Linda Ventresca - Director of Investor Relations Albert Benchimol - President and Chief Executive Officer Joe Henry - Chief Financial Officer

Charles Sebaski - BMO Capital Markets Greg LoCraft - Morgan Stanley Michael Maneasy - Goldman Sachs Jay Cohen - Bank of America Merrill Lynch Vinay Misquith - Evercore Meyer Shields - Keefe, Bruyette & Woods Brian Meredith - UBS Amit Kumar - Macquarie

Good morning, and welcome to the AXIS Capital Second Quarter 2013 Earnings Conference Call. All participants will be in a listen-only mode. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Linda Ventresca, Director of Investor Relations. Please go ahead. Linda Ventresca - Director of Investor Relations: Thank you, Laura, and good morning, ladies and gentlemen. I am happy to welcome you to our conference call to discuss the financial results for AXIS Capital for the second quarter ended June 30, 2013. Our earnings press release and financial supplement were issued yesterday evening after the market closed. If you would like copies, please visit the Investor Information section of our website, www.axiscapital.com. We set aside an hour for today’s call, which is also available as an audio webcast through the Investor Information section of our website. A replay of the teleconference will be available by dialing 877-344-7529 in the U.S. The international number is 412-317-0088. The conference code for both replay dial-in numbers is 10030850. With me on today’s call are Albert Benchimol, our President and CEO; and Joe Henry, our CFO. Before I turn the call over to Albert, I will remind everyone that statements made during this call including the question-and-answer session, which are not historical facts may be forward-looking statements within the meaning of the U.S. Federal Securities laws. Forward-looking statements contained in this presentation include, but are not necessarily limited to information regarding our estimate of losses related to catastrophes, policies, and other loss events, general economic, capital and credit market conditions, future growth prospects, financial results and capital management initiatives, evaluation of losses and loss reserves, investment strategies, investment portfolio and market performance, impact to the marketplace with respect to changes in pricing models, and our expectations regarding pricing and other market conditions. These statements involve risks, uncertainties, and assumptions, which could cause actual results to differ materially from our expectations. For a discussion of these matters, please refer to the Risk Factors section in our most recent Form 10-K on file with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements whether as a result of new information, future events, or otherwise. In addition, this presentation contains information regarding operating income and our consolidated underwriting income, which are non-GAAP financial measures within the meaning of the U.S. Federal Securities laws. For a reconciliation of these items to the most directly comparable GAAP financial measures, please refer to our press release, which can be found on our website. With that, I’d like to turn the call over to Albert. Albert Benchimol - President and Chief Executive Officer: Thank you, Linda. Good morning, ladies and gentlemen, and thank you for joining us today. Last night, we reported second quarter operating income of $50 million, or $0.43 per diluted share, and annualized operating ROE for the quarter up 3.9%. Our quarterly result was adversely impacted by very high frequency of unrelated small and midsize cat and weather events in the U.S., Canada, Europe, and Argentina aggregating to $140 million net of reinsurance and reinstatement premiums. None of the event losses exceeded $35 million and our analysis indicates that this is an issue of random frequency. We’ll discuss the quarter’s loss experience in more detail. Notwithstanding the headline losses for the quarter, I believe the results should be viewed in the context of four key factors. The first is that while our portfolio has historically experienced some volatility, we have been well compensated for that volatility over time as evidenced by our superior underwriting metrics. The second is that this volatility goes both ways. Our first quarter had extremely low cat and weather activity in contrast of the higher activity in the second quarter. Since the year-to-date results are actually quite healthy with a lower year-over-year combined ratio. Operating income of $2.36 per share, up 19% over the prior year and annualized operating ROE of 10.9%. These results are indicative of the ability of our portfolio to absorb volatility including that presented by quarters such as this one. The third point is that excluding the quarter’s cat and weather losses, the core underwriting results were nevertheless quite strong. Both of our segments contributed solid core underwriting profits as Joe will discuss later. Finally, as we have discussed with you on previous occasions, we are committed to diversifying our portfolio so as to reduce earnings volatility over time. And we are making substantial progress in this area. Both our insurance and reinsurance segments delivered strong and diversifying premium growth, with consolidated gross premiums written up 20% in the quarter and 17% year-to-date. Fully 80% of the growth this year has come from the lines other than property, marine or catastrophe lines. Our accident and health and agriculture initiatives contributed almost half of the growth this year. Our property, marine, property reinsurance and property catastrophe reinsurance premiums written were up 8% year-to-date much of which was driven by rates. And our various zonal PMLs have been relatively stable. So, our diversifying growth initiatives are on track and we expect these will delivered our desired reduction in earnings volatility going forward. Diluted book value per share declined 4.5% during the quarter to $42.67 due to the predictability material negative impact of the significant rise in rates and widening of credit spread that adversely impacted our investment portfolio this quarter. Some of this has come back in the last few weeks, but as of quarter end we did take some pain in the portfolio. We remain committed to intelligent capital management sustaining our financial strength and benefiting our shareholders. During the quarter we were active in repurchasing our common shares, $228 million repurchase in quarter. So far this year we have repurchased 8.5 million or 7.2% of the outstanding shares at the beginning of the year. Importantly, we continue to