Good morning and welcome to Everest Re Group Second Quarter 2018 Earnings Conference Call. On the call today are Dom Addesso, the company’s President and Chief Executive Officer; Craig Howie, Chief Financial Officer; John Doucette, President and CEO of Reinsurance Operations; and Jon Zaffino, President and CEO of Insurance Operations. Before we begin, please note that the company’s SEC filings include extensive disclosures with respect to forward-looking statements. In that regard, statements made during today’s call which are forward-looking in nature, such as statements about projections, estimates, expectations and the like are subject to various risks. Actual results could differ materially from current projections or expectations. The SEC filings have full listing of the risks that investors should consider in connection with such statements. Now, let me turn the call over to Dom Addesso.

Thank you. Good morning and thanks for joining our call this morning. The second quarter of 2018 was a decidedly mixed quarter for Everest. Surely, the bottom line results were not where we wanted them to be driven by the reserve charge we pre-announced. Nonetheless, it was another quarter of the successful execution of our strategy. We had a lot of success executing on the opportunities that have been presented to us in the market. We have seen strong premium growth both in our insurance and reinsurance business. Plus in both segments, our underwriting and re-underwriting actions have driven improvements in the attritional loss ratio and the profit margin embedded in our portfolio. Of course, the progress towards our strategic objectives is masked by the reserve charge. No doubt, this adjustment was disappointing. And while it reflects some broader underlying trends going on in the market, in reality we know it will require us to improve and make changes to recognize these trends. The underlying cause of the reserve shortfall can be attributed to two factors, which were not apparent to us at year end. First, our clients are seeing a large number of reopened claims largely stemming from the AOB threat in Florida. Ceding companies were trying to settle claims quickly conceivably to mitigate the AOB issue. The loss reports we received from clients showed a high percentage of closed claims very clearly and we were encouraged by these reports. Settling claims quickly was initially a sound strategy, but what we now know is that this approach left our clients vulnerable when the actual repair bills came in higher than what they originally closed their claim. To a lesser extent, but for the same reasons, the claims reopening, has impacted Puerto Rico after Maria as well driving up losses,…

Thank you, Dom and good morning everyone. Everest had net income of $70 million in the second quarter of 2018. This compares to net income of $246 million for the second quarter of 2017. On a year-to-date basis, net income was $280 million compared to $537 million for the first half of 2017. The quarter and year-to-date results were impacted by current and prior year catastrophe losses. Net income included $9 million of net after-tax realized capital losses compared to $50 million of capital gains in the first half of 2017. The 2018 capital losses were primarily attributable to fair value adjustments on the public equity portfolio. After-tax operating income for the second quarter was $40 million compared to $234 million in 2017. Operating income year-to-date was $260 million compared to $501 million for the first 6 months of 2017. The overall underwriting gain for the group was $20 million for the first half compared to an underwriting gain of $313 million in the same period last year. The year-to-date combined ratio for the group was 99.4% compared to 88.3% reported in the first half of 2017 impacted by the higher catastrophe losses in 2018. In the second quarter of 2018, the company reported a $400 million pre-tax increase in its estimates for prior year catastrophe events, net of reinsurance and reinstatement premium. The increase was primarily related to the 2017 storm events, was about one-third of the change related to reopened claims reported in the second quarter, about one-third coming from higher loss adjustment expenses and the other third coming from the impact on retro aggregate covers. The group also saw $65 million of current year catastrophe losses, net of reinsurance. Of the total, $50 million related to Cyclone Mekunu in Oman and Yemen and $15 million related to…

