Good morning, and welcome to the Q2 2014 Axis Capital Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) Please note this event is being recorded. I now would like to turn the conference over to Rick Gieryn. Mr. Gieryn, please go ahead.

Thank you, operator, and good morning ladies and gentlemen. I am happy to welcome you to our conference call to discuss the financial results for Axis Capital for the second quarter ended June 30, 2014. Our earnings press release and financial supplement were issued yesterday evening after the market closed. If you would like copies, please visit the Investor Information section of our website, www.axiscapital.com. We set aside an hour for today’s call, which is also available as an audio webcast through the Investor Information section of our website. A replay of the telephone conference will be available by dialing 877-344-7529 in the US and the international number is 412-317-0088. The conference code for both replay dial-in numbers is 10048137. With me on today’s call are Albert Benchimol, our President and CEO; and Joseph Henry, our CFO. Before I turn the call over to Albert, I will remind everyone that the statements made during this call including the question-and-answer session, which are not historical facts, may be forward-looking statements within the meaning of the U.S. Federal Securities laws. Forward-looking statements contained in this presentation include, but are not necessarily limited to information regarding our estimate of losses relating to catastrophes, policies, and other loss events, general economic, capital and credit market conditions, future growth prospects, financial results and capital management initiatives, evaluation of losses and loss reserves, investment strategies, investment portfolio and market performance, impact to the marketplace with respect to changes in pricing models, and our expectations regarding pricing and other market conditions. These statements involve risks, uncertainties, and assumptions, which could cause actual results to differ materially from our own expectations. For a discussion of these matters, please refer to the risks factors section in our most recent Form 10-K on file with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements whether as a result of new information, future events, or otherwise. In addition, this presentation contains information regarding operating income and our consolidated underwriting income, which are non-GAAP financial measures within the meaning of the U.S. Federal Securities laws. For a reconciliation of these items to the most directly comparable GAAP financial measures, please refer to our press release, which can be found on our website. With that, I’d like to turn the call over to Albert.

Thanks, Rick. And good morning ladies and gentlemen. Thank you for joining us today. Last night AXIS reported second quarter operating income of $173 million or a $1.63 per diluted share and annualized ROE of 13.1%. We ended the quarter with diluted book value per share of $49.69, an increase of 5% during the quarter. Adjusted for dividends, diluted book value grew 6% during the quarter and 19% over the last year. In addition, we returned $170 million in capital to our shareholders through share repurchases and common share dividends. And for the year to date that number is $377 million. Earnings are up substantially from last year’s second quarter. On a comparative basis, this year's quarter had more modest impact from catastrophes, higher favourable reserve development and stronger results from our alternative investments. Overall we reported a solid combined ratio of 90.8%, including 3.6 points for cat and 8.5 points of favorable prior year development, a good portion of which relates to releases for claims set up for last year's cat and weather, another indication of our prudence in establishing initial reserve levels. The ex-cat combined ratio is higher this year, part of this is driven by higher US property losses, consistent with the experience you’ve heard discussed on other earnings calls, a portion is due to our earning out of the unearned premium reserves on an unprofitable subset of the US D&O book as we discussed on our February call. I am pleased to report that we’re making very good progress on the improvement plan on this portfolio and we should see improvements running through our results in the second half of the year and into 2015. The rest of the increase in the non-cat combined ratio is due to a continued deliberate shift to less volatile and…

Thank you, Albert and good morning everyone. During the quarter we generated good results with an annualized operating ROE of 13.1%. Our quarterly diluted book value per common share, a key metric in measuring the value we generate for our shareholders, increased by 5% in the quarter and by well in excess of 16% over the last 12 months. Adjusting for common and dividends declared, the increase was 6% for the quarter and 19% for the past 12 months. Our results benefited from a reduction in the level of natural catastrophe and weather-related losses compared to the same period of last year, the continued favorable prior year development in our loss reserves and an increase in our net investment income. These factors were partially offset by an increase in our ex-cat and weather, current accident year loss ratio for reasons I will explain shortly. Valuation improvements on our available-for-sale investment portfolio due to a general decline in US interest rates and credit spread tightening on both investment grade and high-yield corporate debt also contributed to the growth in our diluted book value per share. Moving into the details of the income statement. Our second quarter gross premiums written increased modestly by 1% to over 1.2 billion with growth from our reinsurance segment being largely offset by decreases in our insurance segment. In our reinsurance segment, our top line was up $38 million or 9%. The increase was driven by professional, reflecting premium increases resulting from an extension to a large property -- a large proportional treaty and agricultural lines reflecting differences in the timing of certain renewals and our continuing initiatives to grow this line of business. As was the case in Q1, growth was once again impacted by a number of contracts written on a multiyear basis, which had…