execute on our strategic goals bringing on new talent, expanding our franchise with growth and attractive lines in markets both existing and new as we build a broader more diversified portfolio. Market conditions are stable at attractive levels or improving at many of our lines. And we are well positioned to continue to take advantage of available opportunities. I will discuss market conditions in more detail following Joe’s remarks. And Joe, over to you. Joe Henry - Chief Financial Officer: Thank you, Albert and good morning everyone. The first half of 2013 at Axis has seen two very different quarters. Our cat and weather related loss experience was extremely light in the first quarter this year delivering one of our strongest quarterly underwriting profits in the last five years. In contrast, as Albert noted in this quarter we experienced a high frequency of natural cat and weather related losses impacting our portfolio. First half results are a better measure of our underwriting portfolio’s performance this year. For the first six months of 2013 we generated underwriting income of $181 million and annualized ROE of 14.7% and an operating ROE of 10.8%. Moving into the details of the income statement, our second quarter gross premiums written increase 20% to more than $1.2 billion with growth emanating from both of our segments. In our insurance segment our top line was up $106 million or 15.7% reflecting a continuation of the trends noted in the first quarter. Significant growth in our accident and health line contributed almost half of the increase for the quarter. For the year-to-date accident and health premiums are up 78%. In liability our growth in the U.S. wholesale excess casualty market continued this quarter given the significant improvement in the rate environment in selected areas. Growth in our professional lines business in Europe, Canada and Australia continued to drive growth in professional lines overall and an element of renewal timing also contributed but to a lesser extent. Property premiums were broadly comparable quarter-over-quarter as growth from rate and new business opportunities largely offset continued reduction of cat-exposed business written through MGAs and a shift in the renewal date for one significant contract. In reinsurance, our top line was up $99 million or 29.3%. Agriculture contributed half of this increase with a significant amount of this year’s January 1st U.S. business binding later than usual. For the year-to-date, our agriculture premiums are up $122 million to $135 million. Outside of our agriculture initiative remaining growth in reinsurance this quarter was driven by increased participation in the U.S. excess umbrella market, where cedants are benefiting from a more attractive rate environment. Our catastrophe premiums also increased partially driven by expanded relationship with one cedant in Florida and other new business in the United States. This was partially offset by the impact of rate reductions and the depreciation of the yen against the U.S. dollar at the April 1st renewal date. Our consolidated net premiums written were up 24%, exceeding the growth rate for gross premiums written. The corresponding 2-point reduction in our ceded premium ratio for the quarter was driven by a number of factors. The most significant factor was growth in business for which we do not cede significant premiums, specifically our accident and health line and our reinsurance segment. Changes in reinsurance purchasing for our insurance segment also contributed. This included reductions in the quota share session rates for significant portions of our professional lines and liability books, our reduction in the cost of our property excess of loss protection, and higher retentions for both property and marine. Our net earned premiums were up 11% for the quarter with growth in insurance and reinsurance driven by our accident, health and agriculture initiatives respectively. Our second quarter consolidated current accident year loss ratio increased 8.7 points to 72.4%, primarily driven by the high frequency of small and midsize of natural cat and weather related events globally. In insurance, the accident year loss ratio increased 12.4 points with 11.9 points of this attributable to natural cat and weather related losses. We recognized $90 million, or 21.1 points of net losses related to cat and weather inclusive of payments to reinstate reinsurance protection. In insurance, these losses primarily emanated from tornadoes and hailstorms in the U.S. and flooding in Argentina and Canada. While none of these events significantly impacted results in isolation, the combined impact was meaningful to the quarter’s result. Comparatively, the second quarter of 2012 was impacted by $35 million of net losses related to second quarter U.S. weather events. Adjusting for the impact of these cat and weather items, the accident year loss ratio was relatively flat with a higher level of risk losses in the quarter offsetting the favorable impacts of rates. For the first half of 2013, the current accident year loss ratio for insurance is 68.0%, up only slightly from 66.7% for the comparable period in 2012. Adjusting for the impact of cat and weather-related losses, the accident year loss ratio for insurance was down 3.5 points as rate, mix, and experience benefited the ratio. The second quarter current accident year loss ratio for our reinsurance segment was up 5.8 points to 66.3%. We recognized $50 million of natural cat and weather-related losses net of reinstatement primarily related to European and Canadian flooding. This contributed 9.7 points to the accident year loss ratio, whereas the 2012 net losses related to second quarter U.S. weather activity contributed 4.2 points. Adjusting for the impact of cat and weather-related losses, the second quarter ratios were comparable as higher loss ratios booked for agriculture offset improvement in rate and experience. Adjusting for the impact of cat and weather items for the first half of the year, the current accident year loss ratio for reinsurance improved by 1.6 points to 56.3%. In the quarter, our results continued to benefit from net favorable development, which aggregated $42 million. Short-tail classes in both segments contributed $32 million of this balance primarily reflecting better than expected loss emergence. In addition, we continued to give weight to auctorial methods that reflect our favorable experience for liability reinsurance business, a process that commenced last quarter. This contributed a further $22 million of favorable development for the quarter primarily related to the 