John D. Finnegan - Chairman, President and Chief Executive Officer John J. Degnan - Vice Chairman and Chief Operating Officer Richard G. Spiro - Executive Vice President and Chief Financial Officer

Matthew Heimermann - JPMorgan Clifford Gallant - Keefe, Bruyette & Woods Vinay Misquith - Credit Suisse Jay Cohen - Bank of America/Merrill Lynch Terry Shu - Pioneer Investments Jay Gelb - Barclays Capital David Small - JPMorgan Paul Newsome - Sandler O'Neill & Partners L.P.

Good day, ladies and gentlemen. Welcome to the Chubb Corporation's Third Quarter 2009 Earnings Conference Call. Today's call is being recorded. Before we begin, Chubb asked me to make the following statements. In order to help you understand Chubb, its industry and its results, members of Chubb's management team will include in today's presentation forward-looking statement within the meaning of our Private Securities Litigation Reform Act of 1995. It is possible that actual results might differ from estimates and forecasts that Chubb's Management Team might may today. Additional information regarding factors that could cause such differences appear in Chubb's filings with the Securities and Exchange Commission. In the prepared remarks and responses to questions during today's presentation of Chubb's third quarter 2009 financial results, Chubb's management may refer to financial measures that are not derived from generally accepted accounting principles, or GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP and related information is provided in the press release with the financial supplement for the third quarter 2009, which are available on the investor section of Chubb's website at www.chubb.com. Please also note that no portion of this conference call may be reproduced or rebroadcast in any form without the prior written consent of Chubb. Replay of this webcast will be available through November 20, 2009. Those listening after October 22, 2009 should please note that the information and forecasts provided in this recording will not necessarily be updated and it is possible that the information will no longer be current. Now, I would like to turn the call over to Mr. John Finnegan, President and CEO. Please go ahead, sir. John D. Finnegan: Thank you. Chubb turned in another excellent quarter with outstanding underwriting results, a strong return on equity and substantial increase in book value. The weak economy reduced the volume of available business and resulted in a decline in net written premiums but renewal rates continued to be positive. Consistent with our commitments to managing the company for the bottom-line and building shareholder value we continue to adhere to the three pillars of our operating strategy. Disciplined underwriting, conservative investing and active capital management. Successful execution of this strategy is reflected in this quarter's terrific results. Operating income per share increased 68% to $1.56. Compared to the third quarter of 2008 the combined ratio improved 12.7 points to 85.4. We had 0.8 points of tax compared to the 13.6 points in last year's quarter, which included Hurricane Ike. While improvement in the combined ratio was driven by low CATs, our ex-CAT operating margins held up extremely well in a difficult environment. For the first nine months operating income per share was $4.49. The annualized nine month operating ROE was 15.3%. For the third quarter net written premiums declined 7%, or about 5% ex-currency, reflecting in large part reduced demand due to global recession. We had after tax net realized capital gains of 0.13 per share, primarily due to an increase in the value of our alternative investments. At September 30, the net unrealized depreciation before tax of all our investments stood at $1.8 billion, which is an increase of $1.3 billion over June 30. These investments and operating results produced a GAAP book value per share $45.43 at September 30. That's a 10% increase since June 30 and a 19% increase since year-end 2008. Our capital position is excellent and Ricky will talk about the progress we have made in our share buyback program. As you'll recall, in July we increased 2009 operating income per share guidance to a range of $5.20 to $5.50 per share. In light of third quarter results, we are again increasing guidance for 2009 to a range a $5.90 to $6 per share. I'll elaborate on the revised guidance in my closing remarks. And now John and Ricky will discuss our performance in more detail. John? John J. Degnan: Thanks, John. I am going to begin this afternoon with a review of the individual business units for the third quarter. Chubb Personnel Insurance net written premiums declined 5% and currency accounted for about two of those points. CPI produced a combined ratio of 81.6 compared to the 100.7 last year. The impact of CAT losses in the third quarter of 2009 actually improved the combined ratio by about a point as modest CAT activity in the quarter was more than offset by subrogation recoveries for the California wild fires of 2007. By comparison CPI had 16.3 points of CATs in last year's third quarter due largely to Hurricane Ike. So excluding CAT, CPI's third quarter combined ratio was 82.6 this year, still almost 2 points better than last year's 84.4. Homeowners' premiums were down 4%. The combined ratio was 77.3. Personal Auto premiums declined 3% with a combined ratio of 87.2. In other Personal lines premiums declined 10% and the combined ratio with 90.9. At Chubb Commercial Insurance premiums were down 8% with about two points of that decline relating to currency. The combined ratio was 90.5 compared to last year's 106. CCI's third quarter included CAT losses of only 2.6 points compared with 19.9 points in 2008. So excluding CAT, CCI's third quarter combined ratio was 87.9 in 2009 and 86.1 in 2008. CCI achieved an overall three point U.S. renewal increase, a point better than the second quarter. And two points better than the first quarter. In the U.S. retention was 82% and the ratio of new to