Good morning and welcome to the AXIS Capital First Quarter Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Linda Ventresca, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, ladies and gentlemen. I'm happy to welcome you to our conference call to discuss the financial results for AXIS Capital for the first quarter of 2018. Our earnings press release and financial supplement were issued yesterday evening after the market closed. If you would like copies, please visit the Investors Information section of our web site, www.axiscapital.com. We set aside one hour for today's call, which is also available as an audio web cast through the Investor Information section of our website. A replay of the teleconference will be available by dialing 877-344-7529 in the United States. The international number 412-317-0088. The conference code for both replay dial-in numbers is 10118928. With me on today's call are Albert Benchimol, our President and CEO; and Pete Vogt, 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. Forward-looking statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from those projected in the forward-looking statements due to a variety of factors; including the risk factors set forth in AXIS' most recent report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2018, as well as the additional risks identified in the cautionary note regarding forward-looking statements in our earnings press release issued on April 25, 2018. We undertake no obligation to update or revise publicly any forward-looking statements. In addition, this presentation may contain non-GAAP financial measures. Reconciliations are included in our earnings press release and financial supplement, which can be found on the investor information section of our web site. With that, I'd like to turn the call over to Albert.

Thank you, Linda. Good morning everyone and thank you for joining us to review our first quarter performance. For AXIS, the story of the first quarter is that our actions over the past few years are starting to deliver meaningful results. I am pleased by the quarter's results, which I believe signal the start to a strong 2018 for AXIS. I am going to begin by putting our first quarter's results in the context of recent transformation actions, and the ongoing evolution of our company, after which Pete will provide a bit more detail on the numbers, and I will close with a customary review of pricing and outlook. Over the past five years, AXIS has undergone a fundamental transformation, from an intelligent and opportunistic provider of large capacity for volatile lines, in what was a hard market, to a relevant and leading player in a select number of attractive markets, positioned to deliver superior results across a wide range of market conditions. In that time, we exited the number of lines in markets, where we did not see a clear path to leadership or profitable growth, including the Australian retail market, Canadian property, Global Excess Casualty, retail distribution for property and casualty lines in the U.S., and most recently, onshore energy. But we also invested in developing lines with exciting potential, including A&H, renewable energy, cyber, agriculture reinsurance and mortgage reinsurance. We provided our underwriters with better tools and analytics, and achieved industry leading claim service levels. We expanded geographically and completed the acquisitions of Aviabel and Novae. We recruited strong talent. By the end of 2017, AXIS was a relevant top 10 player in substantially all of its chosen markets, including the U.S. E&S wholesale business, North American professional lines, and the London or Lloyd's market for international…

Thank you, Albert, and good morning everyone. During the quarter, we generated strong results, featuring net income of $63 million and an annualized ROE of 5.5%. Our operating income for the quarter was $123 million, and on an ex-PGAAP basis, our operating income was $137 million, generating an ex-PGAAP annualized ROE of 12%. Net income this quarter benefitted from good ex-cat underwriting results, a lower level of catastrophe and weather related losses, continued favorable prior year reserve development, and strong investment income. These positive factors were partially offset by net investment income losses and foreign exchange losses. Diluted book value per share declined by 2% in the quarter to $52.57. The decline was principally driven by net unrealized losses on investments. Before I get into specifics, I would like to provide an update on a number of items. Firstly, with regard to the acquisition of Novae, in the quarter, we recognized $60 million of intangible amortization, including $57 million of VOBA amortization. This expense affected the company's operating income, but was not included in the results of the company's insurance and reinsurance segments. As previously disclosed, the VOBA is expected to be immaterial beyond mid-2019. Underwriting income in the quarter continued to include the earnout of Novae's unearned premium as of the closing date, without the recognition of the associated acquisition costs, since the DAC asset was written off at closing. This DAC would normally have been amortized into acquisition expenses. We estimate that the consolidated acquisition costs on an as-if basis, would have been $40 million higher, resulting in an as-if acquisition cost ratio of 23.1% versus the reported ratio of 19.6%. As we have previously mentioned, we entered into a reinsurance to close agreement for Novae's 2015 and all prior year's liabilities. The agreement effectively transfers responsibility for…