2004 through 2007 accident years. We strengthened our reserves for professional liability insurance lines by $14 million this quarter. This action was driven by recent developments on certain global financial credit crisis claims and was partially offset by the recognition of favorable experience for professional lines business not impacted by the global financial crisis. We have historically taken a cautious approach with respect to the 2007 through 2009 accident years affected by the global financial crisis given that developmental patterns are expected to differ significantly from other years. We have been carefully monitoring both market trends and individual case developments in the quarters and years that followed. And it was the latter that drove us to strengthen our reserves this quarter. Consistent with our historical practice, we reacted swiftly to unfavorable claim emergence for certain underlying reserved classes while exercising a degree of caution in recognizing the impact of favorable experience. We are very comfortable with our overall reserve position at quarter end for professional lines insurance with $1.1 billion in IBNR for all years of which $234 million is related to years impacted by the global financial crisis. Our G&A expense ratio decreased 3.1 points relative to last year. This is primarily due to the $34 million of costs associated with our senior leadership transition embedded in G&A last year. Adjusting for the transition cost last year, the increase in G&A of 80 basis points was primarily driven by increased staffing and office costs attributable to the continued expansion of our global platform over the past year as well as timing issues and certain one-time expenses. Turning to the investment portfolio, the total return of our investment portfolio was a negative 134 basis points in the second quarter, primarily reflecting mark to market adjustments on fixed income securities. This quarter’s pretax unrealized loss of $295 million was principally due to changes in valuation for fixed income securities driven by rising interest rates and widening credit spreads. Net investment income was $83 million for the quarter, up from the prior year’s quarter of $74 million. The most significant driver of the quarter-over-quarter increase was our other investment portfolio which contributed $12 million during this quarter versus a negative $2 million in the prior year. Net investment income from our tax maturity portfolios including cash and investments was $76 million for the quarter, down slightly from $78 million in the prior year quarter. The reinvestment yield on our fixed maturity portfolio increased during the quarter from 1.7% to 2.4% due primarily to the upward shift in the U.S. treasury rates. Cash in invested assets totaled $14.3 billion at June 30th, up from $13.9 billion a year ago. At June 30, 2013, our fixed maturities weighted average credit rating was unchanged at AA minus. During the quarter our fixed maturity portfolio duration increased to 3.5 years compared with 3.1 years at the beginning of the quarter and 2.8 years a year ago. The increase in duration during the quarter is mainly due to the reduction in the anticipated prepayment speeds on our mortgage bank security holdings. The strategy for our fixed maturity portfolio was unchanged and emphasizes spread sectors, the largest being corporate and U.S. agency mortgage-backed securities. In order to reduce the impact of rising U.S. treasury rates, we have increased allocations to local currency emerging markets sovereign debt and floating rates senior CLO debt in recent quarters. We also incorporated tips into our portfolio to reduce the impact from unexpected increases in inflation and increased our municipal bond holdings this quarter due to attractive after tax returns. Equities and alternatives now account for 11.1% of total cash and investment assets versus 10.4% a year ago. We expect these investments to provide attractive returns during periods when our fixed maturity results are suboptimal. In summary the investment portfolio performed in line with expectations during the quarter that remains comprised of a diversified set or strategies with a focus on mitigating the negative impact of interest rates on the portfolio. While raising rates and spread widening adversely impacted our book value this quarter, a theme for the entire industry, our capital position remained strong. We closed the quarter with common equity of $4.9 billion and total capital of $6.6 billion. The change in the quarter includes net income available to common shareholders of $72 million and after-tax mark-to-market reduction in our investment portfolio of $267 million and stock repurchase and dividends of $257 million. During the quarter, we repurchased $5.1 million common shares for a total of $228 million leaving us with $409 million of remaining authorization under our reinsurance program. For the year-to-date, we have returned 151% of operating earnings through share repurchases and dividends and as a total of $418 million. If market and financial conditions remained the same, we continue to anticipate returning closed to 100% of our annual earnings to our shareholders through regular dividends and share repurchases although, we expect to slow a repurchase activity during the Atlantic winter season. We also issued $225 million of Series D preferred shares, which pay a 5.5% dividend. We used a portion of the net proceeds to fund the redemption of the $100 million, 7.25% Series A preferred shares outstanding. This in combination with the other preferred transactions executed over the past 18 months reduced the weighted average dividend rate on our preferred equity capital base by 99 basis points to 6.385%. Our strategic expansion opportunities continued to progress and we remained optimistic about our prospects. We believe that our diversified global franchise and strong balance sheet will continue to allow us to take advantage of market opportunities as they merged. With that, I’ll turn the call back over to Albert. Albert Benchimol - President and Chief Executive Officer: Thank you, Joe. We continue to be positive on market conditions for AXIS. Other than in a few isolated lines and markets, pricing remained stable or increasing from most of our book. The phase of improvement however, has slowed since the first quarter. Within our insurance segment, the overall AXIS insurance rate change for the second quarter of 2013 stand at plus 3% down slightly from 5% last quarter. Rates are continuing to increase across most classes in geographies other than the same few notable exceptions. Our