Thank you, Craig. Good morning. Q2 was the first renewal season following the catastrophes in 2017 for some loss affected areas, notably Puerto Rico and some of the Caribbean at April 1 as well as Florida at June 1. Overall, the markets were mixed. And from a rate perspective, they varied based on loss activity as well as macro and local supply demand factors. However, these and other renewals in Q2 provided our underwriters with an opportunity to reshape our portfolio by capturing higher risk adjusted rewards. We improved our portfolio by achieving rate increases, particularly on loss affected Puerto Rican and Caribbean accounts, growing share with some key Florida clients, reallocating capacity to different attachment points and better priced layers. We also saw more turnover in the book as we decreased shares or declined poorly priced deals and scaled up capacity on more attractively priced opportunities. Shifting capacity from excess of loss layers and proportional treaties on programs to where we are paid the best risk-adjusted price using our leading re-insurer position in the market to get preferred signings and utilizing both alternative capital and our equity capital to most efficiently match risk to capital all position us for better than market results. These advantages benefit us even for flat renewals and help drive some of this year’s premium growth. Our reinsurance gross written premium for Q2 was $1.4 billion and $2.8 billion year-to-date, which is a 29% growth in premium over year-to-date 2017 driven by growth in all of our reinsurance segments. Some of our growth in reinsurance was due to increased excess of loss and quota share participation on existing treaties and also new quota share treaties with improved profitability following the 2017 cat losses. In addition, we achieved some impactful reinsurance successes with several key global…

Thanks, John and good morning. Our global specialty insurance operations delivered a solid quarter of performance. We are encouraged by our steady improvement and the progress we are making toward our key goals. Prominent among these goals are diversified and profitable growth and increased resilience across our in-force portfolios and operating platforms. Our team has done an outstanding job executing on the plan and building upon the many foundational pieces we have put in place over the past 3 years. The second quarter brought some notable performance highlights beginning with the highest level of quarterly gross written premium, net written premium and net earned premium realized in our insurance operation history. It further marks the 14th consecutive quarter of year-over-year growth in our business. This achievement is the result of highly diversified growth across our property and casualty and accident and health operations, our growing geographic reach and our consistently evolving product capabilities. It also speaks to our increasing relevance within the specialty insurance market. This quarter’s results are also encouraging considering our two largest underwriting divisions by gross written premium in the quarter. Everest Underwriting Partners and our U.S. property group experienced notable declines in their premium production due to various deliberate underwriting actions. Importantly, this quarter builds upon the underwriting profitability achieved in the first quarter of this year and brings our year-to-date underwriting profit to $22 million, a more than twofold increase over prior year first half. Our second quarter underwriting profit is $9.5 million, a 3x increase over 2017 second quarter and $37 million more than our 2016 2Q performance. Further, five of the last six quarters have produced an underwriting profit, the lone exception being the third quarter of 2017, where we along with the rest of the industry felt the impact of unprecedented cat…

[Operator Instructions] Our first question comes from Josh Shanker with Deutsche Bank.

Thank you. In your prepared remarks, you spoke about what you got wrong on the cat losses last year and suggesting you have you have under-priced loss adjustment expenses. So, is the book of business you have in cat today under-priced relative to what you should have priced that at January 1?

Good morning, Josh. It’s John. Thanks for the question. I would not characterize it that way and we always are continuing to evaluate loss trends and factors that go into our pricing. And really, it was a function of the loss adjustment expenses that happened in totality when the multiple events happened, but we do look at and have modified our loss adjustment expenses going forward and we did going into this renewal season at 6/1.

Did that change the competitiveness about how you could participate? Did you find that your business was better except for that 1/1 than at 6/1?

I think there is a lot of countervailing occurrence that are happening. And at 1/1, that’s more of a different market. 6/1 is Florida and there is a lot more territories at 1/1. So I think there are a lot of moving parts, including some of the capital. I think there was more macro overarching supply demand as we headed into 6/1. There is a lot of moving parts that are there. With did, as I mentioned in my prepared remarks, we did write more on deals that we liked and wrote – declined several deals or reduced the share of deals that we didn’t like and some of that was pricing, some of that was what we thought the right kind of either an agreement or disagreement on what the price equilibrium should be for losses that happened or losses to particular layers, so either by region or to a client or to a layer and what we thought the price equilibrium should be for that. So, it was more than usual churn in the portfolio this Florida season than we had seen, but we were in the end pleased with our ability to deploy the capital, supporting the clients that we wanted to support. We also wrote more proportional business as we indicated both in casualty and in property.

