Good day, ladies and gentlemen, and welcome to the second quarter 2015, The Hanover Insurance Group earnings conference call. My name is Jasmine and I will be your operator for today. At this time, all participants are in listen only mode. Later we will conduct the question and answer session. If at any time during the call you require operator assistance, please press star zero and the operator will be happy to assist you. As a reminder, this conference is being recorded for replay purposes. I will now like to turn the conference over to your host for today, Ms. Oksana Lukasheva. Please proceed.
Thank you, Jasmine. Good morning, and thank you for joining us for our second quarter conference call. We will begin this call with prepared remarks from Fred Eppinger, our President and Chief Executive Officer, and David Greenfield, our Executive Vice President and CFO. Available to answer your questions after our prepared remarks are Jack Roche, President of Business Insurance, Andrew Robinson, President of Specialty Lines, Dick Lavey, President of Personal Lines, and Bob Stuchbery, President of International Operations and Chief Executive Officer of Chaucer. Before I turn the call over to Fred, let me note that our earnings press release, financial supplement, and a complete slide presentation for today's call are available in the investors section of our website at www.hanover.com. After the presentation, we will answer questions in the Q&A session.
Our prepared remarks and responses to your questions today, other than statements of historical fact, include forward-looking statements, including our earnings guidance for 2015. There are certain factors that could cause actual results to differ materially from those anticipated by this press release, slide two of the presentation deck, and our filings with the SEC. We caution you with respect to reliance on forward-looking statements, and in this respect refer you to the forward-looking statements section in our press release, slide two of the presentation deck, and our filings with the SEC. Today's discussion will also reference certain non-GAAP financial measures such as operating income, operating results excluding the impact of catastrophes, and accident year loss and combined ratios excluding catastrophes, among others.
A reconciliation of these non-GAAP financial measures to the closest GAAP measure on a historical basis can be found in the press release or the financial supplement, which are posted on our website, as I mentioned earlier. With those comments, I will turn the call over to Fred.
Thank you, Oksana, and good morning, and thank you for joining our second quarter earnings call. We are very pleased to report another quarter of strong and improving financial performance. We delivered an operating income per share of $1.56 and an operating return of equity of 10.7%. We produced robust bottom-line results in line with our expectations, strengthened the quality of our book of business, and made progress across our organization. We feel good about our financial achievements and the current market position. Our strategic investments to improve our portfolio and market position have strong traction that is demonstrated by 10 consecutive quarters of improvement in our domestic businesses. Additionally, we believe our franchise is well-positioned for the current environment. Our target markets, our distribution strength, and our underlying leadership and preferred segments should allow us to effectively compete in today's environment and continue to create market opportunities.
Progress on all our strategic initiatives gives us confidence in our ability to continue to generate strong earnings growth through 2016 as we generate earnings accretion in our improving portfolio and grow the top line. I'll touch on some of these points as I comment on our second quarter achievements and business initiatives, first, I'll let David review our financial performance. David?
Thank you, Fred, and good morning, everyone. We reported a very strong quarter in line with our overall expectations. Based on our year-to-date position, we remain confident we can achieve the full-year financial targets we have set. Net income for the quarter was $121 million, or $2.68 per diluted share, compared to $83 million or $1.84 per share in the second quarter of last year. Operating income showed good improvement and was $70 million, or $1.56 per diluted share, compared to $58 million or $1.30 per diluted share in the second quarter of last year. The larger-than-normal difference between net and operating income in the current quarter is primarily due to the $40 million realized gain, or $0.91 per share, from the transfer of our UK motor business that we successfully closed on June 30th.
I will discuss this transaction in more detail in a few moments, it's worth mentioning now that our team worked hard to close the transaction ahead of our anticipated third quarter schedule. The overall combined ratio was 96% in the quarter, compared to 97% in the prior year quarter. Catastrophe losses added four points to the combined ratio, down close to a point from the prior year quarter. Favorable reserve development remains largely unchanged at about 2.5 points for both periods, with some movement between the lines. The ex-cat accident year combined ratio was in line with the prior period, with an improved expense ratio and a slightly higher loss ratio, as underlying improvements in domestic business were overshadowed by large loss activity in the energy line at Chaucer. Catastrophe losses for the quarter were $46.5 million, mostly driven by the domestic lines.