U.S. division, which is dominated by a wholesale E&S property in casualty business continues to show the strongest rate improvement. Overall, rate change this quarter was plus 6% down from plus 9% last quarter. This deceleration in the U.S. is primarily driven by E&S property. This stabilization falls on nine consecutive quarters of rate increases aggregating to 15% something where we seen in our carriers. We expect accounts with recent loss activity, winter flood concerns or accumulation issues within a specific geographic region. We’ll continue to see price increases through another renewal cycle. Casualty business in the U.S. division which is primarily E&S umbrella business continued to show double-digit rate increases, nine quarters after rate increases begin. Overall in the U.S., we are continuing to see more challenging risk flow away from standard carriers and back into the E&S market providing us with a greater flow of submissions, higher new business conversion rates and improved retention ratios. In our international division, most classes monitored continue to indicate rate increases. The average for our London sourced specialty lines within this division is essentially flat this quarter down from plus 4% during the first quarter. The comparison between quarters is exacerbated by the marine liability class, which showed a large increase in the first quarter and by the large proportion of offshore marine business written in the second quarter, which gave up some rates following two-year period of good pricing underlying losses. Once again aviation and terrorism are stubbornly continuing their downward trend at a pace consistent with last year’s. After eight consecutive quarters of rate increases that aggregated to accumulative 19% pricing increase, our global property class written out of London to complete the last quarter and was essentially flat. The international P&C lines within the international division which includes our Canadian and Australian P&C operations are showing great change of plus 1 down from 3% in the first quarter. In our professional lines division, overall rate changes plus 1% down from plus 3% in the first quarter. Most classes monitored continue to indicate rate increases, but generally at a lower rate than in the first quarter. In U.S., price remains more consistent on primary business than in excess layers. Private company D&O and ancillary lines pricing help firmed in the quarter. Outside the U.S., rate change remains more patchy with continued good improvement on Australia, but financial institutions and commercial D&O in Canada and Europe are showing declines in the low single digits. Moving on to reinsurance, in the most recent mid-year renewals dominated by property renewals in the U.S. pricing was under pressure. High margin Florida accounts experienced the most significant rate pressure. This pressure falls on from historically high pricing levels achieved in recent year’s levels which served to attract significant additional capital. From our prospective, much of this business remains attractive especially as the increased southeast exposure improves the capital efficiency and return on risk of our overall portfolio. We’ve been focusing on this for some time and are comfortable that our portfolio today delivers more attractive expected profitability on a risk adjusted basis than the portfolio we had a year ago. Our base is a much stronger one from which to navigate the vagaries of the market. Non-property renewals have been mixed. Generally, the gradually improving primary pricing environment I just described is offset to some degree by increasing competition from reinsurers. This is often manifested in increased ceding commission. Although, we are seeing increases in those ceding commissions in both cases, the net result is a net positive rate to AXIS Re as the underlying rates are increasing at a faster paid from the ceding commissions. Approximately 14% of AXIS Re’s 2012 expiring premium was renewable in July 1. At this renewal, we estimate we were about $260 million of premium, about 4% more than the expiring. Growth from select opportunities in casualty reinsurance offset minor reductions elsewhere in the portfolio. Within property, reductions in catastrophe ratings were somewhat offset by growth in property per risk and quarter share as well as an engineering. I’m confident we are making the most current market conditions. We believe we’ve been successful in growing our business in the most attractive way of pursuing diversified growth in select specialty areas across both of our segments. In insurance, we’ve improved penetration in the E&S lines with new business production this quarter doubling relative to the second quarter of last year. We progress our initiatives in the renewable energy, design professionals and in environmental professional liability, U.K. professional indemnity lines and in our Australian and Canadian operations. Of note, in our accident and health initiatives, gross written premiums in the first half of this year already exceed those with the full year of 2012 at 13%. In AXIS Re, following the activity in agriculture reinsurance in the U.S. which marked the first half of the year we are now working on expanding those relationships as well as the upcoming China and India renewals. We are also progressing on our third-party capital management efforts and have also begun executing our opportunities to hedge our reinsurance portfolio at attractive prices. We believe we are executing on all critical elements of our strategic plan. AXIS is a strong underwriting performance of the last decade was achieved with the focus on complex volatile lines. At the core of our strategic plan is to continue to execute well in underwriting these risks, reducing volatility where we can, but understanding that we have to accept some quarterly volatility in return for a better annual result in volatility. Nevertheless, we will look to further mitigate that overall portfolio volatility and to further enhance overall annual outcomes by diligently executing on select portfolio accretive initiatives in less volatile specialty areas. By year-to-date annualized operating ROE of approximately 11% is the more appropriate measure of our performance this year thus far. While this is a good result, it still does not reflect the full leverage of all the major strategic initiatives in progress at AXIS. And we remain committed to continuing to deliver top quintile annual results with industry average annual volatility for the benefit of our shareholders. And with that, I’d like to open the lines for questions.

