Good morning, my name is Andrao and I will be your conference operator today. At this time, I would like to welcome everyone to the American Financial Group 2009 third quarter earnings conference call. (Operator instructions) Thank you. And now, I’d like to turn the conference over to Mr. Keith Jensen, Senior Vice President of American Financial Group. Please go ahead, sir.

Thank you very much and welcome. I'm here this morning with Craig Lindner and Carl Lindner III, co-CEO's of American Financial Group. I'm pleased to welcome you to American Financial Group 2009 third quarter earnings results conference call. If you are viewing the webcast from our website, you can follow along with the slide presentation if you'd like. Certain statements made during this call are not historical facts and may be considered forward-looking statements and are based on estimates, assumptions and projections, which management believes are reasonable but by their nature, subject to risks and uncertainties. The factors which could cause actual results or financial conditions to differ materially from these suggested by such forward-looking statements include but are not limited to those discussed or identified from time to time in AFG's filings with the Securities and Exchange Commission including our Annual Report on Form 10-K and quarterly reports on Form 10-Q. We do not promise to update such forward-looking statements to reflect actual results or changes in assumptions or other factors that could affect those statements. Core net operating earnings is a non-GAAP financial measure, which sets aside items that are generally not considered to be part of ongoing operations, such as net realized gains and losses on investments, the effects of accounting changes, discontinued operations, significant asbestos and environmental charges and other nonrecurring items. AFG believes this non-GAAP measure to be a useful tool for analysts and investors in analyzing ongoing operating trends and will be discussed for various periods during this call. A reconciliation of net earnings attributable to shareholders to core net operating earnings is included in our earnings release. Now, I'm pleased to turn the call over to Carl Lindner III, co-Chief Executive Officer of American Financial Group to discuss our results.

Good morning and thank you for joining us. We released our 2009 third quarter results yesterday afternoon. AFG has again posted record operating results even as we are faced with an economic downturn and competitive market conditions. We also announced yesterday an increase in AFG’s annual dividend to $0.55 per share, beginning in January of 2010. This dividend will be the fifth consecutive annual dividend increase for the company and represents a 6% increase over the dividend paid in 2009. We believe it underscores the confidence of the Board and management in the company’s business and long-term financial outlook. We thank god for his blessings and we are grateful for our management team for their excellent work during this time of economic challenge. We believe that the depth and breadth of AFG’s specialty insurance expertise has enabled us to deliver high-caliber service to our policyholders and agents and produce long-term value to our shareholders. I’m assuming that the participants on today’s call reviewed our earnings release and the supplemental materials posted on our website. I’ll review a few highlights and focus today’s discussion on key issues in our outlook for the remainder of 2009 and 2010. A record third quarter and year-to-date core net operating earnings per share were up 9% and 5% from the same 2008 periods, reflecting improved underwriting results in our specialty property and casualty operations. We have an annualized return on equity of about 16% including realized gains and losses for the first nine months of this year. Our net earnings of $1.09 per share for the 2009 third quarter and $3.07 for the first nine months of 2009 were also substantially higher than the prior-year periods, primarily because of improved core earnings and realized gains on investments, which include the offsetting effect of impairment charges.…

(Operator instructions). We’ll pause for just a moment to compile the Q&A roster. And your first question comes from the line of Amit Kumar with Fox-Pitt, Kelton. Amit Kumar – Fox-Pitt, Kelton: Strong results. I guess, just going back on your color on the rates, Bill Berkley in his comments this morning talked about the industry where he suggested that '09 accident year would be 108 to 110 and 2010 will be 110 to 112 and he forecasted that this would eventually lead the price increases of roughly 8% to 10% for 2010 and perhaps even more for 2011. Based on your business segments and what you are seeing out there, would you sort of directionally agree with this forecast or are you seeing something different in your business lines?

