Good day and welcome to W. R. Berkley Corporation's Third Quarter 2023 Earnings Conference Call. Today's conference call is being recorded. The speakers' remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words, including, without limitation, beliefs, expects or estimates. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will, in fact, be achieved. Please refer to our annual report on Form 10-K for the year ended December 31st, 2022 and our other filings made with the SEC for a description of the business environment in which we operate and the important factors that may materially affect our results. W. R. Berkley Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. I would now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir.

Lisa, thank you very much, and good afternoon all, and I guess a second welcome to our Q3 call. We appreciate you dialing in and your time and your interest today. Joining me on the call, at least on this end, is Bill Berkley, Executive Chair, as well as Rich Baio, EVP and Chief Financial Officer. We're going to follow on our typical agenda where momentarily I'll be handing it over to Rich. He’s going to give us a bit of an overview and flag some highlights from the quarter. I will follow with a few comments of my own and then we'll be pleased to open it up for Q&A. Before I do hand it to Rich, I just wanted to make a couple of quick observations and really one macro one in particular and that is on the results of the quarter. I think by any measure, I call it a 20% return is really an outstanding result. The fact is there were no one-time this or one-time that in there, that is truly when you strip it down to its fundamentals, that is how the business is performing. And these great results are really a reflection of a team. This is a team sport, not an individual sport. So my congratulations to all of our colleagues throughout the organization on a job very well done. I have the good fortune of being their mouthpiece in these types of settings. But again, this achievement was a team achievement. To that end, obviously, it was a quarter where the organization was able to demonstrate our value proposition to capital. The idea of less risk for more return. We've talked to you all in the past about our, we are preoccupied with a concept that we refer to as risk-adjusted return. You can see it in moments like these that we just saw in Q3 very clearly. When, as our Chairman says, the tide goes out, you get to see who's where and what. You could see it in both aspects of our business activities, one being underwriting, the other one being investing. Our underwriting results of a combined of a 90 during a period that had meaningful catastrophe activity is really exceptional. Additionally, on the investing activity, clearly a book yield of 4.5%, while maintaining a quality of AA minus, and additionally, a new money rate of approximately 6%, that is no accident either. These results, these achievements are a result of our colleagues, their focus, their discipline, and their expertise. This call certainly is about reviewing what happened in the third quarter, but I would suggest even more than that, it is about how the table is set, not just for the coming quarters, but the next several years. So I think we are very well positioned. I think there is a fair amount of visibility. We will be getting into that in a bit more detail later in the call. But at this moment, let me hand it over to Rich, and he's going to walk us through some numbers. Rich, if you would please?