lost business 0.8 to 1. In the commercial market we're encouraged that we have not yet observed any general loosening of term and conditions. We have occasionally seen a couple of competitors gaining higher CAT sub-limits for earthquake or flood, without commensurate premium charges. But these cases have so far been isolated to some large commercial risks. At Chubb's Specialty Insurance, net written premiums were down 6%, about 4% excluding currency and the combined ratio was 83.6 compared to 82.3 in the third quarter of 2008. Premiums for professional liability were down five points, about two of which were attributable to currency and the combined ratio for professional liability was 90 compared to 84.3 in last year's third quarter, due mostly to lower favorable development. Average U.S. renewal rates for professional liability were up 3% over last year's third quarter. And that's the third consecutive quarter this year with positive rate change, although competitive pressures do appear to be increasing. Renewal retention in the U.S. was 84% and the ratio of new to lost business was 0.9 to 1. For Surety net return premiums were down 12% and the combined ratio was 32.5. Now let me put some color around these excellent results in the context of how we see the current insurance market environment. Excluding the effect of currency the run off of the reinsurance assumed business, our premiums were down in the quarter by 4.6%, driven primarily by exposure declines. As would be expected in this challenging economic environment there are increasing numbers of failed business, reduced payrolls, higher instances of audit returned premiums for prior period in lines such as workers comps, fewer new plans and additions, reduced M&A and IPO activity, higher deductibles and reduced levels of new valuable articles coverage. Reported results for the first six months of the year indicated that the economic environment had a similar impact on the industry as a whole. The decline in premium growth was about the same for the industry as for Chubb when adjusted for currency. Based on our experience it appears that the negative impact of the economy on the insurance marketing increased in the third quarter. Accordingly, while we cannot yet speak authoritatively to competitors third quarter results we expect that Chubb's third quarter decline in net written premiums will be generally consistent with overall industry results. Going forward, while certain indicators, such as stock market valuations suggest an economic recovery may be under way it is likely to be a slow incremental and fiscal process. The industry has a way to go before economic conditions are sufficiently robust to fund premium growth. As a result levels of premium growth for the industry are likely the lag any economic recovery. While top-line growth or the lack thereof is on every body is mind these day, I want to take this opportunity to remind you of Chubb's heritage as a disciplined underwriting company. We are committed to making an underwriting profit and will not chase the market for growth, where underlying margins are unacceptable. We will look at it every way to grow the business profitably. But will accept lower growth if adequate returns are not available. This focus on underwriting profitability has served Chubb well in the past and will continue to be the foundation of our operating velocity going forward. On the rate side, Chubb continued to obtain positive rates on renewals with year-over-year increases in the third quarter of about 3% on our overall commercial specialty book, consistent with the second quarter. This is a significant improvement from where we were only 12 to 18 months ago. We were also please that retention is running fairly close to historical levels. As we've said before the key ingredients for further rate increases are here, mainly an industry at a 100% combined ratio, cost escalation still in excess of rates and low investment yields. On the other hand there is an increasing number of tempering forces including the benign North American hurricane season, improved carrier balance sheets, decreased customer demand, increased customer price sensitivity and the fact that some of our competitors are benefiting from the government bailout. All of this suggests that progress on rate increases will be measured and implemental, at least well into 2010. Finally in previous calls I've discussed in detail our view of the credit crises claim environment, our diversified underwriting portfolio, our reaction to some of the market share based exposure estimates we've seen, and our confidence that we are prudently deserving to this category of rises. I won't (ph) repeat those views now, no doubt to the liking of most of you, but I do want to note that our experience since then does support their validity. So with that I will turn it over to Ricky. Richard G. Spiro: Thanks, John. As you've already heard we are obviously very pleased with our financial performance in the third quarter. Looking first at our operating results, underwriting income continued to be strong amounting to $423 million in the quarter. Property and casualty investment income after-tax declined by 3% in the quarter to $317 million. As in the past several quarters this decline was due primarily to lower yields on our short term investments and currency fluctuations on our international investment. Net income was higher than operating income in the quarter due to net realized investment gains before tax of $69 million or 0.13 per share after tax. Our net realized investment gains before tax included $65 million of gains on our alternative investments portfolio, impairment charges of $20 million and $24 million of realized gains from the sales of securities. For comparative purposes we should keep in mind that we have consistently included our share of the change in the net equity of our alternative investments and net realized investment gains and losses. Some of our competitors included their alternative