Good morning ladies and gentlemen. Welcome to the Second Quarter Results teleconference for Travelers. We ask that you hold all questions until the completion of formal remarks, at which time you will be given instructions for the question and answer session. As a reminder, this conference is being recorded on July 22, 2014. At this time, I would like to turn the conference over to Ms. Gabriella Nawi, Senior Vice President and Investor Relations. Ms. Nawi, you may begin.

Thank you. Good morning and welcome to Travelers’ discussion of our second quarter 2014 results. Hopefully you have seen our press release, financial supplement and webcast presentation released earlier this morning. All of these materials can be found on our website at www.travelers.com under the Investors section. Speaking today will be Jay Fishman, Chairman and CEO; Jay Benet, Vice Chairman and Chief Financial Officer; and Brian McLean, President and Chief Operating Officer. They will discuss the financial results of our business and the current market environment. They will refer to the webcast presentation as they go through prepared remarks, and then we will take questions. Other members of senior management are also available for the question and answer period, including Alan Schnitzer, Vice Chairman and Chief Executive Officer, Business and International Insurance. Doreen Spadorcia, Vice Chairman and Chief Executive Officer of Personal Insurance and Bond and Financial Products. Before I turn it over to Jay, I’d like to draw your attention to the explanatory note included at the end of the webcast. Our presentation today includes forward-looking statements. The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Actual results may differ materially from those projected in the forward-looking statements due to a variety of factors. These factors are described in our earnings press release and in our most recent 10-Q and 10-K filed with the SEC. We do not undertake any obligation to update forward-looking statements. Also in our remarks or responses to questions, we may mention some non-GAAP financial measures. Reconciliations are included in our recent earnings press release, financial supplement and other materials available in the Investors section on our website. And now, Jay Fishman.

Thank you, Gabi. Good morning everyone and thank you for joining us today. We’re quite pleased with the strong results we posted this quarter, particularly given the magnitude of our catastrophe and non-catastrophe weather losses. Operating income was $673 million or $1.93 per share. Operating return on equity was 11.04% and we continue to make great progress on lifting our returns, largely in response to continuing very low interest rates and continuing volatile weather. Who would have thought that we’d be talking about a polar vortex in July and at 2.5% ten year treasury in 2014? As demonstrated on slide four of the webcast, comparing this quarter’s earnings to last year is more than accounted for by the tax and legal settlement gains of $122 million, recognized in last year’s second quarter as well as the difference in catastrophe losses quarter-to-quarter. The short story for each of our business segments is good. In Personal Insurance we are really pleased with the marketplace response and production trends. The manual personal auto program Quantum 2.0. While we need more talent, more time and data, the very early on loss indications are encouraging and consistent with our expectations. Our financial, professional and international insurance segment produced record results, with good results from both the bond and financial products business and the international business. In Business Insurance, we continue to generate strong returns as underlying, underwriting margins on an earned basis, continued to expand and written rate gains in the quarter approximated loss trend. Because there was so much interest in our assessment of the rate environment in Business Insurance, we are going to spend a few minutes on that this morning, before I turn it over to Jay. At our recent Investor Day, we were struck by the fact that one analyst asked…

Thanks Jay. Let me start by saying that we are very pleased with our results this quarter particularly taking weather into account. Our investment results continue to be very solid driven by private equity returns as were our underlined underwriting results. Within underwriting earned rate increases continue to exceed loss cost trends in each of our business segments. Al though the benefit to earnings into loss ratio was partially offset by higher non-CAT weather related losses this quarter versus the prior year quarter. Underwriting also benefited from net favorable prior year reserve development of $183 million pre-tax down slightly from the prior year quarter and was negatively impacted by CAT losses of $436 million pre-tax up $96 million from the prior year quarter. We provided two analyses in the webcast this quarter to help you better understand the relationship of operating income to both the prior year quarter and to analyst estimates. Jay already discussed the first analysis shown on page four of the webcast which provides insight as to why operating income decreased from the prior year quarter. The second analysis shown on page five of the webcast provides insight as to why operating income was less than the consensus estimate. The CAT loss estimates contained within the consensus estimates where significantly lower than our actual CAT losses. We hope this type of analysis is helpful to you. Each of our business segments once again experienced net favorable prior year reserve development and BI net favorable development of $25 million was driven by better than expected loss experience in general liability excess coverages for accident years 2008-2012 resulting from a more favorable legal and judicial environment than we had expected. This was partially offset by an $87 million increase to our environment reserves. Net favorable reserve development of a…

