AM Best Comments on Credit Ratings of The Wawanesa Mutual Insurance Company Following Announced Acquisition of Everest Insurance Company of Canada Mar 24, 2026 5:11 PM Eastern Daylight Time AM Best Comments on Credit Ratings of The Wawanesa Mutual Insurance Company Following Announced Acquisition of Everest Insurance Company of Canada Share OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has commented that the Credit Ratings (ratings) of The Wawanesa Mutual Insurance Company (Wawanesa Mutual) (Winnipeg, Manitoba, C ...

Financial Data and Key Metrics Changes - The company reported a net income of $47.4 million for 2025, a significant improvement from the net loss of $81.1 million in 2024 [16] - The full year combined ratio improved to 96.6% from 117.6% in 2024, indicating better underwriting performance [16] - The annualized adjusted net operating return on tangible common equity was 15.3%, with tangible common book value per share increasing by 34% to $8.94 [16] Business Line Data and Key Metrics Changes - The E&S segment generated $59.5 million of underwriting income for the year, with a fourth quarter underwriting income of $19.7 million [18] - Gross Written Premium decreased by approximately 5% overall, primarily driven by a 27% decline in property and an 11% decline in manufacturers and contractors [12] - The average policy size decreased by 9.6% in Q4 compared to the prior year quarter, and 8.4% for the full year [6][7] Market Data and Key Metrics Changes - Submission flow across the casualty-focused business grew by 4% overall for 2025, indicating healthy market activity [8] - Rate changes remained positive at 9% for the year, consistent with 2024, although the level of rate increases has moderated [8] Company Strategy and Development Direction - The company is focused on a wholesale-only E&S platform, targeting smaller and more profitable accounts while exiting unprofitable classes [4][5] - A re-domicile to the U.S. was completed, simplifying corporate structure and improving tax efficiency [9] - The company is investing in technology, including a multi-year upgrade of core operating systems to Guidewire and a partnership with Kalepa for AI-enabled underwriting capabilities [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, highlighting a disciplined portfolio and improved margins [14] - The company sees attractive opportunities in the North American E&S market, particularly with a focus on smaller insureds and enhanced underwriting guidelines [14][15] - Management remains cautious about recognizing trends in claims frequency and loss emergence, emphasizing the importance of reserve protection [13] Other Important Information - The company achieved a full year expense ratio of 30.2%, below the previously indicated 31%, despite a reduction in Gross Written Premium [19] - A one-time tax benefit of $14.1 million was recorded due to the redomicile, but it was excluded from operating earnings for accurate comparison [17] Q&A Session Summary - No questions were received from analysts during the Q&A session, and the call concluded with management expressing satisfaction with the company's performance and outlook for 2026 [25][26]

Core Insights - Bowhead Specialty Holdings Inc. achieved a 21% increase in gross written premiums (GWP) in Q4 to $224 million and a 24% increase for the full year to approximately $863 million, driven primarily by disciplined premium growth in the casualty division [1][2][19] - The company reported a 30% growth in adjusted net income for the year, with an adjusted return on equity of 13.6% and diluted adjusted earnings per share of $1.65 [2][19] - The casualty division was the largest contributor to GWP growth, with a 26% increase in Q4 to $133 million and a 28% increase for the full year to $551 million, largely due to the excess casualty portfolio [1][19] Financial Performance - The expense ratio improved to below 30% for the year, better than the low-30s range initially expected, contributing to the overall profitability [2][28] - The loss ratio for 2025 was reported at 66.7%, an increase of 2.3 points from 2024, influenced by higher expected loss ratios and portfolio mix changes [20][27] - The company’s investment portfolio saw a 36% increase in pretax net investment income for Q4 and a 44% increase for the year, totaling $57.8 million [29] Growth Drivers - The fourth quarter's growth was bolstered by the approval of construction projects, which added nearly 30% to casualty premiums [5] - The cyber liability portfolio and healthcare management liability were significant contributors to full-year growth, with GWP in healthcare increasing 14% to $116 million [6][19] - The digital underwriting model, including the Baleen initiative, is expected to drive future growth, with Baleen generating over $21 million for the year [7][19] Underwriting Strategy - The company employs two underwriting models: a craft underwriting model for complex risks and a digital underwriting model for small, harder-to-place risks [8][9] - The craft model accounted for over 97% of GWP in 2025, while the digital model is designed for speed and efficiency in decision-making [10] - Bowhead Specialty Holdings Inc. maintains a disciplined approach to underwriting, focusing on profitability over volume and avoiding high-risk classes [16][17] Future Outlook - The company anticipates a GWP growth of around 20% for 2026, primarily driven by the casualty division and digital capabilities [11][30] - The expense ratio is expected to remain below 30% due to ongoing scaling and technology initiatives [32] - The company plans to extend the duration of its investment portfolio from 3 to 4 years to better match liabilities [33]

