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Executives

Keith J. Lennox - Investor Relations Officer

Scott A. Carmilani - Chairman, Chief Executive Officer, President and Chairperson of Executive Committee

Thomas A. Bradley - Chief Financial Officer and Executive Vice President

Marshall J. Grossack - Chief Corporate Actuary and Executive Vice President

John J. Gauthier - Chief Investment Officer of AWAC Services Company, Executive Vice President of AWAC Services Company and Chief Investment Officer

Analysts

Matthew J. Carletti - JMP Securities LLC, Research Division

Mei Feng A. Zhang - JP Morgan Chase & Co, Research Division

Christopher J. Maimone - Macquarie Research

Eric J. Fraser - Goldman Sachs Group Inc., Research Division

Allied World Assurance Holdings, AG (AWH) Q3 2012 Earnings Call November 1, 2012 9:00 AM ET

Operator

Good morning, and welcome to the Allied World Assurance Company Third Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now turn the conference over to Keith Lennox. Please go ahead.

Keith J. Lennox

Thank you, and good morning, everyone. Our press release and financial supplements were issued last night after the market closed. If you’d like copies of either, please visit the Investor Relations section of our website at www.awac.com. Today's call will also be available through November 15 on our website and as a teleconference replay. The dial-in information for this replay is included in our earnings press release.

Our speakers this morning are Scott Carmilani, Allied World's President and Chief Executive Officer; Tom Bradley, the company's Chief Financial Officer; John Gauthier, the company's Chief Investment Officer; and Marshall Grossack, our Chief Actuary. Also here to assist with questions are several other members of our management team.

Before we begin, I will note that statements made during the call may include forward-looking statements within the meanings of the U.S. federal security laws. Forward-looking statements are subject to a number of uncertainties and risks that could significantly affect the company's current plans, anticipated actions and its future financial condition and results. These uncertainties and risks include, but are not limited to, those disclosed in the company's filings with the Securities and Exchange Commission.

Forward-looking statements speak only to the date they are made, and the company assumes no obligation to update or revise any forward-looking statements in light of new information, future events or otherwise.

Additionally, during the call, management will discuss certain non-GAAP measures within the meaning of the U.S. federal security laws. For more information and a reconciliation of these measures to the most directly comparable GAAP financial measures, please refer to our earnings press release, which was issued last night and is available on our website.

With that complete, I can turn the call over to Scott.

Scott A. Carmilani

Thanks, Keith, and good morning, everyone. Thanks for joining the call. Before I start the quarter review, I thought I'd it make a comment about Hurricane Sandy, since we're dealing with both enduring the storm and the aftermath of the events. Our hearts and minds go out to everyone who has been affected by that storm. It's impacting us both professionally and of course, for those live along Atlantic coast of the United States and probably, personally as well.

One of the things I was planning to do on this call is to acknowledge Joan Dillard, and thank her for her newest contributions to the Allied World and wish her then best in her retirement. Due to the storm and the airline delays, Joan is not here with us personally. She's remained in Switzerland, I'm sure listening in on the call. We've thought it prudent for her not to be here in person, to not make comments. I assure you we will host her retirement party, anyway, next week.

With that, we're also proud and happy to mention our new CFO and introduce him, Tom Bradley, is with us here this morning. And we'd like to formally welcome Tom to the Allied World team and wish him good luck in this new role. He will make some comments following myself on the facts of our performance.

The results for the quarter for the company were very strong. We ended the quarter with our diluted book value per share being up $5.58 to $93.82 per share. And that's after the $40 million charge for our crop losses that Marshall Grossack, our Chief Actuary, who is also here with us, will discuss in more detail.

Factoring in dividends paid for the quarter, our diluted book value per share is up 6.7%, even without the dividends, our diluted book value per share is up 6.3% for the quarter and a robust 18.5% for the first 9 months of the year.

We again achieved double digit premium growth for the quarter with gross premiums up almost 14% from prior year. For the first 9 months of the year, the premiums are up almost -- are up 20% to $1.8 billion with a quarter to go. To those of you who remember, we finished the year at just at $1.9 billion last year.

Both the insurance segments performed pretty well and our reinsurance segment performed well, although a bit challenged by the drought that we've posted, I'll talk about that in a second. In our U.S. insurance segment, gross premiums were up $61.5 million for the quarter to $263 million. A 31% increase compared to the prior period. The continued growth in this segment is being driven by our extended presence in the primary casualty business that we've been working on for some time. We do continue to grow our Healthcare business and we are benefiting from rate increases from almost all of our lines in that segment.