Josh, these multiple events also had – because they were multiple events, had a disproportionate impact on our retro add book. And as a result of pricing demand that we had back in January 1 we actually have less exposure there than we did in the previous year. Go ahead.

Yes. If you think about your outwards reinsurance book, I think that in retrospect, you wish you had certain kinds of protection, particularly around LAE that you didn’t have coming into this year. Do you feel well protected on your outwards reinsurance book this year or does it carry with the same risks that befell you in 2017?

First of all, big portion of our outwards book is through Mt. Logan, which is proportional as well as some facultative specific deals, which again are for the most part proportional. So, those are not affected. Our cat bonds, which frankly make up the bulk of our protections beyond Mt. Logan, are really intended to be protected against capital events, not earnings events. So, we still feel very comfortable with our cat load that we profess to be under 9% and that our protections are the same or better.

Alright. Well, I will see the floor to other questions.

Thank you.

Thanks, Josh.

Thank you. Our next question comes from Elyse Greenspan with Wells Fargo.

Hi, good morning. So my first question just trying to get a bit more color on the increase to losses for 2017. So, you guys mentioned part of it was related to the AOB issue in Florida. We have seen that going on in the state with a bunch of the homeowner insurers for sometime. So in retrospect, I mean, maybe are you a little bit less surprised that this happened, just a little bit more color there? And then my second question would be, I don’t know, if it’s IBNR that you can disclose in relation to how you are carrying for these events or some other metric I guess. So we would expect we can kind of look to a number and say this has been fully addressed and we don’t expect any additional movement from here?

I will ask Craig to address the IBNR question, but relative to the AOB, the AOB issue was not the AOB per se, it was the threat of AOB that we think was driving the number of reopens. So again to be clear what we were seeing as increases were due to reopens not as it relates specifically to AOB. Craig, on the IBNR question?

Elyse, on the IBNR, we believe that we have put up adequate IBNR and when we went through these calculations for these catastrophe events, our goal was to put this issue behind us. And so we believe the IBNR that we hold for all our cat events and that’s separate from our non-catastrophe reserves is adequate to cover in any and all prior year cat.

Okay. And then my second question maybe this ties back to a little bit of what Josh was asking, but if we look at your losses following on this quarter’s increase as a percent of equity, you do stand above your peers following this increase. So in retrospect, as you think back were you carrying too much risk, two to three storms? And I guess as you have you did mention writing less aggregate retro this year. So do you think given that the increase happened kind of right around the midyear renewals were taking place, do you think that you were able to kind of see it in time to make enough adjustments to the book you are carrying into this year’s wind season?

Right. So in response to your first question, I will take a little bit of – I slightly disagree with characterizing it as above our peers. It’s frankly more in line. We manage our cat exposure as you know on an after-tax basis as do many others, but most others aren’t being in Bermuda, don’t have some of the same advantages from our tax structure that we do. So frankly, we consider it on that basis. And again given our capital position, given what I mentioned in my script, was that again over the last 5 years, our overall cat portfolio has been extremely profitable at generating over $3.5 billion of profits in that 5-year time period as well as I think if you look at our operating ROE compared to our peers, I think you will find that we lead the group there as well. So, the answer to your question relative to tax is we manage our cat exposure at less than 9 points of combined ratio points on an annual expected basis. And frankly over the last 5 years or 10 years, it’s actually proven to come in right in around that number. So we think we have kind of optimized our portfolio. The fact that we write a lot more retro and retro ag than most other participants again because of our size and our scale can lead to a little bit more volatility, but again we think that that’s come with the appropriate returns. I don’t know if that answers your question, but...

