Good day, ladies and gentlemen, and welcome to the Q1 2014 The Hanover Insurance Group Incorporated Earnings Conference Call. My name is Kim and I will be your operator for today. At this time, all participants are in listen-only mode. Later we will conduct the question-and-answer session. (Operator Instructions) As a reminder this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Oksana Lukasheva, Vice President, Investor Relations. Please proceed.

Thank you, Kim. Good morning and thank you for joining us for our first quarter conference call. We will begin today’s call with prepared remarks from Fred Eppinger, our President and Chief Executive Officer and David Greenfield, our Executive Vice President and CFO. Available to answer your questions after our prepared remarks are Jack Roche, President of Business Insurance; Andrew Robinson, President of Specialty Lines; Mark Desrochers, President of Personal Lines and Bob Stuchbery, President of International Operations and Chief Executive Officer of Chaucer. Before I turn the call over to Fred, let me note that our earnings press release, financial supplements and a complete slide presentation for today’s call are available in the Investors section of our Web site at www.hanover.com. After the presentation, we will answer questions in the Q&A session. Our prepared remarks and responses to your questions today other than statements of historical facts include forward-looking statements, including our earnings guidance for 2013. There are certain factors that could cause actual results to differ materially from those anticipated by this press release, slide presentation and conference call. We caution you with respect to reliance on forward-looking statements and in this respect refer you to the forward-looking statement section in our press release, Slide 2 of the presentation deck and our filings with the SEC. Today’s discussion will also reference certain non-GAAP financial measures, such as operating income, operating income per share, ex cat loss and combined ratio and accident share loss and combined ratios among others. A reconciliation to these non-GAAP financial measures to the closest GAAP measure on a historical basis can be found in the press release or the financial supplements which are posted on our Web site, as I mentioned earlier. With those comments, I will turn the call over to Fred.

Good morning everyone and thank you for joining our first quarter earnings call. Overall, we are very pleased with our first quarter results which reflect the progress we are making across our organization. Net income per share was a $1.22 for the first quarter, operating income per share was a $1.05 which translates to annualized operating ROE of 8% and includes the elevated catastrophe and non-catastrophe losses caused by severe weather conditions in the U.S. this past winter. Importantly we made solid progress on our strategic priorities for the first three months and we believe we are well-positioned to deliver improvement in the combined ratio excluding cats we outlined in our last call as well as generate mid single-digit net written premium growth for the year. We continue to see encouraging trends across our businesses both around underwriting results and growth momentum led by accelerating premium and commercial lines. We increased our ex-catastrophe earnings by 15% in the quarter to 143 million before taxes and also increased net premiums written by 9%. I will now turn the call over to David to review our financials. After that I will come back to discuss our strategic priorities and our outlook.

Thank you Fred and good morning everyone. Our first quarter results were solid and marked an encouraging beginning to 2014. Although earnings this quarter were impacted by catastrophe and non-catastrophe weather due to severe cold and heavy snowfall in the U.S. in January and February, the underlying earnings power of our Company continues to strengthen. Net income was $55 million or $1.22 per diluted share compared to $66 million or $1.46 per diluted share in the prior year quarter. Operating income was $47 million in the quarter or $1.05 per diluted share, compared to $60 million or $1.32 per diluted share in the first quarter of last year. Our combined ratio of 98% this quarter compared to 96% in the prior year quarter. Catastrophe losses added five points to the combined ratio compared to two points in the prior year quarter. This was partially offset by one point higher favorable loss reserve development leaving the ex-cat accident year combined ratio in line with the prior year quarter even including the elevated non-catastrophe weather this quarter. Starting with catastrophe activity losses in the quarter were $58 million, or 5% of the combined ratio, all of it coming from our domestic business. Losses primarily stemmed from prolonged low temperatures and heavy snowfalls in many areas which resulted in roof collapses, frozen pipes, ice dams and other water-related damage. Chaucer on the other hand had virtually no catastrophe losses in the quarter helping to partially mitigate the impact of the elevated weighted weather in the U.S. Moving on to the accident year loss ratios excluding catastrophe losses, in our domestic business the loss ratio improved to 62% from 63%. In commercial lines, the improvement of about two points was driven by better loss experience in CMP and other commercial lines. Higher margins in…

