Could you elaborate on what explains the difference between Allied World and others? What is the essence of that lower loss ratio?

We write good business and manage risk effectively, partly due to our reinsurance placement strategy. At CNA, for example, they didn't have treaty reinsurance for the cyber book. If you have a $10 million risk and it incurs a loss, without reinsurance, you pay the full $10 million. With treaty reinsurance covering 50%, your loss is only $5 million because half of the risk is transferred to another reinsurance company. This helps keep loss ratios down.

Could you elaborate on what explains the difference between Allied World and others? What is the essence of that lower loss ratio?

The commissions paid on reinsurance also factor in favorably. If the treaty costs a percentage of the policy, say 20%, and the commission is 20% to 30%, you're ahead. You're paying for capacity at a lower price and can offload higher risks, maintaining lower loss ratios. This is a method Allied World uses that others might not.