Welcome back to the 2025 U.S. Financial Services Conference for Bank of America. If you are here to hear about Hanover Insurance, you're in the right room. We're really pleased here to have John Roche and Jeff Farber, the CEO and CFO of the company. I just wanted to go through a little bio and then I'm going to give John some time. So John was appointed as the CEO in 2017 after joining the company in 2006, but he's a 30-year veteran in the industry. He was the Vice President of Commercial Counsel at Travelers, St. Paul Travelers, before joining Hanover, Fireman's Fund, Atlantic Mutual. He's the Chair of The Institutes, and education business that offers designations for competency in the risk management industry, the Board of Directors of the American Property Casualty Insurance Association, and a board member of St. John's University's Maurice R. Greenberg School of Risk Management.
Jeff joined in 2016 as CFO, 30 years of insurance and financial service experience. He was formerly the Deputy CFO and Chief Risk Officer of AIG's P&C businesses, CFO of GAMCO, and has a pedigree from Bear Stearns and Deloitte. And we're really pleased to have him now. I'd like to give John an opportunity to say some preliminary remarks, then we'll go into Q&A. If anybody has any questions, you should feel free to answer them. Just raise your hand and we'll do it. John, why don't you talk a little about Hanover and a view of the future?
All right, well, thank you first and foremost, Josh, for the opportunity this morning to be part of the conference, and it's an exciting time for our company, so I'll be brief, but do want to share with you the optimism and the enthusiasm we have coming into 2025 after a very strong year for our company, following some challenges that we faced head-on with respect to the hyperinflationary environment, as well as some distinct weather patterns that, in particular, were challenging for us in the Midwest, but as I've said in other venues, the silver lining of that time period was that it really made our company stronger.
And I think we were able to demonstrate the agility that we had, the ability to take a leadership position, particularly in the Midwest around changing terms and conditions and driving pricing, but also demonstrating as part of our agency strategy that people most know us for, that we could have equal followership in some challenging times as we have in some of the better times. And the support level that we saw across the country as we did lean into the hard market and personal lines and drove some real changes in our portfolio management and pricing, I think demonstrated that this company has the right distribution approach, a diverse product set that's relevant to the best agents in the country, and increasingly a focus on the customer and how do we help customers mitigate risk, not just reimburse them when they have challenging items.
We're excited about the innovation and really the transformation that's starting to build in this industry. Combine our financial trajectory, which is back on track with some of the work that we're doing to really elevate our capabilities as a firm. It's a very exciting time at Hanover.
Terrific. Let's talk a little about The Hanover and for people who don't know the company as well, or certainly I can always learn more. If we think about the Hanover Agency Network, how many agencies is Hanover currently in? How many appointments are coming new each year? And what are you expecting out of agencies who become Hanover agencies?
Sure. Well, as you know, we're a little over $6 billion in revenue across roughly 2,200 agents, and even though there's been a lot of change on the agency front, which consolidation and for us, a number of new appointments, that number of roughly 2,200 agents is not terribly different than it was six, seven years ago, and that's because there's a bit of a plus and minus going on here where the consolidation is bringing together some of our partner agents into a more consolidated group. At the same time, there are some agents that don't validate, if you will, on the value proposition, and we respectfully move on, but on average, we've been adding roughly 150 agents a year to bring into the fold, mainly in our personal lines and small commercial to help with our diversification from a geographic standpoint, right?
By the nature of our business, when we have success with an agent, we create some concentration of risk. And so one of the ways in which we continue to address that is to find more agents that are more distributed countrywide and help with that diversification. But the way we measure agency locations really is how they plan with us, not how many offices they have. So sometimes that confuses folks in that the 2,200 represent agents that we sit down with and do our business planning with that may have three, four, five locations reporting into them.
And if we think about a Travelers or a Progressive, I mean, it feels like almost every agency. Can we talk a little about the unique experience of being a Hanover agent and what that means versus having the shingle from a broad-based national agency, a national carrier?
Yeah, and I think there's successful business models for various different types of companies. We kind of reestablished this company a decade and a half ago on the premise that the best product makers in our business were moving towards many, many agents and in our minds, over-distributing almost out of necessity given their size. And on the smaller end, you had a bunch of regional, more intimate companies that had fewer agents and built their businesses more on relationships. So we think of ourselves as the best of both. But what that requires us to do is to find really sophisticated, winning agents that appreciate the difference that we bring to the table. And if we're going to do business with fewer agents, we need them to have a broader and deeper penetration. So we have a very kind of sophisticated and analytical approach.