Financial Data and Key Metrics Changes - Bowhead achieved disciplined premium growth of 24% for the year, surpassing the original expectation of 20% [5] - Adjusted net income grew over 30% for the year, with an adjusted return on equity of 13.6% and diluted adjusted earnings per share of $1.65 [5][20] - Gross written premiums (GWP) increased 21% in Q4 to $224 million, and 24% for the full year to approximately $863 million [6][20] Business Line Data and Key Metrics Changes - Casualty division drove GWP growth, increasing approximately 26% in Q4 to $133 million, and 28% for the full year to $551 million [7] - Professional liability division GWP increased approximately 4% in Q4 to $48 million and 9% for the full year to $174 million, primarily driven by the cyber liability portfolio [8] - Healthcare liability division GWP increased approximately 8% in Q4 to $34 million and 14% for the full year to $116 million, with growth driven by healthcare management liability and senior care portfolios [8] Market Data and Key Metrics Changes - The current accident year loss ratio increased 1.8 points due to higher expected loss ratios and trends after the annual reserve review [21] - The overall loss ratio for 2025 was 66.7%, an increase of 2.3 points compared to 64.4% in 2024 [21] - The investment portfolio's pre-tax net investment income for the quarter increased approximately 36% to $16.6 million, and 44% for the year to $57.8 million [28] Company Strategy and Development Direction - Bowhead aims for sustainable and profitable growth across market cycles through two underwriting models: craft underwriting and digital underwriting [9][10] - The company expects profitable premium growth of around 20% for 2026, primarily driven by the casualty division and digital capabilities [12][29] - Investments in technology and talent are expected to enhance the company's ability to capture more opportunities [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current market, noting a healthy balance of rate and limit management [18] - The company anticipates that social inflation and litigation funding will continue to impact the market, but remains focused on disciplined risk selection [17] - Management highlighted that submissions are growing faster than they can quote, indicating strong demand for their offerings [19] Other Important Information - The company issued $150 million of 7.75% senior unsecured notes scheduled to mature on December 1, 2030, to support regulatory capital requirements [31] - The effective tax rate for the year was 20.1%, which may vary due to state taxes and stock-based compensation [28] Q&A Session Summary Question: What does the prior year reserve development imply for price adequacy for 2026 for professional and healthcare? - Management believes they are priced well, with pricing coming in above trend, and adjustments were made conservatively [33] Question: How should we think of a mature Baleen in terms of loss ratio characteristics? - Management expects Baleen's loss ratio to be superior to the general large casualty business due to the restricted nature of coverage [36] Question: How do you translate industry data into the loss ratio picks? - The company uses proprietary information from a third-party actuary to tailor industry benchmarks to their portfolio [39] Question: What is the long-term target for the expense ratio? - Management aims to keep the expense ratio below 30%, leveraging technology initiatives to improve efficiencies [41] Question: Is there any sign that pricing environment in Excess Casualty is beginning to plateau? - Management noted a lumpy moderation in the market but believes that rate is exceeding loss trend overall [46] Question: Will technology allow for disintermediation of brokers? - Management does not foresee disintermediation happening soon, as the complexity of specialty insurance requires broker involvement [48] Question: How much did mix contribute to the actual loss ratio uptick in 2025? - Management indicated that they will review loss picks quarterly and adjust as necessary, but could not provide a precise number for next year [52] Question: How much of the lower expense ratio guide for 2026 is attributable to scale versus mix? - The improvement is attributed to technology initiatives across both digital and craft businesses [69]

