Good morning, everyone. Welcome to today's ProAssurance conference call to discuss the company's fourth quarter and end 2021 results. These results were reported in the news and released on news release issued on February 21, 2022, and in the company's annual report on the Form 10-K, which has been filed this morning, February 22, 2022. Included in those documents were cautionary statements about the significant risks, uncertainties, and other factors that are out of the company's control and could affect ProAssurance's businesses and alter expected results. Please review those statements. Management expects to make statements on the call dealing with projections, estimates, and expectations and explicitly identify these as forward-looking statements within these means of the US federal securities law and subject to applicable safe harbor protections. The content of this call is accurate only on February 22, 2022, and except as required by law or regulation, ProAssurance will not undertake and expressly disclaim any obligation to update or alter information disclosed as part of the forward-looking statements. The management team of ProAssurance also expects to reference non-GAAP items during today's call. The company's recent news release provides a reconciliation of these non-GAAP numbers and their GAAP counterparts. Now as I turn the call over to Mr. Ken McEwen, I would like to remind you that the call is being recorded, and there will be time for questions after the conclusion of the prepared remarks. Mr. McEwen, please go ahead.

Thank you, Candice, and good morning, everyone. We will discuss selected aspects of our quarterly and full year results on today's call and remind investors that they should review our filing on Form 10-K and accompanying press release for full and complete information. On our call today, we have Ned Rand, President and CEO; Dana Hendricks, Chief Financial Officer; Mike Boguski, President of our Specialty Property and Casualty Lines; and Kevin Shook, President of our Workers' Compensation Insurance Operations. Ned, please start us off.

Thank you, Ken. 2021 was an important year for ProAssurance. A year of continued execution on the strategy we started on over two years ago, and a year of growth as we welcomed NORCAL to the ProAssurance family. It is rewarding to see this all begin to play out in our financial results. In the first quarter, we began to recognize the promised improvements in our operating performance resulting from organizational changes. In the second quarter, we closed the NORCAL transaction, expanding the ProAssurance family and our geographic footprint. The third quarter showed the early benefits of the transaction and hinted at the earnings power of the combined organization while continuing to record underlying improvement in our legacy book. Now, with the close of the fourth quarter, we continue to recognize the benefits of our strategic efforts enacted over the past two years and recorded meaningful reserve development related to beneficial health care professional liability plan frequency trends in 2020 and 2021. In short, it was a successful year. The kind of year that shows the merit of the work completed to date and the benefits of scale operating within our competitive lines of business. I look forward to carrying this momentum into 2022. Now I'll ask Dana to share the results for the quarter. Dana?

Thanks, Ned. For the fourth quarter, we reported net income of $32 million or $0.59 per diluted share and operating income of $33 million or $0.62 per diluted share. For the full year, we reported net income of $144 million or $2.67 per share and operating income of $76 million or $1.40 per share. Net income in the fourth quarter and full year of 2021 was driven by improved underwriting results in our Specialty P&C business and a strong performance from our investments. In particular, results in Specialty P&C benefited from continued rate gains and top line growth, both including and excluding the effect of the added NORCAL premium. For the full year, net income also benefited from the $74 million gain on bargain purchase recorded in the second quarter in relation to the NORCAL transaction. Importantly, we saw a meaningful improvement in our consolidated current accident year net loss and underwriting expense ratio, resulting in a combined ratio of 96.5% for the fourth quarter and 102.4% for the year when excluding transaction-related costs. Consolidated gross premiums written grew to $218 million and $960 million during the quarter and year, respectively, driven primarily by the addition of NORCAL's substantial premium. Growth was somewhat muted by the reduced premiums coming through the Lloyd's syndicate due to our reduced participation in recent years. Topline revenues were bolstered further by $16 million and $64 million of new business in the quarter and year, respectively, coming from our core operating segments. Our consolidated current accident year net loss ratio was 79% in the quarter, a decrease of 4.5 points from the fourth quarter of 2020 driven by a reduction in claims frequency in 2020 in our Specialty P&C business that continued into 2021, which we attribute in part to a combination of our re-underwriting efforts and disruption of the port systems associated with the pandemic. For the year, the current accident year net loss ratio decreased nearly 8 points to 82%, primarily attributable to the frequency reductions just mentioned, partially offset by increased severity-related claim activity in our workers' compensation business. We recognized net favorable prior accident year development of $18 million and $46 million in the fourth quarter and full year, respectively, driven largely by Specialty P&C at $13 million and $33 million. Excluding transaction-related costs, our consolidated underwriting expense ratios for the fourth quarter and year were 24% and 25%, respectively, reflecting decreases of approximately 7 and 5 points, driven by the effect of significantly higher earned premiums acquired through NORCAL and lower related expenses due in part to the favorable impact of purchase accounting. In our Form 10-K, we provide a detailed breakout of the items affecting our expense ratio in the year to help readers arrive at an expected run rate. From an investment perspective, our consolidated net investment result increased to $34 million and $120 million for the fourth quarter and full year, respectively. These increases were primarily attributable to higher reported earnings from investments in LPs and LLCs, and specifically for the fourth quarter, higher net income was driven by additional invested assets from the NORCAL transaction. Higher investment balances were offset by lower yields in the 2021 low interest rate environment.