Thank you, Joe. With respect to market conditions for insurance, after three years of attractive pricing improvements in the industry, we have seen levelling of of pricing overall with moderate decreases across some of the property and specialty lines. However despite a slowdown on pricing, there remain good fundamentals and opportunities for profitable growth in many insurance lines of business. Within our insurance segment, the overall AXIS insurance rate change for the second quarter of 2014 was minus 2%, down from the plus 1% last quarter and plus 3% in the same quarter last year. Pricing declines in property related lines generally drove this result, as casualty pricing remained strong. Rate changes across US lines were generally stronger than changes in the international lines and rates overall are generally in step with loss trends. In our US division, overall rate was flat in line with last quarter after positive rate changes over 12 consecutive quarters, and we also maintained strong renewal retentions across all lines. Price weakened than most but certainly not all property lines, while casualty lines continued in a positive direction. New business in our US P&C operations primarily comprised casualty lines with the greatest contribution from US excess casualty where prices benefited from 13 quarters of rate improvement. The US is the strongest of the geographies in which we operate with respect to pricing environment. This favorable US market works in our favor as close to 60% of our global insurance business is generated locally out of our 12 offices spread across the country. Overall rate in our professional lines division, has been broadly stable 2012. This quarter about 60% of the portfolio as measured by premiums experienced flat to higher rates with the balance seeing declines. The overall rate change was minus 1% in the quarter…

(Operator Instructions) And the first question comes from the line of Amit Kumar with Macquarie. Amit Kumar – Macquarie Capital: Just quickly going back to the discussion on reshaping the portfolio, and I am sort of wondering if you could share your outlook on pricing. I guess what I am trying to figure out is at what point does margin compression from pricing overtake the benefits accrued from I guess incremental capital freed up as well as expense initiatives as we carry on into 2014 without any large losses?

That’s a good question, Amit. I am not sure that I can totally project where pricing will be. What I can tell you is whatever happens to pricing, the initiatives that we’ve put in place are going to give us a relative benefits no matter what the direction of pricing. But generally I would say that where pricing has been these days, it has been toward a continuation of good performance, good pricing performance for casualty and professional lines and less so on property and catastrophe exposed lines. And as you know the shift that we’ve been making has in fact been towards those casualty and professional lines. So we’re shifting the book towards lines of business that have demonstrated continued pricing improvements and reducing some of our exposure to catastrophe and property exposed which are seeing the most difficult pricing conditions right now. Amit Kumar – Macquarie Capital: The two other questions, quick questions are – can you touch upon, first of all, any exposure you might have to the recent aviation losses as well as other losses in Q3 to date?

Just give me one second – as your second question. Amit Kumar – Macquarie Capital: The other question was – can you just go –

I got it. So let me just run through a couple of different claims for you on Malaysian Airlines. We were on both losses but together the exposure on both was less than 8 million. One of those was already booked in Q1 and the second one will be incurred in Q3. Libya, Tripoli, actually we had no exposure, one is on Ela [ph] if that’s how it’s pronounced, is a reinsurance exposure, not material and it’s been reserved for in Q2. TransAsia Airlines is a Q3 event, very small impact to us. Air Algeria, no exposure and the Korean Ferry exposure was fairly immaterial to us. So in general fairly low or no exposure. Amit Kumar – Macquarie Capital: And I guess the only other question I have was just going back to the discussion on crop. Can you sort of talk about where the book is running at and what sort of hedges you might have in place to protect you from adverse -- continued adverse movement in the crop prices?

Yeah, our ag book is running in the low 90s on a technical basis. We don't have a lot of overhead in the crop business, so that's a pretty good indicator of where our results are for both the second quarter as well as a year-to-date basis. Because of some concerns frankly about pricing on the crop side, our reinsurance operation or our ag operation decided to hedge some of that exposure and actually that turned out to benefit us in the second quarter.

And the next question comes from Dan Farrell with Sterne Agee. Dan Farrell – Sterne Agee: Just a question on buyback, looking into wind season and near term, in past wind seasons, but not all of them you have slowed down buyback. I'm wondering how you're approaching that strategically this quarter particularly given where the valuation of stock is currently?