Thanks David. With a solid start to the year, we feel good about our prospects for 2014 as well as the next year. We remain focused on improving the earnings capacity of our organization through underwriting execution and by expanding the market position of our franchise. We were able to advance in both areas this quarter. On the underwriting front, we continue to make good progress. First, in commercial lines we were pleased with the loss ratio improvement in virtually all our lines. Our results in specialty improved meaningfully during the quarter. We believe the surety legacy issues are substantially behind us and we are trending positively in our key specialty lines as the business matures. We also saw good improvement across our core commercial lines though we remain focused on challenging commercial auto. We like the industry in general clearly we have some more work to do. With the underwriting pricing actions we are taking through, I am confident in our ability to manage this fine and drive it to target returns. However, as David mentioned I think it is appropriate for us to continue to take a cautious view. Commercial lines results have also been enhanced by the decline in expense ratio which is a function of our business growth and increased operational efficiency. Second as David mentioned we’re getting good traction in personal pines’ profitability driven by mixed management and pricing. The margins we are generating and the overall quality of our account focused book validates our portfolio actions in this segment. As we move through the year, we believe we can achieve more improvement in this segment. And finally Chaucer is off to a very strong start in 2011. Although results in this business can be uneven, we’re confident in the quality of our Lloyd’s platform…

and:

(Operator Instructions) Your first question comes from the line of Larry Greenberg from Janney Capital. Please proceed.

Good morning and thank you. Hi Fred you mentioned the challenges at Lloyd’s these days I am just wondering if you could elaborate a little bit on that and perhaps touch on the motor market which seems pretty intensely competitive these days? Janney Capital Markets: Good morning and thank you. Hi Fred you mentioned the challenges at Lloyd’s these days I am just wondering if you could elaborate a little bit on that and perhaps touch on the motor market which seems pretty intensely competitive these days?

Well tell me hand this over to Bob but let me first in general -- as you know the reason Chaucer was such a good fit for us is that Chaucer was really a portfolio of specialty positions with the majority of the positions stayed at the market while the pricing is a little -- it’s challenging pricing market and volume is like dent right now we have a lot of opportunity countered to be focused and target opportunities and I feel pretty solid about our ability to hit our target returns and have the kind of growth we said which is quite moderate. So I feel pretty good about it. On the auto side if you recall we are in kind of a specialty auto business we’re not really again kind of a young driver over the broad market and so our profile is a tad bit different and therefore we’re able to sustain the margins pretty well but Bob I’d love for you to give some color to that if you would.

Yes sure Fred. I mean it goes without saying that there are tough market conditions and it’s across most classes of business that we underwrite and that’s really around write levels but the diversity of portfolio helps us also what helps us is the quality of the favorable underwriters that we’ve got and their experience of trading within those market conditions before they have seen soft market cycles before. In terms of the UK I’d sort of echo Fred’s comments the main reductions that you’ve seen in UK motor been driven by younger driver prices is also being driven by our competitors anticipating quite large benefits coming from legislative changes particularly the LASPO which is a change of a legal agent support. Our own views at that time were that benefits weren’t going to be as great we didn’t take as bigger rate reduction as some of our competitors and we saw volume decrease in 2013 because of that. We’ve seen that sort of continue in the first quarter of 2014 but there are some signs now that competitors are putting inflationary rate increases and these are sticking so we are seeing retention uptick slightly within the last few weeks of trading. So it has been a pretty bleak picture our portfolio has helped us because it is specialty but we are seeing some sort of better opportunities now.

