“The guidance that we've given in terms of what we expect for the full year 2025 does not contemplate any improvement in loss ratio. It's all in the expense ratio.”

In context

“er Zaffino: Great. Thank you, Sabra. Operator, we're ready for questions. Operator: Thank you. [Operator Instructions] Our first question comes from Michael Zaremski with BMO. Your line is open. Michael Zaremski: Hey, great. Good morning. First question on the updated kind of combined ratio trajectory guidance for '25. So loud and clear that you'll be able to kind of hit it a bit sooner. I'm curious if you can kind of, if we focus on the loss ratio, what the guidance implies on a like-for-like basis on the loss ratio? Some of the questions we get continuously around most companies seeing some slippage in their loss ratios given lower levels of reserve releases. I'm curious if that's something that's considered within your loss ratio guidance. Peter Zaffino: Thanks, Mike, for the question. The guidance that we've given in terms of what we expect for the full year 2025 does not contemplate any improvement in loss ratio. It's all in the expense ratio. And so we're trying to guide everybody is that all the expenses that exist in other operations will transition into parent, they'll go into the business or they'll be eliminated and that we're not going to be increasing our combined ratios based on the guidance that we gave at the end of '23. So we're not anticipating any caveats on loss ratios to be able to meet that guidance. Michael Zaremski: And I guess just I'll stick on this for my follow-up. So given pricing is below loss trend in certain lines like property and understanding that the absolute, maybe this is the answer to the absolute pricing levels are still accretive to the -- to ROE or loss ratio just does it. To the extent, the current pricing environment held, why does it kind of make sense that the loss ratio should be able t”