Thanks Jay, in business insurance second quarter operating income was $409 million and the combined ratio was 99%. The underlying combined ratio which excludes the impact of CAT’s and prior year reserve development was 92.1% for the quarter, an improvement of a 4 percentage point year-over-year. And 90.1% for the first half of 2014, an improvement of 2.5 points over the first half of 2013, the point of improvement in the quarter was driven by about 2 points of earned rate in excess of loss trends partially offset by about a point of non-CAT weather losses. So despite the significant impact of weather solid profitability in the quarter. Turning to production trends beginning on page 11, retention of 81% was strong and slightly higher than recent periods. New business volume of $486 million was 8% was higher quarter-over-quarter while renewal premium change was down somewhat from recent periods at about 6%. The 6% included pure rate increases of about 4% which was about a point lower than the last quarter. As has been the case for last 13 quarters all major lines of business had positive rate change with the largest change this quarter coming in commercial auto. Not surprisingly auto was the line of business with the lowest return and accordingly the greatest rate need. Loss trend for the segment continued to run at about 4% so on an aggregate written basis, rate gains approximated our current view of loss trends. We believe the production results both in the aggregate and by line of business are appropriate given our view of product returns. But as Jay mentioned in his comments we don’t manage the business in an aggregate or total line level. We execute it account-by-account or class-by-class and this is demonstrated on slide 15 which displays the distribution…

I’m sorry there is an addition from Jay Benet.

Yes thanks Gabi, before we open for questions I did want to mention one additional item. We’d be remiss if we did not say how pleased we were to have been recognized as a A++ company by AMBEST [ph] this past May so we just thought we’d end with that and we’d be happy to take your questions now.

Kelly we are ready for the question and answer portion. May I ask that you all limit yourself to one question and one follow-up please? Thank you.

[Operator Instructions]. And our first question comes from Brian Meredith with UBS. Please proceed with your question. Brian Meredith – UBS: Yes, thanks couple of quick questions here for you. First of all Jay, just curious, if I look at the business insurance, and you kind of strip out the reserve releases and you can normalize for CAT losses. I kind of come up with about a 12% underlying return equity for the business, I guess my first question is that right, and is that about where you’re kind of targeting given the current interest rate environment?

I’ll answer the second part of it; I’ll let Jay Benet – if he does the math in his head. We’ve been saying for some time that our stated target of achieving the mid-teens return on equity overtime was simply really not achievable in this interest rate environment, but we were willing to keep it as a statement, an aspiration goal but also because so much, so many of our systems and our culture are geared around it. Having said that, we’ve chosen to avoid the notion of an artificial ceiling on what rate adequacy or return adequacy is on an individual line or an individual business. Some of that is driven by competitive dynamics, what is the rest of the marketplace doing, some of it is based upon capacity. So I – it feels obviously at 2.5% tenure treasury, a 12% number feels pretty good, but that doesn’t mean that we’re going to not pick the actions on an account-by-account or class-by-class basis, that would continue to lift it if it’s possible. So that’s really our honest assessment of it, it feels pretty good to us, but maybe there’s more and we’re certainly going to try, but that again is a specific comment more than it is an aggregate rate number. It’s so important that we always keep that in mind, we price individual accounts, we don’t price the portfolio. Brian Meredith – UBS: But if you’re pricing right now in line with trend, isn’t that kind of mean you’re assuming that return to adequate?

I’m sorry Brian try me again. Brian Meredith – UBS: You said you’re pricing, you’re pricing your business insurance in line with loss trend right?

Oh no, no what Brian said was that our best accounts are getting modest loss trend. I believe I’m trying to go back to his comments and that our poorer performing accounts, whatever that means in that framework if the three years of rate increases, but there are always poorer performing accounts, if the poor performing accounts are getting significantly more rate increase at lower retention.

