Axis Capital Holdings, Inc. (NYSE:AXS)
Bank of America Merrill Lynch Insurance Conference
February 14, 2013 10:00 am ET
Albert A. Benchimol – Chief Executive Officer
Joe Henry – Chief Financial Officer
John Gressier – Chairman, AXIS Insurance
Okay, let’s get started with the next presentation. Very pleased to have with us, Albert Benchimol, CEO of AXIS. I’ll let Albert introduce the rest of his team. Albert has been CEO for less than a year at AXIS. So he is still relatively new in a role, but we’ve already begun to see some changes at the organization. Of course, Albert did spend a decade at PartnerRe before that.
I guess, his title was CFO, but we always thought of him as more than just a financial executive at that company and certainly he has proven that today at AXIS. It’s his first time speaking as CEO at this conference from AXIS and so we’re excited to have Albert here. Albert.
Albert A. Benchimol
Thank you very much and good morning everybody. I would like to introduce my team colleagues here with me. At my immediate left is Jack Gressier. Jack has been with the company from the very beginning and run the insurance division, which wrote $2.3 billion of premium last year. At his left is Joe Henry. Joe is our CFO and he joined us last June to replace me when I took over the role of CEO.
It’s a pleasure to be here with you today. As usual and probably like everybody else, but first thing I have to do is give you the safe harbor language that our lawyers compel us to introduce at every single meeting, which basically means that I’m going to tell you a lot of really good things about AXIS, but you can’t believe any of it. And you have got to do your own, you have to do your own investigation to confirm it. But take my words, the words I have already revealed we said and it is still good. I would like to start with a review of 2012 because in fact it was a very eventful year for AXIS as Jay spoke.
The first thing that we did of course is execute it on the CEO transition that we had announced in the fourth quarter of 2011 and beyond that we also brought in a number of new executives to our executive committee, including because I mentioned Joe Henry, but also Jay Nichols to run our reinsurance division and also we brought on Eric Gesick as our new Chief Actuarial Officer at Group. The good news here is to say that the team is in place. We’ve had really no turn over in our senior management team and everything is really aligned for us to move forward as a team going forward.
We took advantage of the fact that we had completed our first decade made an executive management transition to challenge ourselves and ask ourselves whether or not the attribute strategies, goals that we had set for ourselves were in fact the right ones to move forward in the second decade. And in fact the good news is we confirmed our strategy and our approach to the market and I will discuss that with you today. Not only that though, but we really did respond in a very positive way to an improving market. And the market is improving, I’m sure we will talk more about that.
It’s fair to say that the improvements are not anywhere close to what you would expect in this cyclical hard market. But they are at least moving in the right direction. I will caution however that in many lines of business as much as we are going to see improved underwriting results based on this pricing. We’re also facing the real headwinds of lower investment income for the industry. And so we need these pricing increases. And ultimately, AXIS delivered what I would consider to be satisfactory but not outstanding performance in 2012 and that really was because although we had a generally favorable last year, we also had a large loss with regard to Sandy.
We delivered a high single-digit ROE. Our net income ROE approached 10%, but the very positive thing is that we are in our strongest financial position ever. Some highlights of 2012; our gross premium written grew 1.1%. This was despite the fact that we significantly reduced our reinsurance premium as a result of the repositioning of our cat portfolio.
The net premiums written however declined modestly about 2% and that is because we grew most aggressively last year in those lines of business that provided great opportunity, but also where we had increased our reinsurance sessions at the beginning of the year. And therefore that had an impact of feeding a lot of the growth that we had on the gross premium basis.
We did have good growth in net investment income. It was up 5% plus last year and that was really on the back of very strong results and returns in alternative portfolios which offset obviously the lower yield that we experienced in our fixed income portfolio.
We also had significant improvements in our combined ratio last year. Obviously, a big part of that was the fact that in 2011, we had severe catastrophes globally both in New Zealand, in Japan, Thailand and so on whereas in 2012, we only had Sandy.
So beyond that, we also had an improvement in our non-cat ratio and that was really a result of the fact that we had significantly lower large loss incidents in 2012 and we finished the year with 13% growth in our book value per share after the payment of a larger dividend in 2012.
Let’s take a broader longer-term view of the organization for those of you who are less familiar with us. The first thing is that we are a hybrid insurer and we insure, and there are two points that I want to make on the slide that you have which describes our insurance business, and the first is the broad diversification that you see in that book of business and in fact you’ll see that we have strong growth in the property lines market as well as professional lines market.