Chaucer catastrophe losses were again very low, less than one point of the combined ratio. Moving on to underwriting results excluding catastrophe losses. In Commercial Lines, through our continued efforts in both rate and business mix management, we were able to drive improvement in the accident year loss ratio in all lines compared to the prior year quarter. The loss ratio this quarter was 57% compared to 58% in the same period last year. In particular, we continue to see improvement in Commercial Auto trends. Bodily injury severity trended as expected as our aggressive pricing and mix management initiatives take hold. Though our recent experience has improved our outlook in this line, this business remains below long-term profitability targets, and we continue to follow a cautious approach.
In that regard, we modestly added to prior year reserves related to Commercial Auto, including within AIX, which is reported within other Commercial Lines. In Personal Lines, the accident year loss ratio, excluding catastrophes for the quarter, was 62%, slightly improved from the second quarter of 2014. The improvement was partially offset this quarter by the emergence of some additional first quarter non-cat weather losses in the homeowners line, as well as higher than usual severity of large losses, which can be uneven quarter-to-quarter. Rate increases in auto and home are around 5%, which is comfortably above loss cost levels, providing us with confidence in our ability to generate further margin accretion as we navigate the current market environment. Domestic expense levels were as we expected.
In Commercial Lines, the expense ratio improved by half a point compared to the prior year quarter, reducing the ratio to 36%. This improvement reflects continued operating efficiencies and the operating leverage we are achieving as we continue to grow this business. The Personal Lines expense ratio was in line in the current quarter against a higher than usual expense ratio in the prior year quarter. We expect the Personal Lines expense ratio to continue to trend at around 28%. Chaucer delivered strong performance with a combined ratio of 91% compared to 92% in the prior year quarter. Catastrophe losses were very low this quarter at less than one point of the combined ratio. The accident year loss ratio, however, was higher this quarter and reflected higher large loss activity in the energy line.
Loss activity like this is a part of Chaucer's business. We expect a certain level of volatility from period to period. Finally, I'd like to provide additional financial details around the closing of the U.K. motor transaction that occurred on June 30th. Our exit was executed through a 100% reinsurance arrangement for prior claim liabilities and in-force policies, along with property sales and policy renewals. Upon closing, our net loss reserves were reduced by approximately $300 million. We also transferred unearned premiums of $137 million and other related items for a total impact of approximately $447 million. On the asset side, we transferred approximately $380 million of invested assets and cash, the balance representing goodwill and intangibles, various receivables, and a ceding commission.
The impact of this transaction on the quarter's operating results was negligible, and as it relates to future periods, underwriting income will not be materially impacted, but the components of Chaucer's combined ratio will change. As you can see from the pro forma results we provided on page 12 of our second quarter earnings presentation, the UK motor business produced a relatively higher loss ratio and lower expense ratio as compared to the rest of Chaucer's business. The expense ratio for the ongoing business is expected to be at around 40%, up from 38%, which will be offset by a decrease in the overall expected loss ratio. Our long-term target for the go-forward business remains at a 95% combined ratio. Additionally, the transfer of invested assets will result in modestly lower net investment income in the future. The total consideration for the transaction was $65 million.
After adjusting for related intangibles, accounting for the value of the real estate sold, as well as transaction costs and other items, we realized a gain on the transaction of $40 million that included $3.8 million of realized gains on investment assets transferred. All in, the exit of this business increased our book value by $0.83 per share this quarter. Moving on to the top line. Consolidated net written premium growth for the quarter was strong, driven by 5% growth in Commercial Lines and 2% in Personal Lines, partially offset by a 5% decrease in Chaucer, which included a negative foreign exchange impact of about four points. The Chaucer growth numbers are presented without giving consideration to the ceded premium of $137 million that was transferred as part of the UK motor transaction on June 30th.
Looking specifically at the ongoing Chaucer business and excluding the impact of foreign exchange, net written premiums grew by 2%, bringing the adjusted consolidated Hanover growth to 3.5%. Fred will have more to say on our top-line performance in a few moments. Turning to investment results. Cash and invested assets were $8.3 billion at the end of the quarter, with fixed income securities and cash representing 89% of the total. Our fixed maturity investment portfolio has a duration of 4.3 years and is roughly 94% investment grade. The portfolio remains high quality and well-laddered for the challenging rate environment. We increased net investment income by 5% for the quarter to $71 million, compared to $67 million in the prior year quarter, as we continue to reinvest higher operating cash flows. The low rate environment continues to pressure investment returns.