So another way to say that Brian is this quarter, the way the arithmetic worked out, is rate that we got on the entire portfolio approximated the aggregate loss trend, but that could be very different and we could be thrilled with the result or unhappy with the result either direction depending on how we get there.

And I think the other part of that, that really is important, is that we wouldn’t contemplate that we can improve our profitability by getting meaningful rate increase on our best performing business. Our focus there is to do our best to offset trend and to maximize retention. Our improvement in profitability is going to come from identifying those segments that under perform. And continuing to make real progress there, I recall in the last quarter, we actually put up a slide which showed the rate gain in our fifth bucket in commercial accounts I think. I can’t remember whether it was commercial or middle market, but compared to the number of accounts in the rate gain to the previous year’s quarter, and the rate gain in that fifth bucket, was 21% I think last year and 20% this year was the rate gain. That’s where the improvement and profitability is going to come from, not just from that shift class, but that’s the example here. It’s going to be identifying those segments that continue to underperform and continuing to drive one. Brian Meredith – UBS: Great, thanks.

The other thing I would add before I’ll address your first question is that we have this internal discussion about margin improvement. And you have to look at it in terms of what you’re talking about. Are you talking about combined ratio or you are talking about dollars. And when you talk about combined ratio, now if you do the arithmetic, if you’re covering loss trend let’s make up some numbers, let’s say you have a 60% loss ratio, obviously premiums were at the 100%. If you’re covering loss trend that’s 4% with rate increases, you’re multiplying the denominator and the numerator by the same number. And you come up with the same combined ratio at the end of it 60%, loss ratio, 60% in this case, which you lose track of in that of the dollars because you’re applying a 4% increase to a 100 and another 4% increase to 60% of that. So you’re actually increasing the dollars of margin and increasing profitability, therefore, even when you’re loss trend. So I just say that for all of you to keep in my mind that you’ve got to look at it as to what question you’re really asking. Is combined ratio changing or dollars of margin changing. Getting back to the first question about the overall returns, we do an analysis of our quarters, our year-to-dates. And if I look at the year-to-date operating return on equity, which was 14.6%, there is prior year development in there. Prior year development to our accounts, because a lot of it relates to recent periods where we’ve seen trends different than what we expected and they’ve been favorable. So in any given period, you can adjust for, but if you look at the 14.6% and back out the amount of PYD and divide by the average equity, you’ll come up with something that looks like a proxy for an accident year, this year. So that’s a way of looking at it, but as Jay said, we look at these returns over time, and we try to manage as close as we can to that mid-teen’s goal.

Our next question comes from Paul Newsome with Sandler O’Neill. Please proceed with your question. Paul Newsome – Sandler O’Neill: Hi, good morning. I was hoping you could maybe review the topical issue the connections between the insurance market and primary market, particularly in the large account basis and just giving the fact that we’ve seen a lot of rate decline and of reinsurance and how should we think about that affecting your businesses as the competitive environment changes a bit?

Hi Paul, it’s Jay Fishman. We think a lot of pitching a little on that, first I just observed that broadly speaking, we are really not a large account writer. I suspect in the context of the question that you’re asking, we are a small commercial and middle market account company. We do large accounts on a fee for service basis that are largely independent of the reinsurance decisions. And we obviously do some national property business; we certainly do that for large accounts. Anecdotally, although some evidence I think exists, the layered national property business, and my recollection, we did this last quarter. I think it’s less than 5% of our premium business overall but the layered large account property business is a much more a price sensitive price driven marketplace, more challenging than it was before. Now there are returns in that segment that are awfully attractive, and so you’ve got to balance up the notion of competitive dynamics within the overall returns. But nonetheless, I think you’re seeing, we think you’re seeing some of the changes in the new capital formation. Whether it’s reinsurance by the way, or excess in surplus, bumping into that layered national property account business. And I would say on a primary side, for us, that’s probably where the impact is most significant. I’m trying to see if anybody else here has a different view? We’re really not – our treaty reinsurance is, for a company of our size, relatively modest. And so we’ve got either savings opportunities, they’re nice but they’re not going to move the needle very much, or we can change the way in which we purchase. We can but more for the same dollars or less for even fewer dollars, but on the margin, it doesn’t change anything. I’ve…