Financial Data and Key Metrics Changes - Bowhead achieved disciplined premium growth of 24% for the year, surpassing the original expectation of 20% [6] - Adjusted net income grew over 30% for the year, with an adjusted return on equity of 13.6% and diluted adjusted earnings per share of $1.65 [6][21] - Gross written premiums (GWP) increased 21% in Q4 to $224 million, and 24% for the full year to approximately $863 million [6][21] Business Line Data and Key Metrics Changes - Casualty division drove GWP growth, increasing approximately 26% in Q4 to $133 million, and 28% for the full year to $551 million [7] - Professional liability GWP increased approximately 4% in Q4 to $48 million and 9% for the full year to $174 million, primarily driven by the cyber liability portfolio [8] - Healthcare liability GWP increased approximately 8% in Q4 to $34 million and 14% for the full year to $116 million, driven by healthcare management liability and senior care portfolios [9] Market Data and Key Metrics Changes - The current accident year loss ratio increased 1.8 points, partly due to higher expected loss ratios and trends after the annual reserve review [22] - The overall loss ratio for 2025 was 66.7%, an increase of 2.3 points compared to 64.4% in 2024 [22] - The investment portfolio's pre-tax net investment income increased approximately 36% to $16.6 million for Q4, and 44% for the year to $57.8 million [29] Company Strategy and Development Direction - Bowhead aims for sustainable and profitable growth across market cycles, utilizing two complementary underwriting models: craft underwriting and digital underwriting [10][11] - The company expects profitable premium growth of around 20% for 2026, primarily driven by the casualty division and digital capabilities [13][30] - Investments in technology and talent are expected to enhance the ability to capture more opportunities that fit the company's appetite [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow profitably despite a competitive market, noting a healthy balance of rate and limit management [19] - The company anticipates a loss ratio in the mid to high 60s for 2026, with an expense ratio below 30% due to continued scaling and technology initiatives [31] - Management highlighted the importance of disciplined risk selection and the ability to walk away from unprofitable deals [19] Other Important Information - Total equity was $449 million, resulting in a diluted book value per share of $13.45, an increase of 22% from year-end 2024 [30] - The company issued $150 million of 7.75% senior unsecured notes scheduled to mature on December 1, 2030, to support regulatory capital requirements [32] Q&A Session Summary Question: Price adequacy for 2026 for professional and healthcare lines - Management believes pricing is above trend and adjustments are conservative, with no significant pricing impact expected [34] Question: Baleen's loss ratio characteristics - Management expects Baleen's loss ratio to be superior to the general large casualty business due to the restricted nature of coverage [36] Question: Industry data translation into loss ratio picks - The company uses proprietary information from third-party actuaries to tailor industry benchmarks to its portfolio [39] Question: Expense ratio target and future expectations - Management aims to reduce the expense ratio further, leveraging technology initiatives while facing headwinds from increased acquisition costs [41] Question: Pricing environment in Excess Casualty - Management noted a moderation in the market but believes that rates are still exceeding loss trends [44] Question: Disintermediation of brokers - Management does not foresee disintermediation of brokers due to the complexity of specialty insurance [48] Question: Growth of Baleen and investment portfolio risk profile - Management indicated that growth in Baleen is improving due to increased acceptance and infrastructure, while maintaining a conservative investment portfolio [62][64]

Financial Data and Key Metrics Changes - Bowhead achieved a disciplined premium growth of 24% for the year, surpassing the original expectation of 20% [6] - Adjusted net income increased by over 30% for the year, with an adjusted return on equity of 13.6% and diluted adjusted earnings per share of $1.65 [6][21] - Gross written premiums (GWP) rose 21% in Q4 to $224 million and 24% for the full year to approximately $863 million [6][21] Business Line Data and Key Metrics Changes - In the casualty division, GWP increased approximately 26% in Q4 to $133 million and 28% for the full year to $551 million, primarily driven by the excess casualty portfolio [7] - Professional liability GWP grew approximately 4% in Q4 to $48 million and 9% for the full year to $174 million, mainly due to the cyber liability portfolio [8] - Healthcare liability GWP increased approximately 8% in Q4 to $34 million and 14% for the full year to $116 million, driven by healthcare management liability and senior care portfolios [9] Market Data and Key Metrics Changes - The casualty market is experiencing a positive rate environment, with Bowhead benefiting from disciplined risk selection and limit management [19] - The company noted that submissions are growing faster than they can quote, indicating a strong demand