The earned yield on our fixed maturity portfolio was 3.6% in the quarter, compared to 3.74% in the prior year quarter, and 3.64% in the first quarter of 2015. However, we continue to carefully expand our portfolio mix into non-fixed maturity instruments. We allocated a portion of new money to higher yielding asset classes, such as limited partnerships and commercial mortgage loan participations. This gradual change in the portfolio composition is contributing to growth in net investment income, helping to offset the current interest yield pressure. I will just finish with a few comments on the strength of our balance sheet and capital position. Book value per share grew 0.5% to $66.28 in the second quarter. Book value per share excluding net unrealized gains on investments and derivatives increased to $60.96, up from 4.3%. Our total capitalization is $3.7 billion.
During the quarter, we continued to actively and opportunistically manage our capital. We purchased about 213,000 common shares for a total of $15 million. Additionally, outstanding debt decreased to $835 million at quarter end, after we bought back $6 million during the quarter. The debt to capital ratio now stands at 22.3%, down 1.8 points from 24.1% at the end of 2014. Looking ahead, we believe that capital is best deployed for continued business growth, but we will continue to monitor opportunities to repurchase equity and debt. Overall, we're proud of the strength of our current balance sheet and believe it will continue to provide a solid basis for us to grow our business. With that, I'll turn the call back to Fred.
Thanks, David. We are very pleased with our financial accomplishments and strategic initiatives we executed in the first half of 2015, which should enable us to achieve good growth and target returns in the quarters ahead. In commercial lines, we delivered solid growth of 5% with premium increases in all our segments. We continue to focus on areas where we can grow profitably, capitalizing on the momentum, the franchise value, and the strong positions we've earned with our partner agents. We are pleased with the traction we made in Small Commercial. We've further leveraged our local operating model and the flexibility of our point of sale and non-point of sale offerings that make us unique in the marketplace. In Middle Market, we remain focused on building and investing in the industry solutions that will maximize profitability and allow us to gain additional shelf space with our partners.
Pricing increases in core commercial were 5.5%, down approximately a point from the first quarter, as some of the more significant pricing we were achieving in segments where we needed it has normalized. Our pricing remains above loss costs and retentions remain stable. We are satisfied with our pricing and retention trends, which continue to run in line with our expectations and feel we will continue to improve our margins. Our target markets, primarily made up of smaller accounts, are stable and still present us with significant opportunities. New business was robust in both Small Commercial and Middle Market, showing continued momentum. We have never been more optimistic and confident in the quality of our new business we are writing. We continue to benefit from the close collaboration with our partner agents as we grow and gain share with them.
Our access to attractive business has benefited our Specialty lines, where we experienced 5% growth in the quarter. We are using our market insight to proactively target desirable accounts and strengthen our position with our partners. Our Specialty business continues to build scale and create opportunities for us. Our Specialty offerings, including Marine, Specialty Industrial, Healthcare, and our diversified portfolio of Professional Liability products, have strong momentum with our distribution. As a result, we enjoyed improved shelf space with some of the best and most sophisticated agents in these areas. Today, we are successfully leveraging our Specialty infrastructure and distributed underwriting capabilities to effectively get access to some of our agents' most attractive business. With plenty of room to grow with our best partners, we have generated strong momentum for the second half of 2015 and beyond.
Overall, in commercial lines, our strong foundation of broad and innovative capabilities, our market insight, and strong partnership allows us to achieve necessary pricing and produce quality growth, even in a current low growth industry environment. Commercial lines' underwritings continue to perform well, yielding over a point of improvement in the underlying loss ratio and a half a point expense ratio as we expected. Turning to personal lines. We continue to maintain the growth momentum we've established, generating a 2% increase in the net written premium in the current period. Rate increases continue to hold at 5% for both auto and home, and we expect we will be able to maintain pricing at this level through 2015 and into 2016. Retention was 83%, up 2% from a year ago and consistent with the first quarter.
We see diminished effect of our successful exposure management efforts, the impact of our growing account mix, and the penetration of our platinum product. Notably, account policies in force grew slightly in the quarter. Our strategic focus on account business, which represents nearly 80% of our book, is a key driver of our strong operating and financial metrics. Writing total accounts allows us to provide customers with a holistic offering and enhanced coverages, which makes the business sticky and improves our overall retention. Our platinum product complements this account strategy. With platinum still being relatively new to the market, we expect to garner additional benefits, including increased retention and in time, higher profitability levels driven by this product's customizable coverages and superior service features. We remain diligent in our efforts to achieve a leadership position in the bundled accounts segment with our agents, with several initiatives underway.