(Operator Instructions) And our first question will come from Charles Sebaski of BMO Capital Markets. Charles Sebaski - BMO Capital Markets: Good morning.

Good morning. Charles Sebaski - BMO Capital Markets: I have couple of questions. The first one on capital management activities, I thought I recalled last quarter, but kind of the guidepost for repurchases was an earnings plus concept that I think Joe you said here, you are kind of at up 2 earnings, I wonder if there is any change based on growth or anything else?

No, Charles, there is no change. We are sticking to the same policy that we had before. Obviously, at this point in time our repurchases are in excess of our income. We take this a quarter at a time, we are laid back during the third quarter wind season, but taking a look at this in the fourth quarter of the year. Charles Sebaski - BMO Capital Markets: Okay. And then I guess on the insurance division, I was hoping to get I guess a little bit more color on the volatility and the return aspect, I guess, the $90 million in cat losses in the quarter, I think it took a lot of us kind of by surprise given that it seemed to be not an above average cat quarter in general. Just wondering if we could see if there is anything that’s been changing the portfolio, if you are either at lower levels on the primary basis or anything year-over-year or just seems that the only time you have been at this level of cat losses has been when there has been major hurricane activity?

Charles, you are right. It is in fact the highest loss quarter in the insurance division since we had without major activity, but we look at this many different ways. And we have looked at the average number of risk losses that we have had from different sources over time, and this is truly an exceptional quarter in both the number of events as well as the severity of the individual events. You are right that it wasn’t a single event, but I think that’s also an important part of the situation. These were a number of smaller claims, the largest one individually being the (indiscernible) energy loss that was related to the floods in Argentina, but other than that, it was all small claims in the single millions mostly. It just happened everywhere. It happened in Calgary. It happened in – it happened all over the U.S. weather. It happened in Argentina. And I will also say that the number that we have provided includes a fair amount of IBNR against the cumulative amount of PCS events for the full year. So, I don’t know how other individuals are reporting those, but we had 14 different PCS events in the second quarter. And according to our practice, recognizing that very often a lot of these attritional PCS losses don’t get announced in the quarter that has experienced our practices to set up an amount of PCS related IBNR to anticipate for the notices that we expect to receive in the next quarter. So, it is a large number, but we have not had any change in our underwriting. In fact, a large number of the accounts, where we have had losses where accounts that we have had for several years that are performed well that have benefited from improvements in terms and conditions. Rest assured that we are spending a lot of time looking at this. As of now, our conclusion is that this is random volatility, but again we will continue to further analyze this and obviously if there are any lessons to be learnt, we will make sure that we incorporate them at our planning for 2014. Charles Sebaski - BMO Capital Markets: Could you tell us on the insurance side of the business what an ROE profile is that you are writing to currently sort of the go forward if there is a benchmark and we have really just a lot of different lines, but…?

Oh my god, there is such a large number of lines, but I think it’s fair to say that if you look at where we were in the last couple of years at least, you will find that on a gross basis the primary insurance results were about flat with the – sorry the gross reinsurance results were both flat with reinsurance. However, over the last couple of years the reinsurance charges that we were paying actually were large such that’s the net result, the net ROE results for our insurance division was modestly lower than the reinsurance. What we seeing over the last 12 to 18 months or so is a change where the ROEs because of the fundamental pricing on the insurance side is improving and the costs of our re-insurance coverage is declining, we are actually seeing the ROE of our insurance division improving meaningfully. Now, overall book is still averaging approximately 10% right now ROE. And so I would say that overall it would above 10% perhaps a little bit better target ROE for the insurance book. Charles Sebaski - BMO Capital Markets: Excellent. Thank you very much.

One more comment I want to make is the volatility of that book in the insurance division again is one that we’ve experienced for the entire duration of our company and not in any one year did our insurance division report a combined ratio in excess of 100. Charles Sebaski - BMO Capital Markets: Excellent, thank you.

And the next question will come from Greg LoCraft of Morgan Stanley. Greg LoCraft - Morgan Stanley: Hi good morning. Wanted to follow-up on the pricing versus loss cost situation, I gave you – you are very fortunate that prices decelerated 1Q to 2Q and what am I wrestling with is how will that flow into the margins over time, you have shown some excellent underlying margin improvement in recent periods and recent years. How would be we thinking about that as pricing is decelerating across the board?

I think by and large if you’re looking at it for most of our lines certainly the property line the umbrella and access lines most lines of business we are contains a see pricing ahead of trend. But one area where it’s clearly not there yet is professional lines. We are averaging 1% and obviously our actuaries are not putting up 1% lost trend number. That said, the loss trend number that we’ve put in our pricing for the last couple of years as you know is overestimated actual loss trends. But at 1% we would say that from actuarial basis professional lines are still lagging, in all of other lines of business we are confident that we are at least at loss or better. Greg LoCraft - Morgan Stanley: Okay, so we can still see margin expansion great. On professional lines, you all mention the I guess the reserve addition I wan to get a little more color on the reserve addition in the insurance division for professional lines there has been a lot of growth there, it’s the biggest reserve bucket, can you maybe help us a bit more with what exactly is occurring in that area what you are seeing. It sounds like it needs more rate?

Well Albert comment on the rate Greg. But let me sum it up this way, first of all you know we are an excess writer for the most part in professional lines. We do some primary but most of our portfolio is excess. We took some action in the second quarter on four credit crisis claims and two non-credit crisis claims which for the most part are now reserved at policy limits. We do not expect this to have a material impact going forward. We did disclose that there was $14 million of net adverse development in the quarter that’s actually combination of $36 million worth of adverse development on credit crisis years offset by $22 million in favorable development in professional lines on non-credit crisis years. So 14 million is the net strengthening but these cases that I am referring to these fixed cases resulted in our decision to take an action you know we are always conservative in taking the bad news first but we don’t expect this to continue if we do we feel that the overall strength of our reserves in professional lines will enable us to handle it.