Yes, that does. And then one last question moving away from the cat increase, the current accident year results were pretty strong in reinsurance in the quarter. In the prepared remarks I believe you said 2 points was from non-cat weather. You showed about a 5 point improvement in your accident year loss ratio in reinsurance in the quarter, which did stand out as you commented just given the shift to pro rata and casualty business. So is that as you think going forward is that a level of improvement that can be sustained or were there some other one-timers in the quarter or should we just look to the half year number as representative of the underlying margin improvement we could see?

I always prefer to look at a half year number, because any one quarter can have a fair bit of volatility in it, but I think the half year number is fairly reflective of kind of what we expect going forward recognizing of course that it was positively impacted by the non-cat – the scarcity of non-cat cat events, which is frankly has not occurred for a number of years. You might recall last year, it was for both primary companies and re-insurers, there was a lot of storm activity in the first half of the year that didn’t reach the level of, in our case, $10 million per event, so we call them non-cat cats. But recognizing that difference, depending on how you would like to account for that in your models again in the 6 month numbers would be more reflective of how we see the portfolio.

And Elyse, good morning, it’s John. I’d just add a little more color on the portfolio so we did see rate increases at different points in time this renewal season post the events again, we talked about it at 1/1 was it as much as we were hoping for now but we did see rate increases at 1/1, 4/1, 6/1 and 7/1, and that is going to have some impact in the numbers you’re looking at we also as we continue to build out our mortgage and credit portfolio, that has run to an attractive combined ratio and there is a lot of other things I talked about the global clients and the strategic relationship we are building with some of those, also has run favorably so there is a lot of moving parts but again, just to reiterate from the prepared comments, we really believe that our overall portfolio, our U.S. international casualty, professional, property, mortgage, structured is better positioned today that we’ve been able to get rate in some places but also position the portfolio and build some stronger portfolio overall that will impact that has impacted the attritional combined ratio.

To further add to that, John mentioned in his prepared comments about, as well, a low combined ratio line expansion in or growth in trade credit political risk and surety again, we have, over a number of quarters now, worked hard to diversify our portfolio not only by product and class of business but also geographically and I think that if you look at the underlying metrics, you’ll find that we’ve achieved a lot of that success and that’s, in part, what’s driving down what historically had been a much higher annual expected cat load, driving that down below 9%, notwithstanding the fact that, yes, we have these events in ‘17, but again, given the fact that we have a retro book that, in retrospect, was not – it was not a surprising effort.

Okay, thank you very much for all the color.

Thank you.

Thank you. Our next question comes from Yaron Kinar with Goldman Sachs.

Good morning, everybody. My first question on the reinsurance front, so Everest, I’d say is probably a little bit of an outlier in terms of the strong growth in net premiums written that we have seen and that growth has accelerated this quarter. John, I know you said that this growth was broad, but I am just curious are there any particular notable deals that drove this particularly strong growth this quarter and are you seeing the ceding commissions or the ceding rates relatively stable?

Good morning, Yaron. Thanks for the question. So, we are – so a couple of things. So I mentioned the global clients and so the large, the top 15 or so multinational insurers, we see them coming back, I would say, the pendulum when we have talked about this over the last several earnings calls or years, where they were retaining more, centralizing their ceded, re-globalizing their treaties and sometimes that worked for them on a pro forma basis and sometimes, it didn’t – maybe it didn’t work as well on some of the classes of business with some of the volatility they wanted and we do see that there seems to be as the pendulum seems to be moving a little bit in the other direction that they are potentially ceding more. And that is a disproportionate advantage to Everest, because they have very strong type reinsurance security committees they want to trade with people in basically all lines of business, not just property they want to trade with re-insurers in all lines of business, and they want to trade with them around the world and given our broad portfolio and experienced underwriters that are situated in all the major markets, hubs around the world, we have that ability to trade with the global re-insurers locally as well as holistically at a corporate level and that is driving not all, but it’s driving some of it we are also seeing continued opportunities in the mortgage space and frankly, we are seeing other clients coming to the market with casualty and professional reinsurance treaties in a way that we haven’t seen the last couple of years so we had been bearish on the casualty space for many years and ahead of our peers on decreasing as the ceding commissions went up, and we didn’t like the trade as much or the strategic positioning of that and we are directionally moving increasing our capacity to that space as we do see more favorable dynamics for us to allow us to support casualty and professional treaties and again, we do have some strategic relationships there, not just with the global clients, that are resulting in some meaningful premium opportunities and you asked about the ceding commissions we are seeing, in some cases, the ceding commissions coming down there’s been a lot of talk about that, that maybe if property can’t subsidize other lines of business, that other lines of business will have to stand more on their own so at 1/1, we were pleased with that, and we continue to see some favorable movement on ceding commissions across our long tail book of business.