Great, thank you. And David I think you mentioned you about 2 points of non-cat weather in personal lines if you mentioned a number for commercial lines I missed it. Did you give a number on commercial? Janney Capital Markets: Great, thank you. And David I think you mentioned you about 2 points of non-cat weather in personal lines if you mentioned a number for commercial lines I missed it. Did you give a number on commercial?

Ys Larry, no, I didn’t give the number on commercial because non-cat weather on commercial really was negligible from the standpoint of our results it was really more of a weather pattern event.

Great, thank you. Janney Capital Markets: Great, thank you.

Your next question comes from the line of Vincent DeAugustino from KBW. Please proceed.

Good morning Vincent.

Good morning. So sort of alluded question here but there has been a good deal of heavy lifting done and some of the margin expansion already in the pipeline from the maturation of the portfolio changes rate actions so one of the things I have spent a lot more time thinking about with all the progress here is what’s incremental and where are the next steps and where is mostly of the earnings growth going to come from if we’re looking further out. And so one of the questions would kind of lead you to wonder what the opportunities are as far as geographic and product expansions that’d be incremental to the current earnings trajectory? And so with that backdrop and Fred you had mentioned with the Investor Day coming up I am sort of just hoping to get a preview for weather we should think about that venues as recapping some of the existing pipeline for margin expansion or if we should think about that as potentially being a discussion on obvious things that it would be incremental in the back half of ’14 and into 2015? Keefe, Bruyette & Woods: Good morning. So sort of alluded question here but there has been a good deal of heavy lifting done and some of the margin expansion already in the pipeline from the maturation of the portfolio changes rate actions so one of the things I have spent a lot more time thinking about with all the progress here is what’s incremental and where are the next steps and where is mostly of the earnings growth going to come from if we’re looking further out. And so one of the questions would kind of lead you to wonder what the opportunities are as far as geographic and product expansions that’d be incremental to the current earnings trajectory? And so with that backdrop and Fred you had mentioned with the Investor Day coming up I am sort of just hoping to get a preview for weather we should think about that venues as recapping some of the existing pipeline for margin expansion or if we should think about that as potentially being a discussion on obvious things that it would be incremental in the back half of ’14 and into 2015?

Yes I think that’s a great question. I think it’s both right, so we still have a lot of opportunity on the margin side, because both our mix improvement, if you look at the -- as we changed the mix of the business and the quality of the business is an upside from that there is still upside from pricing that we’re getting in earning in most of the underwriting work is going to be behind us as far as the math, the change, the big changes and exposure. But we still have quite a bit of opportunity as I see it in the margin. And on top of that what you’re seeing now is we have really good momentum, the quality of our new business is the best it’s ever been, our partnership strategy is really kind of showing up. So our yield on submissions is way up. So what’s happening now is in this transition market the breadth of our capability, the attractiveness of the pricing of the new business and our position with our agents create additional opportunity on top of just the margin expansion as we grow in the more attractive places and we leverage our infrastructure, because as you know we also have some investments that we’ve made in some of these businesses and so you can imagine the leverage we’re going to get as some of these newer offices or newer lines leverage the opportunity that we’re seeing. So I feel pretty good about kind of all of the variables that we’ve talked about. And again we need to, right we need improvement this year, and we need to show a continued improvement next year to really reach our goals. But our confidence is pretty good and we’ll use that session to kind of try to lay out what we see unfolding over the next couple of years.

Okay. Good looking forward to that. And then just maybe a bit of a hare-brained question, but at this point looking out for 2014 maybe something in the neighborhood of 30% to 40% of pre-tax earnings are probably going to come from Chaucer. And what I am sort of wondering is with the intricacies of international tax code, if there would be any opportunity to benefit to re-domicile to the UK and so could you a; do a mechanically speaking b; would it be worthwhile and c; would you ever have an appetite to do it? Keefe, Bruyette & Woods: Okay. Good looking forward to that. And then just maybe a bit of a hare-brained question, but at this point looking out for 2014 maybe something in the neighborhood of 30% to 40% of pre-tax earnings are probably going to come from Chaucer. And what I am sort of wondering is with the intricacies of international tax code, if there would be any opportunity to benefit to re-domicile to the UK and so could you a; do a mechanically speaking b; would it be worthwhile and c; would you ever have an appetite to do it?