We are implementing a set of new operating enhancements, which among other things, will meaningfully improve our agency interface and customer self-service capabilities. We also continue to implement robust agency engagement programs targeting agency representatives from principals to operating levels to further promote our Platinum offering, convey an augmented appetite, and elevate new business. We support agents in being connected with and servicing their customers in today's environment, helping them round accounts and to retain and protect the most valuable customers. These efforts will create efficiencies and improve the ease of writing account business for our partners while also creating business opportunities and operating efficiencies for us and giving visibility to our gradually increasing growth momentum into 2016. Personal lines produced good underlying improvement in the quarter and despite a few large losses and the impact of first quarter weather in the homeowners line.
There's more underwriting improvement to be had in the next year or so and given our current pricing levels and improved business mix. At Chaucer, market conditions remain challenging, and as long as the environment persists, we will remain cautious in our growth in the segment. We have a strong reputation as a market leader in many of the specialty classes at Lloyd's. We continue to leverage this leadership position and our in-depth underwriting expertise to maintain our business position and to find targeted opportunities for attractive growth. Overall, we had a solid second quarter, moving closer to our ROE target. We feel great about our position, strategic and market focus, which is playing out well in the current environment. With visibility into strong earnings growth in 2015 and through 2016, we are very excited about the opportunities that lie ahead.
As we wrap up the first six months, we feel very positive about the progress we made in the quarter. In this respect, we remain on track to deliver an EPS for the year in the range of $5.70-$6 a share, consistent with our previous guidance. With that being said, though, we do not expect significant differences in underlying earnings in the third and fourth quarters. We do plan on catastrophe loss ratios of approximately 6.5% and 4.5% respectively. Operator, could you please open the line for questions? Thank you. No operator comment?
Operator, we are ready for the questions.
Thank you. Ladies and gentlemen, if you have a question, please press star one on your phone. If your question has been answered or you wish to withdraw your question, please press star two. Again, for any questions at this time, please press star one to begin. Our first question comes from the line of Matthew Carletti from JMP Securities. Please proceed.
Good morning, Matt.
Yeah, thanks. Good morning. Just a few questions. A little more high level and a couple of just quick numbers questions. First one is, there's been a lot of M&A out there, a few that would be maybe viewed as, at least in some businesses, competitors of yours. I'm just curious, thinking ACE Chubb specifically and maybe some others, what's your feedback been from agents in terms of your positioning with what's going on? Have you seen anything yet more tangible in terms of any changes or benefits you might expect from that shifting landscape?
Yeah. I think it's probably too early to see anything specific. I would say that typically, in any of the M&A activities that you see, there's often some disruption and opportunity. I think we as a company are very well positioned right now in the marketplace. If some occurs, I think it could create some opportunity for us. We don't expect it per se. We don't plan for it. As you know, we've had some nice success in shifting share with our agents. If there are opportunities, we'll be able to capitalize on those.
Okay. The next kind of market related question I had relates to Chaucer, specifically energy. Just kind of been a lot of market noise and scuttle about how much rates are down and a lot of that oil price driven. What is your guys view of the landscape? Specifically, can you kind of remind me how your book sits versus that? My understanding is it's only certain pockets of the energy market are more or less hit than others.
Exactly. Bob, do you want to run with that? He's not on. Okay.
He should be on. The operator just needs to open his line.
Operator, can you please open Robert Stuchbery's line? Yes, I'm opening that line now. Thank you.
Okay, go ahead, Bob. Sorry.
Give me one second here. It's not open yet. There you go. The line is now open.
Hi. Is it working?
There we go.
I'm here. London's online. As you know, we are a market lead in Energy business. We've got an established and what we'd call a good quality book of business. Even recently, we've changed that leadership position with Kelan Hunt joining us within the last month. Yes, it is a difficult market. Our book tends to be more offshore, less Gulf of Mexico. Rates are off, business opportunities are down due to, as you mentioned, the oil price, reduced activity, also the lack of construction opportunity as well, just as that's drying up. We have seen and will see our income reduce back, but really it's just a matter of this is a market cycle. There's nothing particularly different with the way that we underwrite our book. It's reasonably defensive position at the moment.
Yeah. I would say in total, we feel pretty good about our portfolio charts. We've got it to about flat. That is B segment, I think that is most affected by the economic trends in that business. There'll be some shrinkage in that business. As far as our total profitability and position and some opportunities that we see, we'll hold our own. I think we feel pretty good about that right now.