Thanks Pete. Let's spend a few minutes going into detail on the market and recent price changes we have seen across our business. In our insurance book, we think the continuation of the positive pricing momentum that started after the record third quarter cat events in 2017. In this quarter, our average renewal price change was up 5%. This compares to plus 3.5% in the fourth quarter of last year, and minus 1.4% in the first quarter of 2017. For the moment at least, it seems to be gathering some steam, with the monthly rate change increase in succeeding months, with average increases of 4% in January, 4.7% in February, and 6.6% in March. In the first quarter, 89% of renewed premiums were flat to up, while that figure was 72% in the fourth quarter of 2017. Similar to last quarter, the strongest improvements were observed in our U.S. division, where we achieved average increases of 11.7%, with solid double digit improvements across both E&S property and excess casualty, while primary casualty and programs were up in the mid to high single digits. In our important London-based international insurance division, the average rate change for the first quarter was 4.3%, with the strongest increases in the U.S. and Caribbean exposed property lines. 90% of the premiums renewed were flat to up. Our U.S. and Bermuda professional lines division was a bit above 1% for the quarter. This is noteworthy, as it is the first time we saw positive overall price change in some time for professional lines. About 79% of the book renewed flat to up. The strongest increases are in primary layers and D&O, while excess layers and E&O lines are closer to flat. Across all insurance lines and geographies, we are seeing more submissions and achieving growth where…

[Operator Instructions]. And our first question comes from Elyse Greenspan with Wells Fargo. Please go ahead.

Hi. Good morning. My first question -- I appreciate all the pricing color; in terms of just outlook from here, do you think that the upper momentum that you pointed to, rate increases improving every month of the quarter, do you see that continuing; and I guess, in your comment there, if we get to the June and July renewals and all the capital that has been coming back into the reinsurance market, potentially causes rates to decline at the midyear. Do you think that that will have an impact on the upper momentum that you are seeing in the primary insurance market?

Thank you, Elyse. So I am happy to provide the details on a monthly basis, but I would be loathed to project that we will continue to add one or two points of pricing increase per month. I think, the levels that we have are levels that are sustainable. I think they work well for the customers, for the brokers, and for the companies to try and maintain a well functioning market. But I think we do need to keep these increases going forward. We'd be of course very happy to see improved beyond that. But we are working on the basis, that if it stays at these levels, we need to build profitable portfolios at those levels. I do want to differentiate our outlook from what we are seeing in our various insurance lines, and the reinsurance market. And as I mentioned, I think, the reinsurance market is much more subdued than what we are seeing, at least in our markets, for insurance lines. There, in the non-loss affected cat business, we have essentially seen flattish, maybe up a couple of points, but really not much change. In loss affected portfolios, we have seen mostly, high single digits, and in some cases, double digits. Again, I expect that to continue. My expectation of course, is that there will be more loss affected treaties renewing in the May to July period. So my expectation is that cat on average, will probably show high single digit on average, when you incorporate the higher preponderance of loss affected treaties. And so, I think that's where we are. I continue to hope that we will not see a diminution of the current pricing. But I am also not supporting a vision of substantial improvement, beyond the levels of where we are today.

Okay. And then, in terms of reinsurance, the growth you saw in the quarter. Pete, you highlighted there were some multiyear covers from 2016 that renewed this first quarter. Are there multiyear covers in the back three quarters of 2016 that we should think about in terms of modeling that up for renewal this year?

Yeah. That's a good question. I don't have that answer right off the top of my head. I will get back to you on that. But I think most of it really occurred in the first quarter, but we can follow-up on that.

Okay. And then a couple other questions, just related to expense level. Is the acquisition cost ratio that, you know, about a 23% or so including the purchase accounting adjustments, is that the right level to assume going forward, ex purchase accounting?

That's a good level to assume, ex-purchase accounting. I think it's going to continue to drift up towards that -- into that low 20s area, as the purchase accounting impact goes away.

And Elyse, you know that we have, in every quarter, a little bit of up and down around the loss sensitive factors. So as reinsurance numbers develop well in certain lines of business, we give up a little bit more commission. So that was a little bit higher this quarter. So there is always going to be a little bit of up and down. But Peter is right, that's generally a good level.

Okay. And then, in terms of the purchase accounting benefit for the remaining three quarters. Is there any kind of color that you can give us about thinking the benefit that we should model going forward? And is the right way to think about it, that you get -- you wrote off about $209 million of deferred acquisition cost, is that the level that will come back as a benefit by the end of 2018, or can you just help us think through the modeling there?