Let me add to that couple of things. Greg, you first of all you referred to the large base of premiums of IBNR in professional lines and I think we tried to make the point that we have in excess of $1.1 billion of IBNR that we are very comfortable in that and it was only with regards to a couple of cases that we wanted to increase but that and we in fact released reserves in other non-global crisis here. So, we remained very comfortable with the totality of our professional lines book and when we get one or two bad cases we will take that. Greg you also made reference to the growth in recent years. I think that that’s what the commenting on. If you look at where we have been historically this company had a large exposure in financial institutions that’s one of the areas that we do quite well. And we had some U.S. based D&O and professional liabilities. Most of the growth if not all of the growth that you will have seen in the last three years have been in diversifying lines and in diversifying countries. We expanded and sour European professional liability, we expanded in Australia, we expanded in Canada, we went down market including things like and the design professionals. We have expanded and diversified the professional liability book it hasn’t been simply growing in those existing lines where we have been before. Greg LoCraft - Morgan Stanley: Okay that’s great color. Thank you very much.

And the next question will come from Michael Manese of Goldman Sachs Michael Maneasy - Goldman Sachs: Thank you. Just about one good question on the balance sheet I guess, so it looks like financial leverage is picking up, you have raised a bit that, your are buying back stock ahead of earnings. And we have these marks in the portfolio that are hitting the net equity line, how should we think about the level that you want a maintain in terms of financial leverage are you all in big 10 in terms of AOCI or if you look at the XLCI, I mean how might further March impact your view? Thanks.

Yeah, the general answer to your question is that we tried to keep our financial leverage and that is debt and preferred stock to total capital at or below 25%. We have crept up in the second quarter. When we did the preferred offering, our leverage was a little bit less than it is now mainly due to the unrealized depreciation in the portfolio. But we are pretty confident that if interest rates increase at a reasonable rate over the next couple of years, we can offset any unrealized gains in the portfolio with improvements in investment income and improvement in operating income. So, just coming back to the beginning where we are probably pretty where we are is really where we are comfortable being. We would actually like to bring that down over a period of time? Michael Maneasy - Goldman Sachs: Sure. I may guess the question I mean the outlook for rate is higher, so that makes sense if your I your view is right and moderate change in rates it does comes true then that makes sense, but with that implied and if we do see a big rise in interest rates that you are going to curtail your share, year capital deployed in your buyback activity in order to kind of manage to that 25 level or below?

I wouldn’t say necessarily that would be the case. And again if you think about the margins that we will earn on our under riding income as well as increased income and just simply how the markets are reacting in the last two or three weeks, our portfolios has come back about $60 million from the unrealized position we are at the end of the quarter. There is some volatility in rates we wouldn’t necessarily curtail our stock repurchases program, but our overall policy as we said before is to basically repurchase shares and dividend up 200% of our operating income, so that’s really where we’re going to stick to. Michael Maneasy - Goldman Sachs: Okay. And just one last one, or in just magnitude wise I guess, you lost about just under $300 million in ALCI in the quarter. And your run rate investment income is about $100 million in change, $80 million in the quarter. This time I am just trying to – this is just math. I mean I am just trying to understand the map of you know if you have in this marching you are managing to a 25 then should we say well let’s look at where the total capitalization is, let’s look at where the debt is. And based on where ever that ends up I mean I don’t have – I am not stating a view on interest rates, but I am just asking like if that happens and it pushes you about 25, simply out of your control in terms of what happens in the rate market how are you going to perceive that is that something you are going to manage towards or are you going to kind of look at you are going to peal the marks out and focus on something else?

I think that’s a fair question. And the way we look at it is – is in multiple areas. It’s not an absolute hard line that we will stop buying if we hit the 25, but I think there is two or three areas here. One is we look at our leverage on our GAAP balance sheet, but it’s not the only kind of levers that we look at, we look at our – we look at economic capital, we look at our rating agency capital, we look at what these issues and in all of those cases, we determine the amount of excess that we have in the fee excess remains constant than that’s something that we need that gives us some room to acquire. From a clearly economic balance sheet prospective as you know the gap balance sheet does not reflect the net present value of the reserves whereas on an economic balance sheet, rising interest rate reduces the net present value of the liability so your economic equity actually doesn’t go down as far as your gap equity. The other thing is that although our leverage quote unquote has increased in – with the recent preferred offering. This is about as good a level of leverage that you can have. These are perpetual preferred and we then to think of the perpetual preferred is having significantly less debt like criteria and that also goes into the consideration. So, longer term we believe the 25% is an appropriate level and gap for our leverage, but that doesn’t mean that over a short period of time or you got a kind of adjustments in volatility of interest rates that we add that we let that be our only determinant. Michael Maneasy - Goldman Sachs: Alright, great, thank you.

And the next question will be from Jay Cohen of Bank of America Merrill Lynch. Jay Cohen - Bank of America Merrill Lynch: Thank you. A couple of questions, the first is I seem to I guess pickup in your commentary, you’re talking about your ceded reinsurance, that you had ceded less in your property business and correct me if I’m wrong, but I guess the question I would have it, I guess one reasonable strategy might be gee, if property reinsurance pricing is getting better shouldn’t you be ceding more so, I’m wondering if you could just talk about your strategy there?

