Definity Financial Corporation (DFY) Earnings Call Transcript

Good morning, ladies and gentlemen, and welcome to the Definity Financial Corporation third quarter of 2026 financial results conference call and webcast. [Operator Instructions] This call is being recorded on Friday, November 6, 2026. I would now like to turn the conference over to Dennis Westfall, Vice President, Investor Relations. Please go ahead.

Thanks, and good morning, everyone. Thank you for joining us on the call today. The link to our live webcast and background information for the call is posted on our website at definityfinancial.com under the Investors tab. As a reminder, the slide presentation contains a disclaimer on forward-looking statements, which also applies to discussion on the conference call. Joining me on the call today are Rowan Saunders, President and CEO; Philip Mather, Chief Financial Officer; Fabian Richenberger, Chief Operating Officer; Paul MacDonald, EVP of Personal Insurance and Digital Channels; and Obaid Rahman, EVP of Commercial Insurance. We'll start with formal remarks from Rowan and Phil, followed by a Q&A session. Fabi, Paul, and Obaid will also be available to answer your questions. With that, I will ask Rowan to please begin his remarks.

Thanks, Dennis, and good morning, everyone. Our third quarter results demonstrate the resilient core earnings power and solid underlying momentum of our business with our significantly expanded scale. As we continue to make meaningful progress on the integration of the acquired Travelers business, we are pleased with our achievements to date and the enhanced capabilities of our combined platform. If you turn to slide 5, we provided a comprehensive update on our Travelers Integration Roadmap and the key operational milestones delivered to date. We recently reached an important integration milestone with the conversion process for all product lines now underway, highlighted by the successful deployment of our new specialty lines capabilities and our expansion into Newfoundland. To date, over 1/3 of the acquired portfolio has already been converted to Definity's platforms, with customer retention tracking strongly and in line with our expectations. We are pleased to say that all new claims from converted policies are now being managed in our system. The successful rollout has been supported by strong broker engagement and our disciplined execution. Looking ahead, we remain on track to complete our business conversions and exit of our remaining transition service agreements by late 2027, successfully transitioning our acquired books into steady-state business-as-usual operations. Financially and strategically, we continue to execute with exceptional discipline, and this momentum is clearly reflected in our Synergy Plan on slide 6. Nine months post-close, we have already achieved run rate synergy savings of $56 million, representing almost 45% of our increased $125 million target. Year to date, our underlying results include earned synergies of $31 million. Given this accelerated pace of capture, we remain confident in our ability to realize at least 1/3 of our synergy target by the end of 2026, in line with the increased synergy expectations we announced last quarter. In terms of integration costs, we're on track with our total estimate of $150 million to $170 million, with the majority expected to be incurred during this first year of integration, leaving approximately 1/3 of those costs for 2027. Turning to our performance in the third quarter on slide 7, we delivered impressive top-line growth across the board. Gross written premiums grew 36.2% to $1.7 billion, bringing our year-to-date premiums to $4.9 billion and keeping us on track to achieve our full-year guidance of $6.5 billion. On the bottom line, our diversified earnings power was on display this quarter, generating a resilient operating EPS of $0.36, while supporting a 3.3% year-over-year increase in our book value per share. A consolidated combined ratio of 100.6% was up 11.2 percentage points from last year, driven almost entirely by catastrophe losses, which were higher by 10.9 percentage points. These severe weather events contributed 12.8 percentage points to our combined ratio as our teams responded to convective storms and flooding in Ontario and Alberta, wind and hail events in Ontario, and wildfires in British Columbia. While we expected the addition of the acquired business to increase our combined ratio by a couple of points prior to fully realizing synergies, our underlying results remained strong and nearly flat year over year. This impressive performance demonstrates the powerful benefits of our increased scale, geographic diversification, and underwriting discipline. Our trailing 12-month operating ROE was 10.3%, reflecting the impact of elevated Q3 weather losses and the averaging in of our expanded equity base. Turning to our 12-month industry outlook on slide 8, our key message is that overall market conditions remain favorable and conducive to achieving our financial targets. In personal auto, we expect conditions to remain firm overall as insurers maintain pricing discipline to keep pace with loss costs. Evolving regulatory transitions in Ontario and Alberta, along with improved industry rate adequacy and moderating loss cost trends, are actively supporting a more stable and constructive pricing environment. In personal property, we expect market conditions to remain firm. We continue to take proactive underwriting and pricing actions required to fund weather losses, while focusing heavily on long-term peril and accumulation management. In commercial insurance, while we expect overall market conditions to remain attractive, continued competitive conditions in the large account segment are expected to temper industry growth. As a result, we expect overall industry growth in commercial lines to be in the low single digits over the next 12 months, varying by segment and company. This reinforces our decision to remain disciplined and focus our growth on SME and specialty niches where pricing conditions continue to be positive. Leveraging our strong market position and exceptional broker support, we remain confident in our ability to navigate these industry dynamics, manage our portfolio, and price our products appropriately to deliver sustained profitable growth. On that note, I'll turn the call over to our CFO, Phil Mather, to discuss the financial results in more detail.