Dan, very good question, as a matter of fact, because of the fact that our stock price is trading where it is, we have decided to restart our buybacks in Q3. And as soon as our quiet period is over, we will begin to do that. Dan Farrell – Sterne Agee: And then just one question on the insurance business, was that a couple of quarters of higher property losses in these fire losses and you're not alone in the industry, others have seen them. I guess my question is – there has been mix change where you’ve gone a little smaller, kind of little lower layer, has the mix changes exposed you to some of these more than they would have in the past, or are we just seeing what is a higher than expected level regardless of the mix changes?

Dan, it’s an excellent question and it's worth dealing with. I think the biggest issue with our mix change in the property book is that over the last three years we've actually walked away from a significant amount of premium that historically had given very very low combined ratios and helped us to subsidize the property results in cat free years. However upon review we determined that those premiums exposed us to significant volatility and that it determined that it was best not to renew that business. So part of the business mix was that we were -- we reduced cat exposed premium. What this does is it gives you a book of business that has a traditionally higher average combined ratio over time but with much lower volatility. And again you – as I mentioned in the last conference call, it's hard to demonstrate that to you until we've seen a couple of years with and without cat to be able to demonstrate whether in fact we’ve delivered at that lower volatility. But I think what this does for us is give us a property book which will give you probably modestly higher quote non-cat loss ratio but over time a lower overall ratio when you include cat. And again we did that for two or three reasons. One was dealing with the volatility of the book. The second frankly again was to make sure that we could deliver more consistent results as we go forward. All of these things are helping us achieve better capital efficiency which is one of the drivers of our buybacks.

And the next question comes from Mike Nannizzi from Goldman Sachs. Michael Nannizzi – Goldman Sachs: Couple numbers questions first if I could. Joe, aside net investment income there, it looks like there's a big lift in cash and equivalents as a line item, it’s about 6 million. I just wanted to know what was that?

We have some funds with health trusts in our reinsurance operation and this is just an interest payment -- periodic interest payment that we get. It occurs periodically. So little bit of an unusual number. Michael Nannizzi – Goldman Sachs: Is that something we should expect on an annual basis or is it just sort of kind of sporadic frequency?

It’s more an annual basis, in Q2 that payment was $4.5 million but those funds stay there. So basically it's interest owed. We’re accruing that, I won’t say we haven’t been accruing in the past but we’re accruing it more accurately going forward. I think you'll see more of a smooth impact of that rather than a lumpy impact. Michael Nannizzi – Goldman Sachs: And then the corporate expense line, I just saw – it’s looked like it’s running a little bit elevated kind of in the $30 million range, up a bit from last year. Should we expect that to revert or is that something that you expect to kind of – also just curious of what’s in there, how should we think about that lineup as well?

Yeah, two things. One, you have to look at allocations from our business units as well you'll notice but down in insurance and reinsurance side, our actual expense ratios is down. That’s just an annual re-shifting of business from our segments to our corporate levels, it was more appropriate that some of these expenses were corporate level not necessarily directly business driven. So we just moved things around little bit. I think a better way to look at it is on a consolidated basis. You'll see about a 0.8% drop in our expense ratio this quarter from last year. Last year we had some unusually high expenses in there, we closed one of our offices and terminated the lease early. So that had an impact of about a four-tenths of a point. So half of the drop in the ratio was really due to that. And as Albert was just explaining, we are making some investments in the short-term. We’d expect our expense ratio to float in that 15% to 15.5% range at least in the short-term but with the initiatives that we have in place we’re going to bring that down to sub 14 over the next couple of years. Michael Nannizzi – Goldman Sachs: So if we’re thinking about the expense ratio down at the segment level, any thoughts on just how we should think about that line which is obviously not running through the segments and not running through the ratios but then does flow through profitability?

Yeah, in terms of the segments, I would say that would likely stay pretty stable, because we've got the allocations down to a level where everybody agrees with them frankly. But separately on the corporate area, we occasionally incur some lumpiness in those numbers. Again I look at it more on an annual basis than I would look at it on a quarterly basis to give you an idea of the run rate. Michael Nannizzi – Goldman Sachs: And then maybe just to understand, Albert, you mentioned one to two point improvement by the end of 2015. Just trying to get an idea like -- what is the starting point for that? Is that the year-to-date underlying, is that the year-to-date adjusted for something else, or should we be taking this where we are in reinsurance and insurance as a starting point and then because of some of things you mentioned assume that we could see some improvement from here? I am just trying to get an idea of where -- what's the starting point for that improvement?