Of course, thanks Rob, appreciate it. Net income increased 45.7% to $334 million or $1.23 per share with a return on equity of 19.8%. Operating income increased 30.1% to $367 million or $1.35 per share with an operating return on equity of 21.7%. The company's strong performance was driven by another quarter of significant underwriting profits, bringing the nine months year-to-date to a record, despite consecutive quarters of outsized industry-wide catastrophe losses. In addition, net investment income accelerated throughout the year to yet another quarterly record. Drilling further into the underwriting results, net premiums written grew 10.5% to a record of more than $2.8 billion. We significantly grew the insurance business by approximately 17.5% in other liability, short tail lines, and commercial automobile through rate and exposure. Decreases in workers' compensation and certain professional lines certainly tempered the growth in net premiums written bringing the overall insurance segment growth to 12.1%. The Reinsurance & Monoline access segment was flat quarter-over-quarter with continued growth in Monoline access and property reinsurance. Pre-tax underwriting income was $259 million with the calendar year combined ratio of a 90.2%. The current accident year combined ratio, excluding catastrophe losses, was 87.9%. Current accident year catastrophe losses in the quarter were $62 million or 2.3 loss ratio points, compared with $94 million in the prior year quarter or 3.9 loss ratio points. The prior year favorable development was approximately $1 million, and the current accident year loss ratio excluding catastrophe was 59.6%. The expense ratio increased 0.3 points to 28.3% from the prior year and remains in line with our nine months year-to-date. The small increase is attributable to the same items we've communicated during the past couple of quarters, that being the change in outward reinsurance structures impacting seating commissions and increased compensation costs along with startup operating unit expenses. We also continue to invest in technology and areas to drive operational efficiencies. Record quarterly net investment income of $271 million grew by 33.6% with the core investment portfolio increasing by 59.3%. There are two main drivers for the significant increase in the core portfolio, including the rising interest rate environment benefiting the reinvestment of fixed-maturity securities as they mature or are redeemed. And second, the increase in the size of the portfolio, due to continuous record levels of operating cash flows. In the third quarter, we reported another record level of operating cash flow of almost $1.1 billion. To put some context around this point, the book yield has grown from 3.8% in the first quarter of 2023 to 4.2% in the second quarter to 4.5% in the current quarter on fixed maturity securities. The current nine-month year-to-date book yield of 4.2% compares to 2.6% for the prior year period. It's also worth noting that almost 81% of our net invested assets are in fixed maturity securities, cash, and cash equivalents. The credit quality of the fixed maturity securities remains strong at AA minus, and the duration ticked up to 2.4 years from the consecutive quarter of 2.3 years. Partially offsetting the increase in the core portfolio is net investment income from investment funds. You may recall this asset class is generally reported on a one-quarter lag and will more closely correlate with the broader equity markets. Accordingly, reported net investment income from investment funds was approximately $4 million, representing a marginal improvement from the first-half of 2023. We continue to proactively manage our capital position as you saw our announcement of a $0.50 special dividend per share late in the third quarter in addition to our regular quarterly dividend. This brings total capital return to investors on a year-to-date basis to approximately $775 million, with stockholders' equity increasing to more than $6.9 billion. Book value per share before dividends and share repurchases on a year-to-date basis has increased 13.7%. And with that, I'll turn it back to you, Rob.

Thank you, Rich. That was excellent. I want to share a few more observations regarding the quarter and our outlook moving forward before we transition to the Q&A session. Rich highlighted our growth in revenue, which is gaining traction as expected. To remind you, a couple of quarters ago, we had a difference of opinion with some partners regarding what we considered an appropriate rate, which they disagreed with leading to our separation. This had a significant negative impact on our revenue. That situation is slowly resolving, particularly in the auto sector. We wish them well and will monitor its progress. Regarding product trends, the market has been predominantly focused on property over the last year or two, which is justified. However, it’s essential to keep a close watch on auto liability, as it appears to be particularly vulnerable to social inflation. This also affects excess and umbrella products. In general, social inflation remains an ongoing challenge, and we don’t anticipate a decrease in this trend soon. On workers' compensation, we've previously discussed the need to remain vigilant regarding medical cost trends. While we previously experienced stable costs, we believe this is changing rapidly and will garner more attention in the coming quarters. The benefits previously enjoyed by this sector, due to COVID-19 and labor market conditions are diminishing, and wage inflation is decelerating. Regarding social inflation, we are highly focused on it, as evidenced by our rate increases, which are currently at an ex-comp rate of 8.5%. We intend to maintain our proactive stance, and the market seems receptive, as indicated by our renewal retention ratio holding steady at around 80%. Another important metric I find useful is the paid loss ratio. This quarter, it stands at a robust 47.9%. Given our current business backdrop, this suggests solid strength in our IBNR (Incurred But Not Reported) reserves and we encourage close examination of our IBNR figures. Turning to our investment portfolio, Rich provided detailed insights earlier. The story isn’t just about the 4.5% book yield; the current new money rate is around 6%. Coupled with robust cash flow from our operations, we believe this positions us well for the future. We extended our duration from Q3 to Q4, and anticipate that this will continue over time. However, by keeping the duration relatively short, we’ve enhanced our flexibility to capitalize on higher interest rates sooner. Looking ahead, while the future is uncertain and volatility may arise, our business is equipped to navigate turbulent conditions, as reflected in our rate increases and the trends in our book yield. Overall, we believe our business is strategically positioned for the coming quarters and years, with an acceleration in earnings potential likely. With that, Lisa, I'll pause and we can move to the Q&A.