Our retention ratios are remaining in a healthy 80-plus percent across the platform.

The premiums in our international insurance segment are up again this quarter by 11%. The catalyst behind this growth is also our general casualty businesses where we continue to gain new accounts across the platforms in Lloyd's, Premier and the Asia-Pac region.

Our reinsurance segment, which I mentioned before being a little bit challenged, reported premiums being down about 9% for the quarter. There are some explaining. This includes a negative adjustment to our crop reinsurance booked because the businesses at the seasons estimated actually came in a little bit lower. So we made those -- we made some premium adjustments there. And as well as the result of an early renewal of a premium which was booked in the third quarter last year, which we had mentioned also in last quarter's call. The combination of those things brought the premium volume down by 9% year-over-year, is not a reflection of ongoing business.

These declines were partially offset by favorable premium adjustments in our General Casualty line of business, which we weren't expecting.

Year-to-date, the reinsurance premiums were up by over 1/3 over prior year and that's 9 months.

Let's talk about pricing in the late environment and I'll try to stay brief and turn it over to Tom. The pace of our property rates declined a bit, but it's still up across our book by 8% over the last quarter. Our U.S. and Bermuda platform is still achieving upper single-digit increases, while our European property rates are fairly going up 4%, which in our opinion is still not adequate relative to exposures in that region of the world. Our Lloyd's property book however, is up about 7% for the quarter, that's mainly because a lot of that stuff is outside of Europe that we're writing in that portfolio.

Professional lines. We're seeing rate increase in the U.S. from the low single digits to upper single digits depending on business classes in the professional lines arena. Rates are flat and down a few points for our Bermuda and European professional lines of businesses as an example, but up in the U.S. considerably.

In Casualty Lines, rates were up about 10% in the U.S., only 2.5% in the Bermuda axis market, and in Europe we're actually seen some slight decreases, which isn't alarming yet but we'll be paying close attention to it.

Lastly, while John Gauthier will provide more detail, let me briefly mention to you the formation of and deals announced within Allied World Financial Services. This business is set up to reduce our costs, plain and simple, the fees to be paid outside vendor companies, add diversity to our earning stream and over time be accretive to our EPS and book value per share. And it shouldn't go without mentioned, we expected to increase our knowledge and expertise in these areas as well.

We're delighted with the progress we've made on this front, but for a second, let me turn it over to Tom and we'll go in -- our new CFO and he'll go into the details for the quarter.

Thomas A. Bradley

Thanks, Scott. I'd like to start up by saying that I'm thrilled to join the Allied World team. And while I cannot take any credit for the third quarter results, I'm very happy to be here reporting them.

Operating income for the quarter was $79.2 million or $2.16 per diluted share. And we accomplished this despite recording the $40 million in reinsurance crop losses resulting from the drought conditions in the Midwest of U.S.

In terms of net income, we're reporting $219.6 million, which is the second most in the company's history, and equates to $6 per diluted share. Our net income benefited from almost $150 million in capital appreciation in our investment portfolio. We also recorded investment income of $39.1 million in the quarter. John will speak of these items in a moment when he addresses our investment results.

For the first 3 quarters of the year, we generated operating income of $258 million or $6.90 per diluted share, which compares to $89 million or $2.24 per share of operating income in the first 9 months of 2011 when we experienced a high-volume of cat activity.

For the first 3 quarters of the year, we generated net income of $534.2 million or $14.28 per diluted share, which compares to $91.4 million of net income or $2.30 per diluted share in the first 9 months of 2011.

We had $52.4 million of underwriting income in the quarter, with our international segment being the biggest driver with $47.6 million of underwriting income, including $8.6 million from the current accident year. Excluding the crop losses, the current accident year generated $36.3 million of underwriting profits, and we released $56.2 million of prior year reserves for the quarter. For the first 9 months of the year, we generated $175.4 million of underwriting income, with each of our segments generating positive returns.