Yeah. We expect in the modeling Elyse, that through the course of 2018, you will see about $120 million benefit. So we got about 40 of that in the first quarter, which I mentioned, so 80 for the rest of the year, and that will decline throughout the year. So you will see more of a benefit in 2Q, less in 3Q, even less in 4Q as that DAC amortization benefit runs off. But in total for this year, we are looking to -- it's going to probably be about $120 million, and the remaining $80 million will not be wrote off evenly. Probably, about 45% of that remaining will be written off in the second quarter, and then the last two quarters, the rest, maybe 30% and then 25%.

And then, there is no benefit in 2019? So the only thing we need to think about 2019, is just in terms of the intangible amortization running through the model?

No, there will be a little bit. But it will be de minimis. I think by the time we get to 2019, Elyse, there will be about -- probably $19 million left, and that will run-off -- for the most part, in the first half of 2019.

Okay, that's great. Thank you very much. I appreciate the color.

You're welcome.

And of course, that benefit will be offset by the amortization.

Yeah, the amortization of the VOBA.

Which will be a negative, but will be underwriting.

So just to expand on that Elyse, we gave a schedule out for the VOBA, and again, we expect that to be $171 million of a drag this year, of which $57 million was amortized in the first quarter, and that will be down to about a $27 million drag in 2019. Again, most of it running off in the first half of next year.

Okay. Thank you very much.

And our next question is from Kai Pan with Morgan Stanley. Please go ahead.

Thank you and good morning. So just wanted to follow-up on these -- your comments on the underlying improvements, the loss ratio improved 5 points year-over-year. So why suddenly? I know you have done all the work in the past several years, why suddenly all showing up in this quarter? I just wonder, what's the sustainability of the 58% going forward?

Hey Kai, it's Peter. I would say, that what we are seeing finally come true is -- at the last three to five years of work on the underlying portfolios, we had good progress in the areas we expected to see good progress, and it's coming through, as we are actually starting to earn it in, in this first quarter. Again, there is always puts and takes in the quarter. I think the quarter benefitted from a low level of property activity on the reinsurance side this quarter. But at same token, we had higher level of mid-sized losses on the insurance side, associated with our aviation lines and marine. I'd say, it was a really good quarter. I do think, these levels can be sustainable. But we did not do anything different this quarter. We are just continuing to see the improvement. But it has taken a long time to turn the ship over the last three to five years, to start to earn through.

Yeah, if I can add to that Kai. I mean, obviously, we spent a lot of time analyzing results with us through the loss bridge [ph]. We identify factors like ceded in adjustment premiums, rates, trend, mix, experience, you name it. I think a couple of highlights; number one, we didn't have the adverse impact of Ogden, which as you know, hurt us last year, and that had a meaningful impact on the loss ratio. We continue to have growth in the A&H business, which tends to have a lower loss ratio -- a higher expense ratio, but lower loss ratio, through the business. We have had some ups and downs on the losses, so as Pete says, we didn't have any substantial large loss activity in the reinsurance division, good property activity. On the other hand, we had pretty poor aviation results this quarter. We had some additional losses on marine. Obviously, the property book in the U.S. was affected by the weather events. So every quarter, you are going to have something. But by and large, I think, not unreasonable. And of course, the addition of the Novae book makes a difference, because the Novae book, as Pete pointed out, has a higher acquisition expense, but generally a lower loss ratio. And fully two points of the improvement in the loss ratio is the inclusion of the Novae book in our consolidated results. So from our perspective, this really is consistent with the run-off of the discontinued lines that we have had. We got out of retail property and retail casualty in the U.S. in the end of 2016. But those lines hurt us in 2017. As those premiums ran off, you are now seeing a book, which is less exposed to the discontinued line, and more demonstrating the underlying profit potential of the ongoing continuing business.

That's great. Just to follow on that, is there any seasonality in Novae's book through the year? What I am trying to understand, is that, your historical AXIS, ex-loss ratio has been pretty consistent throughout the quarters. Is there going to be more seasonality, with the inclusion of Novae?