Right, Mike, just one thought. You mentioned in your first question that corporate wasn’t included in the combined ratios. While it's true that it is not reported in the segment combined ratios, in the consolidate combined ratio we do add the three points of corporate overhead. So consolidated combined ratio gets it. With regard to the improvement plans, I think the best way to look at it is to look at it from the ex-cats current accident year results. So you take the six-months, you take a look at where we are right now and we think that these benefits that we can achieve are from what we’ve reported in the six-month period. Michael Nannizzi – Goldman Sachs: So you’re including the development in sort of that starting point?

No, no, as I said it’s the current accident year results. Michael Nannizzi – Goldman Sachs: And then in terms of the reinsurance business specifically, I guess the insurance business specifically, can we get some idea of how much the adjustments you are taking in the professional liability book are impacting the current ratio and should we expect that if it's a year’s worth of business that we should start to see that impact to mitigate in may be the third quarter or the fourth quarter of this year and then will be back to more pure underlying level at that point?

Let me make sure I understand your question. You said reinsurance – Michael Nannizzi – Goldman Sachs: I am sorry – I meant insurance, yeah.

Thank you. Our reinsurance professional lines is doing just fine, thank you. I think with regard to the professional line, we’re looking at – this has been dragging for about a year now. We are going to start to see improvement already in the second half of this year, if only because the unearned premium that is being amortized was a much larger amount in the first half of the year than it will be in the second half of the year. And there will be a very modest amount that will go through probably the first half of 2015 but we expect to see improvements in the professional lines results in the second half of this year growing of course into 2015. Michael Nannizzi – Goldman Sachs: So in other words, we’re at an underlying insurance -- your current accident year number, it’s kind of 64, 65 for the first half of this year, you would -- we should expect that professional liability has weighted on that that because of the level of unearned premium that's remaining that that number should normalizing even the back half of this year?

Yeah, I mean if you look at it, we think that just that nuts of that older unprofitable professional lines probably cost us a couple points in the first half of this year. And that drag should come down in the second half, as I said because there is less of that book to earn. And over the next 12-ish months I think probably – that nut should disappear. But it’s cost us two points in the first half of this year.

So Mike, just to add to that, unearned premium reserve on the 2013 policy year business was about $60 million at the end of June, that will be down below $20 million by the time we get to the end of the year. Now you’re bringing on business written in the 2014 policy year at lower loss ratios because of the fact that of the underwriting actions that the team has taken. So basically you're running off higher loss ratio business and bringing on business that has lower loss ratios.

And I want to make sure that we're being appropriate here in the conversation. You know very well that one does not take a portfolio and take it from point A to point B in a single renewal. So we are -- we -- obviously it’s going to be an improvement path that’s going to take at least a couple of years but we are going to see that improvements demonstrated through the numbers over the next couple of years. But what we’re telling you is is what we're seeing as the current impact. Our guys are doing an outstanding job of focusing on rebalancing the portfolio, increasing attachment points, reducing limits, getting pricing, it's been -- it's really been a pleasure to watch because they are very very focused on it.

And the next question comes from Jay Cohen with Bank of America Merrill Lynch.

Yeah, just I guess one follow-up to that last question. Can you talk about the reserves that you added in that book last year? How are those holding up from prior years? Are you seeing any continued adverse development at all?

Jay, it’s Joe. As we mentioned in Q1 we actually had hardly any losses. The loss activity in Q2 has returned to a more normalized level but on a six-month to six month basis we’ve actually had about $30 million less in reserve activity than we did a year ago. So in short, I will tell you that we’re happy with the runoff of the reserves that we established at the end of the year.

And the second question is maybe bigger picture one on alternative capital. You obviously have staffed to be a bigger player in this arena. We have yet to hear any major announcements from you guys, unless I missed it. What’s the status of your efforts and should we expect to hear something maybe a more substantial?

Well, as you know, I feel pretty proud of about the team that we have when it comes to a third-party capital. I think we’ve got some of the innovators and leaders of that area. We are doing a lot of little things. We've got a number of transactions that we’ve booked with a number of different parties, providing either quota shares to some of our books of business, or ceding business to ventures and so on. That is going to be increasing over time. We are exploring a lot of different ideas, I think it’s too early to discuss what those ideas might be. But as you point out, we’ve got the right people and the right book of business for – to interest alternative capital and it’s something that we will continue to work on over time. So stay tuned, but too early to talk about anything.