You’ll note in the diversification table, the pie chart and about this 11 o' clock position is 7% (inaudible) for accidents and health, and I will remind you that through 2010 that was zero, and in fact I will be talking to you later in this in this presentation about the growth of accidents and health initiative.
The second thing that I want to highlight on this slide is the superior underwriting performance of our company. Over the first 11 years we rode on a growth basis of $20 billion in premium around our $14 billion net, and over that period of time we have delivered an average combined ratio all and everything included up 83%, generating $2.1 billion of underwriting performance.
And in 2012 we had record gross premium written off $2.3 billion, net of $1.5 billion and will deliver a combined ratio of 96 and underwriting income of $65 million, and that’s because we had a large Sandy loss in the fourth quarter. Nevertheless we still improved 2012 over 2011, again because of the lesser impact of international tax and lesser impact of large losses.
In our reinsurance business, you will notice the same thing which is a very broad diversification in our portfolio, including the way that we managed our growth across different lines over the years.
One of the good news here is that, except for some areas of property and cat and some professional lines, there is essentially not as much aggregation, with regard to the reinsurance portfolio over the insurance portfolio in lines like motor and international.
Here too I think our results are very, very strong. We will close the $16 billion of premium over the period of time averaging 89 combined ratio generating $1.6 billion of underwriting profits. Last year, we’ve reported the same 89 combined ratio delivering $198 million of underwriting income, which was a very, very strong improvement over the prior year again, on the back of the catastrophes.
The net of these two histories on the underwriting side combined with an intelligent and prudent underwriting investment strategy and shareholder-friendly capital management expressed that our over our history, we’ve achieved 13.6% growth in diluted book value per share adjusted for dividends.
And in terms of capital management, we have also given back a significant amount of our capital to our shareholders over the years. Throughout our history, we’ve given up in excess of $1 billion in dividends and in addition, bought back close to $2.3 billion of shares through repurchases over the last 12 years. In 2012 in particular, we gave back to our shareholders $460 million in the form of dividends and buybacks which is close to 100% of our net income last year.
So looking forward, as I mentioned to you, we really challenged ourselves to say what we did over the past decade, is that what’s going to succeed for us in the next decade. And the good news is that by and large, the answer is yes. There are some modest changes, but fundamentally, we are and we will continue to be a specialty insurer and reinsurer focusing in adding value in the areas of large, complex, volatile risks.
And so we reaffirmed our commitment to our strategy which was the bottom paragraph on that slide to be one of the leading global, diversified insurance and reinsurance companies as measured by quality, sustainability and profitability. So we went one step further. We committed ourselves to our value proposition and to how we were going to achieve and our value proposition was to provide our clients and distribution partners, a broad range of risk transfer products, meaningful capacity and unquestionable financial strength and also how we would go about achieving that, which is to make sure ethical, entrepreneurial and disciplined culture that promotes outstanding client service, intelligent risk taking and superior shareholder returns.
In terms of our economic goals, our economic goals were reaffirmed. We want to grow our equity and ROE. We want to maximize that within the context of an intelligent and prudent risk appetite. There has been a lot talk over the last few months and recent year. It’s about whether or not financial goals should be changed or reviewed in the context of the lower interest rate environment. We’ve thought long and hard about that and we’ve determined not to do that. And so I will remain to achieve across the cycle at 15% ROE.
Now we are realistic and we know that in the current, our low interest rate environment and that is going to be very difficult. On the other hand, we are looking at this thing to be over a 10 year period and our expectation is that overtime, interest rates will in fact rise and so we are looking at it that way.
For me the most important reason for not changing that 15% is that I refuse to believe that our best days are behind us. We achieved 14.2% ROE in the first decade of our company and we are committed to do everything that we can to beat that and changing the goal I think would have diluted that objective.
That said, we’ve recognized that achieving that objective is going to be conditioned on a number of factors that are beyond our control. Obviously, it will be cat, so it will be the investment environment, the economic environment and so on. So while we are keeping that 15% ROE objective, we’ve also established for ourselves, a relative performance objective, and that is that when we look at our peer group, we want to make sure that we achieve top-quintile ROEs or top-quintile performance in whatever metrics you look at with only average or modestly above average volatility around that performance.