Thank you, Dana. Now we'll get into the details of the individual segments. Mike, please start us off with Specialty Property and Casualty.

Thanks, Ken. We ended 2021 on a high note, delivering a profit of $14 million in the fourth quarter and a 93.6% combined ratio. The result reflects plan frequency reductions in our physicians business, improved prior year development, and the transaction accounting benefits from the NORCAL acquisition. In addition, we continue to benefit from the execution of our comprehensive business strategy to address underwriting results, operating efficiency, and expense management, resulting in improved operating performance across the segment. For the year, we delivered a 101.2% combined ratio and a loss of approximately $5 million. Gross premiums written increased by over 62% to $166 million in the quarter, despite lower retention in our specialty health care business. NORCAL contributed just over $59 million of that increase in the quarter. For the year, gross premiums increased 30% to $682 million, of which $154 million is attributable to NORCAL since the close of the transaction in May. Premium retention was 73% in the quarter, driven by retention of 43% in specialty health care as a result of underwriting decisions on four large policies, representing $23 million of premium. Retention results in the quarter improved in all other product lines and range from 86% to 93%. For the year, retention improved across all product lines, except specialty health care and resulted in a segment retention rate of 80%. We were pleased with the 86% premium retention achieved in the NORCAL Standard Physicians business since the close of the transaction. In the fourth quarter, we achieved an average renewal pricing increase of 9% in the segment, driven by 9% in standard physicians and 18% in specialty health care. Although not reflected directly in our rates or pricing improvement, we continue to strengthen rate adequacy through adjustments to product structure, terms, and conditions. For the full year of 2021, we achieved average renewal pricing increases of 8% in the segment, driven by the standard physicians and specialty health care books at 8% and 12%, respectively. Our small business unit and medical technology liability business achieved increases of 6% and 5%, very solid results in competitive markets. New business trends continue to improve, both in the quarter and the full year compared to 2020. We wrote $13 million in new business this quarter compared to $5 million in the comparable quarter. For the year, we wrote $43 million in new business compared to $23 million for the full year of 2020. The current accident year net loss ratio was meaningfully reduced from the comparable periods of 2020 and to a lesser extent, also benefited from transaction accounting. The reductions in claims frequency that began in 2020 continued through year-end 2021, some of which was driven by our re-underwriting efforts and the impacts of the COVID-19 pandemic. In assessing these trends and given the claims made nature of the business, we determined it was appropriate to recognize some of the benefits in our HCPL current accident year loss ratio during the third and fourth quarters of 2021. We recorded prior accident year favorable reserve development of $13 million and $33 million in the fourth quarter and full year, which included $3 million and $8 million from the amortization of the purchase accounting fair value adjustment on NORCAL reserves. In conjunction with the improved current accident year loss ratio, this had the effect of reducing our net loss ratio for the quarter and year to 76% and 82.8%, reflecting reductions of approximately 10 and 16 points, respectively. For the reasons Dana stated earlier, the segment reported an expense ratio of 17.6% for the quarter, a year-over-year improvement of just over 6 points and 18.4% for the year, a decrease of nearly 5 points. Through year-end, we achieved a total of $22 million in expense synergies from the NORCAL transaction compared to an original estimate of $18 million. We are very pleased with the NORCAL integration process and continued improvements in our performance. I'd like to conclude by thanking our ProAssurance and NORCAL team members for their hard work and commitment to excellence throughout 2021. We are also extremely grateful to our distribution and strategic business partners for their tremendous support in achieving our results this past year. We look forward to 2022 with great energy and enthusiasm. Ken, back to you.

