Octave (OSG) Q1 2026 Earnings Transcript

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Date

May 7, 2026 8:30 a.m. ET

Call participants

• President and Chief Executive Officer — Claude LeBlanc
• Chief Financial Officer — David Weissman
• Senior Executive and Director, Octave Ventures — Paul Rayner
• Vice President, Investor Relations — Karen Beyer

Takeaways

• Insurance distribution revenue -- $78.5 million, representing 92% growth, driven by 42% organic growth and the October 2025 ArmadaCare acquisition.
• Adjusted EBITDA (insurance distribution) -- $25.3 million, nearly four times the prior year; adjusted EBITDA margin expanded to 32% from 17%.
• Net loss to shareholders -- $6.9 million ($0.13/share), improving by 57% compared to a net loss of $16.1 million ($0.57/share) in the prior-year period.
• Consolidated adjusted net income -- $16.6 million ($0.37/share), up by $22.6 million compared to a net loss of $6 million ($0.13/share) last year.
• Organic growth (insurance distribution) -- 42%, with ArmadaCare itself posting 10% organic revenue growth compared to its prior-year quarter.
• Adjusted EBITDA (company-wide) -- $20.1 million, up $21.4 million compared to negative $1.3 million in the prior year.
• Gross premiums written (Everspan) -- $104 million, up 19%; net premiums written of $32 million (up 80%) and net premiums earned of $20 million (up 28%).
• Accident year loss ratio (current programs) -- 54%, while active programs averaged a 57% loss ratio.
• Reported net loss and LAE ratio -- 98.4% due to $2.1 million of losses and $5.8 million in legal expenses from a settlement; settlement accounted for 39.6 loss ratio points.
• Corporate expense reduction -- Nominal expenses declined to just over $12 million from $15 million, and adjusted expenses to $7.2 million from $10.6 million, primarily due to lower acquisition, restructuring, and equity compensation items.
• Buy-in of noncontrolling interests -- $44 million invested into additional stakes in Octave Ventures and four other MGAs at quarter end, funded by cash and expanded term loan facility.
• Debt metrics -- Insurance distribution business leveraged at approximately 3.2 times net debt to EBITDA on a pro forma trailing-twelve-month basis.
• Guidance status -- Claude LeBlanc said, "guidance is essentially unchanged, but you're off to a strong start."
• Startup MGA pipeline -- One to two new startups expected in 2026 due to the volume of launches in 2024 and 2025, though management notes the pipeline remains "deep and robust."
• Capacity expansion -- Platform-aligned and third-party capacity for MGAs increased from $1.5 billion to over $2 billion entering 2026, according to Claude LeBlanc.
• AI and digital strategy -- Company pursuing proprietary and partner-based artificial intelligence solutions, with Anthropic as its core AI model and U.S. MGAs moving to a unified tech stack by mid-year.
• Insurance distribution segment profits -- Net income to shareholders increased to $13.2 million from a net loss of $3.4 million; adjusted net income reached $22 million from $2.5 million in the prior-year quarter.
• Exchange benefits platform -- Achieved record results in ESL business after prior years of negative growth, contributing to margin improvement.
• Seasonality -- First quarter expected to remain the strongest for the insurance distribution segment, followed by the fourth quarter, with the second and third quarters showing more consistency with each other, according to David Weissman.

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Risks

• Everspan's reported net loss and LAE ratio of 98.4% was "as a result of losses and expenses incurred in connection with a settlement to resolve potential litigation matters related to an insurance claim," creating a $7.9 million expense impact in the quarter.
• Management indicated expected variability by stating, "we do anticipate variability in our results from quarter to quarter," due to seasonality and de novo investments.

Summary

Octave Specialty Group (NYSE:OSG) reported significant improvement in profitability metrics driven by its insurance distribution segment, highlighted by accelerated organic and acquisition-fueled growth. The company pursued capacity expansion, increasing aligned and third-party program capacity, and emphasized integrating data and AI strategies across its MGA operations. Everspan reported increased premium volumes but was impacted by a material litigation settlement, while the insurance distribution segment achieved record margins and profit contributions from platforms previously underperforming. Management reaffirmed guidance and signaled strategic selectivity in launching new MGAs, while avoiding further noncontrolling interest buy-ins for the remainder of the year.

