Kemper Corporation (KMPR) Earnings Call Transcript & Summary

Welcome back to the Bank of America Insurance Conference here in -- from One Bryant Park in New York. Arguably, the last virtual insurance conference we're going to have. We're really pleased to welcome Kemper to the conference. We have Chairman and CEO, Joe Lacher; and CFO, Jim McKinney, who are giving us their time. We appreciate it. Kemper is a leading specialized insurer, focusing on growing especially in underserved markets. They have $15 billion in assets, manage over 6.5 million policies sold through over 35,000 agents and brokers. Mr. Lacher has been in this industry for 25 years, including senior vice -- senior executive positions at both Allstate and Travelers. And prior to joining Kemper in 2016, Mr. McKinney served as Executive Vice President and CFO for Banc of California. Gentlemen, thank you. Before I ask my questions, I want to give you a few minutes to set the stage. And -- so please welcome -- tell us what we need to know to start off about Kemper.

Sure, Josh, and thank you for having us and for everybody who's joining us today and for your interest in Kemper. Look, we are thrilled to be in this business. We continue to have a company that really focuses in specialized markets, has very strong, what we believe in most cases in our businesses are really sustainable competitive advantages to meet customer needs and produce terrific long-term value for all of our stakeholders. And we're in probably one of the most challenging insurance environment that I've ever seen or looked at from a historical perspective, in terms of what's popping out as the economy reopens from a pandemic perspective, particularly in the auto business. We got a business that for the better part of the first half of the pandemic saw frequencies down, and as a result, attractive profitability, which I think most of us in the industry had said was not going to be a condition or something that was going to last. But we saw rates drop off from an approved rate perspective. The pandemic saw reopenings. Frequency came back, but you got multiple years of inflation running through the system. And the system is out of balance. The bad news is it's going to be out of balance for a little. It'll take some time. The good news is regulators and customers and companies recognize this is a set of products that are needed by consumers. It's important to the economy. They're going to be there for the long term. And there's a general need from all parties to get the system back in balance to make things work. So we're going to have a little bit of time to restore it. But in the end, we're going to have that strong specialized business that meets the needs of those customers in a way that we believe and have demonstrated is really effective for the long term and a business that generates really an exceptional long-term cash flow in an important part of the market. So we're excited to be in the business. We're excited about the competitive advantages we have. We think they're going to continue to distinguish themselves. And I think we're very aggressively and thoughtfully and prudently managing through a bit of a unique time for the industry.

So let's go put a bow on that, I guess, a little bit. So the 4Q '21 result was tough. 123% combined ratio in auto, up from 111% in 3Q '21. There's a lot of things in motion right now. How much rate does Kemper need to get it back in the kind of returns that it needs? Does that mean everything needs to be up 20%, 25%? If you take the rate that you need at various times, we'll see what the time line is, but what kind of churn is that going to cause the book?

So a lot of questions to unpack there, Josh, and I'm going to try to break them apart. The difference that's going on in this scenario right now is this is a macro environment problem. The loss inflation, the reopening that's going on is impacting every company out there. We're all ultimately going to be dealing with that environment. So if price levels were at a certain point pre-pandemic and if we need to move to a different level post-pandemic, we're all going to move there. So I'm sort of unpacking your questions in reverse. If the market needs 25 points of rate, and we all take 25 points of rate, it doesn't cause disruption in churn, and it doesn't cause people to move around. They're just unhappy the prices are higher. The same way if 4 gas stations are at the same street corner and they all raised their price $1 a gallon, the customers might not be happy about it, but you're not seeing a churn between the 4 gas stations. That's going to come from all of us. I think we're spotting the issue and have responded to the issue and have identified it sooner and quicker than other folks have. I think you've seen that as we've reported earnings in the third -- second, third, fourth quarter. We've been quicker to that. I think as you watch some of what we've done with reserves, you'll see a group that's responding quicker. I think that in the analogy I've used a bunch of times is it's much like one of your kids getting an ear infection or strep throat, the faster you get on the antibiotics, the faster the kid's feeling better. We believe that the faster you get moving and the quicker you identify it, the faster the patient comes through. The third point is what's the absolute level of rate. What I might suggest to you that we think about there is you could do math on the combined ratio and you back into a point of view on what rate was needed to restore things. That takes the assumption that the only benefit we can provide to improve profitability is rate. That's an easy, simple way to look at it. That's not, in fact, how we're running the business. There's a wide variety of non-rate actions we can take. In some cases, we can non-renew policies. We can move underwriting tiers. We can change coverage availability. We can make adjustments in terms of what we do from a new business perspective. That adjusts the filter coming in there. We can take actions against certain agents because not all agents have the same profitability profile. If we took agents with a worse profitability profile and we stepped away from those agents or readjusted commissions -- there's lots of levers that work underneath. And we're, I believe, appropriately pulling on all those levers to get some benefits. We also will compete in a variety of different states. There are some states that have been very quick and responsive in terms of moving on rate activity. So we're much closer to rate adequacy in those geographies. And there's other states that are moving a little slower. We operate our tools in those markets differently. So I'd love to give you an easy answer, and it would be helpful. And if I were an investor, I might want it. Tell me how much rate you need and tell me where I can watch the rates and then I can get the answer. That's not how we're actually managing the business, and you'll miss the speed with which we can apply to penicillin.