Our combined ratio for the quarter was 88.1%, compared to 83.9% for the same period last year. The quarterly expense ratio increased a bit to 29.4% this quarter versus 28.5% in the prior period. Our strong results are driving a higher bonus incentive accrual, but our overall expense ratio remains below the 30% target we have set. For the first 9 months of the year, our combined ratio was 86.2% compared to 100.7% for the same period last year, when we experienced the unusual frequency of catastrophe activity. For the first 9 months of the year, our expense ratio of 29.3% is still lower on a year-over-year comparison to the 30.4% we reported in the first 9 months of 2011.

The increase in our premiums this year more than offsets the impact of the increased compensation expenses.

Cash flow provided by our operating activities for the 2012 third quarter was $198.5 million, compared to $129.7 million in the 2011 third quarter. The increase in operating cash flow is also driven by our increased premium writings.

Our diluted book value per share at September 30, 2012, is $93.82, which is up 17% for the year.

During the quarter, we continued with our share buyback strategy and purchased just over 600,000 of our common shares in the open market at an average price of $78.54 per share, for a total cost of $47.6 million. This $78.54 average share price represents a 14% discount to our average diluted book value per share for the quarter of $91.03. The third quarter buybacks had a $0.25 accretive book value per share value impact. In October, we have also repurchased just under 210,000 shares for $16.9 million, leaving our remaining authorization at $450.2 million as of last night.

Even with the share buyback plan, we ended the quarter with shareholders' equity up almost $300 million from the beginning of the year to over $3.4 billion. We ended the quarter with total capital in excess of $4.2 billion and a debt-to-capital ratio of 18.9%.

I will now turn the call over to our Chief Actuary, Marshall Grossack, to provide some commentary on the loss ratio for the quarter, our crop losses and to update us on PMLs.

Marshall J. Grossack

Thanks, Tom. Our reported loss from loss expense ratio was 58.7% for the third quarter, benefiting from positive reserves availment of $56.2 million or 12.7 points, the bulk of which is driven by reductions in casualty reserves from the 2009 and prior loss years.

Through September, our year-to-date reserve releases were $137.6 million and we remained 3.9% over the midpoint of our actuarial range. After reserve releases, our actuarial year loss ratios would be 71.4% for the quarter and 67.7% for first 9 months of the year.

Both of these ratios have been adversely impacted by the $40 million of additional crop reinsurance losses that we pre-announced in early October.

While on the topic of our crop reinsurance book, let me provide some updated data points from what we gave last quarter. Our full year MPCI crop premiums are $56.9 million, which is down from what we have estimated last quarter, prior to receiving the acreage data from our ceding companies. The split of these premiums, which is about $46.2 million for the MPCI quota share, $4.6 million for MPCI excess of loss exposure, and $6.2 million for hail and Canadian business.

With our adjustment, we expect the full year loss ratio for crop to be approximately 140%. We're continuing to actively monitor the emergence of crop losses and our ultimate losses can still be materially impacted by staying such as finalized deal tallies and commodity price levels.

Finally, let me provide an update to our PML. In previous quarterly calls, we have provided PMLs based upon the RMS version 11 default view of risk. This quarter, we have adopted a view of risk based on our own internal analysis of hurricane risk and validations of major event or models. Given this new approach our win PMLs have been reduced by about 10% to 15% from what we had calculated based solely on RMS 11.0.

As of September 2012, our 1-in-250 and 1-in-100 hurricane PMLs are $682 million and $530 million, respectively. As we have said previously, it is the U.S. Southeast wind that is generally driving our hurricane PMLs, with the Gulf Coast being the second largest contributor. Our 1-in-250 and 1-in-100 earthquake PMLs are $461 million and $330 million, respectively, with California still being the largest driver.

Let me now turn the call over to John, who will discuss our investment highlights for the quarter. John?

John J. Gauthier

Thank you, Marshall. The investment portfolio provided a total return of 2.2% for the quarter bringing the year-to-date return to 4.9%. In dollar terms, that equates to $188 million for the quarter and $405 million for the year. We've talked in the past about the potential benefits of diversifying the portfolio in its low interest rate environment and that diversification continues to pay off. While our quarter fixed income portfolio generated a return of 1.5%, we benefited from the return of our hedge fund portfolio, which generated 1.8%, our bank loan portfolio at 2.7%, our equity portfolio at 5.8%, and our distressed mortgage portfolio at over 15%, bringing the 1.5% from the core portfolio up by 70 basis points or $60 million.

For the year, the core portfolio returned 3.8%, with the remainder of the portfolio less than the entire portfolio return by over 100 basis points or $80 million.