That’s helpful. And just to clarify the increased use of your services and your balance sheet by the global clients, that’s coming that’s broad based or is it coming from a concentrated number of clients?

So, we trade basically with all of them, the top 14, 15, 16 of them, but it varies, where some of them, we trade a lot more and part of that’s their cession strategy, their reinsurance strategy on how where they are in that thought process part of it is long-term relationships that we’ve developed with them part of it is where they’re situated so there is a lot of moving parts, but we do trade with all of them but what we are seeing is our ability that when they come to the market, they would come and talk to Everest they will come and talk to a few other large global re-insurers, but they won’t necessarily talk to a broad reinsurance panel and again, that is disproportionately impacting favorably our ability to grow the book and diversify the book.

Our growth with these global clients, for most of those relationships, the total volume has grown not all, but so we can’t if you’re trying to get to is there are small handful, it’s across the spectrum, no.

Okay, that’s helpful. And then on the insurance side, I guess given that net premiums earned are up over 15% in the first half of the year, why would the expense ratio deteriorate year-over-year?

Good morning. This is Jon. I think you are going to see some movement in any discrete quarter based on the timing of our hiring effort, the timing of various investments in technology I think what we are aiming for is again as I said in my prepared remarks that 30% level is quite competitive but there’s a lot of moving parts as we continue to expand geographically in various lines of business and make various investments so that’s part of it we look at the on a trailing 12-month basis, it’s trending the right way and we also looked at it compared to first quarter, which obviously was a nice improvement. So we are pretty comfortable with where that’s been.

Great. Thank you very much.

Thank you.

Thank you. Our next question comes from Amit Kumar with The Buckingham Research Group.

Thanks and good morning and thanks for the color. I have three follow-up questions to the loss development discussion. Number one, just going back I guess in your opening remarks, you outlined two reasons for the loss development two other companies in our universe talked about the same reasons yet they actually released reserves from 2017 events how can we as outsiders reconcile these two things in which Everest is an outlier?

Well, I mean, I can’t speak to what their process is, and I think I’ve already suggested that we have to make some changes in the way we look at these things and I’ll point back to and I can’t speak to what the circumstances were in these two companies, some of which, by the way, we may have supported on the retro side and didn’t see losses from them until the second quarter. So that’s kind of an interesting sidebar, but we were disproportionately impacted by our retro ag book, which by definition is going to be late record and I think overall, I can’t speak to what they’ve done versus what we’ve done, but we know we have to make changes to how we address these multiple events going forward I will also point to the fact that you might recall that in the weeks following and the months following these events, that widespread press reports of claims being closed, the events were not as large as was expected so there was some market chatter, if you will, that wasn’t setting off any alarm bells for us and clearly, in retrospect, that was a mistake, and we had readily admitted that but for sure, the loss itself is certainly contained within our capabilities, within our earnings our long-term track record is still intact and when you go back and push this event back into ‘17, I still submit to you that our operating returns were better than all of our peers.

Fair point. I guess it’s just relating to that answer can we have some comfort or how much limit is left in this cover, which you were referring to and how will this respond if there is any additional development?

I’ll ask Craig or John to.