And so if the industry achieves only 5% over the next 10 years, we would probably quite pleased achieving 12%, but we definitely want to make sure that we have top-quintile performance whether it’d be book value growth or ROE as compared to our competition.
And how will we achieve that? Basically, we will achieve those goals by following these strategic objectives, one is diversifying growth for better balance and diversity in our portfolio to ultimately reduce that volatility that I spoke about, enhancing our risk adjusted returns through improved data and analytics, enhancing operational effectiveness, making sure that we are more cost effective, more efficient in our processes and business programs, and ultimately developing and empowering our staff in our culture.
We agreed to a six point strategy to achieve those goals: one is recruiting the very best team in the industry; I’ve said repeatedly that an insurance company is nothing more than capital and people, and if you don’t have the right people, that capital will disappear very, very quickly. So it’s all about having the right people, and the reason it’s first on this list is because with us the right, we won’t be able to able to execute on the next five points. And so there’s a real commitment in our company, and I’ll talk about that a little bit more with regards to recruiting, retaining and motivating the best team in the business.
The second as we’ve discussed the development of a broader portfolio of risks, both within the U.S. and internationally, enhancing and leveraging our relationships with our producers, making sure that we get the first and the last call on opportunities, combining the pursuit of individually volatile and complex risks within the context of a diversified portfolio and a very committed risk management program. Finally, managing risk appetite and our capital throughout the cycle to take advantage of opportunities.
And again, I want to be very clear, our goal is to grow our franchise. Our goal is to increase the ROEs and the book value of this organization, but you have our commitment that if we don’t find those opportunities, we will return that capital back to the shareholders, we’ve done that in the past, and if necessary we will do it again. And finally, while we do that, making sure that we stay true to our commitment to delivering unquestioned financial strength to our clients.
We’re actually quite optimistic about delivering on that strategy because we are building on a very positive track record with significant attributes and here are a few of them. The first is we do have a growing global insurance and reinsurance platform. We have over 30 offices in five continents and those keep expanding both in terms of offices, in terms of people, in terms of lines of business that we are offering in the market.
The second is our diversified book of business by product and diversity and geography and we will discuss that a little bit more with you, very, very strong relationship with brokers and clients, that is one of the very, very strong differentiating attributes of AXIS. An excellent market reputation and our ability to access and underwrite complex risks.
In my experience, being in this company over the last two years and over the last 18 months traveling continuously to various offices, dealing with brokers, looking at the senior management team of other brokers and producers that we deal with, the one thing that comes across over and over again is that AXIS punches above its weights, against some of the very largest companies in the world, because of the quality of our underwriters, because of the quality of our product and services. Obviously, the combined ratios that I reported to you are testaments to our ability to underwrite complex risk is a incredibly strong underwriting cost of this company. We've got the right capital. We've got the right ratings and we have the track record to build on.
In addition and this is a good news, not just for AXIS, but for many. We've got the win at our backs in terms of market condition, and you can see here, the various pricing metrics that we monitor in our book of business over we do on a monthly basis, but obviously here we're showing to you, for the last eight quarters, and you can see that in the beginning of 2011, we were dealing with still a falling pricing market environment. That has gone positively over the last eight quarters, we are now clearly in the positive territory, and more importantly in many lines of business, we are now getting great on rates, certainly through the second half of 2012, we were able to add to pricing in the areas, where we already added to pricing in the second half of 2011, and that certainly providing some opportunity.
No, I'm not saying that this is going to continue in a positive slope curve over 2013 and 2014, but we remain comfortable, that's throughout 2013 we will continue to see positive pricing momentum across our overall book.
So how do we achieve that profitable diversified growth that I talked about? We are going to be adding incremental resources into working, leveraging, deepening our relationships with not only the top tier brokers that we've got excellent relationship, but also with the top 20 brokers below them, with whom we haven't done as much yet, but we want to do as again to expand the breadth of opportunities that we have available to us and we are adding to those resources as we speak.
Secondly as to focus on sectors and geographies that have in our mind opportunities for greater growth than the rest of the market and you’ll how we are expanding in Latin America, expanding in Asia, getting into crop business, expanding our Marine book, these are areas that we believe are going to be offering opportunities.
One of the recent successes for us for example was renewable energy. In our London office, we have started accessing renewable energy insurance over the last couple of years and that has been a very good book for us. It has grown and it’s has delivered very good results. So we are looking at areas that will grow. But not only will we do that the reality is that we still have a very small market shares in a number of lines of business. And we can through the continuation of the good work that we’ve done over the last 11 years, continue to expand our market shares in those lines of business.