That’s actually a great question and I think you asked it actually in exactly the right way. It’s not that the number doesn’t have arithmetic meaning, we acknowledge it does, but the tendency to perceive it as a competitive indicator, we just don’t see that. We’ve always said, and have for many years, that retention is going to be the leading indicator of a changing competitive environment. And I’ll go back to the last really difficult pricing environment that we had, which was back into the ‘90s, you’ll see retention rates in middle market drop down into the high 60s. And that really defined what was going on, there was tremendous churn in the marketplace. It didn’t happen overnight, but retention rates declined and that followed, that led, if you will, the overall rate dynamic. Now we haven’t seen that yet, we haven’t seen it on the way up, we haven’t seen it – we’re still on the way up, although we’re at slower rates. We just haven’t seen a drop in retention, and we said for a long time, that we think that’s the principle indicator. Now we also, to provide whatever anecdotal observation we can, we often have provided you with commentary about what we’re hearing from the field. They had to take that with a bit of a grain of salt because it doesn’t mean it’s right, but there are observations from people in the field dealing with individual accounts every day. And our comments remain, that there’s nothing that we’re hearing from our folks that would cause us to think that we’re at a precipice or broadly a more meaningfully competitive environment, but I watch retention. And that’s what I look at, and when I see a drop in that, that’s when it’s time to begin to understand what’s going on in that local environment.

Our next question comes from the line of Kai Pan with Morgan Stanley. Please proceed with your question. Kai Pan – Morgan Stanley: Good morning. Thank you so much for taking my call, my question is regarding to the segmentation changes and management change recently. Could you comment a little bit more on that?

We have much more to say, we put out a press release its part of management’s responsibility, our responsibility here is to make sure that the younger talent in the organization gets additional exposure internally, exposure externally and position the company for continuity and just felt to us like a very ordinary and inappropriate thing to do. The real alignment was to a great extent, driven by reporting relationships within those changes, so much more about the people than about any particular realignment about the business. Kai Pan – Morgan Stanley: Great just follow-on that and Jay has done a wonderful job for the company and the shareholders and is this the recent management change is part of evolution about how the boards think about the succession plan?

Well I would never speak for the board and so – we think we have a responsibility to develop talent and present to the board as solid a management team as we’re capable of doing. And we’re going to be a management team that’s going to step up to that responsibility and not side step it. The depth of the folks in this place around here it never fails to amaze me. The talent here is just remarkable. And my job particularly, is to make sure that those people get additional responsibility and additional exposure. And that when that time comes that it’s very natural, there’s nothing upsetting to the organization internally. There’s nothing upsetting to the constituents externally, it’s as it should be and that’s really my goal. For I mean – I’ll be 62 in November Brian I think is going to be 62 later this year. I think Jay Benet will be 62 in August, so we all – we’re not Methuselah here, we’re mere mortals and our time will come. And our job is to develop that next generation and present them and just have it not be a big deal.

Thank you, next question please.

Our next question comes from Amit Kumar with Macquarie; please proceed with your question. Amit Kumar – Macquarie: Thanks, and I’m not 62 yet so. Just two quick follow-up questions. The first is, I guess it was Brian’s question and you answered that. Jay you said retentions, you haven’t seen it on its way up. And I’m trying to sort of think about those and you’re right, we should focus on retentions and rate adequacy if so many lines are at rate adequacy shouldn’t that eventually start class stating [ph] into better retentions and eventual growth in premiums?

Complicated question. I think that retention, something [indiscernible] taught me many years ago, that the real emotional content behind retention is agent comfortable, market comfortable, customer comfortable, a terrific set of circumstances where everybody feels good and fair and equitable in the relationship. And that will encourage accounts to stay where they are. And that’s a really good thing, it’s good for the accounts by the way. We think tenure matters; we think it’s a advantage, it’s good for the agents. They can attend to things that they need to attend to and obviously it’s good for the carriers that have the business. So the retention dynamic is, I think, really a reflection of the level of comfort of all of the parties to the transaction. And that’s really good, that’s a good thing. Dynamic of growth is a more challenging one. There’s no green light that goes on that says, now we’re interested in growing. Always interested in doing more business, always and when we can bring on new accounts and we have – we’ve demonstrated this in slides in years gone by. Recognizing that there is a, the internal expression is a new business penalty, but recognizing that there’s a new business penalty associated with it, if we can see a pathway to bringing on new accounts, and over time managing them to acceptable returns, we’re going to go ahead and do that, there’s nothing different about that this month than there was last month. And it’s not as if we weren’t booking new business a year-ago when rates weren’t as attractive as they are now. We were, we were as aggressive as we could be. And if anything, I would say that – if we had any disappoint, is that we weren’t actually doing more notwithstanding our…

Next question please.