• Platform-wide technology unification and proprietary AI initiatives are expected to increase operational efficiency, with management targeting full U.S. MGA integration by mid-year.
• Octave Specialty Group remains focused on reducing corporate expenses, with adjusted costs trending down due to lower severance, integration, and equity compensation outlays.
• The company maintains strategic discipline in expanding de novo MGA initiatives, projecting one to two new launches for 2026 and prioritizing "selective" growth amid a strong opportunity pipeline.
• Management positioned Everspan as strategically important but primarily focused on third-party business, with potential for broader risk appetite and relevance to core operations as loss settlement issues are resolved.

Industry glossary

• MGA (Managing General Agent): Insurance intermediaries with underwriting authority, distributing and managing specialty products often on behalf of multiple carriers.
• LAE (Loss Adjustment Expense): Costs related to investigating and settling insurance claims, including legal and administrative fees.
• ESL (Employer Stop-Loss): Insurance product providing protection to self-funded employer health plans against high individual or aggregate claims.
• Combined ratio: The sum of incurred losses and expenses divided by earned premiums, measuring underwriting profitability in property and casualty insurance.
• Noncontrolling interest (NCI) buy-in: Purchase of minority equity stakes held by outside investors in consolidated subsidiaries or affiliates.

Full Conference Call Transcript

Claude LeBlanc: Thank you, Karen, and good morning, everyone. I'm pleased to report that we started the year with a strong first quarter. Our performance was led by our core insurance distribution business, which grew total revenues 92%, driven by robust organic growth of 42% and the October 2025 acquisition of ArmadaCare. Adjusted EBITDA for this segment was $25 million, nearly a fourfold increase compared to a year ago, with margins expanding to 32% versus 17% a year ago. This performance is particularly compelling when considering the fact that 40% or 9 of our MGAs are new, having launched in 2024 and 2025. These MGAs are still in the early stages of growth with some still contributing negatively to adjusted EBITDA.

Our Specialty Property & Casualty segment reported good top-line growth and is well positioned to grow through both third-party and Select Octave programs as the year progresses. Adjusted EBITDA for the quarter was $1.6 million, essentially flat year-over-year when excluding the impact of a settlement or a potential litigation matter related to an insurance claim. David will provide more details of the financial results for the quarter in his commentary. Our story has been one of continued momentum. Over the last five years, we have executed a clear strategy to reposition Octave, transitioning from our legacy business toward a modern, scalable MGA platform.

We have executed strategic acquisitions, including Beat Capital Partners in 2024 and ArmadaCare in 2025, while making significant strides in realigning our cost structure to match the scale of our growing platform. Octave Ventures, our incubator, is a best-in-class scalable platform offering a full suite of business solutions and capacity for startup MGAs, which provides us a significant advantage in attracting top underwriting talent in the market. Our pipeline and white space for startup MGAs remains broad and robust. One of Octave's core strengths is the diversification of its platform, both in terms of sector and product line as well as in the maturity of our businesses.

This is further bolstered by our focus on specialized areas where we have a competitive edge, a combination that we believe will enable our portfolio to perform across market cycles. For example, our Accident & Health segment is expected to represent about 30% of our production this year. Thanks to the acquisition of ArmadaCare and strong organic growth in our other A&H business. We believe our A&H businesses are well positioned to capitalize on secular trends, such as growth of self-funded employer health plans, leading to opportunities for growth in our employer stop-loss, employee benefits, and supplemental A&H businesses.

As part of our key organic growth initiatives, our priority is to continue to increase our growth and margin through product and geographic expansion and cross-sell, supported by enhanced carrier relationships and a digital data infrastructure that reinforces underwriting and speed to market. Octave's data and AI strategy, supported by our digital data infrastructure, is an integral part of our company strategy woven into our growth-Integration, and risk oversight plans. We are pursuing AI through two complementary tracks. The first is bespoke proprietary systems, which are capabilities built on our data, designed by us, and built by us for specific underwriting and servicing use cases. ArmadaCare, which I discussed last quarter, is one example.

The second is a curated partner model, where we work with best-in-class AI providers who bring proven commercial capabilities and where the data boundary is clearly defined and contractually protected. For us, we have chosen Anthropic as our core AI solution, with room for additional fit-for-purpose models where it makes sense. For example, structured data extraction from submissions. Together, these tracks let us move quickly on impactful opportunities while building the proprietary capabilities that will define and differentiate Octave as a data-rich and AI-powered MGA platform. With that backdrop, I would like to provide our perspective on the current environment and how we see Octave navigating the current market. Property lines continue to soften following years of hardening.