We are pursuing a number of new initiatives and ultimately as we look through this it will clearly be over the next month and years opportunistic acquisitions. We are not looking to achieve any kind of strategic transformation in the acquisitions. We are very fortunate. We have all the attributes, we have the right products, we have the offices, we’ve got the people. But there will be some bolt on acquisition here. They are the complement a book of business we would like to add to a skill set for a distribution channel that we feel that we can ask to.
Wherever we are, whatever market we are in, whatever product line we are in we’ll always focus on doing the same thing which is to provide the best products in terms of the coverages that we are offering our clients, in terms of the consistent and sizable capacity that we can offer them. The best service in terms of responsiveness to our clients to our brokers and to our clients. When they have an emergency when they need something done make sure that we are there for them.
And in terms of client handling, one of the most important issues that we differentiate ourselves, in the professionalism and in the timing of our clients handling, And we’ll continue to promote that. And finally make sure that we have the right people and that they have – they are seeing both internally and externally as the right experts to deal with in terms of doing business going forward.
It is the pursuit of these attributes and goals that will allow us to achieve our growth. I’ve talked about initiatives and I wanted to give you a sense of some of them. On the insurance side, one of our most visible initiatives recently has been our accident and health initiative and I will talk about that. But that’s not the only thing we are working on. As I mentioned, we have got renewable energy, we have been expanding in professional lines, not so much in the United States, but really internationally; in Europe, in UK, Canada, Australia and elsewhere. We think there is an opportunity for growth. We are recognized as a leader in professional lines both in the United States and internationally and this is an opportunity for us.
And one of the things that we have done recently is announce our reentry in the primary casualty market and on the retail side. We got out of the casual primary casualty market in 2010, frankly because they didn’t like what was happening in the market. We have been reducing that book of business for a period of time, but we are now starting to see the right indications that it will improve over time and so we’ve added incrementally to our staff, we have added incrementally to our resources and we are going to start writing some primary casualty in that space. This will be slow, this is not going to be a significant generator of premium, certainly in 2013-2014, but we think it’s a good time to start planting the flag in that area.
And of course, I mentioned earlier growing in Canada, Asia, and Australia where we acquired an MGA and established a branch network in Australia. But our initiatives are not only on the insurance side, they are also on the reinsurance side. And there one of the more visible ones would be our international agriculture initiative. Last year, we brought on the management team to expand our crop capabilities internationally and certainly at the time, we had a longer term plan on how to grow that crop business.
I can say that as a result of the impact of the drought in 2012, and what we have been doing since, the growth rates for our crop initiative is going to be accelerated and you will see significant growth in that line of business in 2013. Likewise, we had an opportunistic hire in terms of marine reinsurance last year and again, given the dislocations in the marine market, here again this is an opportunity for us to get into this line of business after significant losses have been incurred in the marine market and where there are opportunities to commence and also internationally, our growth in Canada, Asia and Latin America where we have a strong position in Latin American bond and surety business.
Let me talk a little bit more about the [A&H] franchise because this has been getting a little bit of visibility. First thing is we have been attractive to the A&H for quite sometime and the reason we like the A&H market is because it is a profitable, large, diversifying risk for us. The other reason that we like that business is because not only it is huge; there are two large players in that market. So the rest of the market is highly fragmented. And so there’s a real opportunity to develop a leadership position, a strong position by coalescing some of the opportunities that remained at fragmented market.
So in the late 2009, we really started building A&H initiative. We recruited a team of professionals with a very strong track record of performance in the prior parts of their carriers. We set them up as a separate business unit within our insurance segment because we did not want them focused on anything other than the success of implanting in A&H franchise.
We gave them resources to our entire international platform and resources. Because the intent was always to create a balanced portfolio from the very beginning, we made the decision that we would go after our clients both in the insurance and the reinsurance markets and both internationally as well as the U.S. This is always going to be a global effort.
And since we recognize that, yes, it is a fragmented market, but there’s still two big guerillas out there. What do we do to differentiate ourselves? And to take advantage of the opportunities, and basically we needed to make sure that we differentiated ourselves both in terms of service, in terms of product innovation, and in terms of compliance.
