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Thank you. Good morning. First, everyone should understand we do not [inaudible] insurance business. We got out of that business in 1986, and haven’t seen it since. Number two, I must be the only person that was happy with our quarterly earnings based on the stock price. We’re pretty pleased with how things are going, we’re pretty pleased with where the business is and the direction we see things. I’ll talk more about the general industry and our position. First, Rob is going to talk about the operating segments and then Gene will talk about the numbers and then I’ll try to pull it all together and take questions. Rob?W. Robert Berkley, Jr. Okay. Good morning. Market conditions in the second quarter were a continuation of the trends we observed in Q1. Carriers seem to be increasingly aware of the realities that stem from a weak investment environment, combined with less robust prior year reserve development. Additionally, it is becoming more apparent that the benign loss trends experienced over the past several years may not be a proxy for what we should expect going forward. The reality of these ongoing circumstances continue to apply pressure to the situation, and it consequently is requiring market participants to refocus on achieving and underwriting profit. However, while the need for a change in behavior may be clear, it is equally apparent there is significant tension between the desire to increase underwriting discipline versus the impact these actions may have on production. Having said this, by and large companies seem to be accepting the realities of the industry’s challenges, and are consistently looking for additional rate while simultaneously continuing to show early signs of an introspective examination of their risk appetite. In particular, it is encouraging to see national carriers taking this path, given the meaningful tone they play in setting the stage for the overall market.
Generally speaking, the excess market continues to be one of the areas that is the most resistant to change. It would appear as though there is a misperception held by some that the loss activity that is occurring in the primary layers won’t climb up the coverage tower over time. A prime example of this would be excess comp. It is our view that some of the loss activity that the primary comp carriers have been experiencing with time will begin to impact the excess comp market as well.Having said this, perhaps the silver lining is that history would suggest that areas that get the softest for an extended period of time tend to be the ones that offer the best opportunity in a hard market. Net written premium in the second quarter was $1.19 billion. This represents an increase of 12.6% compared to the corresponding period in 2011. All five business segments contributed to the growth, although to varying degrees. The expansion of the specialty and international segments continues to be a result of our market positioning, breadth of product offering and relationships, as we have discussed in the past. The strength in the alternative markets was driven by improving market conditions, specifically in primary Worker’s Compensation. The growth in the reinsurance segment, primarily in the treaty division, we believe is generally a result of [inaudible] becoming increasingly sensitive to financial strength, as well as their confidence in the value our team brings beyond financial capacity. Our regional segment experienced less growth than other segments, which is a reflection of the level of competition in their part of the market, and their unwavering commitment to underwriting discipline. The growth in the quarter not only varied by segment, but also by operating unit. Of the 44 units writing business during the period, 31 of them grew a total of 23%, while 13 declined a total of 14%. As we have suggested in the past, our model allows us to focus on growth when opportunities present themselves, and the ability to shrink when necessary. Read the rest of this transcript for free on seekingalpha.com