This is particularly evident in the large and middle market account segments as well as on CAT-driven exposures. At Octave, our property-focused MGAs are well-diversified across the U.S., U.K., and Bermuda markets, and primarily focused on low-CAT exposed lines and niche SME markets, which has sheltered us from the most volatile parts of the property markets. So while we are exposed to property pricing trends, our property-focused portfolio companies are navigating rate declines and selectively seeking to underwrite risk where risk-adjusted returns remain attractive. In casualty lines, our portfolio companies continue to see a positive rate environment, particularly in higher hazard lines, such as transport and habitational, where loss trends continue to drive rate increases, in many cases above 10%.

We are seeing a moderation of rate increases in segments with lower hazard risks and in the SME segment of the casualty market. And lastly, our niche professional and other specialty portfolio companies continue to show good growth in a moderating to stable rate environment. In summary, while we have experienced some headwinds in certain lines, the diversification of our portfolio, our experienced underwriting leadership team, and the early-stage growth of our newest MGAs give us confidence in our ability to achieve our growth targets while maintaining strong underwriting performance. I will now turn the call over to David to review our first quarter results. David?

David Weissman: Thank you, Claude. Good morning, everyone. Octave reported a net loss to shareholders of $6.9 million or $0.13 per share in the first quarter of 2026, compared to a net loss from continuing operations to shareholders of $16.1 million or $0.57 per share in the first quarter of 2025, an improvement of 57%. Consolidated EBITDA and adjusted EBITDA to shareholders increased to $3.6 million and $20.1 million, compared to a negative $5.5 million and negative $1.3 million, respectively, in the first quarter of 2025, representing a $9.1 million and $21.4 million improvement, respectively.

Consolidated adjusted net income to shareholders was $16.6 million, or $0.37 per share, compared to a net loss of $6 million or $0.13 per share in the first quarter of 2025, an improvement of $22.6 million or $0.50 per share. Our non-GAAP metrics, adjusted EBITDA and adjusted net income, exclude the impact of a settlement of a potential litigation matter at Everspan, severance costs, other non-recurring costs, and equity compensation. The favorable movement in our results for the quarter were driven by an Insurance Distribution segment and lower corporate overhead. Total revenue for the insurance distribution segment grew 92% to $78.5 million in the first quarter of 2026.

Drivers of this growth included the acquisition of ArmadaCare in the fourth quarter of 2025 and organic growth of 42%. ArmadaCare, while not included in our organic growth calculations, grew revenue organically by 10% compared to its first quarter of 2025. The diversity of our business and certain niche product lines helped deliver these favorable results in the face of softening conditions in certain lines. Insurance distribution net income to shareholders increased to $13.2 million in the quarter, compared to a net loss of $3.4 million in the prior year quarter, an improvement of $16.6 million. Insurance distribution adjusted EBITDA to shareholders grew nearly 4-fold to $25.3 million, compared to $7.1 million in the first quarter of 2025.

And adjusted net income to shareholders was $22 million, compared to $2.5 million in the first quarter of 2025. That is an increase of nearly 8 times. Our insurance distribution results for the quarter were driven by a number of factors, including the October 2025 acquisition of ArmadaCare, organic growth across our diverse group of MGAs, higher profit commissions, lower interest expense, resulting from both a reduction of debt and lower financing costs.

It's worthy to note that after a couple of years of negative growth, as I've discussed on prior calls, our exchange benefits platform in particular had a strong first quarter, posting record results in its core ESL business, a testament to the discipline and commitment of our team. The strong performance in the quarter, which on an absolute basis is also impacted by the seasonality of our A&H business, drove our margins to record highs 16.3% for pre-tax income to shareholders and 32.3% for adjusted EBITDA to shareholders, increasing 26 and 15 points respectively. As a result of seasonality and other factors such as the nature of de novos, we do anticipate variability in our results from quarter to quarter.

Our results for the quarter also reflect our continued investment in de novo MGAs, which reduced EBITDA to shareholders by about $1.1 million in the first quarter of 2026 versus $600,000 in the first quarter of 2025. These costs were spread across approximately five MGAs. While not impacting our first quarter results, we ended the quarter by acquiring an additional 10% of Octave Ventures as well as additional stakes to 4 other MGAs, three of which related to Octave Ventures. The total cost of these NCI buy-ins was about $44 million. These were funded with cash and by the expansion of our existing term loan facility.