Thank you. We'll take our first question from Mike Zaremski with BMO. Please go ahead.

Hi, Mike. Good afternoon.

Good afternoon. Regarding your comments about the increasing visibility and the investment income, I want to clarify that this visibility is indeed improving. However, there remains ongoing uncertainty concerning social inflation and medical cost trends. Have there been any significant changes in Berkley’s perspective on loss costs and trends over the past few months?

Social inflation remains a challenge. However, considering the rate increases we're achieving, excluding the compensation, of 8.5%, I believe we are well positioned to handle the inflation trends we may face. I see potential for improvement in underwriting results over time. That said, with a 20% return, there's no need to take unnecessary risks. The paid loss ratio has been consistent over several quarters, which should serve as a reliable indicator. Regarding the investment portfolio, it's quite straightforward. We can see the new money rate and know the duration, making it easy to calculate the potential upside. As time progresses, we are consistently locking in higher rates. Therefore, while there is significant potential in the investment portfolio, I would also encourage consideration of opportunities within underwriting.

Okay, understood and maybe as a follow-up on the top line growth and you mentioned there were some partners you know part away with that might have led to some of the diesel, I don't know if that was last year, but you know this year we're seeing some momentum in the top line and PW just like pricing let's say being flattish? Any story underlying that you'd like to share a trend line?

I want to emphasize that momentum is coming back on the top line, as we are nearing the end of our relationships with certain partners. The impact on our top line is decreasing with each quarter. Consequently, this is affecting our overall results less and less. Additionally, I should point out that there are segments of the professional liability market that are extremely competitive, and we are not going to pursue opportunities that don't make economic sense. The same applies to workers' compensation. Fortunately, there are many opportunities in other areas of the market, and we are actively pursuing those, which is driving the growth you see. It is likely you will continue to see more of that. While rate increases are a part of the equation, they are not the sole factor.

Thank you.

Yes.

We'll take our next question from Elyse Greenspan with Wells Fargo.

Hi, thanks, good evening. My first question is I guess, you know, building upon the growth conversation, you know, as you guys had alluded to rate growth within the insurance book did pick up in the quarter, obviously, pushes and pulls across the different business lines. Rob, just based off of your overall outlook, you know, how would you expect, I guess, premium growth within that book to trend not only in the fourth quarter but also in 2024 as well?

Obviously, at least nobody knows exactly what tomorrow will bring, but as you would see over the past several quarters there has been the momentum that's building and there's nothing that I see today that's going to take the wind out of that sail.

Okay. And then in terms of the prior year development, so $1 million overall favorable, was there any noise in either insurance or reinsurance within that $1 million or any noise within different accident years that you want to call out? I know you typically wait for the 10-Q, but anything worth flagging tonight?

Yes, I don't think there was anything particularly noteworthy. Rich, did you have anything that he wanted to flag on the call?

I would agree with your comment, Rob, I don't think there's much, you know, in terms of from a segment perspective, pretty benign, you know, in each of the segments, so I think that's all I would comment before the queue.

Okay. Thank you.

Thanks, Elyse.

We'll take our next question from Mark Hughes with Truist.

Hi, Mark, good afternoon.

Yes, thank you. Good afternoon, Rob, Rich. General liability, you had another acceleration this quarter, anything going on there are you seeing some sort of rehardening perhaps in GL?

I think that it's a combination of things, one is rate, and two, certainly our E&S businesses in particular are benefiting from that as well, and our Specialty businesses overall. I think there's a recognition, two things; one, there's discipline, people are taking the rate, and two, I think that there is a growing percentage of the audience that is looking to do business with carriers that they can have confidence in and that's not just about ratings and in the eyes of the insured, I think it's also distribution partners, where they are trying to narrow the number of relationships they have and have those relationships the more important and really focusing on partners that they know will be there tomorrow in a predictable and consistent manner.