I think many people are familiar with our Agency Insight tool that allows us to really sit with agents, including a number of these new appointments, and say, "What does your book look like broadly? Where could we fit over time based on our product set and capabilities? And what's the deliberate plan that we're going to use to get there?" And we have pretty strong discipline about it. So it's either moving down a path or we're moving on and respectfully moving to new relationships that, frankly, will be more mutually beneficial.
In terms of targets for a successful agent that's working within the patterns you've laid out, what percentage of the flow are they sending to you, or at least of the flow that you want within their agency?
So as you would imagine, we have a pretty sophisticated segmentation process that separates out by agent and by agency location. What's the addressable business based on what we do, right? And so how much small commercial do they have? Do they have specialty businesses that fit into our nine major businesses? Is middle market part of that proposition or not? We have some personal line-centric agents that have some other interests. So clearly, based on that, we set very specific targets based on the businesses that we have and what kind of penetration level gets us to a top three status in any of those categories. And we've made a ton of progress. As you would expect, the larger the agent, the lower that market share is going to be to get to relevancy. The opposite's true.
In places like Michigan and Massachusetts and others, we can have 30%-35% share of their personal lines book. But if we're having a more broad and deep relationship with midsize agents or consolidating agents, it may be 7%-8% market share is a really good number, but we demonstrate how that is relevant based on the sectors that we're in.
And so let's talk a little about some of those sectors. One thing, I mean, you write both admitted business and E&S business. Obviously, E&S business often distributed by wholesalers. How does your E&S business attract, I guess, the business? Does it go out to wholesaler? Is a Hanover agent able to say, "Well, this doesn't fit in my admitted market, but I can go directly to Hanover and get a placement there"?
Yeah, so you're right. A huge portion of our business is admitted business through retail agents, right? That is the predominant part of our portfolio. But over time, for a variety of different reasons, freedom of rate and form, some volatility aspects of certain parts of our portfolio, we have leveraged surplus lines paper inside of our specialty businesses as an extension of our capabilities. And then we do have an E&S business unit that is both retail and wholesale with very separate units. So this group focuses on probably 50 agency offices or wholesale offices. So again, very, very specialized and very discrete in terms of who we engage with, even on the wholesale side of the business. And we go through a similar process of what business do you think fits us?
We have had some success in linking some of our retail agents that very much use wholesalers for management liability or E&S or some other lines of business and trying to connect those dots to see if we can create that kind of relationship. But I would tell you the vast majority of what we're doing is modeling our partner strategy where we're very focused on what kind of business we want with agents and wholesalers that have.
And so there might be some agents who are predominantly using your surplus paper as opposed to that they've found these niches that works for our type of model?
So it can be. So we have some agents that are very focused on the allied health and DME space, for example, and we've converted a lot of that business over time to E&S paper. Some of our Hanover Specialty Industrial property business is converted over time to surplus lines paper. But I would still say a big portion of our business is in admitted business in these specialized categories of risk, but the E&S and wholesale business is a quickly growing part of our portfolio.
And so if we think about, I think there's a perception that Hanover obviously has a big personal lines practice and is a very real player in the small commercial markets. You also do have these specialty businesses, but I don't know that they get enough attention, or certainly from the investment community, they can be better understood, but also from the agents. Do the agents understand the breadth of what Hanover has to offer? Is there still a building phase going on to understand these niche, unique businesses that Hanover is a go-to market for that risk?
Yeah, I think the distinction versus the agency slant versus maybe the investment community is how people perceive specialty, right? And I think if you over-index specialty on E&S with a wholesaler, you're not going to see us on the top 50, right? That's not where we play. That's an extension of what we do. It's not what we do every day. If you look inside of the smaller to midsize specialty business that is controlled, obviously, by the retail agent, but increasingly is not making its way to the wholesale channel as they centralize, as they create their own SME models, we're one of the top three markets that target that business that have built the operating model to efficiently get in and extract that business because it's not easy.
A lot of the smaller specialized business is placed where it's placed, and particularly with today's talent struggles, agents don't have time to move this stuff around. But what they see over time is if they work with very specific carriers to say, "Hey, I've got more allied health business than I thought. I've got more small management liability or professional liability. If I can centralize this with somebody that's built consolidation models and efficiency and even service centers that can service some of that small specialty business, then I can improve my EBITDA margins, which for most agents on this side of the business are unacceptable," right? Imagine buying all these agents across the country, putting this all together and realizing that this small face value business is generating, in some cases, single-digit EBITDA margins.