Thanks for that loaded question Vincent. Obviously we look at ways in which we can manage our tax exposure and tax expense. I mean taking a domicile out of the U.S. is a very complicated process. I would say as we grow our business and look at how we expand, we obviously always think about that. But at this point there is really no plan or no intention for us to undertake a transaction like that.

Okay, sounds good. Just looking at the list here just a few other quick ones and I’ll re-queue, if we go back a year or so ago, maybe even two years. One of the things we have heard more about is how some of the larger national players were maybe taking rate up without much regard to account specific factors and how that was giving companies like Hanover a lot of opportunity for profitable new business growth. And it appears that commercial lines and new business growth is still doing quite well, but if I kind of look at some of these larger payers now particularly in the standard commercial lines market, that’s where we’re seeing most of the pricing deterioration for the industry. So what I am wondering is whether that benefit two years ago might be turning into a headwind as we work later into 2014 on new business growth? So I am just curious if you’re seeing any of that or would you expect it to…? Keefe, Bruyette & Woods: Okay, sounds good. Just looking at the list here just a few other quick ones and I’ll re-queue, if we go back a year or so ago, maybe even two years. One of the things we have heard more about is how some of the larger national players were maybe taking rate up without much regard to account specific factors and how that was giving companies like Hanover a lot of opportunity for profitable new business growth. And it appears that commercial lines and new business growth is still doing quite well, but if I kind of look at some of these larger payers now particularly in the standard commercial lines market, that’s where we’re seeing most of the pricing deterioration for the industry. So what I am wondering is whether that benefit two years ago might be turning into a headwind as we work later into 2014 on new business growth? So I am just curious if you’re seeing any of that or would you expect it to…?

Yes so this is the beauty of our strategy. So in the beginning of the term right, where there is a let me tell you there is a lot more bad business hit the market, where there is a lot more outsize rate increases. What you see is there is a lot of flow and so a lot of people can take advantage of it, because of the strategy the relationships with their agents and frankly some of it is good and some of it is bad. For us that just means a lot of reading through to get to the better. What has happened now is with the rate increases moderating less business China goes out to the marketplace. And I would argue more consistency in the quality of the business goes out to the marketplace. And so for us given our limited distribution and real connectivity in what we call pipelining activity, this allows us in fewer submissions to have a much greater hit rate as they share shift to us. And we match up well against our product portfolio. So for us we like this kind of transitional market because it differentiates those that have real line of sight and insight into the business that are in the distribution channel and those that are just receiving phone calls from a broad distribution. So we believe that this is a great time for us. I don’t know Jack if there is any observations you make about the market that will be helpful here.

No I think you’re right on, I think what we see is that we’re getting a bigger percentage of higher quality opportunities because of less disruptive behavior if you will in the re-underwriting process. So it’s all the submission activity isn’t necessarily going up but the ability to get higher quality business because the account managers and placers within agencies have more time to address quality accounts that are looking for some type of pricing consideration. So that’s I think working to our favor because we’re not having to sit through piles quite as aggressively our yield rates are going up as we see some better business. And we’d also remind ourselves that pricing today on new businesses are a lot better than it was two years ago and it’s a lot better than it’s going to be three years from now and the difference between new business pricing and renewals still is at a very tolerable level so we remind ourselves as long-term focus on high quality business and we’re diligent about managing that this is the time when you would like to see some real robust new business growth as long as you have confidence in your underwriting capability.

And again and the other thing about us is our strong commercial strategy which has a lot more coverage between the $25,000 to $50,000 account with distributed underwriters and a more holistic view has been able to take advantages of disruption as others have commoditized that business a little bit and been more narrow in their ability. So a lot of things are coming together right now that we think set up well for us as we just stay focused on execution.