Understood. How about the property reinsurance market, had a little slower growth this quarter compared to the last couple of quarters, what do you see happening there?

Yes, I wouldn't read too much into that. There's just a fair amount of seasonality, if you will, to how that business is written. There is still a good opportunity there and our colleagues I think are very focused on it.

We'll take our next question from Alex Scott with Goldman Sachs.

Hi, Alex.

Hi, Good afternoon. So I wanted to ask you about the paid loss ratios. I mean, you know, I think in 1Q is 48%, it sounds like it's around that level now still. Can you help us think through like how much is that benefiting from the growth in the business, just with insured values and so forth going up, you know, how does that compare over like a longer period of time excluding, you know, sort of those items? I'm just trying to think through, I mean it seems like that's an important part of why you're so optimistic on the future. And as you all know, there is a fair amount of criticism of some of the older accident years. I'm just trying to think through order of magnitude, that dynamic, and sort of how seasoned the older stuff is. I mean, anyway you can help me think through all that.

Sure, so maybe a couple of comments. First off, as far as the growth and the benefit of the growth, I would encourage you to go back and look at how much growth has occurred because of exposure, if you will, versus how much is the growth has come because we are just charging more for each unit of exposure and I would tell you a lot of it is driven by that. In addition to that, as far as reserves and how they develop out, the average duration of our loss reserves is give or take 3.5 years and that's paid. So what my point is, is that the years that perhaps are viewed as more challenging. I think you should have some level of comfort and sense of where those are coming out at this stage.

Got it. That's helpful. Second question I had for you is, I guess on general liability, other liability, and maybe the preference between primary versus reinsurance, you know, I'm just noticing the casualty reinsurance has been declining a bit and we've heard some more cautious commentary from some of the global reinsurers. I just want to understand what you're seeing there that's causing you to favor the primary versus reinsurance exposure?

Well, I think there are a couple of things, first off, a lot of it is not necessarily that the underlying business is less attractive and maybe about the ceding commissions that they are able to command, and at some point, maybe we think the underlying business is okay, but the ceding commissions that our competitors are willing to play on the reinsurance side, that they don't make sense to us. In particular, I would call out some of the professional liability space, but I'm not going to get into more detail on that. As far as on the liability side on the direct or insurance front, you know, it's just where we see opportunities and we like what we see in much of the marketplace, particularly Specialty, and if you want to get even more granular much of the E&S market. And as you and others are aware, we're one of the largest players in the E&S space and in particular in the liability lines. So this is just a good moment, and again, what's going on with the reinsurance isn't necessarily that we just think the market has gone to hell as far as the primary, we just may not agree with what some others are viewing as an appropriate feed. You know, I have heard as of late from some reinsurers commenting on social inflation, and all of a sudden they discovered this thing called litigation funding and, you know, kind of makes you scratch your head and wonder where they've been for the past decade, because these are not new phenomena, these are things that those of us that are in the marketplace, at least in the weeds, we've been not just talking about the dealing with for an extended period of time. So there's nothing new there. I think it's great that they're focused on it, maybe they'll bring more discipline to the marketplace. Yes.

Our next question comes from Josh Shanker with Bank of America.

Hi, Josh, good afternoon.

Good afternoon, thank you for taking my call. Hope everyone's well. Can we talk a little bit short-tailed lines, lot of growth there, you know, I mean, that, you know, that says to me there's property in there, but short-tail is a pretty big catch up for a lot of things, a lot of growth instead what you're finding there and what the opportunities are?

Lion's share of it is property. There is a little bit of auto physical damage in there and, you know, on both fronts, particularly in the property, I think you know the story as well as we do. There is a need for rate, there is an opportunity for rate, and we are trying to make the most of it.