Our insurance distribution business debt to EBITDA on a pro forma TTM basis was roughly 3.2 times at March 31, 2026. We believe our bank facilities are attractive from the standpoint that they have 5-year tenors, modest required amortization, and are currently at a spread of 275 basis points over SOFR, which declines based on leverage. As part of the increase, we agreed to provide the equity in Everspan's intermediate holding company as additional collateral, which is very much standard in bank-funded insurance financing transactions. Given that OSG guarantees the debt, this additional collateral also does not create a material change in the economic terms.

Turning to Everspan, gross premiums written and net premiums written and earned in the quarter were $104 million, $32 million, and $20 million, up 19%, 80%, and 28% respectively, driven by the repositioning of our portfolio, which began late in 2024. First quarter production included the impact of 24 programs, four of which were new compared to last year and two of which were Octave-related programs. The actions we took, which I've previously spoken about, brought down our current quarter accident year loss ratio to 54%, while our active programs are running about a 57% loss ratio. Our reported net loss in the LAE ratio was 98.4% in the first quarter.

As a result of losses and expenses incurred in connection with a settlement to resolve potential litigation matters related to an insurance claim. This settlement resulted in additional losses incurred of $2.1 million and LAE incurred for legal fees of $5.8 million. The settlement accounted for 39.6 loss ratio points in the quarter. On a pro forma basis, including the settlement costs, severance, as well as other expenses mostly related to timing differences, our combined ratio for the quarter was approximately 95%, which is more in line with our long-term expectations. For the first quarter of 2026, Everspan produced a pre-tax loss of $8 million and adjusted EBITDA was $2 million, up 2% from the first quarter of 2025.

Our recent expense reduction initiatives at corporate also began to take hold in the first quarter of 2026 as well with nominal expenses declining to just over $12 million from $15 million last year. Moreover, adjusted expenses declined to $7.2 million from $10.6 million in the prior year comparable period. The difference between reported expenses and adjusted expenses in the current quarter were mainly attributable to acquisition and integration costs of about $1.1 million, severance and restructuring expenses of half a million, and equity compensation of $3.1 million, which included a catch-up accrual due to a change in performance factors of $1.7 million.

We continue to evaluate all expenses in an effort to trend our adjusted expenses downward towards our longer-term goals. I will now turn the call back to Claude.

Claude LeBlanc: Thank you, David. I am immensely proud of what our team accomplished during the first quarter and we are very optimistic about our company's long-term trajectory and target goals we previously shared. As we look forward in 2026, we are very focused on the execution of our strategy with organic growth being our primary driver. Having taken steps to rebalance its portfolio, Everspan is also now well-positioned and on a trajectory towards delivering solid top-line and bottom-line results. As David previously mentioned, we've also made significant progress in addressing our corporate expenses, which will continue to be a central area of focus for us as we progress through the coming quarters.

Operator, I would now like to open the call for questions.

Operator: [Operator Instructions] The first question comes from the line of Mark Hughes with Truist Securities.

Mark Hughes: On the presentation, you show your 2026 guidance, you point out it was initially presented in February. Was the Q1 kind of relative to the guidance, was it consistent with your expectations? It seems like it was quite a strong quarter. Do you feel like you're ahead of where you started out at the beginning of the year? Or was this execution sort of according to plan?

Claude LeBlanc: Good question, Mark. I think we feel Q1 was a very strong quarter. So I think I put it ahead of our plan, certainly for our expectations in Q1. And I think we see a lot of tailwind carrying through for the rest of the year as well on some of the programs that we've launched in the last couple of years.

Mark Hughes: And the -- just to be clear, the guidance is essentially unchanged, but you're off to a strong start. Is that the key point?

Claude LeBlanc: That's correct, yes. We will consider adjusting guidance in the upcoming quarters.

Mark Hughes: Very good. And what does the pipeline look like for start-up MGAs? Is there going to be a 2026 class? How do we think about that?

Claude LeBlanc: Yes. So what we indicated previously is that we were targeting more in the range of our initial expectations on startups for 2026 in the range of 1-2 startups. Part of that is the significant number of launches that we undertook in the class of 2024 and 2025 that we're actively pursuing growth and expansion. Having said that, we have seen and continue to see a very deep and robust pipeline of opportunities that we're evaluating. Our team is very selective in terms of who we'd like to move forward with, but we do expect I'll say at least 1-2 launches this year.