So we're one of very few companies that can get in and say, "All right, what's the process that we can go over time to better assemble that business, better place that business, and improve both of our economics?
One more question, I guess, about the market cap trend that we'll switch a little bit to underwriting. Obviously, you're a big player in the personal lines market and having the relationship with the agents is key. We'll see what happens after these wildfires, but obviously, State Farm has been undercutting the agency markets for a very, very long time by using capital market gains in order to subsidize underwriting losses, and you have juggernauts out there like Progressive, which has economies of scale advantage that's massive. What's the value proposition that an agent comes to a potential personal lines customer and says, "It's better to place the business with Hanover, and you need to have confidence that you're getting both good value and great coverage," right?
I think you study the business well and you know that over time, and this is retrospectively, it made the view look differently prospectively, but the agency channel has been quite resilient on somewhere in the 37-38% share of the IA business. Of course, Nationwide joined the party, so that actually ticked up a point or two. You are right, over time, there have been particularly big mutuals who can leverage their balance sheet and lower return expectations to capture a part of the market. We have an impressive direct-to-consumer leader in Progressive who goes after, for the most part, smaller face value auto business and has done extraordinarily well. Inside of that, which we study, the segmentation in the 20 states that we choose to do business in, we're the best account writer for the IA channel, right? We have almost 90% of the business.
We have the home and the auto, oftentimes the umbrella and toys. We've done the hard work both from an operating model standpoint and from a pricing efficacy standpoint to bring together home and auto in a way where one doesn't compromise the other.
It's very hard to do, but when you do it, you have a proposal to agents that says, "When you have a good middle market customer or higher Coverage A middle market customer that isn't really set up for the high net worth value prop, Hanover is a top market consideration because of the products that we provide, but also the pricing stability and over time," it's hard to say that in a hard market, "and frankly, the service center capabilities and the claim service that we consistently drive." So it is not an overstatement to say that when you go into top independent agents, big and medium and small, and say, "Who are you putting your better account business that wants to be placed with a good company and doesn't want to have to mess with it every year?" I think Hanover rises to the top.
What kind of data do you have? I guess, ultimately, insurance is a product you buy that you never want to use, but at some points, you do have to use it. In terms of claims resolution, what kind of data do you have that successful claims resolution has been an important part of the mix that has kept word of mouth from both agents and customers satisfied that they're very pleased with their coverage?
We have some of the highest NPS scores that we've had in the history of the company right now in personal lines. But the reality is that's coming out of a difficult period where not only has there been a lot of weather that puts a lot of strain on property adjusters and that model, but also we've had kind of the COVID phase and the post-COVID phase where most, I think, claims organizations went through some challenges in terms of responsiveness, in terms of customer anxiety. And so I'm really pleased to say that after decades of being a top claims delivery organization, we're back at historically high levels. But it's different, as you know, that the transformations that came through COVID have allowed companies to be closer to the customer.
The agents have moved further away from that interaction willfully, and it's allowing us to do much more work digitally. Two-way texting is a norm. The communication, those companies that have obviously good skills in the claims area, but have advanced their digital and their telephonic communications over the last few years are leaping ahead. It is the transformation we see on the claims side of the business is probably advancing faster than any other part of our company.
From 1990 to maybe about 2010, if I was talking about catastrophe in the insurance space, we generally were. There were, of course, PCSs around, but the catastrophe risk we were really worried about was the Florida hurricane. In 2011, we had this crazy convective storm, which was a bunch of mega tornadoes we never saw before, which was really only rivaled by this past year and certainly your experience in the Midwest. Hurricane Helene just crushed Asheville 400 miles inland from the coast. Obviously, these wildfires are very unusual. What's happened in, maybe not, there's been a lot of wildfires in the past 10 years. How has Hanover's view of catastrophe evolved? What mitigation have you engaged in? What has that meant for you, the shape of your portfolio as you've tried to address those issues?
Yeah, it's a super important question and issue for us because we're one of the more property-centric companies, public companies anyway, in the top 25, and so in a lot of ways, when the back half of 2022 and 2023 were more challenging for us because of our portfolio mix and some specific storms, frankly, in Michigan that were a bit anomalous, but I think as we're seeing today, what people are saying is there is volatility across the entire risk spectrum, right? I think most people are looking now and saying, "Boy, I had a little bit, wish I had a little bit more property on my mix today with the liability trends coming at us," or if the gift of workers' comp stops giving as much, where are you going to get your returns?