That's very reasonable. So one of the -- if I'm at [ Baird, which have been saying ] for 6, 12 months or so is -- auto insurers are not going to be able to get the rate they need. The political engines behind the regulators feel that you made too much money in 2020. And therefore, they're going to penalize you and make you suffer in 2022. And even if that weren't the case, the reporting of data to the regulators takes place on a lag. And so the data you're supplying them for full year '21 has a very good 1Q '21 in it, which skews the rate need. And therefore, the regulators say, "Oh, you've got to wait until 2022 before we'll give you the data." I have my own views on this, but can we talk about is there any validity to the argument that you -- that the regulators look to penalize insurers? And I would particularly look to California where you have a pretty decently sized presence. In that market, in particular, might that be true?

Yes. Sure. So let's unpack it a little bit. When you ask the question, is there any validity to the argument, there's always validity to an argument. The question is, how do you balance it? Regulators have a couple of responsibilities. Sometimes we all shorthand it and say they're just trying to watch out for consumers to make sure insurance companies aren't making too much money. Their primary responsibility is to make sure that insurance companies are making enough money, that they're there, they've got solvency, that there's an attractive and available market for consumers, that the need for the market to have insurance coverage is there. They've got to, first and foremost, make sure that's happening. And then their secondary item is to make sure there's not an excess profit going through. There are very few regulators at this point in my opinion who aren't aware of the massive inflation running through the economy. And there's very few of them that haven't looked at the pandemic and recognized that, that narrow window of, say, March of '20 to March of '21 is not predictive of the future. And there -- when they go through the regulatory process, they do look at your historical results, but there also are provisions for what results and what inflation looks like on a going forward basis. What we're finding is most insurance departments are recognizing that this is a different environment and are having to look through and digest those. And you can see through a wide variety of rate filings in a wide variety of states, they're actually moving and responding around that. California is a unique environment. California has its -- has a specific set of rating laws in terms of how you calculate your rate filings, how you fill out templates, how you make those filings and how those processes are reviewed. It's much more legislatively defined and regulatory defined in terms of exactly how you fill out -- they call it a template because it's much more paint by numbers, which constrains that process a little bit. We're actively working with the insurance department with the insurance commissioner. We've made rate filings in California. I think if you're watching the rate filings, you'd probably see that we were, I believe, the first one to have their filings accepted and moved on to the analysts in the department. That's the normal ordinary course process for their rate filings. So to the extent that they had slowed things down because they thought there was a profitability in the industry, they've started moving things forward. And we're working with the insurance commission and the insurance department to really help them understand that they need a vibrant insurance marketplace. They need carriers to want to write new business and to pay a reasonable commission to agents to keep a market alive. It's in the consumer's best interest that we're all in a position to do that. And I think the insurance department is increasingly digesting and understanding that.

Joshua, I might point to some of the additional information that we included in our 10-K this year where we actually estimated for folks the impact that the pandemic has had on Kemper. And what you'll see is that our estimate is that you potentially could have underwriting results and other elements improved by about $70 million in 2021. And the impact in the investment that we've had -- been made in terms of the coming out because of some of those change in environment, impacted the business by $485 million alone in 2021. And so we're not like trying to run from the regulators or anyone else in terms of providing the data. I think we just did it in an incredibly impactful and powerful way, right, because this is something that has to be reviewed and looked at. And so we've tried to be very upfront in terms of the impact that the environment has had on us and the impact it's had on the business as a whole.