So Amit, as we went through this from the ground up, we did look at the aggregate covers that had losses submitted on them, and we know what those limits are that remain on those covers but what we really did from a modeling standpoint and going to the underlying underwriters was try to find out what other aggregate covers have we written where we haven’t seen a loss selection yet, and we are trying to extrapolate that across our portfolio so that’s what’s included in our additional loss estimate for these events.

Got it. The third and final question it’s been a few years since we have discussed models and their efficacy I know in the past, I think you have mentioned using an AIR model any thoughts on AIR versus RMS and even any cost of changing the models that you use? Thank you.

Hi, good morning Amit, it’s John. So look, we are well aware of limitations of the models and that these are tools and one of the things that go into how we underwrite, how we price and how we reserve and there were many examples during not just the 2017 events but events prior to that, that showed model misses from the major vendors, and that happened multiple times, including during the 2017 events, with orders of magnitude missed so we agree with you that the models are a tool and need to be thought that way, and so we rely we look at the models, but we rely on first principles as well as underwriting who the clients are we want to support, what do we think of their underwriting, what do we think of our positioning with them, how they trade forward, how they treat reinsurance and/or retro writers and we think that allows us to both build a profitable book of business as well as build a sustainable, competitive franchise with clients that we have around the world.

But you still use the AIR model, right?

Yes, we use AIR. We also look at RMS. We look at other a lot of AIR and RMS haven’t developed in some of the more developed developing countries, and we looked at local models we try to look at all data sources, all modeling, all vendor models that we can to determine what we think is Everest to a risk.

Thank you.

Thank you, Amit. I have got – I think we are running over and we are more than happy to stay on, because we have got a number of other people in queue. So, next caller?

Thank you. Our next question comes from Kai Pan with Morgan Stanley.

Good morning. Thank you for fitting me in. My first question is on the current quarter, second quarter catastrophe losses $65 million seems to be higher than your pre-announcement 2 weeks ago, just want to clarify that?

So Kai, this is Craig. We pre-announced a net after-tax number, and that number was net of other current year weather related losses so as you heard us talk about, we were able to lower our loss selection on the reinsurance side for non-cat losses, if you will, anything below $10 million we were able to lower that loss selection because we didn’t have many events during the first half of the year that were indicating reinsurance exposure so that’s what was offsetting that $65 million, and then the rest is after tax to get us to the $25 million that was in the pre-release.

Okay. So that portion benefits your underlying core loss ratio in your reinsurance operations?

That’s correct. It was not a cat event it was the underlying reinsurance attritional loss ratio.

Great. My second question, on the insurance side it looks like if you take out adjustments a year ago, it’s pretty flat in terms of combined ratio, underlying combined ratio given the business growing and still probably not up to the goal of mid-90s combined ratio yet, so do you think there’s room for further improvement towards that goal and how quickly you can get there?

Hi, Kai, it’s Jon. Good morning. Yes, let me remember, there is two things going on in the second quarter comparative first, as I mentioned, was the renewal rights deal, which moved some things around secondly was the onetime adjustment for our A&H book so achieving the flat both loss and combined on an attritional basis, that feels like we’re directionally moving the right way considering some of the deliberate underwriting actions we took throughout the first half of the year and actually, candidly, we have for the prior couple of years we expect that momentum to continue for instance, some of our newer businesses, which we think have very, very favorable risk-return characteristics, were about a third of our premium writings in the quarter that’s an all-time high from the inception of each of these so as that continues to earn through, we do expect further improvement again you might get some movement in any discrete quarter based on various movements across the book, but overall, we still think there’s room for improvement.

To add to that, Kai, we have some of our newer lines of business, longer earning periods, whether it’s surety, trade credit, political risk, transaction risks and those portfolios are beginning to build, and the earned premium is growing proportionally there and those are very low combined ratio classes.

Okay, great. Last one, if I may. On the buybacks and it looks like you resumed buyback, $25 million in the quarter I assume that’s before you know this loss revision in 2017 events I just wonder what’s your thought process behind it and now you’ve started trading below 1.1x book. Will you be more aggressive in buying back your own shares even during the wind season?