Thanks, Rowan. Our third quarter performance underscores the resilience of our expanded business and our team's rigorous operational discipline. Slide 10 provides a detailed view of our consolidated underwriting and operating metrics. Gross written premiums for the quarter reached $1.7 billion, representing a 36.2% increase compared to Q3 2025. This was driven by a strong 25.7% growth contribution from the acquired renewal book as customer retention rates continue to successfully converge with the underlying Definity business. Our underlying growth contribution representing the renewal of our legacy Definity business and all new business written across the expanded platform was 10.5%. Our consolidated combined ratio for the quarter was 100.6%, inclusive of the acquired business, compared to 89.4% in Q3 2025. This was driven by an elevated claims ratio of 71.9%, reflecting $190 million or 12.8 percentage points of weather-driven catastrophe losses compared to the unusually benign 1.9 percentage points in Q3 2025. Our core accident year claims ratio rose slightly by 1 percentage point to 60.8%, which was within our expectations as we continue to absorb the impact of the acquired business prior to fully realizing synergies. This was partially offset by a 50 basis point improvement in our expense ratio to 28.7%, driven by the early capture of integration synergies, lower incentive compensation accruals, and ongoing expense management. I'll now provide some more details on our lines of business. Starting with personal auto on slide 11, gross written premiums grew by 38.1% in the third quarter to $714 million, inclusive of 23.3% growth from the continued strong retention of the acquired renewal book. Our underlying growth contribution was robust at 14.8%, though this benefited by a few points from an elevated quarterly impact from industry pools. The combined ratio of 96% increased from 94% a year ago. As expected in our transition plans, this increase reflects the anticipated and temporary impact of consolidating the acquired Travelers portfolio ahead of realizing the full impact of our planned synergy benefits, along with higher catastrophe losses, partially mitigated by a reduced expense ratio. Looking forward, evolving regulatory reforms will be an important factor of our operating landscape over the next 12 months. In Ontario, the July 1 auto reforms, which introduced choice-based accident benefits for consumers, have combined with moderating loss cost trends and improving rate adequacy to support a more stable pricing environment. Meanwhile, in Alberta, the industry is preparing to transition to no-fault reforms on January 1, 2027. Average premiums are expected to decline in the mid-teens range in these frameworks, reflecting lower casualty claims costs resulting from reduced tort-related expenses. While this reform will reduce written premiums in 2027, it should contribute to more favorable and sustainable industry profitability over the long term. Note that we have approximately $300 million of personal auto premium in the province. In personal property on slide 12, we delivered top-line growth of 35.3% in the quarter, including 24.7% from strong retention of the acquired renewal book. Continued unit growth and rate achievement across our broker channel led to an underlying growth contribution of 10.6%, bringing total gross written premiums to $486 million. Our combined ratio for the quarter was 112.1% compared to 83.6% in the third quarter of 2025. This increase was driven by severe weather-related catastrophe losses, primarily related to the convective storms and flooding in Ontario and Alberta, which increased by 29 percentage points from the prior year to 32.6%. However, our core accident year claims ratio remained relatively stable, rising only 80 basis points to 51.1%, despite the integration of the acquired business. Turning to slide 13 and commercial insurance, we delivered top-line premium growth of 34.2% to $472 million, inclusive of 30.1% growth from the strong retention of the acquired renewal book. Through disciplined execution, we achieved ongoing pricing and volume increases in small business and specialty lines, which helped mitigate the impact of competitiveness in the large account segment. Our commercial combined ratio for the quarter was 96.1% compared to 88.1% in the third quarter of 2025. This increase was driven primarily by an elevated claims ratio reflecting severe weather catastrophe losses, which increased by 6.3 percentage points to 8.9% in Q3 2026. Our core accident year claims ratio rose by 1.9 percentage points to 56.4%, reflecting the expected temporary impact of incorporating the acquired Travelers portfolio prior to the realization of our planned underwriting and claims synergies. These headwinds were partially offset by a 60 basis point reduction in our commercial expense ratio to 32.4%, demonstrating our strong operational cost discipline and the initial capture of integration synergies, as well as lower incentive accruals. Turning to slide 14, our operating earnings were supported by meaningful growth in net investment income, which reached $79.3 million. It increased 46.6% compared to Q3 2025, driven by interest income generated from our larger post-acquisition investment portfolio and proactive trading into higher prevailing yields. We maintain our full-year outlook of at least $320 million of net investment income for 2026, which reflects our expectation of a sequential increase in the fourth quarter. Slide 15 illustrates the performance of our national broker platform, which continues to deliver as a key strategic pillar, ranking among the top 10 brokers in Canada. Our distribution income reached $18.7 million in the quarter. Combined with $10.6 million of intercompany commission income, our total broker operating income reached $29.3 million. This represents a 10.2% increase over the prior year and 17.6% on a year-to-date basis, keeping our national broker platform on track to achieve our full-year guidance of approximately 20% growth. Of note, this quarter's growth rate was moderated by a particularly strong Q3 2025 comparative period, which had benefited from the specific timing of broker acquisitions. While quarterly broker income can reflect transaction timing fluctuations, we remain confident in our forward-looking trajectory, having closed several acquisitions late in Q3 and into Q4, which should increase the contributions in the coming quarters. The structural strength and resilience of our balance sheet is clearly visible on slide 16. Despite absorbing nearly $400 million in combined pre-tax catastrophe losses and unrealized bond devaluations in the quarter, we have successfully grown our book value per share to $34.53, representing a resilient 3.3% increase from a year ago. With total financial capacity remaining robust at nearly $1.2 billion, we are in an enviable capital position to continue funding our organic and inorganic growth plans, support our broker network, and deliver on our capital deployment priorities. With that, I will turn the call back over to Rowan.