Thanks, Mike, and congrats again on a great quarter and a solid year. Kevin, will you please bring us up to speed on the workers' compensation insurance and segregated portfolio cell reinsurance segments.

I will, Ken. Thank you. The Workers' Compensation Insurance segment produced a combined ratio of 101.5% for the year ended December 31, 2021, including 103.7% for the fourth quarter. The combined ratio was higher year-over-year and reflects a higher accident year loss ratio in 2021, partially offset by an improvement in the underwriting expense ratio. As discussed in the past, the reported combined ratio includes intangible asset amortization and a corporate management fee. The combined ratio, excluding these items for 2021 was 98.2% for the year, an indicator of the results of our ongoing business performance. During the 2021 fourth quarter and full year, workers' comp booked $46 million and $241 million of gross premiums written, respectively, both representing decreases of approximately 3% compared to the same period in 2020. The decrease in year-over-year gross premiums written reflects a decline in new business and audit premium, partially offset by an improvement in premium retention. The workers' compensation marketplace remains highly competitive across our operating territories. For the year, renewal pricing decreases were 1% compared to 4% in 2020, and for the fourth quarter improved to decreases of 2% from 4% in 2020. Premium renewal retention was 83% for the quarter and 86% for the year, representing improvements of 3 and 2 points, respectively. New business writings decreased in the quarter and full year to approximately $2 million and $18 million, respectively, from $4 million and $24 million for the same period in 2020. Audit premium for the fourth quarter resulted in additional earned premium of approximately $400,000 compared to $230,000 in 2020. For the year, audit premium resulted in a reduction to earned premium of $2 million compared to additional earned premium of $700,000 in 2020, a decrease of approximately $3 million year-over-year. We are cautiously optimistic that the additional audit premium recognized in the fourth quarter may be a positive sign that the majority of the unfavorable COVID-19 payroll impact is largely behind us. The increase in the quarter and year-end calendar year loss ratio reflects an increase in the current accident year loss ratio. Favorable prior year reserve development for the fourth quarter was $1.5 million compared to $2 million in 2020. For the year, favorable development was $7 million for both 2021 and 2020. The increase in the 2021 current accident year loss ratio to 74% from 69% in 2020 reflects higher claim activity as workers return to full employment with the easing of pandemic-related restrictions in our operating territories and the labor shortage, resulting in worker fatigue, a reduction in skilled job training, and increases in alternative work arrangement risks. The trend in higher claim activity during the year was largely from smaller policies, predominantly in restaurant, hospitality, and small construction and manufacturing market sectors and was from accounts within our renewal policyholder base. Near the end of 2021, we noticed other work comp companies and the industry in general, beginning to discuss the increased loss exposures due to return to employment and not being in work shape and the labor shortages anticipated increase in losses, trends that we reacted to and recognized early in and throughout 2021. Despite the increase in claim activity, overall frequency continues to be below pre-pandemic levels. The claims operation closed 58% of 2020 and prior claims during 2021, consistent with historical trends and indicative of the short-tailed nature of our workers' compensation business model. Turning to expenses, the underwriting expense ratio increased in the fourth quarter from 32.7% in 2020 to 33.3% in 2021, largely due to the decline in net premiums earned as expenses were consistent quarter-over-quarter. For the full year, the expense ratio decreased to 31.8% due to reduced costs resulting from the restructuring that commenced in August of 2020. Wrapping up with the Segregated Portfolio Cell Reinsurance segment, we reported income of $345,000 for the quarter and $2.4 million for all of 2021. We renewed all of the alternative market programs that were available for renewal during the year, with the exception of one program, which was nonrenewed due to continued unfavorable underwriting results. I'll finish by thanking our workers' comp team members, business, and agency partners. Our team members' hard work, commitment to our core values and best-in-class service was second to none throughout 2021, and we look forward to all we will accomplish together in 2022. Ken?