Turning to Allied World Financial Services. As Scott mentioned, we've moved forward with 2 deals. The first is the purchase of a minority stake in the global third-party plans administration company, Cunningham Lindsey. In this transaction, we are participating with private equity firms CBC, along with Stone Point Capital and Fairfax Financial and the management team in purchasing the company. Cunningham Lindsey is one of the largest providers of claims administration globally and will be a strategic partner as we continue to expand our global insurance reach.

We also recently announce our partnership with Melvin Patterson Asset Management. Melvin Patterson is best known for their distressed business but have broadened their platform over the last several years to include a host of liquid credit strategies. As part of the transaction we will commit to have to managed a total of $500 million of our portfolio over time across multiple strategies. In both transactions, Allied World will have representation on the board.

As outlined when we started Allied World Financial Services, the goal of our investments in this entity are fairly straightforward. One, to get the best value for the fees we pay. Two, to increase our knowledge and expertise by partnering with experts. And three, to participate in the economic returns of these partnerships. In both of these transactions, we've got great partners that we hope to grow with us over time.

And with that I'll hand it back to Scott.

Scott A. Carmilani

Thanks, John, thanks, Tom, thanks, Marshall, for your comments. Obviously we'll be spending much of our time over the next several weeks really understanding the effect of Hurricane Sandy. We'll make updated disclosure at the appropriate time. There's still a lot of stuff and variables to be considered. However, the third quarter results, more than anything, highlight the various book value drivers we here at Allied World have now. Thanks to our size, diversity and business acumen, we're not believe beholden to any one component of these drivers to generate strong returns. While we took bit of a hit in crop losses, we still had enough profitable lines to post $52 million on running crops for the quarter. By supplementing that result with our targeted growth initiatives, strong investment return and prudent reserving approach, we're able to report these strong earnings.

Couple that with our attractive capital management strategy, and you will see that we believe we are extremely well-positioned going forward to continue to significantly increase shareholder value over time.

And with that, I'm going to turn it back to the operator to answer anybody's questions.

Question-and-Answer Session

Operator

[Operator Instructions] The first question comes from Matt Carletti of JMP Securities.

Matthew J. Carletti - JMP Securities LLC, Research Division

Just had a few questions, I guess, first one for you, Scott, on relating to Sandy. In thinking about it at a high level, other than just scale of the event. As we look at it, say, I'm going to guess that maybe Irene is the best comparable we have. And other than just kind of the industry loss as it relates to Irene whether ends are being double or triple or whatever that number is. Is there anything specific to Allied World that should lead us to believe that your share of that event or everyone to think of it would be different, than just kind of that 2x or 3x? That there is anything in your book that we should think about in that regards?

Scott A. Carmilani

Well, first, let me say that the Sandy event itself and the destruction it's causes multiples of Irene in terms of water and power outages. I think it's a different storm, too. Irene when inland it went up and kept going and affected all the way through into Vermont. This is much more concentrated from Delaware to Southern Connecticut and -- power still out in our Water Street headquarters downtown New York. There's still no trains or planes or buses or ferries that can get there. Much of the Southern Coast of New Jersey is wiped out. So it's going to take a long time for anybody to figure out. We don't have a bigger share of the large or reputable name, personal lines insurance carriers that we have before. And those limits are capped out in the low double-digit numbers for us. But to the extent of how big this loss is, who knows. It really depends on how much of the relief comes from FEMA versus carriers. I heard insurance commissioners are already making political statements about the applicability of certain wind deductibles on the radio. And power is still out. It depends how long power is out before the effect to have what kind of utilities and hospitality industries so -- in a lot of places. Atlantic City was extremely hard-hit. Still a lot of those casinos are not doing well. And those hotels are just fine. Just getting a hotel room here in Manhattan hasn't been easy for this week. So we'll see. On the insurance side, we have some large names. We'll take limits losses on, I'm sure. But I don't expect it to be an insurmountable capital event for Allied World. We'll see how it affects the industry.

Matthew J. Carletti - JMP Securities LLC, Research Division

Okay. And then I appreciate all the pricing color you gave. I guess my follow-on question to that is are you seeing anywhere in your book, material changes in terms of conditions? Or are those has been pretty steady?