The strategic and financial results Phil just walked through demonstrate the structural resilience of our expanded business. We entered this year with a clear mandate to execute on the transformational integration, rapidly secure cost synergies, and protect our underlying underwriting margins. And our progress this quarter demonstrates that we're delivering on those commitments. Our integration success to date validates the business case we established for the Travelers Transaction, which is expected to deliver a more than 200 basis point improvement in our operating ROE on top of our organic plans. With this powerful accelerator, we are confident in our progress toward our mid-term objective of sustainable mid-teens operating ROE. Our disciplined execution of this integration strengthens our operational playbook and increases our conviction as we pursue our goal of building a top 3 property and casualty insurer in Canada. Underpinning this ambition is our strong structural profitability and capital base, which ensure we are positioned to continue building long-term sustainable value for our shareholders. Building on our leading digital platforms, we continue to scale our core AI capabilities as a key contributor to loss ratio outperformance and operational efficiency. We are proud to share that our claims and technology teams collaborated to recently deliver Definity's first fully agentic AI solution for broker first notice of loss. Early results indicate this has delivered a 50% reduction in claims administration effort for broker-submitted claims, serving as a powerful proof point of our ability to translate new technology into concrete business value. Building on that same commitment, we continue to invest heavily in our claims operations to provide industry-leading support to our brokers and customers in their key moments of truth. Let me add my appreciation to our claims professionals and customer service teams across Canada. The third quarter of 2026 was an active period for severe weather, and our teams responded to multiple catastrophe events that impacted many of our communities. Our frontline employees demonstrated exceptional dedication to support our customers and brokers when they need us most. It is their extraordinary effort during these challenging events that defines Definity's customer-centric values and operational excellence. With that, I'll turn the call back to Dennis.