Our next question comes from Michael Nannizzi with Goldman Sachs. Please proceed with your question. Michael Nannizzi – Goldman Sachs: Thank you. I had a question about Dominion actually, if I remember right, that was a business where you guys bought it was operating around a 100 combined, and it looks like you’ve really turned that around very quickly,, just curious kind of where’s that business running now. And maybe you can just talk a little bit about what actions you’ve taken in order to kind of to get yourself to that place, thanks.

Sure Michael its Alan Schnitzer I’ll handle that. I guess I would say, I would caution you from thinking that we’ve turned it around that quickly there’s certainly a lot integration work going on and we’re still; we’re still hard at work on that. So the improvement you’re seeing I guess is your, you’re looking at the results and seeing the combined ratio relative to what we guided you to and treating that to Dominion, that’s actually not correct its mostly a reinsurance transaction and some large losses that were better than what we had in the ‘92. So it’s actually not coming from the Dominion, but to get to your, to get to your question what are we doing? We’re doing all the sorts of things you’d think that, that a company like us would be doing. We’re working hard with Greg Toczydlowski in personal insurance and the whole business insurance team to bring all the know-how and sophistication in data and analytics, some scale and synergy advantage, but really just taking the know-how we have resident here at Travelers’ and exporting it to that platform. And we feel very good about the opportunity, as good as we did when we signed up the deal, but I can’t tell you that it’s all been reflected in this quarter. Michael Nannizzi – Goldman Sachs: So then so the expense ratio benefit that we saw is primarily a result of the reinsurance, can you mention them?

No, no the expense benefit you saw does primarily come from the Dominion, but there is, there is a more than offsetting loss ratio deterioration from the Dominion. So on a net basis and an all win basis, loss and expense ratio, the Dominion is actually hurting, but it is helping on the expense ratio pretty significantly. And it’s a loss ratio piece we think over that time, we’ll be able to work through and bring to hurtle levels. Michael Nannizzi – Goldman Sachs: That makes sense.

Next question please.

Our next question comes from Jay Gelb with Barclays. Please proceed with your question. Jay Gelb – Barclays: Thanks very much. First I’ve been covering the company and industry for a long time. I think we all understand the spring storms tend to be a heavy seasonal CAT quarter. I think it will be helpful for folks to get a perspective on what you would normalize annual CAT load to be. If I look back over say the past dozen years, I think the average is between 4 and 5 combined ratio points. Is that a good starting point?

And Jay, just for clarification you were talking about in the second quarter. Jay Gelb – Barclays: Correct, I was talking about – say for the full year I think that gives a better perspective.

Actually, this is Jay Benet, Jay, actually if you go to the proxy, there’s a discussion about results and in it we do talk about what the expectation was for the CATs in the year versus where we ended up. And my recollection is the numbers about $550 after tax dollars. In dollars yes, so we’re just having somebody open up the proxy and make sure we’re right about that. Jay Gelb – Barclays: Okay thank you, I can generally take a look at that. On the next issue it would be in terms of capital return, I’m wondering if we were to think about out years, could Travelers ultimately be in a position where dividends plus share buy backs could exceed in your operating earnings?

Not permanently, it can obviously year-to-year. And that’s really a function of timing, but the only way that it could actually exceed earnings permanently would be if we look today at the company. That’s the only way to do it, so you know not permanently, no.

Jay let me just jump back, it’s Brian McLean, you started with we all kind of know spring storms and volatility and clearly we do, but when we look at our data of particularly what’s happened with spring weather over the course of the last – well since 2008, it’s dramatically higher than what you would have seen in the previous 20 years. To the extent of you know a 3X kind of number and in fact that’s not even counting the 2011 off the charts number that we had. So we’ve always known that we would have near term, short term volatility in our CAT numbers and everybody follows the industry, it’s used to looking at that, but particularly for the second quarter tornado, hail activity and how our product is used to deal with that, we really have done a lot of thinking about what’s the long term move to and whether we see continuing volatility in that number?