The very many regulatory developments that we've had over the last three years, including for example, the development of the Affordable Care Act, really changed the regulatory landscape. As we have created an opportunity to come in and distinguish ourselves by focusing on compliance products that responded to the evolving regulatory market, and in many ways the fact that we hadn't been there was actually an advantage as compared to legacy carriers, perhaps the first deal with making their existing account, their existing products and relationship compliance, and so right now we are really spending our time and energy on smothering producers and accounts with service, with product innovation focusing on in many cases accounting producers that perhaps are below the radar of the larger players, but these are still produces who have good book to business, good volume and they need that service.
In many ways it's a little bit of parallel if you would of guerilla warfare. When you own a big part of the market, you have to defend every part of it, when you’re new start-up you can focus on one, two or three specific areas, and give that all your energy, and we can be successful even against larger producers.
And our track record today is delivering what we wanted to. We literally wrote no more than $7 million of [an ACE] premium in 2010. We grew that to $127 million or so in '11, over a $160 million in 2012, now this is a multi-year program, it requires a very broad platform, and so the G&A expenses are still such that we are not today reporting a positive contribution.
But we are confident that by 2014 this business will generate positive contribution. And within a couple of years we are going to see beyond that. We’ll see ourselves at a book that will approach or exceed $500 million that will deliver in excess of the 15% ROE.
Now when you start a business of this type you take your opportunities where you can. And so the growth has been lumpy whether it’s in a market or reinsurance or here or there. But we feel that overtime as we sell lot of book of business we’ll get the balance that we are seeking between insurance and re-insurance between accidents and health between U. S and international.
All I can tell you is although we have not generated positive earnings from our A&H business yet. We remain absolutely convinced that we are on course and that we will deliver on the goals that we set for ourselves.
Another area that we spent a lot of time on in 2012 was optimizing and improving our cat portfolio. Essentially we found upon the view that in some cased we were over exposed to certain zone or in some cases the market that did not promise long-term superior return. And so we’ve had a multifaceted approach.
Within Jack’s insurance book we’ve taken our commercial property book and we try to move it away from a purely concentrated in peak zone, and so look for more diversification there. One of the more interesting things that we did last year is that we’ve reviewed our approach to cat export business generated by MGA.
When we started our organization we obviously had a lot of capital but did not yet have all of the relationships, all of the avenues for business. That to allow us to use our capital and in those years, we entered into relationships with MGA that have over time generated very attractive very profitable business for us. However, as we’ve expanded, as we’ve got our own book of business, we now recognize that we can access cat exposed business on a row. We can actually do a better job of creating the balance that we want. And so last year, we started the process of canceling 11 MGAs that had been generating cat business in our trends here. I want to be very clear. We did not do this because we were losing money on these MGAs. In fact, some of these gave us 10 years of loss-free business. We just felt that this was not the best way to use our cat capacity.
And on the reinsurance side, as you know well we’ve taken back our cat business. We got out of a number of businesses and contracts and treaties in the U.S northeast and in the mid-Atlantic and we grew in the Gulf, we grew in Florida where we felt there were better risk return opportunities in that area. And then finally as we were looking at how our two books of business between insurance and reinsurance were working together, we realized that in some cases we had perhaps a little too much overlap.
One of the interesting things that we learned with Sandy is that historically when you look at it, Axis has been a commercial writer. And so we had both commercial risks on the insurance side and the reinsurance side. And when you have a Sandy loss which is mostly a commercial loss they tend to aggregate. We are spending more time right now putting some personal, more personalized exposures in our reinsurance book.
With regard to staffing as I said to you before, we are focusing on our staffing and our skill set. As I mentioned, we brought on very strong new talents in 2012. What we are going to be doing over the next couple of years is spending more time – I’m sorry- is spending more time on developing our own staff.
When you’re starting a company, you’re bringing in producers, you’re bringing good people and it’s the way to accelerate the growth initially. But now that we have 1100 people on the company, we’re going to be spending a lot more time developing our next generation of leaders. That will make sure that those leaders have an approach to risk and approach to underwriting and cultural values that are more consistent with a way we run our business.
And the reason that’s important is, when you’ve got 1100 people in 30 offices in five continents you want to make sure that all of these individuals approach the business in the same way. So, we will be investing on that.