Thanks, Rowan. We are now ready to take questions.

[Operator Instructions] Your first question comes from Bart Dziarski from RBC Capital Markets. Please go ahead.

I wanted to start with the lowered industry outlook for commercial. Could you provide more detail on what you're currently seeing, and does that lowered outlook contemplate pricing pressure moving to the mid-market to the extent you're seeing any? Thanks.

Well, thanks very much for that, Bart. Maybe let me start and then I'll ask Obaid to add a bit of color. I think that we've called out that we think the industry is going to be in the low single digits, and that's really no change to the current environment we see, because currently the industry is running in the low single digits, and we think this is pretty stable. We haven't seen any change over the last couple of quarters to what we expect in the next. And so we remind everyone that the market is still a bifurcated market. So the large business, which is close to 1/3 of the industry, remains competitive. And we've explained that before as after multiple years of hard markets, there's significant margin in, but we're still seeing a lot of competition in the large business. As far as the rest, the small business is stable and continues to be that. We've seen no contagion down market. We do think that the industry outlook is going to vary by segment and by insurance company. Overall, from our perspective, we still believe it's very conducive to the way we shaped our portfolio, what our ambitions are. We have for some time now been deploying our cycle management playbook, which continues to work very effectively for us. We do have a culture of underwriting discipline. We have been very active in portfolio shaping, and essentially that means avoiding those hypersensitive segments or poor performing segments. We've been very focused on pricing adequacy using our granular models, risk selection with the specialized underwriters. We spend a lot of time on broker management, mostly ensuring great service to them, appropriate incentives, and making sure they're aligned to our underlying appetite. So we are still getting good flow of opportunities from them. And you may have noticed as well, we've been very active for some time now on expense management, and that's both claims expense management and OPEX. So we're confident in our plans and how things are going, but we are just reflecting what current conditions are. But let me ask Obaid to add some color to that and how it's affecting our portfolio.

Thank you, Rowan. So I'll just follow up on what Rowan said, and we've said this before. Less than 20% of our portfolio is exposed to the large account segment where competition is most intense. Here we are defending the accounts where profitability is strong and our retentions are fairly strong. Competition is most intense on business coming to the market, so this is where the new business is. We are disciplined in that part of the market, and as a result of it, we're winning fewer new accounts in the large account space, and that's impacting the growth in that part of the book. When you move past that 20% on the SME side, we continue to see mid to high single-digit pricing, and retention levels are very much in line with what we've seen historically; they're very strong. We're not seeing any impact of the same level of competition coming in there. When we look at the middle market segment, we're seeing pricing which is low to mid single digits. Again, retentions remain fairly in line with what we've seen historically. And as a result of these two things, we are getting a mix shift where we are growing in exposure and customer base on the smaller accounts, not so much on the larger accounts. And that mix shift is costing us about 1 or 2 points in premium growth. Moving further, we've talked about our specialty business. About 1/3 of our portfolio is in the specialty business. We've got maybe 10 verticals in there. Competition varies by vertical, it varies by size of account within the verticals, but we try and look at this business as a whole. And as a whole, we're getting about mid to high single-digit growth in that segment. And that's really a function of the lower market share we have in that segment, as well as many sort of new markets capabilities we've built organically, and now we've gained some net new capabilities out of Travelers and the acquisition. So we don't see this changing either. We think this momentum on the specialty side will continue for us. So now, really, if I take a step back and put it all together — our portfolio construction, what we've built in our digital assets from the small business side, the capabilities we have on the specialty side — we think this will continue to give us momentum to have 2x our performance to the industry in terms of growth. We really don't see that changing. If the Street is at low single digits, that doesn't really change our outlook on it.