For us, what it says is, "Listen, we're going to continue to try to diversify the firm both geographically and mix both property casualty and across the various segments." But fundamentally, we have to get that much better at property aggregation and micro-concentration management. And the silver lining of the past few years is that we're able to do things today that we would never have been able to do but for that particularly challenging 2023. Not just with a hard market in personal lines, but with the use of deductibles, with the ability to do some trimming that agents now understand better because they saw how pervasive those losses were. But what you also saw in 2024 for us is that weather is going to show up in different geographies, and we don't have the level of concentration we have in Michigan in a lot of other places.
So as we aggressively address the Midwest and use the capability we've built over two decades to manage those concentrations well and make sure we're getting paid for that risk, I think the future is very bright. The weather will not go away. It could get worse. But we've contemplated that in our growth patterns, in how we're pricing our risk today. We have pretty good reinsurance coverage so that we're not, for the big, big events, we're very well protected. So I think when you look across all of the trends in our business today, we feel like we can continue to manage the property exposures and the cat exposures. And we guided to our 2025 cat. And as we forecasted, it's already starting to come down, even while we maintain some pretty conservative assumptions in our cat loads.
I guess, I mean, in my mind, there's three major tools you have. There's aggregation that you can manage. There's reinsurance, and there's price. In thinking about the last two years, the changes you've made, how do they, what's the impact, I guess, of each of those changes in how it's reoriented your cat risk?
So maybe I'll jump in. The ones you referenced, Helene, Milton, wildfires, we tend to be lower represented in the hurricane and wildfire because we don't write personal lines in Florida or California. What our challenge, as you referenced, has been severe convective storms, particularly in the Midwest. So the tools that we use there are price to start, and we've gotten very substantial increases in premium, particularly in homeowners, some as high as low 30s and year on year on year. So we think we're in excellent shape. That really helps a lot in terms of cat, but also helps ex-cat, right? Because it's obviously the same denominator. Secondly, we've done a tremendous amount of work in disaggregating, so non-renewing or not growing new business in some of the Midwest areas to slow down or shrink the PIF count meaningfully there.
And then also adding in deductibles in terms of all peril and wind and hail deductibles. So that reduces claims and both the number of claims as well as the size of smaller claims. And then finally, we've been pretty active at maintaining our attachment point for cat, the property per risk, and we've been adding at the top. But reinsurance generally doesn't play a huge role in severe convective storms. So the storm that is $30 million and you have a whole bunch of $100,000 claims or $20,000 roofs, that's not really a reinsurance event. Reinsurance for us is a casualty event attaching at two and a half or a large property event, which we've maintained our $200 million attachment point for things like hurricane or those large events.
We do have one additional slide in the investor deck for this conference that we'll bring forward and tries to show the aggregate impact that we're having on our property aggregations over time over the last six quarters, I think, Sean, we put out there.
Slide 19.
Slide 19 in our investor deck that folks are looking at. And to your point, what we can't do is give that retrospective on the very specific storms that came through because those aren't the storms that are coming next. We have to do a modeled exposure of the cumulative effect of all those levers. And that was our first attempt to try to get at that beyond just throwing out numbers. But when you put in $2,500 all peril deductibles in 1% or 1.5% wind and hail deductibles across Coverage A on those policies, which historically have been reserved for the coast, and you start doing that in the Midwest, it moves the needle. That combined with almost 50% of price over the last couple of years, it's not a surprise to anybody that those property aggregations are coming down pretty meaningfully.
On that very same slide in the bottom left-hand corner, there's a chart that shows technology in terms of devices, whether they be water sensors or temperature sensors and going up dramatically. That's really helped, particularly things like schools or large buildings where we had an issue for Winter Storm Elliott in late 2022, where there was a huge storm, freeze event, and Christmas Eve, and everybody didn't come back for a week, and all of a sudden they found feet of water in first floors and whatnot. That's really having a dramatic impact on the loss content.
Jeff, you mentioned when you're listening to the reinsurance, a per risk program you have for casualty losses above $2.5 million. You are more property-centric business, but you do have this casualty exposure, and we've just been through a very large bout of inflation, and a lot of people talk about social inflation. Sometimes I think I call it social, we didn't reserve enough is also another name for it in some ways. What gives you confidence? You can talk to most any company and says, "I think we've gotten this under control." Why does Hanover have it under control?