in the market [20] Company Strategy and Development Direction - Bowhead aims for sustainable and profitable growth across market cycles through two complementary underwriting models: craft underwriting and digital underwriting [10] - The digital underwriting model, initiated with Baleen, focuses on small, harder-to-place risks and aims to improve efficiency through technology [11] - The company expects profitable premium growth of around 20% for 2026, primarily driven by the casualty division and digital capabilities [13][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current market conditions, noting a healthy balance of rate and limit management [19] - The company anticipates a loss ratio in the mid to high 60s for 2026, with an expense ratio below 30% due to ongoing scaling and technology initiatives [31] Other Important Information - Bowhead's investment portfolio saw a pre-tax net investment income increase of approximately 36% in Q4 to $16.6 million and 44% for the year to $57.8 million [29] - Total equity reached $449 million, resulting in a diluted book value per share of $13.45, a 22% increase from year-end 2024 [30] Q&A Session Summary Question: What does the prior year reserve development imply for price adequacy for 2026? - Management believes they are priced well, with pricing coming in above trend, and adjustments were made conservatively without significant pricing impact [34] Question: How should we think about the loss ratio characteristics of Baleen as it matures? - Management expects Baleen's loss ratio to be superior to the general large casualty business due to the restricted nature of its coverage [36] Question: How does the company translate industry data into loss ratio picks? - The company utilizes third-party actuaries with proprietary information tailored to their portfolio, enhancing their reserving conservatism [39] Question: What is the long-term target for the expense ratio? - Management aims to keep the expense ratio below 30%, driven by technology initiatives and operational efficiencies [41] Question: Is there a sign that the pricing environment for excess casualty is beginning to plateau? - Management noted a moderation in the market but indicated that rates are still exceeding loss trends overall [44] Question: Will technology advancements lead to disintermediation of brokers? - Management does not foresee disintermediation, emphasizing the complexity of specialty insurance that requires broker expertise [48]

Summary of W. R. Berkley Conference Call Company Overview - **Company**: W. R. Berkley (NYSE: WRB) - **Industry**: Specialty Insurance Key Points Stake Acquisition by MSI - MSI, a large Japanese insurance company, is acquiring a 12.5% stake in Berkley, previously announced as a 15% stake [3][4] - The relationship between Berkley and MSI has lasted over a decade, with MSI seeking increased exposure to the U.S. insurance market [3][4] - No new shares were sold by Berkley or its executives in this transaction [4][5] Business Strategy and Market Position - Berkley has maintained a consistent focus on the specialty insurance industry for 55 years, managing 60 different businesses in niche markets [6][7] - The company aims to create value for shareholders through expertise in these niches rather than broad market coverage [6] Insurance Cycle Insights - The current insurance cycle shows a decoupling of product lines, with some markets softening (e.g., commercial property) while others are firming (e.g., commercial auto) [8][9] - The cycle is driven by human emotions of fear and greed, affecting underwriting discipline [8] Claim Cost Trends - The industry has faced challenges from economic and social inflation, leading to increased loss trends [10][11] - Berkley is making progress in adjusting rates in response to these trends, although rates may not continue to rise as steeply [11] E&S Market Outlook - The Excess and Surplus (E&S) market is expected to continue gaining market share due to challenges faced by the standard market [12][14] - Berkley’s E&S portfolio is heavily weighted towards liability lines, which are expected to see continued opportunities [14][15] Growth and Profitability - Berkley aims for high single-digit growth, focusing on profitability rather than just issuing policies [16][17] - The company is prepared to wait for favorable market conditions to pursue growth opportunities [17][18] Property Cat and Reinsurance - Property Cat rates are expected to decrease by 10-20%, with Berkley evaluating its participation based on risk-adjusted returns [19][20] - The company is cautious about becoming a significant property Cat writer [34] Expense Management - Berkley aims to keep its expense ratio under 30% while investing in data and analytics for efficiency [24] Artificial Intelligence Initiatives - Berkley is exploring AI tools for underwriting and claims processing, with early positive results [25][26] MGA Risks - The presence of Managing General Agents (MGAs) is highest in competitive markets, leading to potential conflicts of interest [30][31] Berkley One Growth - Berkley One, focused on high-net-worth personal lines, is on track to become a billion-dollar business [32][33] International Expansion - Berkley has opened operations in India, focusing on the liability space with a specialty approach [39] Capital Return Strategy - The company plans to return capital to shareholders through share repurchases and special dividends, while being cautious about M&A [40][41] Investment Income and ROE - Berkley expects to maintain high teens return on equity (ROE) due to strong underwriting health and investment portfolio performance [42][43] Additional Insights - The company is cautious about the sustainability of current medical trends in workers' compensation, which may not be favorable long-term [37][38]