Do you have any insights on your increased reinsurance costs? You're not a major buyer of reinsurance, so are you able to absorb some of that price increase for the benefit of shareholders, or is some of it being passed on in the reinsurance market?

The short answer is, Josh, that we are trying to ensure that the additional cost of that capacity that we rent is being passed on to the client and I think we're doing that reasonably well. Not a perfect indicator, but you can see that in the difference between the gross and the net and part.

And then, look, it's down a lot from where it was in 3Q '22 but the cat loss in the reinsurance segment was somewhat high. I don't think your big Hawaiian right, but maybe there's some homes in Hawaii you write the Albo in the Panhandle in Florida, just doesn't seem like that would have been a big area for you. Can you talk about the cat loss a little bit in the reinsurance segment?

Yes. The long story short, did we have modest exposure to the things that you're talking about or that you flagged, yes. And then there was also some SCS exposure in there, too.

Okay. If I can ask one more question. You provided some information on the rate, not really loss trend. You've discussed commercial and its potential. What is the loss trend in commercial auto? What are you reserving considering your concerns about social inflation? Is there a difference between your current view of the loss trends and how you are booking it? I understand you're aiming for a conservative approach, but have you accounted for this in your pricing and related strategies?

The short answer is on the part of the portfolio. But generally speaking, we are looking to build in a risk margin beyond what the actuarial answer would be. Thanks, Josh. Thank you, Josh, you too.

We'll take our next question from David Motemaden with Evercore ISI.

Hey, David. Good afternoon.

Hey, Rob. Good afternoon. Just had a question on the commercial auto premium growth and I guess I hear your commentary loud and clear on social inflation impacting that line, so I was a little surprised that the growth accelerated there, was that more a function of this partner that you parted ways with, resulting in I guess an easier comp or have you seen something change there on the pricing side this quarter that makes you want to lean into the commercial auto market a little bit more?

So a couple of things that's worth noting. Yeah, part of it has to do with a bit of runoff as you alluded to, but the bigger story from my perspective is the rate that we are achieving. And we are pushing very hard on the rate and we're getting it. And ultimately, we have a view as to how much we need for rate and to the extent that we're getting it, then we don't have a problem writing the business. But we are not going to write it if we don't think we can get the rate that is required plus to achieve our targeted return.

Got it, thanks. That's encouraging. And then maybe, you know, I know you guys have been vocal on just workers' comp, medical cost inflation, and staying on top of those trends. I'm wondering if you're actually starting to see that come through, then manifest in your claims data, just in terms of the medical cost inflation starting to impact your payments.

We are definitely observing early indications of this, and it has been apparent for some time, which has contributed to our cautious stance. We have been discussing how the economic model for providers, especially the large health systems, is unsustainable as they are depleting substantial amounts of capital, and a change is inevitable. Part of the solution will involve the payers. Workers' compensation will not be shielded from these issues. The situation encompasses more than just pharmaceuticals; it involves various aspects of medical costs. If we set aside the workers' compensation component for a moment, conversations with major payers like United and Cigna reveal trends that, when considered in the context of workers' compensation, highlight that we lack the same negotiating power that a large payer has, which is a significant point to note.

Got it. Understood. And then maybe if I can sneak one more in, just a quick one. I didn't hear you talk at all about the fire losses. And I think is that fair to assume that that's pretty much one you guys have re-underwritten that book, and that's no longer impacting results? Or did that have some smallish impact this quarter as well?

The answer is that it wasn't overly noteworthy in the quarter. I'm not inclined to declare victory because then it always comes back to bite us. But I think we're making progress on that front. That having been said, as far as the loss picks go, for our conversation around the environment, we're just not in a rush to do anything but be thoughtful and measured. The fact is the business is generating by any measure, great returns and we don't see that changing. So there's no reason to push better for us just to make sure that it is thoughtful and well controlled. And if we're going to err, we're comfortable erring on the side of caution.