I'll let Jeff speak to the reserve part of this, but I think what we've tried to demonstrate for the investment community is that even pre-pandemic, we made some pretty material changes in our liability portfolio based on what we were seeing in the commercial auto trends. Our thought was that eventually that would bleed its way into the more broader liability trends and ultimately into the umbrella, which is where the severity lives in our industry. We moved out of some of the more kind of retail-oriented classes. We downsized in the major metropolitan areas. We removed ourselves from any monoline umbrella. I think we can look back and show folks that we're not playing whack-a-mole, that we thought ahead. We tried to think about what the liability severity trends might be into the future and how could we position ourselves better.
Jeff can speak to not only the frequency benefits that we're getting on that, but also the way we think we've been prudent in our reserving.
I think there are a couple of elements which give us a lot of confidence in our reserving and our casualty picks overall. I started with Hanover in the fall of 2016, and the first thing we had to do was take a $174 million reserve charge, and we released earnings on February 1, 2017. The stock actually went up $6, and we joked that maybe we should take a reserve charge every quarter, but in reality, I think it was our commitment to getting ahead of trends and having a conservative balance sheet and recognizing that the better companies are more likely to have favorable development than adverse development, so you had to do that. Fast forward to 2020, and we had a frequency benefit, which was unusual because people weren't going to work and a variety of things happened. People weren't driving.
So we chose to be conservative in that element, and that has proven to be useful. As you fast forward and go through the COVID and post-COVID years, we made some decisions in 2017, 2018, 2019 after we took our reserve charge that we wanted to think carefully about geographies and major metropolitan cities. We also wanted to be very thoughtful about which industries were more likely or less likely to have heavier severity. So some of the industries we have, we have data that shows some of our industries since before COVID have very, very substantial frequency benefits. And some industries like contractors are actually up because people have been doing lots of work and they're more prone to injury and social inflation. So if it was only severity per claim in and of itself, everybody's suffering from that.
Social inflation, I think about it as just the same situation is more likely to attract a lawyer, a more aggressive lawyer, people are more likely to sue, and juries and others are more likely to award more. If it weren't for the frequency benefit, then we would have really had a challenge. But the combination of conservative reserving, prudent loss picks, having the frequency benefit that comes with industries and geographies being a little more property-centric than casualty-centric, and then finally our relatively low attachment point at $2.5 million, I think gives us a really lot of confidence that our casualty picks and our reserves are in very good shape.
I think that's great. Now, one thing that's sort of I noticed from the guidance for 2025 is generally your outlook for investments, investment returns kind of higher than I think that the market was anticipating. Are you making changes to the investment portfolio? What's going into that that's driving a healthy return on the float?
So there's a couple of things. Number one, the cash flow over the course of 2024 and into 2025 because the results have been so strong and the growth we're expecting has been very strong. So there's more cash flow coming in. Number two, the absolute level of interest rates are staying high for longer than many had anticipated, and we have turnover of investments. So if you're investing in the low fives for a AA fixed income seven-year bond and something might have come out of the portfolio in the threes, that gives you a lot of heft in terms of increasing. And then finally, we had some, really two things I want to say. We had some tax gains really back from 2021 that were expiring.
So we decided to sell some lower coupon bonds that had losses and buy additional bonds with current coupons and carry back against those gains to get cash flow than they would have expired. So the portfolio turnover has a big impact. And then finally, we sculpted the portfolio a little bit to add asset-backed and RMBS types of securities. So asset-backed, I think people like to call cards and cars, credit cards and auto loans, which are high-performing and high-quality and reduce some commercial mortgage-backed securities. And that was with our new partner. June 1, we went to Wellington to outsource our fixed income at a very attractive cost and modified our portfolio. So we're feeling very optimistic. Others have done it at different times.
If you look at the growth of others in the industry because of the construct of their portfolio, the short-term nature of some of their cash that they were sitting on, just when did things mature? When did they decide to sell lower-performing fixed income? Everybody had it. And when did their cash flows grow? Ours were just a little later because of our deteriorated performance in 2023. And now we're really seeing that dramatic increase, and we should have that in 2025 and 2026.