Company Overview - Bowhead is a growing and profitable E&S focused specialty P&C business led by industry veteran, Stephen Sills, with a strategic partnership with American Family Mutual Insurance Company, S.I[16] - The company has a strong underwriting culture and provides sustainable underwriting across market cycles[16] - Bowhead's leadership team has an average of over 30 years of experience[21] Financial Highlights - Bowhead's Last Twelve Months (LTM) Q3'25 Gross Written Premium (GWP) was $823 million[19] - The company's GWP Compound Annual Growth Rate (CAGR) from 2021 through LTM Q3'25 was 42%[19] - Bowhead's LTM September 2025 Combined Ratio was 95.6%, comprised of a 65.5% loss ratio and a 30.1% expense ratio[19,20] - The Year-To-Date (YTD) September 2025 Adjusted Return on Equity (ROE) was 13.3%[19] - Approximately 80% of the company's LTM Q3'25 GWP was written on an E&S basis[21] Market and Strategy - Bowhead focuses on profitable, growing lines in the attractive E&S market, which has been expanding with a '20-'24 DPW CAGR of 20%[11,27] - The company utilizes a fully-integrated and accountable value chain with in-house underwriting expertise[11,40] - Bowhead balances its "craft" underwriting strategy with "flow" business launched in 2024 to manage growth and profitability through underwriting cycles[57]

Financial Data and Key Metrics Changes - Gross written premiums increased by 32% year-over-year to a record $232 million in Q2 2025 [5][11] - Adjusted net income rose by 62% to $12.8 million, with diluted adjusted earnings per share increasing by 32% [5][11] - The loss ratio for the quarter was 66.2%, a 0.7 percentage point increase from 65.5% year-over-year [14] - The expense ratio decreased by 3.2 percentage points to 30.6% compared to 33.8% year-over-year [14] Business Line Data and Key Metrics Changes - The casualty division saw a 32% increase in premiums to $151 million, driven by the excess casualty book [6][7] - Professional liability premiums increased by 23% to $55 million, with commercial public D&O driving more than half of the growth [7][8] - Health care liability premiums grew by 39% to $24 million, with growth across all departments [8] - Baleen generated $3.4 million in premiums during its fourth full quarter of operations, showing steady month-over-month growth [9] Market Data and Key Metrics Changes - The excess casualty segment is experiencing a modest uptick in competition, but favorable underwriting and pricing conditions persist [18][19] - In the E&S construction project sector, there is a deceleration of new construction projects due to tariffs and labor availability concerns [19] - The professional liability market remains challenging, particularly for financial institutions and large cyber liability accounts [20][21] Company Strategy and Development Direction - The company emphasizes disciplined underwriting as a core strategy for enduring success and cross-cycle profitability [22] - Bowhead is expanding its craft and flow platforms to capitalize on market opportunities while maintaining a disciplined approach to underwriting [22] Management's Comments on Operating Environment and Future Outlook - Management noted that while competition is increasing, the overall discipline in limit deployment and rates in the excess casualty segment remains [18] - There are signs of market stabilization in public D&O, with brokers anticipating flat or rising rates [20] - The company is leveraging technology to underwrite small and middle market accounts effectively [21] Other Important Information - Net investment income increased by 56% year-over-year to $13.7 million, driven by higher average balances and yields on invested assets [16] - Total equity reached $408 million, resulting in a diluted book value per share of $12.04, a 9% increase from year-end [17] Q&A Session Summary Question: Comment on capacity available for financial institutions - Management indicated that the significant capacity is currently restricted to financial institutions and has not leaked into other professional liability products [25][26] Question: Update on social inflation in professional liability - Management noted that social inflation is more pronounced on the casualty side, with claims settlements increasing significantly [27][28] Question: Investment income outlook and reserve mix - Management expects investment income to grow due