Great. Thanks. Just a quick numbers question. Both the Chaucer accident year loss ratio, which had some energy impact, then the Personal Lines, which had some kind of holdover Q1 weather impact. Are you able to quantify the impact of each of those on those numbers to get a little more run rate or X noise?
Yeah. I would just tell you on the Personal Lines side, it's relatively small.
Less than a point.
Less than a point.
Okay.
On Chaucer, I just would continue to come back to you. You've seen the results have been very well over the last many quarters, and we always try to guide back to a 95. Energy did affect us. Obviously, there were some other losses in the book this quarter, but we don't quantify the amount because I don't want you to take the current run rate as their go-forward rate. We still would go back to the 95 as the rate that we use on that book.
Okay. Fair enough. Thanks very much for the answers.
Thanks, Matt.
Our next question comes from the line of Dan Farrell from Piper Jaffray. Please proceed.
Hi, thanks. Good morning.
Good morning, Dan.
Good morning.
I was wondering if we could spend a little time on Personal Lines. Your PIF count change continues to gradually improve. It's still a little bit negative.
Yeah
how long you think before that can inflect a positive, and then your comments on the Platinum product still being in relatively early stages. I'd love to get a little more color on how much more benefit you think that can provide. You talked about that sort of improving retention and growth.
Yeah. Let me just comment on the PIF count, because what's happening is we still have some monoline that is just dropping off. While we don't talk about it as much because the big numbers are down, we're still working on some thinning. That's what you're really seeing is the monoline, particularly the monoline property business is kind of decreasing a tad.
Right. Yeah. When you look at our account business year-over-year, we're up 1.7%, and our sequential account growth is about 0.3%. We're seeing every quarter improvement growth in our account business. On the Platinum side, that business is performing really terrific. The retentions of our account business is in the high 80s, almost reaching 86. Some of the quality indicators that Fred was referencing that will lead to improved performance in the future. I think I referenced this on a last call, but just the limit profiles, the percentage of the accounts that have an umbrella attached is nearing 40%, 20 points better number of accounts with limits of 100, 300 on the liability side. It is early, so it's hard to say what the precise improvement will be in our loss ratio.
We're optimistic, absolutely with that kind of profile of the business, that it'll turn to better results.
What we would argue is that the agents have a significant portion of their book, really their better book are these types of accounts. The product is the best out there as far as the experience for the customers with the self-service and the dedicated service in claims, et cetera. What we believe is as they experience it, we will see a shift of some of their best business to us. We'll both grow with them organically, but we'll also better serve some of their existing customers. That's why what we're seeing is as these things get rolled out and kind of be embedded with the agents, our experience is going to be that we will see share shift to us over time.
Our total growth, as we've signaled, we do see in the two, slightly higher range for the remaining of the year. It'll be into 16 when we see PIF year-over-year growth.
That's helpful. Thank you. Then just a question on investment portfolio and investment income. David, you mentioned in your remarks a little bit about some of the movements you're making into non-fixed income assets. I just wonder if you could expand a little more on that. Then as we think about the path of investment yields and these ongoing shifts that you're doing, can that help offset some of the yield pressure we're seeing? I forget if you also just mentioned what new money yield is on the portfolio versus the overall existing fixed income portfolio. Thank you.
Yeah, sure. There's a lot of questions wrapped up in there, I'll go through all of them. Just in terms of the new areas or the, well, they're not so new. We've been kind of pushing money into some of these categories over the last probably one to two years. We have about 7% of the portfolio in funds, either hedge funds or partnerships or other strategies that are outside of the core fixed income portfolio. We make very modest investments on a per partnership basis. We feel pretty good about that and the risk spread of that portfolio, and it's obviously been helping us tremendously. We did start a commercial mortgage participation portfolio a little over one year ago, that's obviously growing a little bit. You can see that's roughly
About 16% of our other asset portfolio at this point, and growing nicely. Obviously, we're careful in that regard. We're really happy with that. Obviously, the main component of the assets are the equities where we're investing in high dividend yield strategies or market-based funds or index-based funds, which are obviously doing well as the market is increasing. In terms of new money yields, we're seeing somewhere around 3.5% in terms of the earned yields. I'm sorry, earned yield. Sorry, new money yields are going to be a little bit lower than that. I think when you look at some charts we've put out, we are feeling like we're at the lower end of the curve, and we've been holding on. The rates haven't come down much in terms of our earned yields over the last few quarters.