I would say twofold. By and large, not really. One of the good things is their book, of course, and that we were very attracted to, is that they have a lot of small accounts, very diversified. They actually add diversity to our book of business, because they have more European exposure, and that adds balance, so those are good things. But I would say that, when you think about cat exposure, our cat exposure was predominantly around the -- when it comes to wind, mostly around U.S. wind. Quite happens every month, if you want, but when you think of wind, it's predominantly in the summer and early fall. Novae has a much larger European property book, and so we are probably going to be more exposed to European property wind losses. So I would say that, it probably is going to reduce the overall seasonality of our cat exposure, because whereas we were low in Europe before in the European wind season, we are now going to be higher. And we have always been, like everybody else, higher exposure in the summer for U.S. wind, and we are going to continue to have U.S. wind exposure. So yes, they have a different pattern, but I think it probably levels out our pattern, because of the rebalancing between Europe and U.S.

That's great. Then on the cost savings, the $100 million, so I just want to make sure that like -- that's after potential reinvestment in the business, so that will be flown through the bottom line. And also, could you provide a schedule in terms of annual cost savings, like target, as well as the restructuring costs through the next three years?

Kai, thank you for bringing that question, because it's actually very important. As much as the numbers that we gave you, the 60 and the 40, they are actually the result of additional savings elsewhere. But we, specifically, allocated a good chunk of those savings to investing in our people, to investing in development, investing in technology and analytics, so the number that we gave you, is the net number after incremental investments that we are going to do in our people and our business. That of course, is going to be achieved off of the expense structure and the expense base that we have in 2017, that will roll-through through 2020, and Peter, you may have some insights on calendar year projections. But we feel pretty good, that by the end of 2020, we will have eliminated those expenses. Kai, we are very confident in still sticking with the estimates we gave you for the $60 million associated with Novae. If you take our $7 million synergies actually experienced in the first quarter of 2018 and annualize that, you can look at -- we have already got $28 million on an annualized burn rate towards our $60 million. We do expect to get to, up to $35 million of that this year, so $30 million to $35 million, and we said $50 million to $55 million next year, with the full $60 million coming in 2020. For the additional $40 million that Albert mentioned, we do have end plans that suggest that we will get to that additional $40 million also by the end of 2020. We have not gone through the details scheduling on when all those actions will actually take place. I'd say that the predominant will actually come through in 2019, and with the remainder coming through in 2020.

It's fair to say that we don't expect substantial amounts in 2018, and we are working through it. We will rolling out the new organizational structure. There will be things that are done through the rest of this year. So we don't expect that there will be any real savings from that incremental $40 million during this year, and we will see more of that to split between 2019 and 2020. Does that help?

Yes, yes. Very helpful. My last question if I may is on the industry consolidation. We have seen increased M&A activities in this industry, I just wonder, will that provide any opportunities for AXIS, or you will be solely focused on integration of Novae and growing organically?

We are focused on integrating Novae. I mean, we have got a full project -- a list of projects in front of us right now. We are doing a lot of work, very successful and I think, on schedule. We are completing the integration of Aviabel. We are focused on the execution of the strategy, the integrating of Novae and Aviabel and [indiscernible].

All right. Thank you so much.

Good. Thanks Kai.

Our next question comes from Amit Kumar with Buckingham Research. Please go ahead.

Thanks and good morning, and congrats on the print. Two quick questions if I may, the first question, obviously is going back to the discussion on Novae. In the opening remarks, you mentioned that the number was mid-90s CR [ph] and there was sort of room to improve on that. Can you just sort of update us as to where do you think that number settles on a normalized basis?

As you know, we are not really keen on guidance, Amit. But the reason I feel confident that, mid-90s accident year combined ratio has room to grow, is twofold. The first is, as Peter mentioned, we are less than halfway through the synergies associated with the Novae acquisition. So by definition, that should help. The second issue, is that, although we like a lot of what Novae had one. In fact, what attracted us to Novae in the first place, was that they had already taken a lot of the tough decisions to focus their book of business on areas where they were profitable. But the truth is, there are still some parts of that portfolio, that continue to use some action, and I know that over the last six months, since we have been in that company, there is a bunch of business that we chose to non-renew. And you still don't see the benefits of that portfolio improvement. Just in the first quarter, we probably non-renewed willingly, probably somewhere between $30 million and $50 million of business that we said, you know what, going forward, this is not a business that necessarily meets what we want to do. Again, you won't see any of that reflected in the results for several quarters. So I feel good that we are doing the right things. That we are continuing to do the right things, and as these actions work their way through the earned premiums and the expense lines, I have confidence that we are going to see further improvement in the Novae and the London book of results. As by the way, I expect, in the overall book of AXIS.