to increased balances being invested, with a focus on growing the portfolio size [32][35] Question: Update on Baleen's performance - Management expressed a positive outlook for Baleen, highlighting successful technology development and the ability to scale the business [40][42] Question: Expense ratio outlook - Management is optimistic about reducing the expense ratio below 30% in the near future, despite some headwinds from increased fees [48][50] Question: Timing of annual assumption review and reserve assumptions - Management confirmed that the annual review occurs in Q4, with ongoing internal assessments each quarter [54][55] Question: Opportunities to boost new money yield - Management is actively seeking opportunities to enhance yield but remains cautious about chasing high-risk investments [58][60]

Financial Data and Key Metrics Changes - Net income per diluted share increased by 8.7% year-over-year to $1 per share, with an annualized return on beginning of year equity of 19.1% [11] - Operating earnings were $420 million or $1.05 per share, yielding an annualized return on beginning of year equity of 20% [11] - Stockholders' equity increased by more than $380 million or 4.3% to a record $9.3 billion [15] Business Line Data and Key Metrics Changes - The Insurance segment's accident year loss ratio excluding catastrophes was relatively flat year-over-year at 60.7%, with a combined ratio before catastrophes of 89% [13] - The Reinsurance and Monoline Excess segment's accident year loss ratio excluding catastrophes increased to 54.1%, with a strong combined ratio before catastrophes of 83.8% [13] - Net premiums earned reached a record of $3.1 billion, while net premiums written increased to a record $3.4 billion, showing growth across all lines of business [13] Market Data and Key Metrics Changes - The property market is becoming more competitive, particularly for larger accounts, while smaller accounts face less competition [19][20] - The commercial transportation market continues to see activity from Managing General Agents (MGAs), pushing for rate increases [20] - The professional liability market is mixed, with public Directors and Officers (D&O) insurance beginning to stabilize, while private and non-profit D&O remains competitive [21] Company Strategy and Development Direction - The company is focused on achieving appropriate risk-adjusted returns and is optimistic about growth opportunities in the liability market over the next 12 to 36 months [32] - The company is maintaining a defensive posture in certain areas while leaning into higher hazard, more specialized lines of business [70] - The company is cautious about the competitive dynamics in the reinsurance market, particularly regarding ceding commissions and discipline in casualty lines [25][114] Management's Comments on Operating Environment and Future Outlook - Management highlighted concerns about economic inflation, labor market dynamics, and the resilience of U.S. consumer spending as macroeconomic factors impacting the business [7][9] - The company is optimistic about its ability to manage through potential challenges related to tariffs and labor costs, while also focusing on pricing strategies [45][88] - Management expressed confidence in the investment portfolio's positioning and the potential for improved investment income [31][94] Other Important Information - The company paid ordinary and special dividends totaling $224 million in the quarter, contributing to a growth in book value per share of 6.8% for the quarter and 14.3% year-to-date [16] - The effective tax rate for the quarter was 23.2%, exceeding the U.S. statutory rate due to taxes on foreign earnings and state income taxes [15] Q&A Session Summary Question: Growth potential in the current environment - Management adjusted growth expectations to a range of 8% to 12% from the previous 10% to 15% due to recent market conditions [38] Question: Underlying loss ratio dynamics - The underlying loss ratio remains primarily influenced by business mix, with no unusual factors noted [39] Question: Impact of tariffs and labor costs - Management indicated that current loss activity does not reflect significant impacts from tariffs or labor costs, but they are monitoring the situation closely [45] Question: Trajectory of margins - Management believes that current rates are positioning the company well for future improvements, but cautioned against premature conclusions [47] Question: Capital management and share buybacks - The decision not to repurchase shares was based on maintaining surplus capital for future opportunities, with a focus on special dividends as a more efficient return method [52] Question: Medical inflation and its impact - Management is closely monitoring medical inflation and its potential effects on workers' compensation and stop-loss portfolios, with sensitivity analyses conducted [65] Question: Competitive dynamics in the private client business - The company is experiencing traction in the private client space due to its expertise and value proposition, despite not being the cheapest option [126]