You talked about at the outset the idea that there were actions that you could take, including, in some cases, non-renewing certain customers right off the start. But you are open for business. You sell your product through agents. To what extent do you control the funnel that even if there are good customers that are out there who want to come in, they're not coming in at a good price right now given where we are? What tools do you have to restrict the entry of unprofitable businesses coming on to your books fresh today?

Yes. We've got a lot of tools in that process. It varies by geography and by state -- they have different state laws. So I'm going to generally describe something. We have the ability to put up individual underwriting rules. We have, in most cases, tiering rules where we -- inside of effectively a rate card, there's multiple underwriting tiers. So you can change the rules on those, which moves somebody across underwriting tiers. We have, in virtually all cases, very precise ability to change billing plans. So we might take something where we say, boy, at your -- Josh, your age and your territory and your accident and conviction history, we think your profitability is worse than, say, Jim's. We might require you to pay 100% down payment, and we might allow Jim to pay 2 months down. What that does is that creates a different cash flow dynamic for you. And you might, in fact, look at that and say, you know what, I'm willing to pay a higher premium with another company because they'll let me pay these over time. And it produces a different answer from that perspective. So we have a variety of those tools. We can also restrict -- restrict at an individual agent level, either the amount of volume or capacity they have. We can adjust their new business commissions. There's a lot of tools that we can use. And what we're trying to do and what we do all the time is attempt to be appropriately surgical in that process to get an optimum level of profitability and to do what we can to make sure we're not damaging the business for the long term. It is an optimization process.

So a hobby horse of mine, I've been doing a little bit of the financial like historical analysis. And I noticed something unusual, that both Kemper and Progressive beginning in the second quarter of 2021, so it's only been for 3 quarters, there was a massive spike in the net reserve for future losses that not surprisingly is coincidental to a huge decline in the paid-to-incurred ratio. I have a slide of that data for Kemper here if people are watching. And it looks like the paid-to-incurred ratio is around low 80% for Kemper right now, which for a short-tailed underwriter, even if it's growing, is almost unheard of to have that amount. My knee-jerk reaction is, well, this looks like conservatism to me. I realize you have very high loss ratios, but the paids are really low, maybe there's future of hidden earnings in this. I'm trying to mine it. On the other hand, this is a short-tailed line of business. The discretion you have on the whole self-rated exam part of the opportunity to extra reserve isn't really available to auto insurers the way it is to liability insurers and whatnot. Can we talk this slide a little bit and get some color on what's going on and what's driving a 40% increase in your loss reserves and a 1,500 basis point decline in your pay-to-incurred ratio?

So I'm going to ask Jim to cover all the details. I want to make one comment overall. I think you're hitting a great point, Josh. And I think a lot of people generally miss the analysis under this. They just pick a combined ratio and they -- and compare combined ratios across groups, and they forget to ask the question, what is going on underneath and why and really miss meaningful differences.

Jim?

Yes. So when you take a look at this slide, [indiscernible] there's a very marginal component, which is related to a little bit of slowing in terms of the speed for which claims are being paid. And that's an environmental factor that's seen across the industry. It's not the item that's overarchingly contributing to most of this. The biggest piece that is driving the pattern that you're showing is our belief in terms of what the future inflationary expectations are. And so while, to your point, there are not a significant amount of variability in terms of once you get to, say, 9 months in this business in terms of what that paid component could be, there is a substantial amount in differences that could occur in terms of your picks up until that kind of 9 months or that 12-month period of time. And for us, when we're looking at that, you could look at a couple of different things. You could say, take a historical view of one inflationary trend and use that to model out or you can take a trend that you believe is going to be the future inflationary trend for severity that's going to play out. Our general belief is that we're in a period of higher inflation for longer, and our picks reflect that. And so when you're looking across, historically, you might have had a 4%, 5% type of inflationary trend kind of coming across. We -- similar to what we've seen throughout the year, if you look at autos just alone in the fourth quarter, you had a 9% sequential increase over the third quarter. We think that, that trend going back to historical norms at this point in time would be inappropriate. And effectively, our reserve position reflects what we think the increasing trend is going to be and what we're actually going to pay at those future points when those payments get made. And as a result, if we're wrong and where others aren't -- and I know there's great differences on how the industry has picked this. If we're wrong, then okay, there's some conservatism and there could be some [ favorable ] -- if we're right, then what you see is a high-quality balance sheet that has an accurate reflection of the environment. And it means that our underwriting actions and our coordination with regulators and all of that is at the right place to ensure that we have both appropriately modeled out with the business that we are taking appropriate rate across our segments to address it and that we're taking appropriate underwriting actions to appropriately, again, bring us back to a strong long-term profitable business that has the appropriate rate adequacy that needs to be there in order to have -- to be the strength of the company and to provide customers with the top products and choices that they deserve.