It was a very attractive price.

Thank you.

Thank you, Kai.

Thank you. We will take our last question from Meyer Shields with KBW.

Thanks. Two quick ones. I think first of all in reinsurance, was there any change in the accident year loss pick for casualty and specialty lines from the first quarter to the second quarter?

There was always movement, Meyer, with respect to loss picks throughout the quarter we constantly look at, we hold reserve committees at the end of each quarter as part of that process, we do that both on the reinsurance side and the insurance side, but as we go through that process, we look at everything, we look at rate change up or down, we look at loss cost trend up or down, but there is constant movement in those expected loss ratios in any given quarter where the movements this quarter. The answer is yes, slight movements only.

But nothing material, and some of that has to reflect the fact that we had some newer business coming into that line so it has to be reflective of the business that we’re now putting on the books but generally, it’s been pretty stable.

Okay, that’s very helpful. So in the past few years, you have had phenomenal aggregate reserve development generally concentrated in the fourth quarter I know this is sort of an unrealistic question, but should we assume that some of the second quarter reserve releases came out of what we would normally see in the fourth quarter as a function of conservative reserving?

Well, part of the answer to that question and it’s not a ridiculous question, the reserve studies that we had done this time are the same reserve studies that we do every time for this kind of year typically, those reserve studies, because they are smaller lines of businesses, don’t produce these kinds of results, which and therefore they are not material. And therefore sometimes – if they are material, they get booked. If they are not material, then we wait for the fourth quarter. So this time around, we have some relatively smaller lines of business or classes of business that produced pretty favorable number obviously. And so obviously I don’t know the answer to your question, because we haven’t done the year end reserve studies yet, but typically you wouldn’t expect this level of releases from the lines of businesses that were under review and therefore you wouldn’t expect these lines of business to have contributed that much to the year end reserve releases. Is that helpful at all?

It is, yes. Very much so. And I guess just a final follow-up, is there any sense of the change in – or any quantification of the losses ceded to Mt. Logan because of the reserve shift?

Could you say that again? What was that?

Yes, I am sorry. The magnitude of the change in 2017 tax free losses that were ceded to Mt. Logan?

Yes. So, this is John. So, the short answer is yes. As indicated previously, Mt. Logan participates on basically quota shares of layers and portfolios of business that Everest writes and consequently, the cession to Mt. Logan grew particularly – grew accordingly with the increase in the loss picks that Everest put forth.

Okay, perfect. Thank you so much.

You are welcome.

Thank you ladies and gentlemen. That ends our questions for today.

Thank you, Todd and thanks to all for your questions today. I hope you came away with a better understanding of the circumstances regarding our reserve change. But nevertheless, as we look back at the portfolio and our business model, we remain very confident that our underwriting strategy is solid. And as I mentioned, it’s evidenced by our 5-year average operating ROE through 2017, which after adjustment for the cat losses was 11.8%. This is better than each of the companies in our peer group and I think it’s worth emphasizing. Cat business is volatile. But as I pointed out, it’s profitable through the cycle and again as I mentioned previously, it’s less than 9 combined ratio points on average through those same 5 years. But what I really – I think the message we want to leave you with is the understanding of the breadth of our entire business model. And over the last couple of years, we have succeeded in lessening our cat exposure by diversifying our reinsurance portfolio and the credit, other specialty classes along with as John talked about, the resurgence in our casualty lines of business. And as a consequence, the attrition results continue to improve. Furthermore, the organic build of our insurance operation has been noteworthy. We now have profitable specialty insurance operation expected to exceed over $2 billion in premium. That’s double from 3 years ago. I recognized in the short-term that it maybe very natural to look at the current results in this business that can be sometimes misleading. And if you more closely examine the underlying metrics, I think you will find and get a better sense of what the future holds for Everest. So, we believe it’s a bright one. Thank you very much for your interest this morning.

Thank you, ladies and gentlemen. This concludes today’s conference. You may now disconnect your phone lines and have a great rest of the day.