Well, first of all, let me speak to the industry – Bill’s comments about the industry. It’s hard to put a precise time on when things are going to happen, but the rubber has to hit the road here with regards to increasing accident year combined ratios and the need for additional price for the industry. Clearly, we think we are operating on a – with better underwriting results than the industry. So – that said, we feel our accident years today for '09 still give us in the mid-teens kind of ROE’s, but on California comp, clearly we need weight. We got 6% in the quarter, but we probably need another 10% to 12% on top of that to assure us that we can produce the accident year underwriting profitability in that business that we need long term. In property and transportation – those are kind of unique businesses. The crop business is in a class of its own and is really – doesn't really correlate to allow the other businesses in the industry, which I think is probably a strength for us and that doesn't really correlate to hurricane and cat-exposed property or other businesses. So that business is clearly a lot different and kind of stands on its own, as well as maybe some businesses like equine mortality or financial institutions or financial institutions’ book in our specialty financial part that really is kind of a contra-core economy kind of a business, where it’s actually growing pretty good. That said, in our many of our property and transportation and casualty businesses, we need to achieve some rate. I think our 2010 guidance clearly reflects my opinion about prices and we are trying to reflect a very reasonable realistic viewpoint of where accident year combines are going for us and for the industry in that guidance. Amit Kumar – Fox-Pitt, Kelton: That’s very helpful. I guess just related to that, in terms of the competition, I know you talked about that in the opening comments, but are you seeing sort of inflection points where you see that the margins are being eroded for them and hence, they are at that point where they might start pulling back or is the aggression still the same?

I wouldn’t – I think we are in a competitive environment though not a crazily – crazy competitive environment. And generally, when you listen to everybody’s earnings reports and generally, everybody – rates on renewals are fairly stable, but there is – it’s very competitive for new business and some large competitors that have been on the roads are protecting renewals pretty substantially in that. So I’d say that this is a competitive market – very competitive marketplace, not crazy at this point and I think everybody – I think the industry is on the verge of really needing some substantial rates. Amit Kumar – Fox-Pitt, Kelton: That’s helpful. Can you – I guess, just related to what you said, can you maybe also talk a bit about sort of the claims inflation trends you might be seeing?

Keith, you want to speak to that? I don't think we are seeing any – anything unusual. I think where at California, the only segment probably is a little different – California comp where because of reform we saw a very moderate inflation in the past, but I think we are back to a more normal severity or inflation mode in California comp now that we are away from reform. Amit Kumar – Fox-Pitt, Kelton: And then what’s your forecast overall as we head into maybe coming out of this recessionary environment? When do you see that change or I guess pick up down the road?

There is a chance that you could see inflation tick up a couple of years from now. Certainly doesn't seem to be any signs right now in any of the industry statistics or in our claims stats on that. Keep in mind, AFG maybe a little bit different in that 45% of our businesses, short-tale property, transportation – shorter-tale businesses to begin with. So inflation probably doesn't have as big a potential impact on reserves or long-term. Amit Kumar – Fox-Pitt, Kelton: Okay, that’s helpful. And then maybe sort of changing gears here, can you just remind us what were the remaining reserves on the RVI book? I think you mentioned in the opening comments that if trends continue, there could be a possibility of additional reserve releases.

The remaining reserves as of the end of the year were in the $50 million range. Amit Kumar – Fox-Pitt, Kelton: $50 million?

That was both domestic and Canadian reserves. Amit Kumar – Fox-Pitt, Kelton: Domestic and Canadian? Can you – I guess, related to that is, can you talk a bit about – there is a news release out there, which talks about the sale of the Premier Dealer Services to PDS Holdings.

Sure. That is a third party administrator that works primarily on product in the auto market. It’s an area that we have strategically concluded that we are going to disengage from. We’ve come – we’ve discontinued our excess wear and tear in our GAAP product and so this is part of that departure. It’s a very small dollar value for us. Amit Kumar – Fox-Pitt, Kelton: Okay, that's very helpful. And then I guess final question. When you talk about the 2010 guidance, can you sort of give some sort of broad guidelines similar to what you have on Slide 11, what you do for '09? Can you sort of just briefly go through at least some of the lines and talk about 2010?

We are kind of right in the middle of our business planning right now. Generally, we release that information, but it usually comes with our year-end results. Amit Kumar – Fox-Pitt, Kelton: Okay. Okay, that’s all for now. Thanks so much.

Thank you. Your next question comes from the line of Abe Schloss with Maxim Group. Abe Schloss – Maxim Group: Hi, good morning and congratulations on a great quarter again. Just – you announced you are taking a $50 million gain on VRSK in the fourth quarter and I was just wondering how you would translate that gain plus the unrealized gain we have in the stock with the stock at $28 into our current book value.