Thank you, Kevin. Now I'll turn it back to Ned for a review of the results from Lloyd's. Ned?

Thanks, Ken. Results from our Lloyd segment improved in the fourth quarter and full year of 2021, reporting a profit in both periods. As you know, we've reduced our participation in the syndicates in recent years, and lower gross premiums written this quarter and year reflect that change. Furthermore, as a result of our reduced participation in the results of the syndicates in 2021, we received returns for approximately $33 million of cash from our file balances. Our participation in the results of Syndicate 1729 remains unchanged at 5% for the 2022 underwriting year. However, effective January 1, 2022, Syndicate 6131 ceased underwriting on a quota share basis with Syndicate 1729. As a result, we received an additional return of approximately $27 million of cash from our file balances during the fourth quarter. Before we open the call to questions, a few closing comments, I want to thank our executive leadership team and everyone at ProAssurance for bringing their best every day. Since I became CEO in mid-2019, I've said many times we have work to do. Even with all that we have accomplished, this continues to be true today. Our pursuit of excellence is ongoing. We have seen continual improvement in our results, and we can and will be even better. We've always said we are not in a business that should be evaluated on a quarter-to-quarter basis. We operate long-tail lines of business in markets that can be turbulent, and it will be another year before we have fully integrated our NORCAL transaction. So it may be bumpy along the way. However, I am confident we are on the right track and that over the longer term, this will become more and more evident in our financial results. And a final note. As some of you know, this will be Ken McEwen's last earnings call with ProAssurance, as he leaves to pursue his passion for writing. I want to thank Ken for all that he has done and on behalf of the entire executive team, wish him well.

Thank you, Ned. Very much appreciated. Candice, that concludes our prepared remarks, and we are ready for questions.

Our first question comes from Greg Peters of Raymond James. Your line is now open. Please go ahead.

Good morning, everyone. I guess I'll start off with my first question regarding the improvement in your current accident year loss ratio for Specialty P&C. We know that you've been applying a lot of rate, but there's also been, I think, maybe some tailwind benefit of courts being closed, lack of cases moving through. I'm just curious how the latter has informed your decision for your loss ratio improvement? And is it possible that if the courts open back up or that is going to tick back up again?

Greg, thanks for your question. I'll let Mike chime in, but maybe just a few thoughts on it. You're right. There absolutely has been some sort of benefit that has come out of the decline in claim frequency. And because we write largely claims related to business, we felt that we were able to recognize some of that benefit in the year. There's still a lot of unknowns around that. So what we don't know is if the decline in frequency that we've observed will be offset by some sort of increase in severity. This idea that the lawyers that are bringing forward the cases are being more selective on what they're bringing in, so there's more likely to be an indemnity payment than perhaps in the past. So we're trying to find a balance for that. And as far as what is attributable to the rate that we've gotten versus that impact, it's hard to separate those out, but they do all go into the analysis. We do worry about an increase in claims with this increase that will come at some point in the future as court systems opened back up. From a claims-made standpoint, it's really about the business that we write into the future. And it's one of the reasons that we're not letting go of the momentum and drive for price increases that we're having because we think those unknowns are out there. And I know that there will be competitors that buy into those lower frequencies as they price business for 2022. We don't think that's a prudent thing to do given that unknown, especially around the court systems. Mike, would you add anything to that?

Nothing with respect to the court systems, but I do want to just provide a little bit of color on re-underwriting because I do think it is a business mix in our book of business. We've reduced the volatility and some frequency-driven business. I mean in specialty health care, as an example, we're off some very large accounts. We've exited correctional care. We've reduced our exposure in senior care by about 75%. We've repriced and underwritten our hospital book. And we've done a really nice job in our physicians' books in what I would call our noncore states that had higher loss ratios that we've improved. So I do think the overall volatility reduction and frequency reduction as a result of re-underwriting will be helpful as we go into the future.