Perfect, thanks for the color. Keefe, Bruyette & Woods: Perfect, thanks for the color.

Thanks Vincent.

(Operator Instructions) Your next question comes from the line of Bijan Moazami. Please proceed.

Good morning everyone. Bijan Moazami, Guggenheim. I have a question on each one of your business lines and that’s what which offset lots of premium volume growth could you tell us a little bit more about this casualty people you hired who are they what’s their track record, how you’re paying them and what are they riding for the long-term business or shorter term casualty? And then I have a follow-up on commercial and personal line. Guggenheim Securities: Good morning everyone. Bijan Moazami, Guggenheim. I have a question on each one of your business lines and that’s what which offset lots of premium volume growth could you tell us a little bit more about this casualty people you hired who are they what’s their track record, how you’re paying them and what are they riding for the long-term business or shorter term casualty? And then I have a follow-up on commercial and personal line.

Bob do you want to take that?

Yes hi yes it’s just a team of people that we brought -- they joined us at the backend of last year from Ashton they have got extensive experience in this class of business writing for a number of years and they have peak where writing a portfolio of approximately $300 million of income. We’ve got a relatively modest bucket in for the remaining 2014 and hopefully that will enable them to take some of the best accounts from the portfolio they were experiencing before. The type of business they write they’re writing predominantly specialty lines businesses reinsurance of them across a wide range so it’s quite a diverse portfolio and not a lot of general casualty more specific. And they form part of the underwriting team here is a separate division within Chaucer.

Okay. On Marine and Aviation, you picked up a fair amount of volume what’s the story there and by the way, was there any further impact from contractual and quota share in the quarter? Guggenheim Securities: Okay. On Marine and Aviation, you picked up a fair amount of volume what’s the story there and by the way, was there any further impact from contractual and quota share in the quarter?

Yes, that was some of the impacts as we’ve said earlier but some of that starting journey has waived through and actually in fact Marina and Aviation although it went up in the quarter there was no one particular area where we saw it was more taking opportunities across the number of lines so there wasn’t as we’ve mentioned in casualty there wasn’t one area that saw a massive increase but there is still a lot of pockets of opportunity that the underwriters will take and the 1st of January renewal season got 20% of those.

Yes, and the broader point again coming back to it is that this isn’t about 25% growth rate for Chaucer it’s a lot about timing of some of the opportunities and so therefore we don’t moderate through the year where we’re talking about mid single-digit growth so we do not meet them for the year.

Okay, great. On commercial line segment 8 points of price increase only 1.6 points of the improvement in loss ratio and there is not a whole lot of known weather cat or weather non-catastrophe weather, if you will. So the question is that is there a change in the reserving philosophy, are you guys becoming more conservative in the way you set up reserves? Guggenheim Securities: Okay, great. On commercial line segment 8 points of price increase only 1.6 points of the improvement in loss ratio and there is not a whole lot of known weather cat or weather non-catastrophe weather, if you will. So the question is that is there a change in the reserving philosophy, are you guys becoming more conservative in the way you set up reserves?

Well, I think I’ll start off on that I mean Bijan I think as I’ve said on prior calls we have taken a more cautious approach in certain lines of businesses we’ve maintained some higher bps in some lines of businesses a good example of that is commercial auto which we’ve been talking about for a number of quarters. So I wouldn’t’ say it’s a whole set of change in reserving process our practices are fairly consistent but we are being a little more cautious in certain parts of the portfolio where we’re seeing severity trends as an example in commercial lines.

Okay. And maybe if Jack can comment on the workers’ comp and auto it’s a little bit of a unfavorable reserves on auto and I guess David you mentioned a pickup in BI severity what really drove that and favorable on workers’ comp and is there anything going on with lost cost there? Guggenheim Securities: Okay. And maybe if Jack can comment on the workers’ comp and auto it’s a little bit of a unfavorable reserves on auto and I guess David you mentioned a pickup in BI severity what really drove that and favorable on workers’ comp and is there anything going on with lost cost there?