investment gains and losses in investment income. Unrealized depreciation before tax at September 30 rose to $1.8 billion from $512 million at the end of the second quarter. The substantial increase was due to the overall improvement in the global capital market during the quarter which led to strong performance across all of our asset classes. Turning to our investment portfolio, the total carrying value of our consolidated investment portfolio increased to $42 billion as of September 30, 2009 from $40.3 billion at the end of the second quarter. The composition of our portfolio remains largely unchanged from the prior quarter. The average duration of fixed maturity portfolio is 4.2 years and the average credit rating is AA2. We also continue to have excellent liquidity as a holding company. At September 30 our holding company portfolio included $2.7 billion of investments, including $1.2 billion of short term investments. Book value per share under GAAP at September 30 was $45.43 compared to $38.13 at year-end 2008 and $38.25 a year ago. Adjusted book value per share which we calculate with available for sale fixed maturities at amortized cost was $42.31 compared to $38.38 at 2008 year-end and $39.14 a year ago. As for reserves we estimate that we had favorable development in the third quarter of 2009 on prior reserve by SBU as follows: In CPI we had about 65 million; CCI has 13 million; CSI had 100 million; and reinsurance assumed had about 10 million, bringing the total favorable development for Chubb to about $205 million for the quarter. This represents a favorable impact on the third quarter combined ratio of about seven points overall. For comparison in the third quarter of 2008, we had about $210 million of favorable development for the company overall, including about 15 million in CPI; 60 million in CCI; 125 million in CSI and 10 million reinsurance assumed. During the third quarter, our loss reserves increased by $322 million. Reserves in our reinsurance assumed business, which is now in runoff declined by 38 million. Reserves in the insurance business increased by $360 million during the quarter. The impact of currency fluctuation on loss reserves during the quarter resulted in an increase in reserves of about $185 million. The expense ratio for the third quarter was 31.2 compared to last year's 30.2. Actual expenses in dollars were down but the ratio increased, due primarily to the effect of lower net written premium. Finally, I want to give you an update on capital management. During the third quarter, we repurchased 8.7 million shares at an aggregate cost of $412 million. The average cost of our purchases this year through September 30 was $45.11 per share. As of September 30, there were 7 million shares remaining under our current repurchase authorization. And as we said during our last earnings call, our intention is to complete the repurchase of all of these remaining shares by the end of the year. As you heard earlier and as we have demonstrated over time, active capital management is one of the pillars of our core operating strategy. Till the end of 2005, we have repurchased approximately $5.5 billion of our common stock. We will review our 2010 share repurchase plans with our Board in December. John will discuss our updated guidance in his closing remarks. John? John D. Finnegan: Chubb has performance extremely well in both the third quarter and first nine months of 2009. Here are some highlights. For the third quarter net operating income per share was $1.56 and annualized operating ROE of 15.5%, even on the heels of five years of soft market conditions. For the first nine months we had operating income per share of $4.49 and annualized operating ROE of 15.3%. These results were achieved through disciplined underwriting and a focus on bottom-line profitability rather than premium growth. Premium renewal rates at CCI and CSI continue to be positive as they have been all year. Our investment portfolio continued to perform well, with unrealized appreciation before tax of $1.8 billion as of September 30, reflecting substantial increases in the value of all components of our holdings. Book value per share increased 10% in a three months ended September 30 and is up 19% since year end 2008. We maintained a strong capital position which will enable us to complete our current share repurchase program by year-end while still leaving us sufficient capital to take advantage of any significant upturn in the insurance market conditions. Let me conclude with a few comments on the revised guidance we announced in today's press release. Based on our excellent third quarter results and our outlook for a strong fourth quarter, we are updating our 2009 calendar year operating income per share guidance from the $5.20 to $5.50 we provided in July to a new range of $5.19 to $6 per share. This revised 2009 operating income per share guidance is based on an assumption of 354 million average diluted shares outstanding for the full year, the same as in our July guidance. Our revised guidance also assumed two percentage points of CAT for the fourth quarter, which would result in 1.3 points of CAT for the calendar year. This compares for the full year CAT assumption of three points included in our July guidance. The impact on operating income per share of each point of CAT in the fourth quarter is about $0.05. As you work on your models for next year please note that we expect our guidance for 2010 which we usually issue at the time we report fourth quarter results in January will incorporate a more normalized long term CAT assumption, probably in the three to four point CAT range. We believe it will not be prudent to expect a repeat at this year's extremely mild weather. For perspective, based on the current share count, the difference between 3.5 point CAT assumption and this year's 1.3 point CAT assumption on a standalone basis, an adverse impact on operating income per share of about $0.45. And with that we will open it to your questions.