A good example anecdotal actually of the magnitude of the volatility, there was not two on the go, we didn’t think about catastrophe loading auto, in personal auto. We do now and that’s just the function of experience. So we’re reacting to the changing weather patterns kind of almost on a real time basis. It’s hard to answer the question at this point, of what a normal level is, that’s why we talked about it so much over the last few years. There’s been a driver of not only weight, but underwriting in terms of conditions; it’s just proving to be a challenge.

Next question please.

Our next question comes from Vinay Misquith with Evercore. Please proceed with your question. Vinay Misquith – Evercore: Hi, good Morning. First question on the competitive environment, I think you’ve done a good job explaining that it’s largely unchanged. Jay, you mentioned that you think there is likely going to be a soft landing. Just curious sort of looking at the cycle versus the past, what’s different and what gives you confidence that there is going to be a softer landing this time around?

Just because it’s my opinion doesn’t mean it’s so; I need to start off with that. It’s just one persons point of view right, we’ve been talking for years now about the fact that our view was that the magnitude of this cyclicality in our business, we thought would be lower than an historical experience. And it was driven by everything from much better data across the industry. I’ll exclude myself, but I think much better management in the industry than wasn’t the case 20 years ago. You look at capital deployment philosophies; it’s different than it was 20 years ago. I think Sarbanes Oxley and the attention of audit committees and boards to adequacy of reserves to the level, the procedures and policies around reserve setting has made them much more accurate. It’s not that people were abusing it before, it’s that there’s a whole different level of attention and focus on those initial picks, what’s driving them, what are the factors for transparency that exists to what the governance committee, external auditors, internal auditors, boards, those are all things that will make the accounting and reserving process better. Never guarantee, we’re all talking about the future but it will make it better and I think it has. And I think as a consequence of that, the feedback move between clean performance and underwriters and pricing decisions is stunningly faster than it was 20 years ago. We actually are at a point now where we’re booking weather dynamics virtually month-to-month. When I first started here, you were lucky if you had it in the quarter, that’s the level of feedback there was. So the delay in understanding what’s trans-factoring it back into reserving and changing pricing, was much more attenuated than it is today, its crisp. And I’ve listened…

I’m going to turn it over to Greg in a second to talk about loss trend, but it would be remiss if I didn’t observe, because I think he takes it for granted on this. We mentioned that the number of quoted policies is actually up 10%. That’s one of the really wonderful surprises here, we thought going into this, that we were being quoted everywhere because of the comparative rating process. And it was not our going in expectation that by putting in a different model, that we would actually increase the number of quotes. And so what’s been – that 10% is a big number and what’s impressive about that, is the agent understanding and reaction of the Travelers product of Quantum 2 as a legitimate competitive product and they’re embracing it in their quoting process. So that’s where we loss trend, but we’ve to some extent, taken for granted internally the increase in quotes but it’s a substantive plus.

Absolutely and I think that echoes about how we feel about loss performance, we’re very encouraged when we saw that increase in quote flow that Jay talked about. Obviously our focus then shifts right to the margin about how we’re feeling about the profitability in that business given that we’ve just launched our three largest states last month. We’re not up on our 1 year anniversary, obviously we don’t have a credible set of earned premium yet to really declare a victory, but our focus is really looking at long-term surrogates of profit right now, including the mix of business, short-tail coverage’s like the frequency on physical damage coverage and all of those things that we’re looking at, they’re right within expectation. So we’ll continue to aggressively measure the ultimate combined ratio, but all those proxies that we look at are within expectations. So we’re feeling as good about the quote flow that Jay talked about that we are with the early loss indicators.

Before we go to the next question, Jay Benet has a correction.