Yes, I mean commercial auto is something that as we said we’ve been talking about for seven quarters and so I think what we see is continued evidence that the industry is experiencing an elevated level of BI severity saying just it’s well documented there is a number of factors that are contributing to that whether these medical cost issues or some evidence that distracted driving and increased litigation are contributing to all of that. And because some of that is unclear about when that peaks out and when it starts going the other way or whether it flattens out, we really chose to continue to be quite cautious about taking too much credit for price over loss trend or for that matter trying to predict when the loss trend curve plateaus. So I think you can see are we more conservative than we were 18 months ago in the auto line? Absolutely, because we were not catching up to the loss trends as it turns out. But I think we’re being responsible and thoughtful about how we look at the line of business. But because we have been at it a while I don’t think this is something that’s going to be outsized for us. On worker’s comp I wouldn’t read too much into the first quarter quite frankly, we had a couple of losses that we took and that we overall the underlying trends in worker’s comp should perform consistent with our guidance and also with the amount of pricing that we’re putting over loss trend in that line of business.

And just to comment on your question about the releases there Bijan and I have also made this point previously in other quarters. We do take a conservative approach to worker’s comp the mix for our business there shifts a little bit and as the shifting to the smaller part of the market we’re seeing more positive development in out reserve factors. So that’s an old story playing through frankly.

Great thank you. And on personal lines, how much further exposure management you need to do? So I guess the question is that when are you guys going to get an appetite to increase policy and force count in homeowners is that ever going happen? Guggenheim Securities: Great thank you. And on personal lines, how much further exposure management you need to do? So I guess the question is that when are you guys going to get an appetite to increase policy and force count in homeowners is that ever going happen?

Yes again I think what we said is, we’re finishing up the exposure management work this week -- this year it’s kind of spread across the four quarters, a lot of it is northeast where we had legacy concentrations by zip code because of the -- we used to be a very much personal lines business in four states. And so a lot of that is behind us. We’re, we feel very good about our portfolio and our book and kind of the mix we’re attracting now. And so as I said the second half of the year I think you’re going to see growth out of that business and we’re going to feel great about it, it is account business with the right agents, well spread across our platform. But this exposure stuff is really something that’s kind of our last step if you will of our legacy concentration risks that we had in other regions. I guess I would the common denominator across all our businesses when we talk about pricing and margin et cetera. I’ll echo what I said in the call, we got two points of improvements last year, we’re going to get two more points of good solid improvement and we’re confident in our ability to do that. We set ourselves to up for more improvement next year as well. I think it is appropriate that we’re thoughtful and conservative in some of these lines as we watch it play out. But we feel pretty darn good about where are right now as far as our path on continuing that improvement really in all our businesses and in all our lines. And I think that’s kind of a tone we’re trying to set as far as where we’re going this year and next.

Thank you. Guggenheim Securities: Thank you.

Your next question comes from the line of Matt Carletti from JMP Securities. Please proceed.

Yes, thanks good morning. JMP Securities: Yes, thanks good morning.

Good morning Matt.

Looking at the domestic businesses, first quarter in a while that there has been net favorable development which is a welcome change. I think in the prior question, whether it’s been three kind of focus areas if you will personal auto, commercial auto, surety. You covered commercial auto in a prior question. Could you give a little color on surety and personal auto and really what’s kind of led you to think we’ve turned the corner whether it be kind of an update on where we’re in those the claims counts in surety or whatever you can provide? Thanks. JMP Securities: Looking at the domestic businesses, first quarter in a while that there has been net favorable development which is a welcome change. I think in the prior question, whether it’s been three kind of focus areas if you will personal auto, commercial auto, surety. You covered commercial auto in a prior question. Could you give a little color on surety and personal auto and really what’s kind of led you to think we’ve turned the corner whether it be kind of an update on where we’re in those the claims counts in surety or whatever you can provide? Thanks.