Got it. That's helpful. The only other question I have is, I guess, going back to Kai's question on consolidation. Probably, I will try to ask it in a bit more direct manner. Your name has been reported in the press and there obviously has been a lot of discussions in the investment community, based on VR and Excel and other franchises. And clearly, there has been exuberance in the stock price, based on that investment chatter. Based on the response to Kai, should the takeaway be that you are more focused on the integration and hence, it's premature to think that anything could happen, or how should I sort of string those two comments together?

Well, let me start with the policy that -- our policy is not to talk about rumors, our policy is not to talk about hypotheticals, what could happen in the industry or not happen in the industry. My response to Kai and my response to you, is that, we are focusing on things that we can do and that we can control, and right now, we are focused 100% on the execution of our strategy, because we think that will deliver significant benefits to our customers, our employees and our shareholders.

Okay. I will just stop here. Thanks.

Our next question comes from Meyer Shields with KBW. Please go ahead.

Thanks. Good morning.

Good morning.

So Albert, you talked, I think, very reasonably about disappointing property catastrophe rate increases despite, record or near record catastrophe losses last year. So if we don't have that, the same sort of historical uptick post events, is the line of business still worth the volatility?

Well that's an excellent question, and frankly, that's the reason you will notice that our net cat premium has actually declined over the last five years. Cat is still an important component of risk management for our customers on the reinsurance side, and I think it makes sense that this should be an important component of our offering. As you know, many customers continue to want to have cat protection through their traditional reinsurance program, in addition of course to, taking advantage of alternative markets. And it's my belief that customers can -- are willing to pay a little bit more for the incremental benefit and service that you get on reinsurance. But net-net, I think that you will continue to see that our net cat exposure will decline, if we don't get the adequate compensation for it. But our strategy, and it's our strategy that we have put in place and execute it now for quite some time, is that we want to continue to provide a full range of products and services to our customers, and then, to the extent that it makes sense for us, to partner with third party capital, and share those cat premiums with our third party capital partners, we will do so. It's a strategy that delivers fees in the good years, and that reduces the net losses in the bad years, and that's a policy that we will continue to use.

Okay, that's helpful. And second, I was hoping if you talk a little bit about net gross ratios byline of business within insurance? In other words, whether there are any changes in the insurance purchasing byline of business?

The short answer is, there always is, because every year, we have an opportunity to renew -- to review the construct and consider attachment points where they were doing more quota share, more excess, so on and so forth. I would say that, if you look at our numbers, we have, probably over the last two-three years, increased our sessions in professional lines, and so that's a pattern that has been there. I don't expect a meaningful change to that approach. I think that, every year we look to optimize our property, the reinsurance purchases, and as you know, we renew our property program, including cats in early May. So we are looking to optimize that structure, and we will be reporting on that, later on. Other than that, we continue to maintain the patterns that we have in the past. Is there anything you want to add to that? Hang on a second, maybe Peter has -- something that you want to add to that?

Yeah, I mean the only thing I would add, Meyer, is we did actually buy some more reinsurance in the cyber space. We actually have a really good quota share tree, that actually Novae had on its cyber book. We had actually had a smaller quota share on our book, and we actually had [indiscernible] increased our purchasing to help protect the cyber product. We are a large player in cyber. We love the business. We think we are very good at it, and we have got a cyber center of excellence. But in order to protect the unknown unknowns, we have upped that quota share on our book as well. So you would have seen some increased sessions coming out of the insurance side, due to that new treaty. We feel good about it. It's a good treaty, good ceding commission and a good profit commission if the business performs well.

Right. And to your earlier point, Meyer, our cat premiums, we are increasing recessions of cat premiums this year, and you will recall, I mentioned earlier. In this year, we are ceding about half of our cat premium, and that number was closer to 42% last year.

Okay, that's very helpful. I appreciate it.

Thanks.

And the next question comes from Brian Meredith with UBS. Please go ahead.

Hey, thanks. A couple of quick ones here for you. First one, just curious, on the investment income, the fixed income that you had in the quarter; given where we are right now with current rates, should we expect that to start ramping up here going forward? Anything you are doing with the investment to maybe take advantage of the higher interest rate activity?

Well Brian, a couple of things, just to give you a couple of points. I know this is always a question, but the book yield at the end of the first quarter was 2.7%, and that was up from 2.5% at the end of 2017, and our current new money yield is 3.2%, so that's considerably above where our current book yield is. The other thing I'd point out is, we do have about 15% of our fixed income portfolio in floaters. So as rates tick up, we should be able to gain that advantage a little bit quicker.