So looking at Manheim numbers, which is one set of information, over the past 12 months, the price of used cars up 45%. Somebody sent me an interesting note yesterday that the Dodge Caravan is the most inflated car. It's gone up in value 70% over the past year. And if the used car inflation were to stabilize -- let's just not even talk about like it going down after supply chain issues get resolved. If it stabilizes, does that mean that potentially your inflationary assumption that's underlying your loss picks is too high?

There is an element of that. And again, I want to be careful because I don't want to lead people -- I want to be really careful. I don't want to lead people to believe that there's going to be a bunch of favorable development. Our picks are what we think the environment will play out as and our best estimates of what that inflationary curve is. There is a component -- yes. If you fundamentally stabilize off of the fourth quarter, though, from a mechanical perspective, and let's say, our calc was that they were up over 2 years 51% along with our curve as a whole. If you thought that, hey, that was it and you got a baseline price for autos at that stage that stayed exactly where that inflated number was in '19, there could be some favorable development that would come through as we have picked an inflationary curve that obviously is up from that 51% that we've referenced on our call at the end of the year. And again, we think that's prudent. If you look at the fourth quarter, the sequential 9% over -- as we mentioned on the call, I didn't have a 9% sequential increase. But if you would have thought maybe more about a 5% or 7%, as we've highlighted in future curves, we would have had -- there would have been a bigger increase had we not been thinking about that. And it is unusual to think about things as having -- I mean when you hear 37% type year-over-year inflation, 51%, these are not normal numbers that we have -- we're just not used to that in this country. We've had a very stable environment for 40 years. But again, our picks reflect what we believe the environment is today, and we think they're an accurate reflection of where we anticipate things to play out. And we think others are going to catch up, quite frankly, to this view. That's our best estimate.

That's right where I was going to go, Josh. I've been in this business a long time, and I understand the analysis you're working. If we were a workers' comp writer, you might go that way and think, okay, somebody salting away some conservatism for the long term. You point out this is a relatively short-tailed business. What I might suggest to you is going right where Jim is going, it's possible there's some positive. What I think you're more likely finding is that we believe we've leaned in, we're seeing the negative that's out there, and we're responding and taking the medicine early, and then we're getting our entire organization lined up around attacking the issue in the environment and doing what we need to do. I think you're more likely to find others in the auto business short than you are finding -- and I think you said you did a similar analysis, and Progressive was showing something similar. I think you're more likely to find that we're on the balls of our feet and responding quicker, and others are going to play some catch-up. I think that's what we suggested in the second quarter you were going to see, and I think you've seen that as the focus in the third and the fourth quarter -- come in.

It makes sense. For those who have been with us for the last couple of days, you know that you can ask questions through the Veracast app. And I do have a question coming in here from the audience. It says, Kemper said on the 4Q call, their non-preferred business is more specialty than nonstandard. Can they expand on what they mean by this and how it relates to underwriting performance? When Kemper says it's specialty nonstandard business, do they see the IPCC business as matching those characteristics of a preferred company -- a preferred customer demographic as they think about retention loss factors? Or are there other underwriting factors that they can see make it distinct from the legacy Kemper nonstandard business? If that makes sense how I've read it, well.