Thank you. (Operator Instructions). We'll go first to Matthew Heimermann. Matthew Heimermann - JPMorgan: Hi, gentlemen. That was real quick. Couple of questions if I may. I guess first in can you just give us a color on the work comp line. And in particular, I'm just trying to get a sense of how actually your margins are comparing year-on-year given that on a calendar year basis obviously there is a pretty dramatic bump up.

Yeah. There work comp Matt is negative 9% this quarter. So premiums for worker's comp though on an industry wide basis have declined about 15% over the last over two years 2006 to 2008 while our premiums were down only about 5%. The book is still profitable, both year-to-date and in the third quarter. Little less so in the third quarter this year due primarily to two things, one large loss and some less favorable development this year. Matthew Heimermann - JPMorgan: Okay. But there is still you're seeing still favorable development there? Or there is absence of favorable versus favorable last year?

It's actually about flat this quarter. Matthew Heimermann - JPMorgan: Okay. And then it -- that large loss, I mean is that because you had kind of elevated last ration's in that line now, I think the first three quarters of this year, is that something that's been affecting every quarter or is there just a trend that's been affecting a particular portion of the book every quarter? I am just...

I think, Matt that our combined ratio this year is 91.5. Third quarter was 95.7. That reflected the effect of the one large loss. Now but certainly to be fair, worker's comp has had some margin compression over the last year or two, given what's happened to rates. 91.5 though is terrific by historical trends, I think you'd agree and probably 15 points better than the industry as a whole. Matthew Heimermann - JPMorgan: No, that's fair, I just don't want to make the mistake of assuming the type of deterioration we've seen on year-on-year. So I would just -- but the color is helpful there. Two other; just kind of clean up questions I guess. One just on the reassurance assumed; what's the unearned premium reserve loss there,

Fairly insignificant, Matt. Not much at all. Matthew Heimermann - JPMorgan: Okay. And then just with respect to auto, it looks like you kind hit an inflection point with respect to some of the growth weakness you've seen in the first half of the year. And I just wondered if it's anything you need to yet point out there or is that just random mess at this point in the numbers?

You are talking about growth? Matthew Heimermann - JPMorgan: Yeah, would the decline really moderated versus first half?