Got it. Understood. Thank you.

Thanks for the questions.

We'll take our next question from Ryan Tunis with Autonomous Research.

Hey, Rob. How is it going?

First question just on short tail lines. Obviously, there's been some mix shift in that direction. I think that, that would have somewhat of a lower underlying loss ratio. Is that the right way to think about it?

I think it potentially does. But with a lot of those lines, you got to remember, we carry a cat load. So we are not going to release the cat load prematurely. So that could spill over that benefit may not be realized, if you will, we may carry that through into a future period. But yes, to your point, would it have a lower loss ratio oftentimes, yes.

And then, I guess, just bigger picture with commercial auto. It seems like it's been like almost an impossible line to underwrite over the past decade. Just curious like for a business like Berkley. Why does that line need to be such a large component of what you underwrite? Is it that it's bundled with other stuff? Or you think you can ultimately get it right? I'm just curious why structurally that has to be such a large part of your mix?

Yes. So I think we need to dissect that a little bit. And apologies in advance if this proves to be more of an answer than you're looking for. But as far as commercial auto goes, I would draw the analogy perhaps to your point that it's sort of the industry's version of whack-a-mole. As far as our book goes, we write it both stand-alone and we also write it as part of a package. Is it relevant to how you write a package? Yes, it is. But that doesn't mean you should write it in an undisciplined manner. I think as far as the Monoline goes, we play when we think we're making a buck and quite frankly, a lot of our Monoline guys, we think, over the past few years have done very well. So we'll see over time, but I think we just have some reservation and concerns about where the marketplace is going. That having been said, it has caused us indigestion from time to time. I think we've as of late, have more consistently done better where we're running at Monoline because we are very focused on it. I think there are some examples where we've written as part of a package where we probably haven't been as focused and didn't have as strong an expertise being brought to bear, and that is something that we are working at changing. But yes, are there moments in time where I look at it and I say, how does this make sense? That having been said, there are many parts of this organization where they are doing it consistently well. Thanks, Rob.

We'll take our next question from Brian Meredith with UBS.

Hey, Brian. Good afternoon.

Good afternoon to you. Rob, just curious, any green shoots at all in the professional liability line and maybe even related to cyber, and we've seen some big losses come through in the cyber area of late. And is that causing any kind of upward pressure on rates and maybe some opportunity around that line?

I guess my answer would be not yet. We'll have to see what comes about. Particularly as far as cyber goes, it's going to be interesting to see what type of pressure the reinsurance marketplace brings to bear on the underlying or the insurance marketplace. As far as D&O goes, it continues to be very, very competitive. Other parts of professional liability, I would tell you that to a varying degree, it's pretty challenging out here. So again, I think that you can still make a buck in a bunch of pockets, but you need to be careful. The answer is as we saw what was going on with it. We pushed the picks up. We think what we're carrying makes sense and it won't be an issue but quite honestly, we wish them well, but we're not going to miss them.

Great. Thanks.

We'll take our next question from Meyer Shields with KBW.

Hey, Meyer. Good afternoon.

Hi, good afternoon. How are you?

Good. How are you.

Thank you. I wanted to delve deeper into the topic of commissions on casualty reinsurance, as there have been reports of European reinsurers being concerned about social inflation. I'm curious if it's still too early to tell or if, in your current discussions regarding the upcoming casualty reinsurance renewals, there are any signs that the commissions might be improving.

They don't invite me to their pricing meetings, so I'm not sure. Given the discussions, I think they might be considering it. But we will have to wait and see if the conversations turn into actual actions.

Fair enough. I wanted to step back a you talked about Berkley's willingness to write more property in the current environment. And I'm wondering about now that we're nine months through the year, how the growth that you've seen compares with the expectations you had and the opportunity you saw as you go back to December of last year?

