Alex Scott: Got it. Thanks. And the second one I had is just a follow-up on, there was a comment earlier related to, I think it was the 35% filing where it was mentioned that, that can take up to 18 months. I mean that one, I think, was filed in late May. So that would suggest would be like all the way towards the end of 2024, if I just take that comment at face value as to like when you potentially get the California approval. I’m just trying to weigh thinking through that versus some of the comments that suggested the regulatory environment may be getting a little better, I mean that seems like a pretty long time line. Can you help us think through and maybe I’m just trying to take that a little to cut and dry?
Tom Wilson: I think I’m probably the one that said 18 months that was not to imply that we think it’s right to wait 18 months or it should take 18 months. We just said sometimes it takes a long time, the California department stayed on all rate increases for a couple of years. They’re not in that mode anymore, and we’re working actively with them because they know that’s not a good place to be and it doesn’t create a good market. So I think what you can do is just look at the monthly numbers we’ve put out on rate increases. You can factor that in. You can — we’ve given some math on how it rolls into the P&L. And that will give you a good look 12 months forward at what that blue line is that Mario talked about and at what rate is going up. They will tell you what’s going to come in. And then you can make your own judgment on what you think severity and frequency will be.
Alex Scott: Got it. That’s helpful. Thanks for clarifying.
Brent Vandermause: Hey, Jonathan, we’ll take one more question.
Operator: Certainly. One moment for our final question then. And our final question for today comes from the line of Yaron Kinar from Jefferies. Your question please.
Yaron Kinar: Thank you. Good morning. Thanks for first allowing me in here. I want to go back to the capital question and the decision to stop the buybacks, if I may. And Tom, I’m certainly — I appreciate the thought of it doesn’t really make sense to buy back stock when we’re generating a loss. That said, I think we have seen about $2 billion of buybacks since I think, the second quarter of last year in a loss environment. I think everything you’re showing on — and presenting in the slides would suggest that we are hopefully inflecting in the auto margins. I think even a quarter ago, you were still talking about over $4 billion of holdco liquidity. So I’d just love to better understand what changed or shifted in the thinking here to make you decide to stop here, especially when stock seems to be attractively valued relative to previous buybacks?
Tom Wilson: Let me go back to the genesis of the buyback program and then roll it forward. So it was a $5 billion program, about $3 billion of which was because we’re returning capital that was generated by sale of the life and annuity businesses. So it was really a $2 billion net program. We tended to have that program — that buyback program was usually sized by how much money we made the prior year and we weren’t using in growth. So it was in arrears kind of share repurchase program. And that’s how we got to $5 billion. So we’re 90% of the way there on $5 billon, we couldn’t complete it, for sure, and we just decided you’re losing money, don’t buy stock back. It’s just sometimes good capital management is just a common sense as opposed to a specific formula because it’s formulas change, correlations change and all that sort of stuff.
So from our standpoint, it was really no more complicated. I mean, Jess and I talked for like five minutes were like, okay, another quarter of a loss. A lot of — lot catastrophes are a lot higher, almost two standard deviations away. We factored that in when we decided on the $5 billion. We factored that in when we looked at last year, keeping the program going. And it was a sensitivity, but it was a sensitivity, not a reality when insurance into a reality, you say, okay, let’s just stop buying it back. And if we feel like getting back to it, we will. And we have a strong track record of buying stock back, but what will drive the value of our stock, and I can close on this is not share repurchases. Like we’ve looked at share repurchases. As I said, we bought $37 billion back.
The return on share repurchases, if you take the price that you bought it at and the price of the stock at any point in time. Of course, it varies like it’s cheap now, in my opinion. And so it would be good to buyback. But when you look at it over an extended period of time, it kind of turns into the cost of capital, which makes some sense. Sometimes you get a 20% return because you buyback cheap and the stock went on to run. Sometimes you buy it and it stacks up and you get lower return. But when you look at it over a long period of time, so you don’t really create shareholder value by doing share buybacks. If you don’t do share buybacks, you destroy shareholder value. That’s a bad thing. But — so the way we’re going to create shareholder value is get profitability up, execute transformer growth and broaden our — the product offering to people and things like protection plans, which are low capital, high growth, high-return businesses, health and benefits in the same way.
So that’s our plan. We look — thank you for tuning in this quarter, and we’ll talk to you next quarter.
Operator: Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.