And I’ll have Andrew comment but as we have mentioned this is really a old raw book, we will work it through the inventory and virtually that the outstanding work remaining on that is next to nothing now. And so we really like our book and the portfolio going forward and feel good about the way we’re positioned in that business going forward, so it’s just going right on track the way we saw it would, and we feel pretty good about it. I don’t know if there is anything Andrew you want to say about it.

I think Matt the only thing I would just add is that to Fred’s point we starting back probably what almost 24 months ago just we separated out a raw portfolio we put a person in charge of that, we have been able to detail our exposures and manage them down and quite honestly the book has effectively unfolded from a loss perspective broadly consistent with our expectation. There has been some tiny things in terms of some acceleration some deceleration but generally as we expected and I think that Fred’s point the remaining exposure is relatively de minimis. On the go forward business we have a very strong both commercial and contract as well as a team focused on smaller value transactional commercial and what I would say to you is, is that we have been able to get some very good talent coming in and our position in the market is one I think is strong and improving we fully expect that surety will again be a meaningful contributor to our earnings as we look forward to ’14 and ’15 as well.

Okay. And then any color on personal auto? JMP Securities: Okay. And then any color on personal auto?

Yes I mean I think when we look at personal auto I think a lot of the pain we experienced back a couple of years ago as you know we had some significant developments over the prior couple of years and that we’re pretty confident it has subsided we’ve taken a long-term approach to our view of the lost trends in the 4% to 4.5% range and we continue to take that view as we price it into the product and we feel very confident that we’re in a very good reserve position and that we’re going to see the 2 point improvement that Fred alluded to in that line as well.

Great. Well, thanks for the answers and congrats on the nice start to the year. JMP Securities: Great. Well, thanks for the answers and congrats on the nice start to the year.

Yes thanks and I appreciate it.

Your next question comes from the line of Vincent DeAugustino from KBW. Please proceed.

Hi. Good morning again and thanks for taking the follow-up. Fred just to the comments you made earlier on the commercial lines expense ratio it would just seem like some of the improvement there might be sustainable and I think maybe the prior commentary I may have before pointed to a more gradual improvement. So I am just kind of curious if there is any additional optimism on the commercial lines expense ratio improvement trajectory? Keefe, Bruyette & Woods: Hi. Good morning again and thanks for taking the follow-up. Fred just to the comments you made earlier on the commercial lines expense ratio it would just seem like some of the improvement there might be sustainable and I think maybe the prior commentary I may have before pointed to a more gradual improvement. So I am just kind of curious if there is any additional optimism on the commercial lines expense ratio improvement trajectory?

Yes, we have talked about a point this year from the growth there and I think that’s the right way to think about that business as I look forward there is more to go next year though for us and kind of across the commercial platform because those our core commercial businesses are maturing as well as our specialty businesses so I mean I think you all know we invested a tremendous amount both geographically but also in the number of lines of business. So what we believe is that we’ll get some of it this year but we’ll get more of it next year too and we’re working hard on that we know where it’s going to come from et cetera. So I feel like we have opportunity this year as well as next year as it unfolds.

Yes I think always keep in mind though Vincent with that is Fred is referring to the core commercial book and then obviously that tends to get offset as we grow the mix in specialty businesses. So sometimes you don’t always see it in the number but when we break it apart and we talk about it the core commercial book is where we’ll see that reduction in expenses but as we grow specialty that’s going to be a higher expense ratio business.

Great, thank you everyone for taking the follow-up and nice quarter. Thanks. Keefe, Bruyette & Woods: Great, thank you everyone for taking the follow-up and nice quarter. Thanks.

Thanks Vincent.

(Operator Instructions)

Okay. So thank you very much for your participation today. We’re looking forward to speaking to you next quarter.