And just a point of clarification on your answer. And I know you mentioned this in your prepared comments, you said that you talked about the large policies that were non-renewed. Is there any sort of tail risk with that? Or are those policies all claims made so that once they're off the books, we're over and done with that?

Yes, I think— I don't have specifically in front of me the tail risk on that, but they typically have tail policies for those risks. What I would say, Greg, too, is one of the things I want to point out here is we've had a lot of kind of $5 million to $10 million large accounts over the last couple of years that didn't perform to our expectations. So a lot of our large account book now is $5 million or below, taking away some volatility in the results and certainly taking away some volatility in the results and also the premium volatility. I just got a clarification that all claims-made policies on those $23 million. So there is no tail. So I just want to clarify that as well.

Thanks for that clarification. The other question I just had regarding reserve development. And you guys have traditionally had a remarkable record of conservative reserving and favorable reserve development. Obviously, that was interrupted in the last couple of years. When I look at the favorable reserve development that you've reported in 2021, can you speak to the accident years that this is coming from? Because I have to imagine it's probably the older accident years, but maybe you could give us some color on that favorable development.

As we said, there's a bit of the claim frequency reduction in 2020 that we have taken some credit for. So typically, you're right, it's the older years where we see the more meaningful development because it takes 24, 36 months and the court system shut down even longer for us to get a clear picture around reserves. But that claim frequency reduction has brought some of that forward.

Okay. I know there are others that are going to ask questions. So I guess my final question is, I don't want to run with your fourth quarter results and annualize that out, but you are showing progress—and I know you've done a budgeting—laid out detailed budgets internally. Can you give us an idea of what you think might be a reasonable combined ratio target for the specialty business in 2022? And if you don't want to go there, just give us some ideas on what the levers are that could lead to further improvement.

I don't think we're going to give you an estimate for the year. I think a couple of things to think about, and Michael chime in. One is that there are some beneficial impacts from the NORCAL transaction vis-à-vis purchase accounting that impact the combined ratio for Specialty P&C, especially around the expense ratio but also around reserves kind of for the first 12 months, the first four quarters will have a favorable impact and then will largely go away. And the re-underwriting efforts that we began in May with the NORCAL book are still underway. So I think there's still, for us, learning on the NORCAL book, we're underwriting the NORCAL book and caution as we reserve for the NORCAL book. And then there's this question mark about what does client frequency do in 2022. And we'll learn more and more about that as the year progresses. But I think those are some of the things that we've got to factor in as we think about what the results of 2022 will look like. Mike, what would you add to that?

Nothing to add. I think it will really come down to the benefits of our prior re-underwriting efforts. The work we've done on NORCAL. And Greg, I will say that we made some really good progress in '20, prior to that NORCAL team made really good progress in '20 before the close of the transaction. And we certainly had a really good start on both rate for the physicians business and the specialty business and solid retention in '21 since the close of the transaction. And then the third component is clearly the uncertainty of the court systems and how that will impact frequency.

Greg, one thing that we can do is point you to the business combination footnote in our Form 10-K. So you'll actually see a schedule on Page 146 that outlines the expected amortization in 2022 of our fair value adjustments and purchase GAAP accounting. So I would just point you in that direction because there we outlined that we expect amortization on the fair value adjustment on reserves that will affect prior accident years to the tune of $10.6 million and unearned premium associated with the premium that we brought over to the NORCAL of about $5 million in '22, and then that will end. There will be no amortization beyond that. So I mainly wanted to point you there because it's a great resource.

I actually really appreciate that because once you get beyond Page 100 in the 10-K, you kind of begin to lose its content, if you know what I'm saying. So.

Our next question comes from Paul Newsome from Piper Sadler. Please go ahead.

Congrats on the quarter. Maybe just a few more comments on the competitive environment for the specialty business. It isn't really clear to me if it's sort of incrementally getting better or worse. And if you could talk about sort of the importance of that pricing number in terms of how we should interpret that as incrementally better or worse?