Ultimately what we want to do, what this management team wants to do. Is to make sure that whoever you are, whether you are an employee or producer or a shareholder that when we mention the word, access, since you’ve got very clear understanding of what is we want to do? We want to think of us as an organization with a clear strategy and direction, a growing global presence an expanding portfolio of attractive risks, experts, service oriented team that delivered superiority results and attractive returns from our shareholders. That's what we are working towards.
Thank you for your attention. And at this point in time my colleagues and I will be happy to answer your questions.
I had a couple, Albert. The first is you’re talking about some of these new initiative will clearly drive some premium growth at the same time you are investing in people and teams overall do you think you'll be able to manage the expense ratio to a flat comparison or should it creep up a little bit?
Albert A. Benchimol
That's a very good question. I mentioned two things, one is the fact that we want to improve our operational effectiveness, and so as we expand our investments in new teams and new markets. We are also trying to make sure that we create that capacity for new expense by finding efficiencies where we are spending money right now. Joe Henry is currently leading a project to look at our expenses and expense ratio to ensure that we create that capacity.
I will say that our goal in 2013 and going forward is to ensure that our expense ratio, G&A ratio does not increase year-over-year over what it was in 2012. Now in 2012, our expense ratio did include about a point on executive transition charges and so when you adjust for that we end up with an expense ratio of low 15% that is our target. We want to make sure that we keep it at that level or better.
Sure, I’ll just answer that. It’s on the technology side. Jack and his team in particular, but (inaudible) to a certain extent as well. We’ve been investing pretty heavily in technology to improve our operational excellence. So it’s not very apparent in our expense ratio because that hasn’t been growing very rapidly. But I just want to let you know that, as well as trying to keep a lid on the expenses, we are making significant investments to improve our operational point of this.
Thanks Joe. The other question I had unrelated on the add side across business, what are you seeing from a demand standpoint, whether it is demand from farmers or from buying insurance or insurance companies buying reinsurance? After this drought, you figured there might be a change.
Unidentified company representative
Absolutely, there is a change. I’m not sure there’s much of a change from farmers. They’ve always been big users of the program. And after all, that’s one of the great benefits in that space. I mean, the farmer community does get a significant benefit here. But I think what we are finding out is a greater recognition by all parties involved in the agri business and there’s some real volatility and some real risk here.
Everybody wants to get smarter about managing risks. And that includes the underlying primaries and there’s clearly going to be and there is more reinsurance purchasing from the primaries in 2013 than there was in 2012. And you’ve seen some growth numbers being reported by people who are in the reinsurance world, but also increasing awareness in the rest of the world from that kind of securities. So another example Saskatoon just announced recently that they’re going be buying for the first time reinsurance protection. That’s to backup the government program. And you’re seeing large traders, wholesalers, economic entities looking for protection, if you’re looking at government programs, looking for protection and so the demand growth in crop and agri business is in fact increasing.
Albert, you mentioned the favorable pricing environment, could you just remind us of the market dynamics that have put us where we are in terms of being a favorable price environment, but more importantly as you look at what you are thinking about and your competitors are thinking about the durability of that pricing environment.
Albert A. Benchimol
That’s fair. Historically, people have always said you can’t get pricing increases until you had a large cap and large capital depleting event. And with that, whereas the story has been true, if you look at it, the insurance industry as a whole is having a hard time earning its cost of capital. And I think finally you are getting that kind of just pressure, of just getting beat up and saying we need to have more profit and we are looking at your investment income going down, notwithstanding the fact that investment balances are going up, how are we going to manage that. So, if you are seeing that I think it is just ultimately fatigue that we need to add – we need to generate inadequate returns. It is not fun trading at less simple value, it is not and so we need to do something to demonstrate to ourselves to our board, to our shareholders that in fact we have a business model that can deliver in excess of our cost of capital. And that’s why I think that it will continue. We all know there is a substantial capacity, but we have to deliver. We are not expecting the kind of specs we had in the past. But at least for the moment, we believe that through 2013 we will continue to see improvements. Now, Jack tells me, Jack is obviously very, very close to market, maybe a little slower in property, but still positive, but accelerating in liability.
Unidentified Company Representative
Yeah absolutely. Particularly along retail liability lines the excess causality primary (Inaudible). The professional lines are slower and steadier for our portfolio, property had some driven by the international cat in 2011 and through 2012 was particularly strong, let’s just started to level off a bit. But leveling off is phased with following Sandy. So we continue to see that improve too.
Join me in a second, Albert?
Albert A. Benchimol
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