We had some more robust growth outside the U.S. in auto in the third quarter this year which affected those numbers. Matthew Heimermann - JPMorgan: Okay. All right, thank you.

And next we'll move onto KBW's Cliff Gallant. Clifford Gallant - Keefe, Bruyette & Woods: Good afternoon.

Hi. Clifford Gallant - Keefe, Bruyette & Woods: Firstly; give a little bit more color in terms of your new business. But you talked about 2% up on your renewals. Is there any color you could give on how your how pricing on new business might compare to what the expiring rates were on business you win or even business that you lost with respect to how much competitors were cutting by at all because of where in recent weeks if there's been any change in direction of pricing. Thank you.

Couple of points, submissions were up a bit this year on the commercial line side, probably about four points. We write about 20% submissions that we get. To your specific question about how they performed, the renewal business, is more surprising is more seasoned and tends to perform better than the new business. But the probability is driven more by the renewal business where commercial and specialty retentions run low to mid 80s. In this softer market though we're deliberately adding less new business then in prior years, which is giving us a very stable book overall. Pricing tends to be a little lower on new business then it does on renewal business, particularly in the marketplace where they think that we're adding it very judiciously and cautiously.

I think, if we could, Cliff by historical standards, that percentage of new business to total business is well down from previous year. So it's a small percentage probably about 13, 14%.

Yeah. Round about five.

Down 5.6. Clifford Gallant - Keefe, Bruyette & Woods: Thank you.

And next we'll hear from Vinay Misquith from Credit Swiss. Vinay Misquith - Credit Suisse: Hi good evening. In terms of pricing and rate increases, could you help us understand how rate increases compared with loss cost trends right now?

Well, loss cost trends differ by line of business. In the commercial lines we generally plan to about a four point increase in loss costs driven mostly by netable and so they will be higher in some one than others. So rate across the board in commercial is up three points this quarter. It varies on line to line. Property tend to lead casualty a little more in our ability to take rate.

I wouldn't think that we have much margin compression in commercial at today's pricing. It's generally applying the four points to the loss ratio which is be more like 60% of the total. So I don't think we see much market -- I think we gotten to the point we are getting close to a an equal equilibrium point. But we are not certainly generating higher ex-EBITDA margin at this month. Vinay Misquith - Credit Suisse: Sounds fair enough. And Infinity reported such good results and you had another competitor also report great results this quarter. What you think is going to happen with pricing over the next six to nine months?

Well, as I said in the introductory remarks there is every reason to believe that pricing and rates order will be going up in the industry. And I won't repeat the reasons why. On the other hand there are a lot of contravening impacts as well on the economy and price sensitively of customers and the need for risk managers to reduce their insurance buying and insurance premiums being a likely target of cost reduction. We do think that premiums will eventually begin to be more robust and reflecting rate but it's going to be an incremental process and a bit lumpy and play out overtime. And as I said we think it' going to lag economic development. I can't put a precise economic -- return to economic robustness. I can't put a specific time line on it. Vinay Misquith - Credit Suisse: Fair enough. And one last question on the professional liability lines. I believe you mentioned that the competition was increasing if you could elaborate on that please?

Yeah, there is some new entrants. There are also some players who have been in the business for a while who decided that this is an opportune time to move down from high access levels to primary levels and do it on the basis, take the business on the basis of price. Eventually we have a lot more experience. We're sure that they'll pay the price with their decision and rue. We'll write it. We may move up in order to get our price. We'll write it if we can get our price. And then we'll it bide our time until we can come back at levels where we traditionally played. Vinay Misquith - Credit Suisse: That's great. Thank you.

Next from Bank of America/Merrill Lynch, Jay Cohen. Jay Cohen - Bank of America/Merrill Lynch: Yeah, thank you. It looks like in your commercial business that the actual year combined ratio, excluding catastrophe losses improved from the first half of the year. And I'm wondering if there is anything behind that. And then maybe related to that, did you report any current year favorable development? Any favorable development from the first half of the year, that wouldn't be prior year but maybe prior period?