That’s a good question, it’s a per risk versus the cat I think it’s fair to say that cat reinsurance is getting cheaper and we are in fact buying more cat reinsurance. The issue is with regard to the per risk, we’ve done a fair amount of analysis around that and we’ll determine that we were literally ceding away too much of our property in diversification benefits within the lower levels so, we modestly increased the retentions on the per risk layers and also on professional lines and casualty we’ve reduced the quarter shares. But the net of it all is even with the overall net improvements in many lines in reinsurance. The net of it all is that the changes in the ceded reprogram are anticipated to provide both A higher annual results and B lower annual volatility to the overall portfolio. The one area whether is the most reduction in cost which is cat we haven’t in fact acquired more reinsurance reduction. Jay Cohen - Bank of America Merrill Lynch: That’s really helpful. The second question I guess is look at the third quarter it feel like every other day there is some catastrophe manmade typically, with train crashes and other things. Do you have any sense at this point if there is any major exposures you have for instance the Canadian train crash seems to be the biggest that one that’s out there.

Yeah, almost makes you worried to take the train these days. I don’t disagree with you. Obviously we monitored these everything that we see today gives us we are concluding given the data that we have today that there is nothing material that we’ve seen happening in the quarter for us. Jay Cohen - Bank of America Merrill Lynch: That’s great, thanks Albert.

You’re welcome.

And the next question is from Vinay Misquith of Evercore. Vinay Misquith - Evercore: Hi, good morning. The first question is on the margin improvement in the year-over-year. The accident year loss ratio in cat is roughly flat. I believe you mentioned some larger sort of one-off losses excluding cat. But if you could help us understand so should we be looking at the first half of the year is accident year loss ratio is cat and sort of turning that forward and assuming so that’s going to be modestly improving because of rate?

Yes, Vinay. I think that’s a good assumption. If you concentrate on the second quarter for a minute, as far as the insurance is concerned, we had about a point impact on our loss ratio from rate. And I think we have mentioned in the first quarter call that we expected during the year to have a 1% to 2% improvement in our actually in your ratio as a result of rate increases. Well, about half of that has earned through in the first half of the year. However, we did have an increased incidence as Albert described of risk losses, which offset to some extent the benefit that we would have seen coming through rate in the accident year loss ratio. So, I think a much better way to look at this is the six months rather than just the second quarter result. On the reinsurance side for the most part the rates that we are achieving are keeping pace with trend. So, really, no major change there. Vinay Misquith - Evercore: Okay, that’s helpful. Second question was on the reserve development so far I understand it right, you added about $36 million to the professional liability book. So, the pro forma number for this quarter would actually have been about $78 million of favorable, is that fair?

That’s correct. Vinay Misquith - Evercore: Okay. And there is no – so the reason being because the pace of our reserve development has fallen off recently. And so just curious as to whether you are seeing something different now versus the past or it’s just because of these one-time issues?

Yes. As you know, we have comment about the future relative to reserve development, but our reinsurance prior year development was really what we have experienced in the past. So, there has really been no change there. And as far as insurance is concerned with the exception of this professional line situation that we referred to our prior year development was more or less where it’s been. Vinay Misquith - Evercore: Sure, that’s helpful. And then one last question on the net investment income, the income from fixed majority investments was up 5% quarter-over-quarter, just curious what’s happening there? There was about $75 million this quarter versus about $70 million last quarter?

Right. We have an investment in Treasury Inflation-Protected Securities, or TIPS. And you know that we have got some CPI adjustments that flow through that. So, investment income in those areas fluctuates from quarter-to-quarter if you need specifics, we can give you that, but basically that’s the overall answer. Vinay Misquith - Evercore: Sure. But this quarter is the normalized rate you will think or it’s a little bit higher than normal?

Bear with me a second, I have that somewhere here. Yes, it’s about $2 million higher this quarter than normal. Vinay Misquith - Evercore: Okay, thank you.

And our next question will come from Meyer Shields of Keefe, Bruyette & Woods. Meyer Shields - Keefe, Bruyette & Woods: Thanks. If I can turn again to the professional liability, when you talk about the $22 million of favorable development, excluding the credit crisis issue, what accident year do those from?

I believe, its spread out just give me a minute and I will do, yes, bear with me here, I am looking through the table. So, most of the strengthening that I referred to in the credit crisis years came from 2009, but the beneficial impact really came from accident years 2007, ‘06, ‘05 and really it’s spread out among the number of years and as well as 2010. Meyer Shields - Keefe, Bruyette & Woods: Okay.

So, ‘05, ‘06, ‘07 and ‘10. Meyer Shields - Keefe, Bruyette & Woods: Okay, that’s helpful. Albert, you talked about more how do I characterize it, lower rate increases in the number of lines of business? Can you talk about why you think that’s actually going on is that new competitors, old competitors just being more aggressive or some other factor?