And the next question comes from Alex Miller [ph] with Davenport.

Wanted to focus on the insurance segment. Wanted to look at the – you’ve talked about the accident year loss ratio ex cats, I was hoping you could isolate one further impact of the midsized and attritional losses, professional lines and your business, all the three pieces, if you could quantify the impact. What I am trying to get at is what is the core number, the true underlying accident year loss ratio ex cat, if you could please help me with that. Thanks.

Yeah, let me get to that answer first and then I will give you the components of it. We think this 64% accident year loss ratio ex cats for insurance is probably higher by a couple of points from where it is at 64. So a year ago we were at 59, now we’re at 64, it’s about a 5 point change. So if you look at the components of that first in terms of our rate versus trend, although we’re still getting some benefit from rate increases in prior periods, the trend – the loss trend is actually exceeding rate a bit. So that's worth about a point. Two points of that change is really due to mix of business. We're adding as you know accident and health as part of the insurance operation. We’re also growing our liability lines so the mix piece of that is, call it, 2 points, 1.8 points, but call it two. On the property side of the house and on the professional lines side of the house, as we discussed we've increased initial expected loss ratios on the professional lines to deal with the CMS issue that we talked about today and in the past. And we’ve got a higher level of property losses which are worth about three points of that change. So again we've increased initial expected loss ratios but in the quarter we had higher than expected property losses which was worth about that 3 points.

Okay, second one, it’s a numbers question. Looking at the net investment income this quarter, looking at the fixed income portfolio and that went up quite a bit even though your – the yield is flat, duration hasn’t changed much. Just curious what’s driving that.

Yeah, we have tips securities within in our investment portfolio and there is a CPI adjustment that's made I believe twice a year. So that have the impact of increasing our fixed maturity investment income by a couple million dollars from where it is, actually 5 million to be specific.

Last one if I may, just big picture, I know that you’ve written quite a bit of multiyear contracts and listening to the prepared remarks, the point I got was that the fatigue in the market on price declines was probably driving to the point where you could start to see price declines slow down a little bit. So I am trying to square that with the fact that you wrote more tier contracts in the second quarter, if you could please help me with that?

I think it’s simply a question of what works for us and works for the clients, and as I mentioned to you, although we certainly saw some pushback I think it would be inappropriate for me to call the bottom to the price. We do continue to expect some competitive environment and so for the right account on the right terms it's appropriate to write some multi-years and for other accounts it's not. So it’s only a small fraction of our contract I believe, under 30 if I am not mistaken -- 30 that were multiyear so. So it’s a selective and judicious use of that structure to work with long-standing and profitable clients. And so it’s really balancing – it is a balancing act.

Max, let me add to those long-term agreements or multiyear deals are spread out into over several different lines of business. As Albert said that, I missed it, sorry but it’s spread out -- it's cat, it's property, it’s ag, it’s motor and it’s liability. So it’s spread out across the whole portfolio, it’s not in an one area.

And the next question comes from Meyer Shields with KBW. Meyer Shields – Keefe, Bruyette & Woods : I just wanted to understand one of your comments, when you talk about that we should not expect the accident year loss ratio to improve significantly from where we are I guess year to date, does that mean that the improvements that we would expect from D&O and heightened let’s say fire losses is going to be offset by other deterioration, or were your comment excluding that?

Meyer, thank you for raising it. I probably misspoke, what I meant to say was it's not a straight line, you have to expect that there will be some quarterly volatility that is all I meant. I continue to expect improvements in those loss ratios. I think the volatility of our industry just causes us to be cautious and not predict or promise straight-line improvements. Meyer Shields – Keefe, Bruyette & Woods : Joe, earlier you talked about the hedge in crop benefiting the quarter, where does that show up in income statement?

It’s other income, it’s below the line. It’s not in our loss ratio. Yeah, it’s relatively small to it, I don’t want to overstate that.

And the next question comes from Charles Sebaski with BMO Capital.

Just had a follow-up regarding the multi-year and Albert, you said I think that annualized premium would be down 18% in the reinsurance group. If it was excluding the multi-year, did I understand that correctly?