Thanks for that. It's very helpful color. And on the Travelers integration, so it looks like we're seeing momentum continuing. You're talking about the strong retention and conversion. Could we just get a mark-to-market update on where you're spending the most time today? You touched on specialty lines capabilities being built out, so would just love to get an update there. Thanks.

Yes, and look, I think the main message here is that this is a huge undertaking for the organization, and it continues to go very well. When we look at the key drivers — is the retention as we wanted? Absolutely, it is. And in fact, they're converging on Definity levels. We look at the conversion, which is now in flight as we move them onto our scalable platforms. And then we think about the synergies that we've shared with the market. Obviously, we updated that last time to $125 million; we've now triggered about 45% of those. And we continue to have very, very strong broker support well into the integration. And it might be useful to hear from Fabi about how it's actually going.

Yes, certainly. So from a big picture point of view, and I appreciate your question, I'd say that we are really pleased with how the conversion of the Travelers business has been progressing this year, very much in line with Rowan's comments. We are getting great support from our broker partners across Canada, and that is helping us to achieve our planned retention thresholds both in personal lines and in commercial lines as well. As importantly, I would say that the loss ratio of the acquired business is coming in very much in line with our expectations as well. And that's a function of the detailed pricing segmentation work that we've done across all of our segments. As you can imagine, this integration has been a major operational undertaking for us, and I could say that we are really, really pleased with how all of our work streams have been executing our plans. Maybe giving you a little bit more context on that point, at any given time, we have close to 1,000 of our employees actively involved in this integration. We have been executing against the major integration milestones to keep this program on track. And as we disclosed earlier on, we've been able to write new business on a combined basis, leveraging the new capabilities that we've acquired within a few weeks of closing. That gave us good new business traction, gave us an opportunity to expand our value proposition with our program partners, and then in Q2, we started converting the acquired business outside of Ontario. In Q3, we added Ontario, and today we are at the point where we have all segments and all product lines being converted over to our underwriting and claims platforms. Across product lines, we have detailed process maps in place. And typically, when you run an integration of this size, you get to a point where you have a little friction with your broker partners, but we don't get any negative feedback from our broker partners. They would say that this has been the best run integration that they've experienced in Canada, and they are really pleased. And again, as I mentioned, this allows us to achieve our planned retention thresholds. While we are onboarding the 400,000 individual clients across commercial lines and personal lines that we acquired, we are relying on a comprehensive transition service agreement with Travelers, who continue to be excellent integration partners, and we have migrated and rationalized over 1,000 external supplier agreements as well. From a business perspective, we have been welcoming over 100 new brokers, and we are glad to say that we retained all of them. And in line with my earlier comments, we are at the point now where we are converting between 30,000 and 40,000 policies over to our underwriting and claims systems. To do that, we also secured the required regulatory approvals across all provinces in a timely manner so that we could keep our overall conversion on schedule. So far, we have converted about 1/3 of the acquired portfolio, and we have a great deal of confidence that we can complete the conversion by the end of 2027. At that point, we will exit the TSA and then decommission all of the legacy Travelers systems as well. As I mentioned, we are really pleased with the integration progress that we're achieving. I think it's a great proof point on the talented and engaged employees that we have across our company. All of that gives us confidence that we need to achieve our growth guidance of $6.5 billion and achieve our enhanced synergy targets of $125 million.

