Importantly, it’s not only customers with loss making lines they are speeding with upward draft. We observed a number of our major reinsurance clients, perhaps more particularly in Europe, successfully using the argument that losses they sustained in one part of the globe need to be compensated for by improved prices around the globe.
In third place, if you look at the supply capital. And that I mean is the degree of over or under capitalization to give line and this is not evenly distributed. There is a mismatch between where the supply of capital is and where the demand for capital is. Therefore, we are seeing the same macro phenomenon at a global level, having differential impact in different regions and in different lines.
By virtue of Aspens’ extensive distributions network onshore and offshore and in diverse product mix, we are well placed to exploit these relatively undercapitalized pockets, which offer well above average pricing.
And fourth, U.S. wind air version 12.5 and RMS version 11 releases, last year is telling insurers and reinsurers like that there is more risk from the same amount of exposure. RMS version of 11 delivers the same message, but in a more muted way to the Europeans.In Japan, (inaudible) stress transferred theory and is associated a less than the Tokyo earthquake are telling Asian insurers and reinsurers that there is heightened risk of an earthquake in the Tokyo Bay area. This is not about charging more money for the same risk, because bad experience. This is about charging more money because the risk itself is greater. Later in the call, I will illustrate how these macro factors bring themselves very specifically investment lines of business in the regions in which we operate. But before I move to discuss our performance of the quarter, I want to mention our recent capital raise. In April, as a result of the attractive debt pricing environment, we opportunistically accessed the public markets and completed a $160 million preferred offering. This enhances our financial flexibility and rating momentum continues. And also support our U.S. lines and gives us the opportunity for more share repurchases. Read the rest of this transcript for free on seekingalpha.com