For the cat premiums that we renewed on July 1, the annual premium would be down 18%, once you exclude the impact of the multi-year premiums. It's not with regard to the entire reinsurance book. After all we are growing in other parts of the reinsurance book. I was specifically speaking to the July 1 renewals.

And further on the reinsurance side, I guess I just like to better understand the strategy that you guys have. I know you’ve given some discussion previously about your portfolio and the business mix, and I guess I am specifically referring to the southeast hurricane exposure at 150 and 100 that relative to my understanding of the pricing dynamics – like is it just sort of up a late catch-up or why this -- the growth in this segment now versus the beginning of ‘13 or the beginning ‘12 etc?

Well, I think it's really a question of trying to optimize the portfolio that we have at every renewal. I think we need to – let’s put this in perspective if I may. You’ve heard me speak about managing our cat exposures and cat related volatility being a key focus of ours. So what we've done right, so we’ve rebalanced our book, we’ve shifted the composition of individual portfolios, we talked about the micro-zonal concentrations. We’ve reduced our weights and zones that were underpriced or in which we were overweight and we increased exposure in better priced zones where we were underweight. This resulted in I guess essentially a reduction in all zones, excluding Florida and the Gulf which have historically been among the largest and best price markets and where we, as you point out, increased our PML. The PML for Florida is still down to 1 and 250 from where it was a couple of years ago but certainly the 150 and 100 has gone up. I think your point about why we didn't do it a year or two ago, I can only tell you that we did it now. I think if you take a look at the overall portfolio, though, I think you should take a look at the fact that some of the other things that we've done is we’ve improved our corporate protections, we’re making better use of reinsurance retro and cat bond. And you speak to the PML but there's another statistic that probably is worth is talking about and although it's not released, let me give you a sense of what I'm referring to here. We look at the model annual aggregate net loss. So all of the cat losses from all cat exposed business the total for the year and…

One other -- I was just curious you mentioned early on about the [indiscernible] business that got set up this year and just wonder if there is any additional color you could provide on how that business is going?

Well it’s very early stage, we brought on a team in the first half of this year, we spent several months working on the usual licensing issues setting up the offices, processes and controls, the whole usual issue and we've engaged in the market and we’re now quoting and binding but it’s still very very early. However we’re very confident that this is a team that has a very strong track record and this will be a slow methodical growth but it does add good diversification to our already very well diversified professional lines portfolio.

And the next question comes from Kai Pan with Morgan Stanley.

Hi thanks for taking my question. This is [Quintin Miller] for Kai Pan. Just had a quick one, as you guys are taking down the cat exposure within the reinsurance segment, you still have very strong return on equity results. So I'm just curious sort of what returns you're seeing within the cat related business that you are writing and/or where you kind of feel the market is currently?

I am not sure how to answer that, because again I think one of the things that we look at is not only the individual terms, it’s as I mentioned in my earlier answer, it’s how -- it builds into the total portfolio, and improvement in the portfolio. But there is no question that returns on cat business overall that we are seeing in the market are probably down 15%, 20% over the last couple of years. So one of the issues that that is clear to us is that in some accounts in some zones, we’re getting very close to the bottom because we’re at least the traditional market in my mind probably won't be able to support much more in certain accounts and certain zones. Other zones and accounts do provide acceptable pricing. Obviously in Florida which was the highest -- among the highest price markets, even with some of the changes there are still several accounts that provide acceptable profitability. Where it goes from here I can't tell you. But the feeling that we get is that the traditional marked at least is starting to put some pushback.

And then just one quick question for Joe, follow up to Jay’s earlier question kind of the reserving. You talked about the professional liability but that was a great number you guys put on the reserve releases this quarter. Is there any kind of more color you want to talk about in terms of where you did the reserve study this quarter and/or anything else that might help us sort of going forward as to how we’re thinking about modeling it out?

Yeah, the only thing I will maybe add is the fact that of the $85 million in total reserve releases 30 million of it came from property in the 2013 accident year. So this is releases from very recent property related business which goes back to the point that Albert was making during his comments. As far as CMS is concerned, it's a normal reserve study that we do every quarter, and as I mentioned we’re very happy with the way that the reserves that we set up at the end of 2013 are running off.

And the next question comes from Ian Gutterman with Balyasny. Ian Gutterman – BAM: I guess first, can I get a couple of clarifications on some numbers, Joe, you mentioned the UEP on the D&O book was 60 million a year, now you expect 20 million by year-end. Where was that the beginning of the year, that 60 million?