It’s a comment more than a correction. We said we would give you the number from the proxy as it relates to the quote, unquote normal CAT losses. And what we’re remembering was actually from two years ago, the proxy from 2013 had $645 million as the after tax cost associated with CAT. So we had $550 before, and as I’m reflecting on that, the thing I’d want to share with you is really the fragility of these kinds of estimates, because looking at the $550 going to $650; it’s not a reflection of increased exposure. It’s really a reflection of trying to refine year-over-year what these CAT estimates are. And it’s not all that long ago that if you ask the same question, we would have said something like $350 million after tax. And thinking back to those times, it’s our exposure base was actually quite a lot larger than that. So this notion of – so while we’re saying this is quote, unquote normal, I just want to highlight the fragility of the estimates.

Great, next question please.

Our next question comes from Randy Binner with FBR Capital Markets. Please proceed with your question. Randy Binner – FBR: Hi. Thank you. I have a couple on reserves and it’s in the commercial area, you commented that asbestos environment led to kind of 08 to 12 releases. Can we infer just kind of from a normal claim closing pattern on general liability, that anything you’d get 08 and prior in that area is kind of – you would have seen it by now?

This is Jay Benet, when we’re doing; we’re dealing with reserves, by definition we’re dealing with incomplete information. So we’re looking at new information that’s coming in every quarter and evaluating that with regard to whatever the assumptions have been. So I wouldn’t look at any one of our reserves as being at finality. We’re always looking at the flow of information and adjusting. There are times when you see some things; you’re not sure whether you’re going to react in full or in part to it. So I think it’s the best I can do to answer your question. Randy Binner – FBR: Okay. Yeah I mean I’m just trying to get a sense of – because there’s some PL and GL but it’s not, it’s not as long as like asbestos environmental, so I’m just trying to get a sense of, if there really even is the potential for a lot more to come from 08 and prior?

I mean our reserves are always a best estimate, so we don’t really comment on whether they’re going to change, we’ll see what the data says going forward, there’s always new information coming.

I’d just make an observation, asbestos and environmental is a general liability exposure. The difference there is that particularly in the asbestos arena, much of it came from a time when there were no policy aggregates, there were per occurrence aggregates that we started on a mid basis. I think we ended up with policy aggregate starting in the early 80s. So that was pre dated that, but liability is a policy that lasts forever, you can always have things – you just never know.

Great, next question please.

Our next question comes from Jay Cohen with Bank of America Merrill Lynch. Please proceed with your question. Jay Cohen – Bank of America Merrill Lynch: Thank you. I guess question I had was on loss trend, you talk about a loss trend in business insurance of roughly around 4%. And I’m wondering is that the number you’ve priced for or is that what you are observing, because seemingly what you’ve been pricing before for the past, you know five years. You’ve seen something less than that given the reserve releases. So when you talk about that number what exactly are you referring to?

Our actuaries, our finance, our business folks are always looking at what they think frequency and severities going to be and you know, building in you know various assumptions they take into account, what recent trends have been. There’s always the question of gee, if you’d seen – and make up an example, if you’ve seen recent inflation running at 1% or whatever, what does that mean going forward? Is it going to continue at 1% or is it going to get better, is it going to get worse? So at a very granular level, we’re making assumption everyday and pricing and reserving as to what the future has in store based on current events and past trends. And when you look at the kind of environment that we’re faced with today, looking at very tame inflation, but some of the factors at work as to creating uncertainty as to what those inflation rates are going to be going forward. You have to take that into account and ultimately, that along with every other assumption comes down to a series of numbers for frequency and severity. And things have been running pretty moderately, but when we say there’s a 4% trend factor and you go back in time, I think you’re absolutely right in saying well maybe it was actually a little less severe than we had expected. So we had favorable development, but going forward, you have to make a determination as to whether that’s going to continue or whether the world is going to change.

Right so specifically Jay, when we say this quarter 4% loss trend, we’re talking about both what we’re seeing is trend in the current year, and what we’re pricing for. And obviously that’s an aggregate number so it’s all over the place by different lines. As we have prior year development, we’re looking at why we had that development and does that change our outlook of what the current year should be? So an example of one which usually wouldn’t would be if we had favorable development on prior year CAT, we’d probably say that doesn’t – unless they were dramatic, wouldn’t fundamentally change our view of CAT’s this year. There are other things that you could obviously say would change it. So the base year does move but, its –

Yeah and the most volatile part of it is non-CAT weather. Our loss trend numbers make an assumption about non-CAT weather and that’s obviously, at least I think, the most unpredictable part of that loss trend dynamic, it is one of the reasons why you’re hearing us relentlessly talk about upset by favorable non-CAT weather or upset by adverse non-CAT weather, it’s just who knows. Jay Cohen – Bank of America Merrill Lynch: On that topic you talked about non-CAT weather relative to a year-ago being worse. Can you speak to non-CAT weather relative to a normal second quarter, was this worse than you might have expected normally, instead of just compared to last year versus the normal expectation.