I think that we feel quite good about what has been accomplished by our colleagues and I understand that many of you, the only barometer you have is how much premium that we are writing. But what may not always come through as clearly is maybe we're collecting the same amount of premium but we've reduced the exposure by one-third or maybe we're collecting 30% more premium, but we've reduced the exposure considerably. So it's not just a matter of how much you write. It's a matter of how much you're going to make, obviously. And I think our colleagues both domestically as well as outside of the U.S. have done a nice job navigating the channel and continue to.

Okay, fantastic. Thank you very much.

Thanks for the question.

We'll take our next question from Mark Hughes with Truist.

Yes, thanks. I wanted to ask about the expense ratio, particularly in the reinsurance segment, which was quite low this quarter. What are your general thoughts on the overall expense ratio?

I believe that we can maintain an expense ratio comfortably below $30. However, this can be influenced by various factors. Our preferred strategy for growth is often through starting new businesses. When launching a new venture that is still in its early stages and lacks scale, the limited earned premium can negatively affect the expense ratio. Nonetheless, we view this as a more controlled way to expand the business. The expense ratio may fluctuate, but the main factor will be the timing and growth of the new businesses we initiate. We are confident that we can keep the ratio starting with a two.

And so nothing unusual this quarter in the Reinsurance & Monoline excess.

Rich, is there anything that you can think of?

No, I think it's for the same reasons that we've been talking about and that you alluded to, Rob.

Excellent. Thank you.

We'll take our next question from Yaron Kinar with Jefferies.

Thank you. Good afternoon. My first question, and I may be paraphrasing what I think I heard from you, but I think you're not taking the foot off the pedal in terms of rate. At the same time, you are achieving a ROE of about 20% new money rates would suggest upside there. So why is there a need to continue to aggressively push rate here? Is it that you worry about medical inflation, social inflation and once they rear their head they quickly impact margins?

Well, I don't think it's once they rear their heads. I think their head is fully reared at this stage, and the neck just keeps growing. So from my perspective, it is exactly what you suggested, it is loss cost trend. And while perhaps there's some evidence that financial or economic inflation is slowing, though still elevated relative to what it's been in the recent past. There is no evidence that social inflation is abating at all. And as a result of that, we're just going to keep pushing. At a minimum, we need to keep up with that.

Got it. And then we haven't heard in a while about the international book. Can you maybe give us a quick update there. Is it margin accretive, dilutive for the quarter for year-to-date? How growth patterns developing there?

It's accretive. We have some terrific businesses outside of the United States. Run by some outstanding people with a shared set of values that we have in other parts of the business, very focused on a lot of the things that we talked about, particularly risk-adjusted return. And it is certainly not dilutive to the franchise overall.

Got it. If I could sneak one last one, if I may. On the property book in the loss picks there. assume those develop a bit faster than you see in the casualty line. So how long before you start updating those? Is it mostly frequency driven and we could see those start to move according to the actual frequency within a couple of quarters? Or does it take longer?

It takes some time. We review it approximately every 90 days and don't want to rush into conclusions. There are two aspects to consider. One is how we approach the attritional risk versus our catastrophe exposure. The catastrophe aspect is somewhat different; as I mentioned earlier, we have a catastrophe load that we incorporate, and we won't release that too soon. It will carry over from one quarter to the next. Regarding the attritional aspect, we prefer to wait a bit longer to observe how it develops. But, it shouldn't take years for us to assess. Thank you very much.

And that concludes the question-and-answer session. I'd like to turn the call back over to Rob Berkley for any additional or closing remarks.

Okay. Lisa, thank you very much for hosting us. Thank you to our colleagues for participating in the call. I think just going back to some of the earlier comments, the table is set, and it's pretty visible how it's set. I think the earnings power of the business is just going to be growing for the foreseeable future. More likely than not, we're going to get the double benefit of both of our core activities, both the underwriting and the investing and the momentum should continue. So thank you again, and we will look forward to speaking with you early next year. Have a good night.

This concludes today's presentation. Thank you for your participation, and you may now disconnect.