Scott A. Carmilani

Terms have been holding pretty steady. If anything, they're tightening it up a little bit, because people are starting to -- now as they're getting in their third season of rate increases and some property lines looking for a different excuse, if I can use that word. So we're seeing some of that. Professional Liability is tightening up some more, so we'd like to see that. Casualty scenario where it's going both ways, up, down, sideways. It's not consistent.

Matthew J. Carletti - JMP Securities LLC, Research Division

Okay. And last question just relating to crop. So in terms of thinking about Q4, it sounded from the commentary that you have the year where you think it will be. So should we think about 100% kind of loss ratio for the crop book in Q4?

Scott A. Carmilani

I think we booked 140 for the year.

John J. Gauthier

Yes. We, the effort that we put in for crop is kind of that 140 is kind of an all-in number for the year. But yes, we still have will earned premium -- obviously, about a quarter of our premium we'll earned in the fourth quarter. And we'll be booking that somewhere between 75% to 80% loss ratio.

Operator

The next question comes from Mei Zhang of JP Morgan.

Mei Feng A. Zhang - JP Morgan Chase & Co, Research Division

I'm calling in for Matt Heimermann. We just wanted to know like if you can talk about the company's exposure to Sandy in terms of commercial loss or in terms of commercial lines or reinsurance like for Allied World. Is it more exposed to commercial lines or reinsurance?

Scott A. Carmilani

Well personal lines businesses will be more exposed to reinsurance because we don't write personal insurance on a direct book. On the commercial portfolio, there'll be some large names, utilities and communications company where we will have losses. And we don't know to extent whether there'll be property losses on what businesses, other than in the hospitality area. Were still compiling all that information, finding out who's open, finding out who's working and a lot of it will be determined on when power comes back on for these places. It's starting to come on a little bit by a little bit.

Mei Feng A. Zhang - JP Morgan Chase & Co, Research Division

Got it. And also for commercial guys, is it more of a frequency issue or like severity?

Scott A. Carmilani

Well, commercial is going to be both. It's not frequency because it's -- this event doesn't happen -- it's a 1-in-100 year type of storm. We hope this wouldn't -- this kind of storm in this extent of the storm wouldn't be an annual event or even a once in every few decades. But it will be severe for the professional -- personal lines carriers.

Operator

The next question comes from Ray Iardella of Macquarie.

Christopher J. Maimone - Macquarie Research

This is Chris Maimone calling for Ray. Just hoping, maybe for starters, Tom, if you could just give us maybe a little bit of background, more than what we read in the press release and kind of tell us a little bit about what's your view towards the move to Allied World?

Thomas A. Bradley

Sure. I spent most of my career prior to the last 3 years in the insurance industry, starting with Bernst [ph] Insurance Practice in Baltimore and 2 tours with Zürich Financial, USF&G and St. Paul Companies. I worked in -- back home in Minneapolis for the last couple of years while my son finished high school and the opportunity with him going off to college and the opportunity here at Allied World to get back in the insurance industry with a great company, that's well-positioned and my ability to have the flexibility to now move to New York out of Minnesota was really key to get it for me, personally and professionally. I love the insurance business, I haven't spent most of my career in it. And I have had -- in not only financial but some operational roles, so I'm thrilled to be here as part of the team and back in the game in what's going to be another exciting time.

Christopher J. Maimone - Macquarie Research

Great. Okay, the next question, I just wanted to hit on the Melvin Patterson and Cunningham Lindsey. I was just curious if you could tell us a little bit more about how those relationships came to be and how long you've had each of those relationships for?

John J. Gauthier

I'll start and Scott can add. It's John. Both of them were announced in the fourth -- one in the third quarter and one in the fourth quarter and neither one of them is closed. So we've known both parties for years. Both our partners and the folks at Cunningham Lindsey and, obviously, Melvin Patterson -- we've been discussing the deal opportunities over the last several months and maybe in a little bit before that. Both were announced recently but neither is closed. So the duration of the personal relationship go back years. The duration of the official relationship hasn't actually officially started.

Christopher J. Maimone - Macquarie Research

Got you. That's helpful. And then if I could just a question about premium growth. Seems like you guys are going most quickly in the casualty lines. Just wondering what's driving the growth in that specific line and how does the price adequacy looking there as well?