I’ll take that and it’s a little different BI to PI so in, in personal insurance we would say this quarter was the non-CAT weather was about normal. It was a couple of points worse than last year, which was abnormally low. In BI this quarter non-CAT weather was a little bit high, so about a point unfavorable to both last year, which was kind of normal and what we would have expected this year. And the difference there is especially when you get into tornado, hail the, the impacts in the commercial business can be really random and volatile. Personal lines you have a storm and it hits the neighborhood and we can kind of see the claims. In business insurance you can hit our risk or not hit our risk and it could dramatically change the number. So that’s the perspective relative to kind of normal. PI about normal this quarter BI a little bit worse than normal.

Great. And this will be our last and final question.

And the last question comes from Josh Stirling with Bernstein. Please proceed with your question. Josh Stirling – Sanford Bernstein: So we talked a lot about reserves. I was wondering if you could give us some color, I know it’s the best estimate, but there’s a range of different approaches across the industry. Some companies consistently target something like a zero favorable development targets on consistently target a much larger number. You guys, just from observation, seem to be sort of in the middle of the range, but everybody is thinking about earnings over the next few years, pricing slowing you think you’re guiding in your – in your outlooks actually talk about how underwriting margins and the underlying basis seem to be slowing and stabilizing. I’m wondering what we should be expecting you guys truly would like to be sort of a normal level of favorable development, when you think about sort of what’s your real philosophy really. And through the cycle or look like, it’d be really helpful for us?

Looking at each other, Jay and I my own view is that our goal is to get it right. If we could pick the right number, and first of all, that’s our responsibility, our obligation is to record a best estimate. So that’s what we do, we attempt to record best estimate. And the accounting rules are critical, they’re a really big deal, but it’s also how you price and how you think about the returns in your business. And where you perceive risk versus rewards. So the importance of making it our best estimate is just critical. We struggle to figure out how to manage the business if we were recording something other than that, because we priced to that loss ratio, we priced to that trend, we priced to that yield curve, it’s just critical for us. So I’m sure Jay and I would say this but – give you the same answer, which is our expectation sitting here today, is that there won’t be any development. We think we’ve got it right, it doesn’t mean that we don’t have issues that we’re watching and aware of and you’ll ask us often about emerging trends and claims. We keep track of all that, but our goal is to get it right and so the notion of a question about a normal level of reserved development, just doesn’t resonate with us. We don’t think of it that way, we don’t think there is a normal level of reserve development.

And I fully agree with that. It’s always about best estimates; it’s always about getting it right. I just echo what Jay says. Josh Stirling – Sanford Bernstein: That’s fine. And thank you but again, I just asked the question. This quarter seemed to slow a little bit, the competition was – I think you talked about some good guys and bad guys, I was very, was obviously a good news and then there were some environmental. Is there anything that we can infer from the lower PI favorable development and the lower personal lines favorable development that we should look at as a forward leading indicator or is the process still the same and should we look back over the average and make our own conclusions?

Well we try to give you as much information as we can with regard to what the drivers of favorable development are. So in the case of PI, do you think about the first quarter, a lot of it dealt with weather related losses both CAT and non-CAT and we had some additional non-CAT weather related losses that turned out to be more favorable. And business insurance, you just mentioned of the level of favorable development was 25, but that was after the environmental. So if you just look at the numbers, you’ve got a storyline that over the last many years has provided insight as to what are the drivers of it and we’ll see just how those drivers, or others, manifest themselves moving forward, but I don’t think there’s more that we have to offer that relates to that. We try to be pretty transparent, very transparent.

Very good, that will conclude our calls today. Thank you very much for joining us and as always, Andrew Hersom and I and in Investor Relations will be available for any follow-up questions. Thank you.