Question-and-Answer SessionOperator Operator Instructions. Our first question comes from Ryan Byrnes of Macquarie Research. Ryan Byrnes - Langen McAlenney Sorry that's Ryan Brynes from Langen McAlenney. Good morning everybody and congratulations on the strong results, John. It is a pretty strong way to leave on, but the press release didn't state there were any share repurchases in the quarter. Is that a change of philosophy or just unnoted there? Brad Irick Hi, this is Brad Irick. No change in philosophy and 400,000 shares purchased during the quarter. Ryan Byrnes - Langen McAlenney And then quickly just with the reserve releases in the D&O book, I saw that there weren't any changes to the DFP book, but I want to know was it more international weighted versus US public book or how did that -- was there any breakdown there? And just want to see I guess how successfully thought you were in terms of raising retentions and I guess how you were able to -- what their overall retentions were for that book in the past year? Chris Williams Yeah, this is Chris Williams. We are about two-thirds of the way through the process. To give you some color on that, we are non-renewed about 30% of the book, we are averaging about a 50% increase in the deductibles, and we have been able to reduce the limits by 10%. So we will have more to update after the next quarter on that. Operator Thank you. Our next question comes from Michael Nannizzi of Goldman Sachs. Michael Nannizzi - Goldman Sachs Just one question. What was the -- I just want to confirm that the accident-year loss ratio and the professional liability segment this quarter? John Molbeck We don't have that information in front of us. Michael Nannizzi - Goldman Sachs If I can get $26 million, I think then, I get like a 90, I just want to confirm if that's the right number and then just want to understand kind of what already -- John Molbeck Well, if you think about it this way, I didn't know you still existed Mike so it's good to hear your voice. Michael Nannizzi - Goldman Sachs Thanks. John Molbeck If you think about it this way we are running DFP that's running in this year we are running at a 100% combined. Michael Nannizzi - Goldman Sachs Okay. Okay, and then on the A&H segment the underlying loss ratio is 71.3% which is at the low end of range for the last couple of years. Was there a unique margin improvement there or was that just something? I mean there have been quarters where you have been down in that range I am just curious. John Molbeck No, nothing unique has happened. The accident year loss ratio and professional liability is about 66%. Michael Nannizzi - Goldman Sachs Okay. Oh in professional liability it was 66%. John Molbeck Yeah. Michael Nannizzi - Goldman Sachs Okay, my mistake, okay. And then you paid down a bit of the credit line in the quarter, is that right? I just haven't been able to look at everything as close as I would like but I think I saw the debt number, the notes payable number come down I think the credit line rose up in there. Is that right? Is it $42 million that was paid down or do I have my number wrong? Brad Irick This is Brad, yeah, the number moved down a little bit. I think we are 13.5% from a debt capital ratio closer to 15% I think last quarter. Operator Thank you. Our next question comes from Ray Iardella of Macquarie Research. Ray Iardella - Macquarie Research So a couple of question from me I guess maybe start off and hit on Ryan's question about capital management. Just curious I know 400,000 shares repurchased but, any reason for the slowdown in repurchases relative to the strong earnings and strong cash flow? John Molbeck Not really, we have been optimistic we have been in a blackout period for a while because of earnings after the Board announced it so I think it's just more of a happenstance than anything else. We remain opportunistic and will continue to do so for the foreseeable future. Ray Iardella - Macquarie Research Okay, any thoughts on valuation relative to the buyback and relative to book value, is that kinda how you guys look at it? John Molbeck We are kind of in the Warren Buffet class. Ray Iardella - Macquarie Research Okay, fair enough. Other question you know, I wanted to ask a little bit about the HMO medical excess business. What kind of you know, purchase price did you get for the renewal rights? Chris Williams We simply sold the business off to a reinsurance partner of ours where based on their success of renewing that business there will be a small override to us. Ray Iardella - Macquarie Research Okay, so nothing, not surely recognized in the third quarter then? John Molbeck No, nothing will be recognized until next year. Ray Iardella - Macquarie Research Okay. And then I guess, you know, one last one from me in terms of the favorable development on the professional liability side. What accident years were those from, if you could give us a breakdown that will be very helpful? John Molbeck Well we really won't -- we are not give you the breakdown but we will tell you they're of years 2006 and prior. Ray Iardella - Macquarie Research Okay. And one last one if I can. The A&H business, now that you guys took out the HMO medical excess would it be possible for you guys to release the year-to-date loss ratios from 2 Q and then the first quarter loss ratio for that segment? John Molbeck It is going to be restated. Ray Iardella - Macquarie Research Okay. All right fair enough. John Molbeck It will be - you will have that information. Operator Operator Instructions. Our next question comes from Mark Dwelle of RBC Capital Markets. Mark Dwelle RBC Capital markets A lot of my question had been covered, but one other one was the other operating expense in the quarter was kind of elevated on a dollar basis. Is there anything unusual or infrequent in that number? Normally run rate around $80 million. John Molbeck If you think about it as Brad mentioned earlier, we have invested a relatively insignificant but material amount of money anyway in dividend stocks and bank loans. And so Black Rock is doing that for us and so you are just seeing the natural uptick of that. Mark Dwelle RBC Capital markets That's the operating income, I meant operating expense? Brad Irick You are talking about other operating expense? Mark Dwelle RBC Capital markets Correct. Brad Irick Okay. This is Brad. The - a couple of things there, one is we do have the FX impact that's in that line item. You will see that broken out separately in the press release in the last page where we show the kind of non-operating elements to get to operating return. So that's one piece of that. We do have strong earnings for the periods that does have an impact on compensation and bonus accruals. So you will see that has an impact as well. John MolbeckWe always like to be able to increase the bonus accrual, because we have good results. Mark Dwelle RBC Capital markets That's fine, I am sure shareholders would do - tend to agree. The FX is about $4 million of that and so apart from the bonus there was nothing unusual other than that increased the run rate? Brad Irick No. And I think the $4 million, I think may be an after tax number that you [are quoting] [ph], it is more like a $7 million pre-tax. Operator At this time there are no further questions. John Molbeck Well, thank you operator and thank you everyone for joining the call. Our next call will be run by Mr. Chris Williams, who will be CEO of the company so congratulations Chris, and everybody have a great day. Chris Williams Thanks John. Operator This concludes today's conference call, you may now disconnect.
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