133. Ian Gutterman – BAM: And then similarly on the 4% to 5% combined ratio improvement by ‘17 you said one to two by the end of ’15 on the D&O and A&H, the G&A seems about another point, so it seems there is another two points of other stuff, a) is my math right? B) what is the other stuff?

When we talk about 4 to 5 points, it’s actually couple of things. One is we actually expect probably another point as we fully work out the business mix and that will be offset by other improvements. As you point out, there is a couple of points next year that we expect from a combination of CMS, A&H some expenses but as I also said earlier in the call I think that the improvement in CMS is going to be more than just one year, because I think there's a transition being done in that book which will take a couple of years and will contribute to the improvement in a couple of years. The other area is that some of our subscale and I should watch my word as I say that, because they are growing well, they’re growing into their book, we’ve got a handful of initiatives that are in fact expected to grow and as I mentioned earlier cover their G&A and start to contribute positively. That's one of the factors. Another factor is that we are -- one of the things that I'm absolutely adamant about is that we need to give our underwriters the tools and the resources for them to make the right decisions about their portfolios. And you know CMS being a perfect example of the announcement comes in, you know what, this piece must not write, this piece let's write some more of, we’re doing that in terms of a more granular analysis of the portfolios across the books of business. And we’ve already in some of the areas that we can start to improve upon and we will do that. So it’s a combination of a number of different factors and as I said in my prepared remarks, I'm sharing with you what we've identified now. We’re not going to put our pencils down, we’re going to continue looking for ways to optimize those portfolios as we go forward. Ian Gutterman – BAM: I just have one more on the underwriting strategy. You had a bit of I guess maybe unexpected or maybe contract result of growing your reinsurance and shrinking your insurance, and you explained why they don’t make sense is , not so much questioning, I just wanted to probe a little bit on why that’s happening. And I guess two things I was thinking about. One is on the insurance side why not buy more reinsurance, you mentioned some pressure in expense ratio from getting rid of reinsurance given how attractive it is why not buy tit more? And on the reinsurance side, we obviously talked about the multi-years earlier and I understand the strategy, I guess my only question on multi-years is, do you have to give up rate to get multi-years or you’re getting multiyears at market clearing rates, so it’s kind of a free option if you think the market is going to decline further?

Let me deal with the multi-year. As I said it's really part of an overall portfolio and client relationship. We don't need to give up rates, I think a lot of clients are happy to lock in these terms for a couple of years, three years. And under the right circumstances it is something that we’re prepared to do. With regard to the growth of insurance versus reinsurance, frankly if you take away the multi-years and you look at annual premium production which is what we do mostly on the insurance side, the numbers -- the difference in the growth rates between one and the other really do not -- don't come across as that significant. And there is always including in this quarter in this year timing issues, contracts that were written for 15 months or 18 months where extensions are occurring and so I wouldn't read too much about that yet. But there's no question that in insurance the US D&O book we’re shrinking that book as we are fixing that book. Obviously there's been some good growth in A&H but that's from a smaller base. In professional lines we had the benefit of – sorry, in the reinsurance we’ve had the benefit of continued good growth in agriculture reinsurance and as Joe mentioned earlier as the benefit of an extension of a large contract. So there's always little things going there. It is not our intent to grow any book of business unless we believe that that will offer attractive business opportunities. Now with regard to the reinsurance, I will say that we look at reinsurance every year and while it's true that last year we did reduce our retentions in a number of books of business as we were reviewing our reinsurance by this year that has not been in the same way. Most of our quota shares have been get flat except that our global D&O book we actually increased our sessions. So last year we ceded 32.5% of our global D&O book and this year we’re ceding 40% of our D&O book. With regard to our property per risk towers, we’ve purchased more coverage on our property per risk towers. We’ve also purchased some more catastrophe protection on both insurance and reinsurance. So we continue to modify the book to make sure that we get the best mix if you would of ceded and retained results.

Thank you. At this time I would like to turn the call back over to management for any closing comments.

Thank you very much and thank you all for participating in our call. We covered a lot of good ground today and as I mentioned earlier we look forward to reporting to you in future quarters about the progress that we will be making on the initiatives that we discussed with you. Thank you.

Thank you. The conference has not concluded. Thank you for attending today’s presentation. You may now disconnect your lines. Have a nice day.