I want to remind everybody as we get toward the end of the session that you can ask a question. I will call on you, I promise. So letting you know. Let's talk a little about the capital model. I mean, sometimes it's hard to come up with hard numbers, but the business is going to grow naturally as pricing grows, but there's also share gain and whatnot. What's the ROIC on a new dollar deployed into the business? And how should shareholders feel about that as opposed to returning a dollar capital to them?
I always think that the highest and best use is profitable growth. If you think about what the ROEs are today and our long-term aspirations, which are to be greater than 14%, and candidly, we're there this year based on the guidance if you build your model. Profitable growing the firm is the best use of capital we have. At a 6%-7% written premium growth, we probably use about half of the capital that we will generate this year. That leaves other uses. Ordinary dividend, we've got 20 years in a row of growing the ordinary dividend. It'll be up to the board, but I suspect that you'll see increases in the ordinary dividend. Lastly, stock buyback. I think there's still plenty of room in stock buyback.
We look at the dilution of book value and we think about what are the number of years, and I think there's some stock buyback will be a participant in the allocation and management of capital for 2025.
Sorry, I mean, you sort of started to say, but the number of years, how many years out are you saying is a good price to value retiring shares?
It really depends. It depends on how quickly you think your performance is going to get better or get worse or what have you. But certainly mid-single digits is the limit in terms of book value deterioration and the payback on that is the way I usually think about it. And I think we're in good shape with the appreciation, the increase in earnings per share that we're anticipating over time. I think our stock is still a very strong buy.
Jeff, maybe to accentuate the first part of that. In our business, it's really hard to get broad-based earnings streams, right? Most companies over-earn in a particular part of their portfolio and are fixing or modifying other parts of their portfolio. We come into this year with real strength across all four major businesses, and so we're pushing ourselves, as we suggested in guidance, for some minimum growth across that portfolio. We reserve the right to modify that if things change and the environment causes us to think differently, but we couldn't be more optimistic about being able to take that capital that we're generating now and put it to good use.
The marketplace is going to be challenging, but we think our relative position and the diversified portfolio to get personal lines to be able to participate, to get middle market to be able to participate, and to continue to lean on small commercial and specialty at minimum growth of upper single digits, that's a unique period for us to take advantage of. And I think that will be a big driver of our capital utilization.
As a former Michigan guy, I don't know if you can ever really leave. I'm always interested in what's going on in that state in particular. We're coming up on the fifth anniversary now of Governor Whitmer's signature no-fault auto reform. What's that meant for your business and what's that meant for the competitive marketplace in Michigan?
Sure. Well, it's been helpful. And I think you know we were major advocates and participants in driving for that reform over time. And so there's no doubt that the fee schedules and the reforms that have been put in place are having an impact. What has been a little bit surprising and disappointing, at least for the consumers, is that there still seems to be a reluctance for a lot of people to kind of buy down, if you will, and not take full PIP limits. Some of that because they know there's a first-party element of that, and so they're reluctant to buy less coverage for themselves. But some of it is just a fear of the unknown.
And even comparisons to other states where you say, "Hey, you can buy an umbrella," you're basically charging yourself too much based on these participation levels and the PIP levels that are being purchased. But to be honest with you, as a carrier, when you're getting kind of lost cost reforms that are working and people are still paying the full freight of these PIP limits, it's somewhat of an optimal situation. But that said, we're continuing to drive through our agents the proposition that over time, this is probably not as necessary to buy those limits at those levels because we think that's what leaves you vulnerable to either some other proposition, whether it's a direct-to-consumer proposition or something of that nature. But to that last point of your question, the competitive landscape is pretty stable.
I mean, it's obviously a hard market, but I think because of some of the property concerns, people haven't been rushing into Michigan and making that their growth territory. So we could be running a lot more business in Michigan. Our growth levels in Michigan are a function of us being tight on new business, making sure we're back to profitability and advancing our diversification efforts.
When you say you could write a lot more, does that come up against the capital management issues that?
Exactly. But for our self-discipline around cap management, we could be growing a lot more in Michigan. And we talk actively about that. That is our goal to be able to get that spread of risk and getting paid for the risk at a point where we're not afraid to grow Michigan. That is the end game. But we're still kind of in the middle innings of that game.
Wonderful. Well, with that, I want to thank John and Jeff for being here. I hope you have a wonderful schedule. Hartford is going to be next if you want to continue the insurance sleeve of this conference, and appreciate your time.
Thank you.
Thank you, Josh.