.
Yeah.
I'm thinking about fire following, like earthquake has fire following.
Well, earthquake, fire following an earthquake is excluded from an earthquake policy, so it's the same thing here.
Okay.
And then also, though, even though there was strong wind, but since there was no hurricane watch or warning on Maui, we're not on risk. And so it's no different than if there's, like, strong trade winds or a tropical storm that comes through there. We're not on risk. So it's very specific in the coverage that it provides.
How about Hilary? You also write flood in California.
Yeah. Mm-hmm. Yeah, Hilary was, you know, it was a great weather channel event, and certainly had our phones in Southern California ringing from friends that want to understand what was going to happen when this massive storm was striking San Diego, where we all live. But what happened was, it was a, you know, what people on the East Coast would kind of not bat an eye at. It was a strong, strong storm that came through, but there was, there was flooding in certain areas. And we'll, we'll have some flood losses, but not aberrant from what we would see, you know, in the rainy part of the year in California.
It's important to point out that, like our flood program there, typical limits, $250,000 is kind of satisfying the mandatory requirement for flood policy, that a mortgage would require, and it's also a 50% quota share. So we've had, you know, 12.5 claims, very manageable.
Great. You've had a successful reinsurance renewal. Chris, my understanding, just looking at the reinsurance schematic, it's almost like the quota share is linked to the XOL, where you have to exhaust the quota share before you could get recovery on the XOL. Can you walk through that dynamic? And I don't really have a sense of if you could quantify the risk, the s ession within the quota share.
Yeah, we haven't quantified all the sessions. We've kind of given out color, but overall, it really depends on the type of risk, depending on whether or not it will participate with our excess of loss. The excess of loss tower is really designed for property risks, so some of our newer lines where we have quota shares, such as casualty, it is going to have a type of quota share will then not participate on the excess of loss. But a lot of our quota shares do, are uncapped, so we don't have any loss caps associated with them. Some of them do have loss caps associated with them, but they are significantly above the projected loss rate. A good example is on our, before we- 350%, depending on the partner. So they're all protected there from a quota share standpoint.
It's also important to note that we quota shares, where we are taking the minority share, especially of a program where we're getting traction, we're loading up a program, we're getting scale in that. So it's not something where we're taking the majority of the losses of passing those on into the reinsurance market.
And then, you know, those coupled with the property quota shares, where essentially, you know, if we a commercial earthquake, we cede out 20% to reinsurers that have an occurrence limit that's related to a PML out of premium ratio. If there was a circumstance where it exceeded that PML out of premium ratio, which by the way, is above our existing PML out of premium ratio, it comes back then on our... Then it mirrors the benefit of our cat tower. So our cat tower would kick in. So let's just say if it was, you know, the PML out of premium ratio equated to $100 million. Once it's above $100 million, then it would come onto our excess of loss tower.
Just to be clear, you managed to one PML . Is that the PML to premium threshold you're talking about?
Our PM out of premium threshold is. We keep it above the 250-year. The occurrence cap on the commercial earthquake quota share is actually above that, but if it does go above that within that quota share, then it comes onto our tower.
...What about other perils? Would you be able to quantify?
They're uncapped. So like, builders risk and the marine, they're uncapped.
Okay. And how do you envision your ceded re strategy maybe evolving over time?
Yeah, you know, we wrote - we have historically written ceded re. You know, we wrote some at the beginning of this year. And some of that was strategic to partner with existing reinsurers. Say, we'll support you in an uncorrelated exposure. You continue to increase your support with us on the earthquake side. I do see a scenario where we will build out more of a ceded re franchise, where we can write low frequency, high severity, both property and uncorrelated property and casualty business or specialty business. But it would be akin to, you know, a small line of business like we're trying to do within casualty or within our inland marine and other property. Frankly, we thought we'd write more at the beginning of this year.
We were kind of taking the approach, if you can't beat them, join them on the reinsurance side. But, and I think that opportunity will still persist, but it's not going to turn into a, you know, 20% line of business.
Okay. Let's take a quick pause and just see if anyone has questions in the room. Maybe as you're thinking through some questions. Congrats on your positive outlook from A.M. Best. I'm wondering if, you know, there are any positives that came out of that, whether it be better reinsurance terms, more traction with your agents, and particularly maybe, Chris, you could comment on how your capital management strategy may evolve as a result.
Yeah, thanks for... We were pleased to get the positive outlook. I think we're pretty focused on trying to get the actual full upgrade to an A. And if that does transpire, that will help us in selected lines of business where certain buyers are more rating sensitive. It won't change much on the property side, but I do think it will be helpful on the casualty side, and particularly in the professional lines as well as some of the excess liability. It would result in cheaper reinsurance, but it hasn't to date. But I do think it will open up distribution for us and afford us the ability to access certain classes of business that we've been excluded from.
But, I'm back on point, but I think that's probably, you know, four to seven months now when A.M. Best reviews.
Yeah. capital side, we're very well capitalized. I think when you look at it from an A.M. Best standpoint, our capital ratio, our BCAR score, is at the highest level. So we don't necessarily feel we need to make any changes. We still feel we have very ample room for growth in our portfolio. We continue to strategically do buybacks opportunistically, but overall, we feel very well capitalized and positioned to grow the business organically.
Questions? Okay, so this is a little bit off topic, as you don't write residential homeowners, but you're in California, and you're, you seem to be very plugged in on that state. So I'm just wondering to hear your perspective on some of the proposals, like changes to Prop 103?
Yeah. Well, it sounds like they officially hit an impasse last night with the changes that were being explored, in particular around the utility of models in reinsurance, cost models, in particular, wildfire especially. And so what I saw was that, you know, it was going to try to go to the legislature this week, which would have again incorporated models in exchange for forcing insurers to take more in calculated regions, that has fallen flat. And so my expectation is it'll probably be revisited in January at the next legislature session. Without, so you are going to continue to see a pullback from standard market carriers.
I've heard a stat that of new business in the state right now, 80% of new business in the state is either going E&S market or the FAIR Plan. So, I just don't know how that is sustainable, when you have a department that's either unresponsive or is scared of the consumer watchdogs coming in and intervening on judgment. So there has to be some change, in the interim, you know, we continue to see a ton of wildfire-focused submissions and plans or high-value homeowners plans that want to partner. But I think for us, we're better focused on being an earthquake and flood specialist in the state that can partner with those that want to take on just the homeowners risk, whether they're admitted or E&S.
But there has to be some change, otherwise, you're just being... It's going to be, the crisis will be exacerbated.
Do you think, like, these wildfire catastrophe models are robust enough?
I think they're getting better. I think they're getting better. I think the only thing that is that, you know, is it, I, I... It probably works well from a risk selection standpoint. From a portfolio standpoint, it can help you with spread of risk, but I don't know, if the science is as sound as it is.
You know, a year ago, you mentioned about 47% of your business does not provide attritional losses. You know, how much of that has changed since then?
Yeah. So if you look at... That was more for just the called the earthquake in Hawaii, the binary business. That has decreased a little bit. That is now 43%. If you include fronting in that number, it's about 72% of our book has what's called minimal attritional loss exposed to it. And then the other 28%, as we talked about a little bit earlier, is exposed to attritional losses. Still a heavy amount of quota share, where we're seeking out the majority of that risk to reinsurers. So it's part of the reason our loss ratio has been able to stay low, right? Call it around 20% for a significant period of time. So it's something we like about our book, and something that eventually will change as we talked about potentially, you know, we're very happy with.
Great. Any questions? Okay, I think we're out of time, so let's give a round of applause and thank Mac and Chris.
Thank you.
Thanks, Chris. Appreciate it.
Thank you.