So, Bart, I think that was a nice comprehensive insight into this big program. But to me, I think the main message here is we're removing the execution risk and any uncertainty related with the transaction. So we're feeling really good.

Great. Thank you both. Those are very comprehensive answers. I appreciate it.

Your next question comes from Alex Scott from Barclays. Please go ahead.

I wanted to probe a little bit more on some of the comments on the use of artificial intelligence. I think you mentioned it was benefiting the loss ratio in particular. Interested in some of the things you're doing, how far they're rolled out, what kind of benefit it's having on claims administration within the loss ratio.

Sure, happy to do that. I mean, it's a big and obviously focus area of ours, and there's a lot of activity that we've been putting in place. Generally, we feel that most of the activity and value seems to be impacting the loss ratio, and then obviously the remainder on the expense ratio. We think we've got a really good advantage here in the marketplace. There's a couple things driving that for us. We've got 30-plus years of digitized and proprietary data. We have a great cloud platform, the Google platform. We've been doing this for well over 10 years. We've got over 250 AI and data practitioners currently running in excess of 140 active models and solutions. The other part that I think is really relevant: it's one thing to have these capabilities, but you've got to get them to the front of the business. When you think about the Vyne platform, the modern technology platforms in claims now, as well as on personal lines and commercial lines, we're getting this stuff to the front lines. You ask about a couple examples. There are so many in commercial lines. We've been using it in a number of things, including underwriter submission intakes, which really helps productivity and code velocity of our underwriters, which will help us grow our business. In claims, in my comments I mentioned we just launched an agentic agent for first notice of loss, receiving about a 50% effort reduction there as that rolls out. We're using it in fraud. On the one hand, it helps our pre-bind quality of business in Sonnet. On the other hand, we are getting less claims leakage. We've got tools like document tampering that reduce and identify fraud. Certainly appraisals get more accurate. In our contact centers and claims, we've got over 15% of productivity. We have an AI agents assistant, we've got call summarization, and then of course on the tech side, it really helps with coding and even replatforming some of our existing systems. So it's pretty deep in the organization, I would say, and being very well adopted. And what we're really focused on is, as you put this to work, can you start seeing the measurable impacts? And that's a real focus of ours of making sure actually it does drive more revenue or better retention or less fraud or sharper pricing segmentation, which we believe it is. But there's still a lot of opportunity ahead, and I think this is going to be one of our value drivers in the years ahead.

Got it. Helpful. And my follow-up, I'll stick on the AI topic. I mean, if you look in your crystal ball, how do you see it evolving distribution of personal lines products? Are you seeing anything in the works that will connect more directly into some of these large language models that might be part of that?

Yes, a couple of things there. I think when you think about the potential for disruption, it is very unlikely to impact the commercial business with the complexity there. And so in personal lines, where there are some more commoditized or standardized products, we do think that there might be some modest disintermediation, but on the other hand, there's a number of offsets there. I think what we're seeing is the growth of these digitally savvy and AI-enabled brokers that actually are growing and taking share. And I think that even within the broker distribution channel, there's just a mix shift going on from some of the traditional smaller, less sophisticated bricks-and-mortar brokers. We have definitely seen people using AI for a while now in the price and product discovery phase. It's interesting that still about 40% end up after that research going to brokers. And where you do see some of the early movers, we still think it's a limited population and a gradual use of, for example, these personal assistants that you see coming out. So it's not that we don't see any impact, we just think it's manageable. And I think when you think about the implications for Definity, the fact we're multi-channeled certainly gives us a very good position to trade through this. And we also do have a platform, a broker platform we built over the years, a top 10 broker. They tend to have a mix of business and locations that are in some of the smaller communities. Human connections are still very important. Advice makes a difference. They themselves are using AI. It's helping their business in the admin-heavy world improve their margins, and I think it probably drives more pipeline for the brokers. So I think the only comment I may ask Paul to just touch on there is, as we think about some of our platforms, how are we linking?