Could be a little bit more, but I think we're trying to keep it in that range, given the number of starts that we had in the last couple of years.

Mark Hughes: Understood. And the plans for buy-in for the remainder of the year, you spent $44 million looks like right at the end of Q1. So that will have an impact on Q2. What is the outlook now for any additional buy-ins of the noncontrolling interest through the balance of the year?

Claude LeBlanc: Yes. For the rest of the year, Mark, there wouldn't be any additional buy-ins currently planned.

Mark Hughes: And then what -- any observations about the capacity? You talked about how you're seeing some deceleration in rates still robust in some of these casualty lines, but maybe broadly speaking with property and some other lower hazard lines, maybe a little bit less buoyancy. How about in terms of capacity providers your ability to secure sufficient capacity for the MGAs and start-up MGAs. Any observations there?

Claude LeBlanc: Yes. I think we've seen just continued increases in opportunities with both existing and new capacity providers, I think the reinsurance markets in particular we've seen improvements in terms, broadening of appetite and opportunity. I think we mentioned on our last call that we've increased our capacity both in amount and duration of both aligned as third party capacity from $1.5 billion entering 2026 at over $2 billion. So we continue to see many opportunities. We do manage our business on a curated capacity model and we'll continue to look to expand that as we progress through the year.

But to date the opportunities continue to come to us and we're seeing broader, I'd say, more diversified opportunities as we continue to expand our platform.

Operator: Next question comes from the line of Ryan Tunis with Cantor Fitzgerald.

Ryan Tunis: I guess first question kind of following along with the capacity discussion that you just had with Mark. Property, it looks like it's your second biggest line, you mentioned geographically diverse. I'm curious though, just from a concentration standpoint, is it -- you have concentrated MGAs? Like, where does the premium sit? Is it that you have MGAs that are largely property dedicated? Or does the property premium tend to sit in places where -- it's not solely just focused on property, that is question.

Claude LeBlanc: That's a great question, Ryan. I'm going to pass that over to Paul Rayner, Senior Executive and Director at Octave Ventures, to respond to that.

Paul Rayner: Yes, very pleased to. So I'm Paul Rayner, executive at Octave Ventures. Right. In response to your question, we have a number of different MGAs that play into the property market. Very much the model is each of our MGAs have their own specific pocket. We have an MGA that is focused more on the large commercial D&F. We have one in the U.S. more focused on middle market property. We have another focused on small commercial. Outside of that, we have MGAs that will have various package policies, which will include property and liability components.

On the whole, as you look across our market, our property focus, we are relatively low CAT compared to our peers, particularly in the London marketplace. I think that goes to a lot of Claude's comments around how whilst we are seeing rating changes, that is somewhat more muted for us. They're being led in our large commercial sector and becoming increasingly mixed as we move through the ranks as we get to the smaller end of it, of the sector. Did that answer your question, Ryan?

Ryan Tunis: Yes, you did. That's helpful. I just wanted to push a little bit more on just the conversations. I guess, you're having with the capacity relative to a year ago, I mean, there's so much discussion about the property market. Yes, just what are the types of questions you're getting from capacity providers? Is it just that they're just really focused on results that I mean, they clearly have been good, but is it's just a little bit surprising to me that the capital wouldn't start getting a little bit antsy given the competitive environment.

Paul Rayner: Should I continue, Claude?

Claude LeBlanc: Sure, Paul, yes.

Paul Rayner: Sure. So we continue to see technical rate adequacy in our property markets. You'll recall they've gone through a period of strong hardening, as we, whilst we are seeing rate reduction, we still see technical profitability within the rates. That's very much the conversation with our capacity partners. I think the add-on comment on capacity and building from Claude's comments is the capacity has been very loyal and strategic with our businesses. We've built good and deep relationships with them. They're very bolted on to the fact that we seek to govern our businesses in a way that protects their interests.

And so on the one hand they're very understanding, ask a lot of questions, but they come from a very knowledgeable place. On the second part, we've got a lot of structures to access capacity through both our managed balance sheets being the syndicates included which are all third-party capital as well as the traditional arrangements. So we have a lot of different conversations, a lot of different questions, but they come from a knowledgeable perspective, and ultimately that we are risk-selecting through this cycle to deliver the returns that we represent to them.