I mean it's certainly state-by-state on the competitive side, particularly in the physicians business. And I think with just a general reduction in frequency in '20 and '21 in the industry. I certainly feel like the physicians market is more competitive than the specialty market. In the specialty market, we continue to get solid rate, certainly improvements in terms, conditions, and product structure, as I mentioned earlier. And I would just say on the rate side, it just feels like over kind of '19, '20 and '21, we've had some consistency. A lot of our rate that we expect going forward is in what I would call the noncore states because we have certainly moved our core states to a solid profit level. So what we expect next year is more work on those noncore states that have not been as profitable in the past.

Then maybe moving back to the workers' comp business. What is your sort of incremental appetite for business going forward given the level of profitability in the quarter? How do you think about sort of appetite for new business perspective?

No, that's fine. I was just going to say, I think new business is something we always have an appetite for. Similar to how we can price it where we think it should be priced. But Kevin, can you provide a lot more specificity?

Yes. We're—as we've seen in the last couple of years, we've had higher retention. We've been able to hold rate to low single-digit decreases. As Ned said, we'll take the new business one account at a time as part of our individual account underwriting strategy, but we will walk away if we cannot get our price. So we're going to be very careful. The industry in comp, the soft market has been, by any measure, 6 or 7 years, and we're going to continue to be diligent and careful throughout the different market cycles.

Our next question comes from Mark Hughes of Truist. Your line is now open. Please go ahead.

The loss pick for 2022 for the Specialty P&C, I understand you don't give forward guidance, but this is something presumably you're making a decision about in the near term here. And given the movement in the current accident year, that is a really nice improvement at year-end. Makes me wonder how much of that might have been catch-up for earlier in the year and obviously, the low frequency in 2020. But when we think about where to set or think about 2022, I wonder if you might just give a few thoughts there.

But yes, I think it's always best to look at the year-to-date numbers. Because there always are some, as you said, there are some adjustments as we—especially in this quarter—as we reacted a little more strongly to the decline in claim frequency. So the year-to-date number is a good place to begin. I think as I look at 2022, one of the big unknowns is what's going to happen with claim frequency. And I think we're going to approach 2022 very cautiously and not make the assumption that the low claims frequency that we have seen during the heart of the pandemic will continue. Now ultimately, the data will prove that out, but we're going to approach 2022 cautiously from a claim frequency standpoint initially and not assume that the very low frequency that we saw in '21 repeats itself. Mike, what would you add?

Yes. I just would reiterate my earlier points that it will come down to how the NORCAL book performs to the physician book primarily with respect to the re-underwriting efforts from 2021? And then what is the impact of all of our prior re-underwriting efforts to frequency? And then the third component there is certainly the uncertainty of the court systems and what direction that will go. It makes given the frequency reductions and the actions in the fourth quarter may be a little bit challenging mark to set that. So we'll obviously evaluate all that data and make the selection. But those are the three things we'll be looking at.

The full year is the place to go. And then just looking at maybe more recent audit premium trends versus what we saw earlier on in 2021 and us recognizing early the impact of return to employment and the labor shortage are things I would consider in looking at models moving forward.

And then Dana, you had said earlier in your comments to look to the 10-K for expected run rate of expenses; you highlighted the Page 146 disclosures. Were there some other disclosures that would bear on the question of the expenses for the coming year, and I'll ask sort of the same question, what's the right run rate on expenses excluding these kind of one-timers that will run off as the year progresses?

So Mark, as I think about the expense side of it. I would—what's a little tricky in there is that we still have for the acquired book. We have NORCAL deferred amortization costs continuing to build at each quarter, and we gave some disclosure in there about how—indicate about how expenses would have been higher if that was at an eventual run rate. So I think you can refer to that to give you some estimation of how to factor that into the future. And then, of course, what's also challenging then is we're also making decisions in terms of expense reductions, and we're going to see those coming through, which would have obviously an offsetting effect. So going the other direction. And of course, we're not disclosing any specifics around that. But those are things that I would point to in trying to arrive at a run rate. The other thing that you can do is look at our disclosure; I could look at a page number, but around our—we sort of explained changes in our expense ratio year-over-year at whatever level you want to see it, whether that's within one of our segments or at the consolidated level, and that can be very helpful for you as well in sort of your best estimate work for the upcoming year.