Yes, thank you, Rowan. Really two things. One is we believe we're future-proofed. Our future-proofed platform investments that we've made over the last several years to automate our systems, to move all of it into the cloud, and to connect through APIs allow us therefore to take advantage of these emerging AI capabilities much faster than a company that would have to make those investments. We did that very consciously and deliberately, and now we're able to take advantage of it. The second comment I would make is, despite those capabilities, we do have to be a little cautious around the use of it. And there's been some publication recently around will companies allow agents to access their sites, and so there has to be a balance between providing capabilities to customers and also making sure that you maintain privacy, confidentiality, and accuracy of the information that you provide. So we're working carefully with the various regulators across Canada and the government to explore where the future of this AI will take us. But we are well positioned to take advantage of that future when it comes. Thank you.

Your next question comes from Brian Meredith from UBS. Please go ahead.

Yes, thanks. My first question, I'm just curious with the Alberta reforms, is there any lag between the benefits you're going to see with respect to the loss cost benefits and the premium reduction? So maybe an impact on loss ratios in 2027, or is it rateable?

Thanks for your question, Brian. It's Paul here. So really just stepping back for a second, the simplest way to explain this is essentially any activity or claim up until that point continues under the old regime. So all the reserving that we've done, all the analysis we'done, the premium we've collected on those accounts continues to support that business. Essentially, what happens on January 1 is a full reset. This is quite unique and one time. And what that means is all new accounts and all new claims after January 1 are under the new regime. And the new regime essentially removes a lot of that tort liability out of the system and the accompanying premium related to it. So we estimate there's likely a mid-teens impact to top-line premiums for the industry, and then there's a commensurate reduction in the liabilities. From our perspective, it is immediate and there's no real lag. We also think that that's going to be a slightly positive impact to the bottom line for us.

Perfect. Very helpful. And then second question, can I talk a little bit about excess cash? I mean, your stock is down a couple of percent year to date, despite some pretty impressive results. How are you thinking about that? I know your leverage ratios are still a little bit high, but you've got more than $700 million of equity excess capital.

Yes, I think, Brian, on that one, if you go back to our philosophy around our capital priorities, the first one remains supporting organic growth, which is big and we see that as great. We keep moving the dividend forward, and then it's M&A. And as you know, M&A can be a little lumpy; you can't perfectly line these things up. But since we've gone public, we have deployed about $1 billion of capital into our broker distribution channel. We've spent $3.3 billion on Travelers. So I think you can see we're active and we're effective at deploying these, which in both of those examples is a really strong performance out of the box. We have a goal of being top 3, and part of that goal is to continue outperforming the industry. You heard Obaid talk earlier about commercial lines growing at twice the rate of the industry. We think these organic growth capabilities allow us to do that, but it also does require us to participate in inorganic growth, and we need at least $1 billion-plus of organic growth to get to that top 3. So that's really the focus for us. We think the environment is favorable. You've seen some foreign companies exit the Canadian marketplace. Scale increasingly makes a difference, and that commercial market is a bit more complicated now than it was a few years ago. So we definitely think that's the case. When we consider M&A, and really this would be the big mover of capital deployment, we think about our operational readiness, and of course Travelers is going really well. We know there's a regulatory time lag between announcing a deal and getting it done. So we're not on the sidelines; we are active in this. We have a screening process and a prioritization process where we look at the size of the business, the portfolio mix, the quality of their operations, the potential of the synergies, ease of integration, availability, of course, and then our financial capacity. And I think that's where you're getting to, is that we have a significant amount of financial capacity, over $1 billion, and that's before any equity raise. So our view is that we're growing this business organically, but we will participate in a consolidating market. And the timing of that is just a little bit difficult to see. So at this stage, that's kind of still the way we think about our capital deployment, and we don't have any other immediate plans for that excess capital. Excellent, appreciate it. Thank you.

Your next question comes from Jamie Gloyn from National Bank. Please go ahead.