Yes. It makes perfect sense. Let me be an insurance weenie for a second and break things apart. A lot of times, we'll oversimplify and we'll talk about nonstandard and preferred. There's many more gradations. And again, this is still an oversimplification, but you might think of highly preferred, preferred, standard, near-standard, nonstandard. Most of the time when folks are talking about nonstandard, the picture they have in their head is somebody with 3 DUIs and a couple of accidents, somebody who lapses their policy regularly. They might have the insurance for 3 months out of the year and not for 9 months out of the year. They picture a problem on sort of every level. That's the lowest end of the spectrum on nonstandard. In the specialty world, we look at it as those nonstandard drivers or near-standard drivers or we look at a group that might be in the near-standard or standard or the lower end of preferred but might have some unique specialty need. It might be that Spanish is their first language. It might be that they're in some place like Miami and Fort Lauderdale, which had a lot of fraud and abuse and PIP challenges. And a lot of carriers stay away from that environment. So we'll look at the specialties and work on all those. That's why we call our business a specialty auto business, not a pure nonstandard, to try to make that designation. And what we're trying to articulate is we're not exclusively in that nonstandard bucket. That is part of our specialization, but we have other pieces that move into that near-standard or standard bucket or the lowest end of preferred. It's not your -- what most of us think about when we think about preferred is sort of the highly preferred, the family in the suburbs with two cars and no accidents, and they're enjoying the benefits of that Dodge Caravan rising in price. They're a different profile. What we're trying to articulate is that a chunk of our business -- perhaps that Hispanic customer, Spanish is their primary language. They don't really speak English. They're paying their bills on time, but they might not have been licensed in the U.S. for 5 years. They might only have a license for a year or 2. Most companies will look at that as a nonstandard risk because they haven't been licensed for a long time. Most companies will look at that as a specialized bucket because they've got to get a translator involved to service that customer. We have the bilingual capabilities. We have a specialization in the underwriting the components. We're dealing with that customer. So we're not seeing what is traditionally nonstandard like loss behavior. We might see more standard or near-standard or the low end of preferred loss behavior, but we're also seeing similar retention capabilities. We priced it differently. We're not pricing it the way a typical market would call it preferred, but we're also not pricing it the way someone would typically price nonstandard. We are cutting the gradations a little more finely there, and that's what we were trying to articulate. If you just put it into nonstandard and preferred, your head will explode, it's not a fine enough gradation, but that's part of what our specialty capability does.

And in terms of slicing and dicing this sort of situation, maybe even less [ granular ] than that, but some of what's been going on, I think, in auto losses, there's a class component to it that essential workers and frontline workers, they've been working the whole time. And office workers have had a great deal of flexibility. Perhaps as a population, the percentage of those various groups buying new cars versus used cars is somewhat different. And as the automakers have sort of been producing higher-end vehicles because they have a higher profit margin on them, the real problems in the supply chain have come at the affordable car level, where the price of used cars is going up more dramatically. Can we talk about the degree to which these -- the pain trends are more visible in Kemper's numbers because of its customer base and what the implications are if people do come back to work in spring 2022 for the auto market broadly and whether Kemper would be ahead of that curve if that occurs?

So our best guess, Josh, is that we probably have in our group a higher percentage of customers who would have been more essential workers or would have been actively driving. They're less likely to be office workers working from home and bunkering down. So that likely meant that they were already on the road. So when other folks came back on the road and were driving, they were out there able to be hit. So we probably saw some -- we didn't see as much frequency benefit in the beginning of the pandemic, and we didn't get as much benefit, and we were more quick to rise. I don't believe that's an underwriting abnormality. I believe it's the composition of the customer base we're dealing with. But I think more broadly what's going to happen is perhaps we, as an economy or as a country, return to a little more normal, a little less -- we move into an endemic rather than a pandemic environment. We're seeing frequencies in miles driven getting close to where they were in 2019. We're seeing patterns around time of day different. We're going to wind up with underlying loss inflation issues that we're going to deal with as an industry for a while. I do think there's some natural cap. I mean at some point, there's only so much you're going to pay for a 2016 Dodge Caravan. I know there may be a utility. I know there may be a need. I know there may be a press. But at some point, you're just not paying that much above sticker price for a 4-year-old or a 5-year-old car. There's got to be some leveling off in that process. So I don't think the pace of increase can continue, but I'm not sure how fast it's going to actually recede. I don't know if that helps.

It does. And the frequency issues for the nonstandard versus the standard population -- is frequency understated in standard lines but accurately stated in nonstandard lines given commuting trends for different occupations?