It’s – all of that is included in the current book value. If you think about it, we’ve got about 117 million shares outstanding and on our remaining holdings in Verisk, they would be, at a value at yesterday’s closing, in the $190 million range with $25 million of cost basis. So call that $165 million, so you would be approximately $1.50 of book value associated. Abe Schloss – Maxim Group: That’s in our book value then?

That’s per tax, $1 after tax. Abe Schloss – Maxim Group: Okay, thank you.

Thank you. And your next question comes from the line of Jay Cohen with Bank of America-Merrill Lynch. Jay Cohen – Bank of America-Merrill Lynch: Hey, couple of questions. Just to follow up on that Verisk question, so the remaining ownership, you – that will be mark-to-market going forward?

Yes, that’s correct, Jay. Jay Cohen – Bank of America-Merrill Lynch: I see you’ll have some unrealized gain there assuming the stock stays where it is.

Right. Jay Cohen – Bank of America-Merrill Lynch: I want to switch to the topic of capital. Obviously, your GAAP equity has recovered dramatically. Statutory surplus has continued to creep up, premiums shrinking. It looks like just based on simplistic measures that you are getting back to a level of excess capital. I know you guys think about it relative to the rating agencies. I’m wondering how you feel about your capital relative to what is needed from a rating standpoint.

Yes, I mean, we feel real good. We’ve got, as I mentioned before, over $500 million of liquidity. We are at the capital levels we need for the business enough and – so that – we are – that allows us to do what we do best and that’s find things to businesses to add, businesses to acquire, we are always looking. Also, it gives us the flexibility to potentially repurchase shares if we feel that is a good investment and we just increased our common stock dividend. So – yes, I think between those three kind of things – those are the kind of things that we are looking for, as well as the normal organic growth opportunity. So the economy clearly slowed the opportunity for the usual organic growth in our line.

I think the other thing, Jay, that I’d highlight is we are doing all of those things at a parent holding perspective. But in the operating company’s, from a statutory perspective, the level of capitalization is at the top end or above the capital required for the rating categories, depending on whether you are looking at the BCAR or the S&P cap at. We’ll see.

I think, Jay, even with the recovery in the market after such a volatile couple of years in the economy, we want to keep a little power dry, not just to – for potential opportunities or defensively. Things can continue to bounce around a little bit. Jay Cohen – Bank of America-Merrill Lynch: So when you think about the opportunities to deploy excess capital, you – with your stock trading 80% of reported book value, does that make share repurchases a more attractive alternative if your goal is to grow book value per share?

I would think so. Jay Cohen – Bank of America-Merrill Lynch: And I’m assuming in your 2010 guidance there is no share repurchase activity assumed in that guidance?

That’s correct. Jay Cohen – Bank of America-Merrill Lynch: Okay. That’s great. Thank you.

Thank you. (Operator instructions). And you do have a follow-up question from Amit Kumar with Fox-Pitt, Kelton. Amit Kumar – Fox-Pitt, Kelton: The last question in terms of your capital levels. Are there any segments or specific lines you would be interested in sort of expanding down the road?

I think we – outside of the businesses Keith talked about, the auto related financial product – financial insurance products, we are interested in expanding really pretty much all of our businesses as the right opportunities come along. Amit Kumar – Fox-Pitt, Kelton: So no new entities or niches I guess?

Sure, we are interested in starting new niches. We started to loop [ph] an environmental liability business over the last 12 to 18 months and we are always starting things up and we are always looking. So – pretty good time to look at things too. Amit Kumar – Fox-Pitt, Kelton: Right, right, makes sense. Okay, that’s pretty much it. Thanks again and once again, congrats on the quarter.

Thanks, Amit.

Thank you.

Thank you. And there are no further questions at this time. I’d like to turn the call back over to the floor for any closing remarks.

Thank you very much. We appreciate you taking the time to be with us this morning and we look forward to reporting our year-end results early next year. Thank you. Have a good day.

Thank you. Ladies and gentlemen, this does conclude today’s conference call. You may now disconnect.