I think in many cases, each line of business has its own psychology. I think on the primary side, we have had a number of quarters now of increases and it could be that there is little bit of satisfaction as we are now. It could be that it is just an anomaly of the accounts that we have renewed this quarter. That is particularly the case I would say when we look at the international book, where depending on the concentration of the line of business that you are in, the preponderance of the renewals if that book of business is up versus down. As I mentioned in the first quarter, the international book of business was favorably affected by significant increases in the marine liability lines. Over 20% of our premiums renewable in the second quarter in international or in the offshore energy and that’s had a very good pricing and excellent results. And so here we started to see some declines as a result of that. If I want to say one thing, it would be that for most of the lines of business that we are seeing, the changes are consistent with what we have been observing in terms of A) prior pricing and B) loss experiences. The one area that is still lagging is in professional lines and there again there is a reason for that. The lower layers of professional lines, which have been most affected by claims increases, including M&A litigation and so on and so forth, those lower layers are in fact seeing healthy pricing increases. When you get to the excess layers, as Joe mentioned, we are mostly in the excess layers, most of those layers have in fact been protected from a lot of these losses. And so the loss experience in a number of these excess layers have actually been quite good which goes back to my comment about how we are feeling very comfortable about our overall portfolio, how the loss trends that we have been pricing in our professional lines, in fact, haven’t really come out in reported cases. And because of that, the pricing improvement is lagging in the upper layers, because the losses haven’t shown up in the upper layers. So, most of what we are seeing fundamentally is consistent with loss experiences, loss trends that we have seen. Obviously, with regard to the reinsurance book, the biggest factor that we have seen is the substantial increase in capacity afforded by the capital markets. And that has of course reduced the amount of business available to the re-insurers. Re-insurers have all that capacity they want to put to use. They are not putting it to use in the catastrophe world. So, many of them are displacing that catastrophe into other lines, which is why we are seeing increased reinsurance competition in other lines. And as we have mentioned to you that’s reflecting itself or manifesting itself in terms of higher ceding commissions. So, it’s all consistent with the observations that we have had with regards to prior pricing activity and prior claims activity. Meyer Shields - Keefe, Bruyette & Woods: Okay, thank you very much.

And the next question is from Brian Meredith of UBS. Brian Meredith - UBS: Yes, good morning. A couple of just quick questions here. First, for Joe, I am wondering, Joe, do you have what the spread is between what’s your reinvestment rate is which I know you gave us in what is maturing in your investment portfolio gives a sense as to what that looks like?

Yes, it’s as of June 30, Brian the book yield is 2.58%. Our yield to maturity or the reinvestment yield is 2.41%. So, while we had some challenges in the past with the portfolio trending down to lower interest rates, the fact that interest rates have risen, actually we have narrowed that gap pretty considerably. Brian Meredith - UBS: Got you. And then the second question Albert, I’m curious we’ve heard from some others the kind of leading property cat reinsurance company is that they took advantage of the attractive retrocessional rating environment right now or prices to improve their portfolio returns there. It does look like you guys did that, any reason why?

One of the things that I have mentioned is that we have actually started to hedge our reinsurance portfolio using ILWs and other transactions of that type. And in addition, we have acquired protection on our aggregate book on an annual aggregate excess of loss basis through a cat bond that we priced just yesterday. So, we are definitely looking to manage our overall cat exposures in volatility. Brian Meredith - UBS: So, we will see that come through in the third quarter.

Yes. Brian Meredith - UBS: Okay, great. Thank you.

And next, we have a question from Amit Kumar of Macquarie. Amit Kumar - Macquarie: Thanks. And I guess two quick follow-ups. First of all, just going back to the discussion on, I guess, individual risk losses in the insurance segment, did you disclose the – what the number was in the opening remarks, what that loss, how much did that add up to?

No, we did not disclose it. Let me characterize it by saying that we have had last year we had one risk loss in excess of $10 million in this period. In the current year, we have had a couple of more. And really if you go back in our history, we have never really had a period where we have had more than three. So, this is an unusual situation. We didn’t disclose the exact amount, but it had a small impact on about a 0.7 impact on our accident year loss ratio in insurance. Amit Kumar - Macquarie: Got it. And that’s actually quite helpful. The only other question I have is just going back to the discussion on the claims activity on the professional liability bucket. Would it be possible to share, I guess what the total bucket of claims related to the credit crisis looks like? So, that maybe we can think about it on a relative basis, and I guess related to that is it did something specifically change in those four claims in this quarter?

I think I am not sure that we can sit here and go through the individual, but I think what I can say is that for the global credit crisis years, we did say that we had $234 million of IBNR related to that. With regards to what happened this quarter frankly, there were small number of cases that took a right turn in terms of moving in a direction opposite of how these cases will developing the past, including one in which a favorable judgment was return on appeal. So, there is a fair amount of volatility. With regards to global financial crisis cases, which is again why we have always been slow in taking any action on those years, because we were frankly, we were expecting noise of this type. So, the favorable activity that we have seen in those years in the past we absolutely didn’t want to respond to, because we felt it sooner or later, we would get the occasional surprise, the surprises happened here. And as Joe mentioned rather than dig into the IBNR for these cases, we just thought to take action and recognize those through the income statement and keep our IBNR protected for future development. Amit Kumar - Macquarie: Okay, that’s all I have. Thanks for the answers.

And this concludes our question-and-answer session today. I would like to turn the conference back over to Albert Benchimol, President and CEO for any closing remarks. Albert Benchimol - President and Chief Executive Officer: Thank you, operator and thank you all for being with us on this quarter, and we look forward to speak to you again at the end of the third quarter. Good bye.

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