My guess is they're probably both accurately stated. And I don't know exactly what the new normal will be. I don't think anybody is suggesting that we're going to get out 3 months and everybody is going to go back to their 2018 commuting patterns and offices are going to be full the same way they were. I think we've all learned how to do what we're doing right now. And the environment will have a new normal. People may not be hunkered down as much, but I don't think you're going to see offices quite as full. And I don't think you're going to see the same commuting patterns, and there's going to be something different. As a result, as an industry, we're going to collectively adjust our underwriting and pricing around that normal. I think that will happen well within the margin of error of the course correction for inflation. While we're as an industry correcting for that pent-up inflation, for that draining of rate out of the system, the stuff on the margins will just work itself out over the next 12 or 18 months.

And I think there's two things I would maybe add to what Joe has said there. One element, I think Progressive did a reasonable job kind of outlining some of these differences in their call where they specifically called out that you're seeing a higher level of frequency in what are nontraditional time periods, but that's offset by some decreases in frequency during your normal rush hour traffic or other elements. Net-net, you kind of get to the same place from a frequency perspective, I think, at the end of the day. And we'll see, I'm sure shifts marginally around the edges continue from here forward. That said, I think the biggest difference that's inside here and where we need to be careful, and what I don't think is accurately maybe reflected -- but I could be wrong here, this is my personal view -- I don't think everybody has reflected those severity trends and what effectively those costs are going to be. And so when you're looking at those combined ratios or other elements, whether it's on the preferred or standard, unless you're really -- kind of everyone's got their own points of view and there's going to be multiple right views are reasonable. But unless you're kind of picking for a longer, higher inflationary trend perspective, I'm not sure that -- if that's not inside your numbers today, I'm not sure that those are acutely reflected combined ratios. And you might find that we're -- the specialty and nonstandard companies and preferred companies are a lot closer today on an absolute basis than what is currently being shown. And the positive thing is 12 months from now and a little bit forward from here, we're going to have a lot of data on that. There's going to be a lot of schedule P data in that, that's out there from an industry perspective where we can take these things. But at the end of the day, we're not really paying -- there's not a difference between ourselves. I'm not trying to call out Allstate or anyone out. But by Allstate or Travelers, we're all paying the same general price for vehicles of that. Maybe around the edges, there's some slight difference. But we all have the same kind of BI inflationary [ kinds ] and other elements. So...

We've run over, but one quick question on capital adequacy and shares down 40% off April highs. Stock trading at discount to book, although not tangible book. Debt capital is 22%. You obviously have some earnings volatility now, but that -- generally it's a fairly stable type of business in terms of the long-term [ projectability. ] Do you have an ability to raise some debt here and buy back shares? Do you have the ability to show some confidence in your own valuation at this point? What can you do to help shareholders see the course that you're plotting out in terms of confidence in the share price?

So I think we have a bunch of different levers that we can pull. We definitely have debt capacity. We run at very modest levels from there. But we have other quota share reinsurance capabilities that are available to us. And we have a substantial amount still of appropriate excess capital in that within -- to both navigate this environment and then to, I think, capture a chunk of what will likely be a significant growth opportunity once we've restored and come to rate adequacy at the end and others are working -- continue to work through this environment. I would suggest that while you could certainly think about or do some things from a stock buyback, I think it's much more prudent at this stage and what will create much more substantial long-term shareholder value for the company is to be prepared for that exit and that return to rate adequacy throughout that period. And essentially, what that opportunity will be to continue to kind of grow market share in those segments and to serve a broader segment of the customer base with really attractive solutions. And we think that's going to be pretty meaningful. And if you look at our 5-year average results, we've grown in several multiples of what the industry has. I think this will be a great opportunity for that. And we've done it with top quartile profitability. Our 5-year underwriting margin tends to be right around 4, 5 points, 6 points even inside of this environment. Our capabilities and tools and that -- you're not putting up 5-year results like that by chance. We think that, that's going to create a lot of shareholder value, and that's one of the reasons that we're deploying and working our capital stack the way that we're working it today.

Well, I've gone over, but it's fascinating, I call this must-see insurance TV. And thank you for your time. I know you have a busy schedule meeting with customers -- with investors today. And so if anyone has any questions for Kemper, they can certainly e-mail me. I can get them to you. But thank you very much for your time, and good luck in the new year. It's going to be a fascinating one. Thank you for being at the conference.

We appreciate it. Thanks, everybody, for their time and attention and your thoughtful questions, Josh.

Take care.

Thank you.