Scott A. Carmilani

Much of the growth is coming from primary casualty lines where there is a much more adequate rate closer to the frequency and severity, but you're getting a lot better paid for the risk on trade. And so where we've been growing is in the larger ticket. Primary casualty businesses, some of the specialties we've put forth like environmental, Defense Base Act insurance, construction and related real estate casualty businesses, where we're either primary or first access and getting much better paid than we are in the excess of 300 layers. And that's where most of the growth is coming from.

Christopher J. Maimone - Macquarie Research

Got you. And then one final one, if that's all right. I'm just wondering about the U.S. insurance business. It seems like some of your peers combined ratios this quarter were in the low to mid-90s. And I was wondering if you could tell us a little bit more about what was driving the combined ratio and your business being a little bit higher than peers?

Scott A. Carmilani

Well, I can't really comment on other peers and where they're coming in at. If their combined ratio is lower is because they have a lot of property insurance with no losses in the third quarter, very minimal third quarter cat losses other than crop and maybe they have a bigger property book. But our action here is actually below 100, which I think is considerably within or better than our peers in this specialty space.

Marshall J. Grossack

I'll just get that. This is Marshall. I got a touch of that as well. And I think our reserve releases were probably smaller as a percentage of premium in the U.S. base this quarter, and that was driven by our programs -- where we did have one program that have a little bit higher than expected losses this quarter. And that's in runoff.

Operator

[Operator Instructions] The next question comes from Michael Nannizzi of Goldman Sachs.

Eric J. Fraser - Goldman Sachs Group Inc., Research Division

This is actually Eric Fraser for Mike. A quick question, just -- can you maybe discuss your exposure to the business interruption policies, and maybe walk us through a typical BI policy, some key provisions, timelines, claim drivers of that line?

Scott A. Carmilani

Well, our caveat is expecting every BI of every insured policy is negotiated in different, in terms of timeline and deductibility. Some of them higher deductibles, some of them have numbers of days and it's different for every kind of industry. So for a manufacturing facility, it might be raw materials, for a sales company, it might be inventory. For a hospitality industry, it might be a number of days where there's nobody can check in at the end, if you will. For utility, it could be days without power. And therefore, our cable company, they can't charge -- you can't charge customers if you can't provide them CNN and ESPN. So that will be deducted from everyone's cable bill and that will be a continued business interruption loss for those who have -- for those of us who insure Verizon.

Eric J. Fraser - Goldman Sachs Group Inc., Research Division

Okay. And then -- that makes sense. The pace of buybacks. This quarter, it was a bit lower. I wonder if you maybe could talk about that? And then if you anticipate any impact to the fourth quarter buyback as a result of potential losses?

John J. Gauthier

Yes. I think when you look at the buyback plan and we've talked about this before, it's really on autopilot. We don't spend during wind season. We're in the market everyday. As the price-to-book ratio goes up, we buy less shares. As the price-to-book ratio goes down, we buy more shares. And obviously with the stock trading up, there was a slight deceleration in the buying frequency.

Eric J. Fraser - Goldman Sachs Group Inc., Research Division

Okay. And then just lastly on the reinsurance book, you've some growth there year-to-date, maybe just could you let us know if there's any additional capital needs or if we should be assuming a higher cat load on that business?

Scott A. Carmilani

No. We have no additional capital need. And in fact we're still writing at the lowest premium to surplus out of our peer group at around 40% or 50%. So we have a lot of headroom there in the right business. The premiums for the reinsurance book are up about 1/3 for the year, but down 9% for the quarter. So absolutely not a capital raising event or need for capital. What was the second part of your question?

Eric J. Fraser - Goldman Sachs Group Inc., Research Division

The cat load that was associated with those premiums.

Scott A. Carmilani

Yes, that's not changed. We mentioned our PMLs, mathematically come down when we analyze and pick apart the model. But our aggregate exposures on the commercial book are probably flat to down. And while they might be up overall in the reinsurance book, they're more spread around the world, so there's less exposure to U.S. winning California quake overall as a percentage of the portfolio. And our equity, as John and Tom mentioned, has still grown this year. So as a percentage of the capital of the company and the overall exposure, we're not -- it's not really changed much.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Scott Carmilani for any closing remarks.

Scott A. Carmilani

Close, okay. Well, for those of you who are stranded or marooned, I hope you get power back soon. For those of you who joined the call, thank you very much for joining us. And for all of our employees, I hope you find an office somewhere soon. Thank you.

Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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