Great. And then, any thoughts about kind of cash deployment stuff in the balance sheet, or with ADC, I guess, you have got cash flows going out here soon?

Yes. So with the ADC -- or not with the ADC, I am going to call it the RITC, we will finish that up in the second quarter with some cash. But you may not see that totally come through in cash, because we have actually been -- actually working with the reinsurer to transfer securities across, which would show up in the cash flow. But we do have some cash there, and we are keeping our eye on the timing of the payments. We still have the reserves up for the 2017 cat.

How much is that going to be, from a cash perspective?

For this year, if I think about that, I don't quite have the timing on that. I can tell you that, the total reserves at the end of the quarter for the cats, as I mentioned, they did come down a little bit from where we were. But we were at about mid-700s in reserves for the cats in 2017.

Got you. And then, Albert, I guess for you let's kind of turnaround the whole M&A topic we have had so far, and maybe ask you, what opportunities, not so much from buying companies, but what opportunities do you anticipate there might be in the marketplace, if you have already seen any from some of the consolidation activity we have seen so far this year?

Well the issue is that, whenever there is any kind of turmoil in any organization, whether that turmoil comes from M&A or anything else, there is always an opportunity to attract talent or an opportunity to attract new pieces of business, because brokers would rather deal with different people, and to that extent, you seen this of course. I mean, we continue to be recruiting top quality talent, and we are looking at a couple of opportunities right now, that were brokered on thinking you know, we might want to move this, we might want to move that. But that's the everyday job of our business, is to try and take advantage of those things. So we will continue doing that.

Great. And just last question, can you just remind us, when you say you want capital levels to return to kind of pre-hurricane levels before you look at buying back stock again, how do you define that? Is it getting the debt-to-capital ratios back down getting shareholders equity or common equity up to the level prior to the hurricane?

Yeah, I think it's all of those. We said upfront that we have -- so if you look at our numbers, Peter, you can jump in here. But our current leverage numbers are higher than our target leverage numbers, and there is two reasons for that. One, is obviously that we took a dip in the equity last year, because of the cat losses. And again, at the very least, we'd like our equity numbers to be where they were, prior to that. But more importantly, we have also prefunded the 2019 maturity, and we fully expect, and in fact, we said so in the offering, we fully expect that we will repay that in spring of 2019 --

Yeah, spring of 2019.

So those things are going to get us back to a total leverage level, which is below 30%, which is where we want to be, and equity above where it was. I have to tell you, if we continue to see the kind of progress that we are seeing in our book and in pricing, we are always going to give priority to profitable growth.

Great. Thank you.

Our next question comes from James Naklicki with Citi. Please go ahead.

Thanks. My question is on the current accident year loss ratio. What was the favorable impact of rating trend during the quarter? I know you quantified it last year?

Yeah. So as I mentioned, the only place -- in most places the rating trend is almost zero. The place where it really changed was in the U.K. motor, where we are now getting the earnings increases above the trend, because it's -- frankly, we are playing catch-up. Other than that, I would say, on any one line of business, it would have been no more than plus two or minus -- sorry, plus 0.2 or minus 0.2 on the ratio, is that correct?

Yeah. I'd say in total, year-over-year, James, it's about 0.5 point in total, and that 0.5 point is really fundamentally driven by the changes we got on the motor book. Absent the motor book, it would be right about where Albert said.

Got you. And just one follow-up; on the other insurance related income during the quarter, nice jump there. Was that more on the fee income side or the weather and commodities business?

$9 million at year-over-year improvement James, was due to the lack of the loss of a weather and commodities derivative from last year. We had a loss of about $8.7 million running through that line last year on the weather and commodities, and that's now zero.

Got you. Thanks guys.

And this concludes our question-and-answer session. I would like to turn the conference back over to Albert Benchimol for any closing remarks.

Thank you very much. I do want to recognize that this was a very good quarter, and it does reflect the very hard work, and a very dedicated and talented staff have done over the years, to get us to where we are. We have had a great team here. They are very focused on their customers. They are very focused on delivering a strong result, and I look forward to continuing to work with them, to deliver further improvements on behalf of all of our key stakeholders. And we will talk to you in the next quarter. Thanks very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.