We think as we move forward with some of the strategies we're employing, we'll be able to start to see that tick up. Obviously, the big question will be what the Fed does with interest rates in the future and how quickly those start to move up for the whole sector. I'm sorry, new money yield, I don't have it in front of me, but I'll get it for you.
Oh, sorry, 2.8%. Yeah.
Okay, great. Thank you very much.
Thank you.
As a reminder, ladies and gentlemen, if you have a question, please press star one on your phone. If your question has been answered or you wish to withdraw your question, please press star two. Again, for questions at this time, please press star one to begin. Our next question comes from the line of Meyer Shields from KBW. Please proceed.
Morning.
Morning, Meyer.
Great. Morning. How are you all?
Good.
Starting off on personalized bundling, obviously Progressive is making a very concerted push to increase its attractiveness as a sort of bundled personalized insurer. Are you seeing the level of marketplace competition focused on that changing?
There is a lot of discussion about it, I would tell you. I think that in the agency channel, the vast majority of this account business is controlled by, frankly, smaller regional companies. Right now, you've seen a number of folks mention that they're going to do more, they're going to try to invest in it. Currently, we feel like we have kind of an industry-leading solution there. We're obviously not taking that for granted. As we mentioned, we're continuing to enhance and invest in it. Lots of discussion. Wouldn't say that it's a dominant-
Yeah. I would just add that for our target customer segment, not seeing that Progressive's announcement of moving into the home business is going to sort of eat into that segment. Their auto business tends to be a different segment than ours. As they move into home, arguably the home business attached to that auto customer is what we'll be targeting initially. Our target massive fluid market segment, right now we're not feeling that increased competition. As Fred said, we love good, healthy competition, and we'll keep our-
Yeah. Again, it's one of these things, in my view, that a lot of our competition has kind of neglected the service aspects for it. Shockingly, as an example, most of the account-oriented business in the regional companies, they don't even have service centers. There's a big gap in how some of that business is serviced and how much self-service capability they have. That's why we're enjoying kind of an interesting opportunity here because structurally, a lot of these folks, whether they have the coverages is at one point, but whether they can actually service the business is kind of a bigger point.
Yeah. Also, maybe final comment, this is where our distribution strategy really comes to help us secure a solid position in this market segment. Our deep relationships with a narrow number of select number of agents. All the work that we've done to sort of win over the CSR, the account managers, that will pay dividends. Progressive even has stated publicly that they're challenged in that segment, and they're working hard to improve their shelf space with an agency. This is where our distribution strategy really comes and pays dividends for us.
Okay. That's very helpful. Thanks. Then shifting gears, obviously, tons of consolidation, at least chatter out there. Are you seeing an uptick in maybe smaller, call them not high profile companies that are thinking that they might need to affiliate with a larger company?
You mean on the underwriting side, are you talking about?
Yeah. In other words, are smaller companies knocking on your door more saying, "Hey, it's time to talk?
I think obviously, we've done roughly 10 or 12, depending on how you think about the renewal rights deals we've done, transactions. We're always kind of being thoughtful about what helps shareholder value in positioning our franchise. We're always having conversations. In my view, I haven't seen a material uptick in interest and or conversations. I think it's one of those constant things because what's interesting is a lot of things that are happening in our industry, frankly, not just because of some of the announcements recently, but if you look at the last five years, whether it's the weather volatility or regulatory need around risk management and capital, the need for spread of risk and scale and the technology investments these folks are all wrestling with. There's always a number of people that are being thoughtful about it.
I would caution people to think there's going to be a big wave. An enormous amount of these small companies are mutuals that have a very different
Motivation
motivation philosophy. I've mentioned this in like at our investor day, if you look at the share of the smaller, the $100 billion that's controlled by the smaller companies, that has shrunk materially in the last 15 years, maybe $30 billion. They're slowly shrinking, a lot of them, I don't see some massive movement to consolidation. I just think it's one of those things that the business itself will find there'll be some consolidation to better equipped, more targeted solutions. Again, lots of conversations, I would say no earth shattering change in the trends there.
Fantastic. Thanks so much.
Thank you very much.
There are no remaining questions at this time. I would now like to turn the call back over to Oksana Lukasheva. Please proceed.
Thank you everybody for your participation today, and we're looking forward to speaking to you next quarter.
Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. You all have a great day