Ryan Tunis: And just shifting gears last one for Claude. Really just on Everspan and what the vision is for that from here how it fits in with the overall business as it obviously continues to shrink as a percentage of the mix. We had a little more noise this quarter. Just, I guess, update us on the strategic priority of that business at this moment in time.

Claude LeBlanc: Sure. Our views on Everspan have not changed in that it is a strategic business within our ecosystem. We do view the program business which it manages, which is third-party business primarily. We don't do a lot of business between Octave Ventures and Everspan. So again, I think we have to remember it is primarily a third-party market business. But that business continues to grow. It's provided us some opportunities on introductions to new MGAs, quite frankly, and new opportunities in the marketplace. We have done some selective programs that we've moved into Everspan. Again, they're selective to avoid competition in other third-party markets that Everspan competes in.

But there are some good opportunities and we have added a couple more into Everspan. Again, the strategic fit and nature of Everspan is still very valuable to us and remains so. I would say that we have and continue to look for ways to have Everspan be more relevant and valuable to us. And I think as we continue to grow and expand broadening of risk appetite, scale, risk limits, and rating, for example, are all things that we're hoping to be able to find ways to leverage Everspan in a greater way to the extent we can achieve that.

We've been working and considering different ways to achieve that in order to allow Everspan to broaden, again its risk appetite, broaden its growth opportunities in the marketplace and increase its relevance to our core business as well. So again, it remains an important part of our business. We think we have it going in the right direction. We've made some changes having this litigation settlement behind us is another important step. I believe we're well-positioned as we look at the balance of the year.

Operator: Next question comes from the line of Tommy McJoynt with KBW. Please go ahead.

Thomas Mcjoynt-Griffith: A couple questions on the insurance distribution segment. To start off, could you go into a bit more detail on how you see the quarterly seasonality of earnings this year following this very strong 1st quarter? In some sense, can we look at the quarterly seasonality of last year as a proxy, or has the recent acquisitions and growth in the A&H impacted that too much where we can't really look to the past to think about seasonality?

David Weissman: Sure, Tommy. Thanks. So yes, last year gave us a little bit of a roadmap to seasonality. We had some of the same dynamics last year in terms of the A&H business as we do this year. A little more pronounced given the inclusion of ArmadaCare. First quarter is certainly going to continue to be our strongest quarter. Fourth quarter is probably the second strongest and the second and third quarters are more in line with each other.

Thomas Mcjoynt-Griffith: Okay. Got it. And then we've seen the public broker multiples sink on concerns of brokers being disintermediated by AI. As part of your evaluation and underwriting of MGAs, what are you looking for to make sure that those MGAs aren't going to be disintermediated or at least face lower barriers to entry that drives up competition? What does your underwriting process of those MGAs look like?

Claude LeBlanc: Yes. So it's a good question we've been listening to what the brokers have -- how they've been responding to the questions. I think from our perspective, we're not a broker. We're not into retail or wholesale broking, and we are really more of a pure play MGA platform. I think the risk associated with AI on the in particular the MGA market, I think is much more limited. Having said that, I believe and we strongly believe, we've built this into our strategy, that AI will be a core component of our growth strategy and oversight of our business going forward. We've made significant strides, as I mentioned earlier, investments into AI.

I think we're approaching this from a position of strength given that, while we made some acquisitions our largest acquisition being Beat Capital Partners, where most of our MGAs have been launched, initially are on a homogeneous tech stack. We've been actively moving our other MGAs onto the same tech stack, which we'll have completed that in the U.S. marketplace by mid-year this year. Aggressively moving into a data architecture across all of our MGAs globally. Being able to do that without legacy systems and disparate systems, I think gives us a big advantage to implement that quickly.

So we believe that we're going start seeing the benefits of that in terms of efficiency, velocity of underwriting, underwriting effectiveness, if you will, better risk selection, as we progress through the year and into next year. I believe those are some of the key benefits that we see coming out of AI in the near term. But I don't see AI as an individual component or business model disintermediating the MGA space in any way, especially in the commercial or more complex specialized risk components of the MGA sector.

Operator: Ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the floor over to Karen Beyer for closing comments.

Karen Beyer: Thank you everyone for joining us this morning. We'll be around for your calls today. Thanks, and have a great day.

Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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