Just one other thing—I'm sorry to interrupt you. One of the other things, just I think to be aware of the tax credits that we've invested in have been a big impact on what the effective tax rate has been to the organization over the last number of years. And we're beginning to get to the tail end of those tax credits, not detailed in toward the tail end of those tax credits. And again, within our 10-K and within the investor deck that we put out, there's a lot of information around how these tax credits will play out, but that's something else just to think about.

Our next question comes from Gary Ransom of Dowling and Partners. Your line is now open. Please go ahead.

I wanted to ask about the slowdown in paid losses. I didn't have a whole lot of time this morning looking at the 10-K, but just looking at the health care professional liability paid losses, it's pretty clear that there's a slowdown across the accident years across the latest diagonals of the triangle. And I was wondering if you can at all describe how much of that is more related to the underwriting? How much of that is somehow narrowing down the volatility of some of the other accounts versus what we know has happened in terms of the court slowing down, which gave you a natural slowing across all those accident years. Can you comment on that at all?

Gary, it's a great question. And I think the honest answer is we don't know specifically how much is attributable to which factor at this point. And it's one of the reasons that we remain cautious in kind of how we're establishing reserves and we'll remain cautious in '22 as we set that initial accident year loss pick. Because it’s just—it’s hard at this point to parse that data and give an answer that is with any certainty; we'll be able to look back in 3 or 4 years, I think, and have a lot more clarity around that. But there are just so many moving parts towards that, our re-underwriting efforts, our repricing efforts in everything that Mike's talked about, and then you throw the pandemic on top of that and the impact of the court systems; parsing it out is a bit of a challenge. Obviously, claims are being resolved more slowly as the court systems have shut down and slowly reopened. That has had an impact. I don't know if there's anything else you'd add to that, Mike.

I have nothing further to add.

Just to follow up on that. Are there any jurisdictions where the courts are starting to open, and you have seen at least some of how that might—the reopening might affect the numbers?

It is—some jurisdictions are kind of more open than others. Some have opened and slid back down as Omicron came through. If I would say, across the entire book, we said that the slowdown is still there. And I think you can get into some specific territories; I don't know if you followed them, put a nice report out on kind of jurisdiction by jurisdiction with all the data that they gather, which is a bigger data set that we have. And I know there were states like Florida that were kind of "more open" than other states. You can kind of look at what the pandemic shutdown procedures were in states to get a sense from that of what largely the court systems followed that on a state-by-state basis. But again, I think it's still early days on all that.

All right. And one more question on workers' comp. As I think about what happened on your audit premiums over the course of '21, sort of returns and then switching to additional audits late in the year. It seems to be lagged from what I've seen at other workers' comp companies where they were already starting to see more recovery in those audit premiums earlier in the year. And I don't know if that was something about your book or something about your estimates, but is there anything you can comment on there?

Gary, it's Kevin. No, there's—I really don't have a specific comment on it. We're 25% health care. I don't think that has anything to do with it, smaller restaurant hospitality. So really nothing I can read into audits are all processed timely, so there's no lag there to read into. So I really—I don't have any insights specifically, except that we're starting to turn positive here towards the end of '21.

And just, Gary, again, I don't know, I can't speak to how others do it, but correct me if I'm wrong here, Kevin. But we are booking actual audit premiums that come in the door that we have confirmation, and we are not looking at an estimate of what we think the audit premiums will be. And if others are estimating that, it could be that they're leaning into that sooner than we are. But ours are based on the actual audit premium themselves.

Yes, that's a great point. We do have an above asset up, which we haven't touched positively in a long time. So I do think we're being more on the conservative side. Great point, Ned. Thank you.

Thank you. As there are no additional questions waiting. At this time, I will pass the conference back over to Mr. Ken McEwen for closing remarks.

Thank you, Candice, and thank you to everyone who joined us today. We look forward to speaking with you again in May.

This concludes today's conference. Thank you for your participation. You may now disconnect your lines.