No. Let me go through the for the third quarter overall our CAT combined ratio was 91.4. We had the third quarter favorable development was only dead-on third quarter 2008. So you were pretty much then looking at the ex-CAT comparison and it was less than a one point increase in CPI, about a one point increase in CCI. 1.5 point decrease in CSI. There has been no significant change, Jay in CCI. It actually is running reasonably well, right on what we expected. I don't think that third quarter was in any way significantly different. In answer to your question, I know one of our competitors does follow that convention of reporting entry year, accident year development. We don't, I don't think most companies do. It doesn't in the end obviously affect the bottom line at the end of the year. But we don't make that adjustment during the year. Vinay Misquith - Credit Suisse: Fair enough. Thank you.

We'll move onto Terry Shu with Pioneer Investments. Terry Shu - Pioneer Investments: You've commented quite a bit on the impact of the economy on the top line. Can you also comment on the impact of the economy, weak economy on losses? Has that helped on a net-net basis loss frequency. So as we see the top line improve with economy improving, well, do you think from a qualitative standpoint would also impact loss frequency?

Well, it's hard to establish a direct correlation between the economy and frequency of the book. But along the lines of your question, frequency is generally down in most of our lines in the mid low single digits from six to 8% except in ex-CAT number in property where it's up a little bit. But overall the newer rights count year-to-date is down 6%, is down 9% overall in this quarter. So clearly the frequency trends are to our liking. While renewal writing accounts are down 6% in the third quarter, we think that's partially due to reduced mileage being driven and the high cost of gasoline. So I am not sure I can establish a direct correlation but we're pleased with the way frequency has been going. And this has been a trend over the last several quarters. Terry Shu - Pioneer Investments: So is the number you cited is the cost, not just personal lines, personal auto but also commercial line, this mid single digit decline in frequency.

That's correct. Auto's down 8% year-to-date, both in auto liability and auto physical damage. I can give me more breakdown if you want. Terry Shu - Pioneer Investments: Thanks. So again from a net basis the weak economy could have in fact helped profit. That is pressure on the top line but the bottom line of the underwriting came in better is that it.

I don't think that we could say that. We could say that our loss trends continue to be quite favorable. But probably lots of reasons out there which the economy might suggest, the economy might be one but seven points in the top line will be tough to offset and loss trends of the economy.

I'd like to think some of it has to do with good underwriting. Terry Shu - Pioneer Investments: And the other question is that you've been experiencing, you and one of your major competitors modest rate increases but steady rate increases. We haven't quite seen that in prior cycles, that carrier or insurers are able to achieve rate phases even though there hasn't been sort of a collapse in profitability. So this is some what unusual, is it not that the industry is over a 100, not yourself than the other for sure players in the industry in aggregate. And you are still able to achieve modest rate increase even in a tough economic environment. So it's somewhat unusual?

Well, your description is correct. I mean a little bit lumpiness in the ability of carriers to get rate. Some carriers can get it, some can't. But even those carriers like us that are getting it are getting it more in some lines than we are in others. But if you look back at the last, the end of the last soft market, prior to September 11 in 2001, the rate taking was also a bit lumpy. It wasn't consistent across the board among carriers or among lines of business. So it was the catastrophic event of that attack that turned the market hard in a broad based way and began to ride the tide and what the boats were driven. Terry Shu - Pioneer Investments: Right, so results were a lot worse back then compared to now. Results overall are okay. And you're doing very, very well and the industry is still kind of hanging in there.

Absolutely. I won't agree with you that results are okay. We're doing very well, I agree with that part. We think the industry is running at least a hundred and may be very well running on an accident year higher than a hundred combined ratio. They just don't know it yet. Terry Shu - Pioneer Investments: Fair enough. So that the gap has widened yourself and certain other carriers versus the industry average.

Actually, we've been saying for three quarters of the year so that there are going to be certain companies that win in this environment and certain companies that don't. And I think that's beginning to show. Terry Shu - Pioneer Investments: All right. Thank you.

Next we will from Jay Gelb, Barclays Capital. Jay Gelb - Barclays Capital: On the capital management front, it looks like through the nine and based on the guidance for the rest of the year, it could generate operating earnings in access of $2 billion and that looks like share buybacks would be less than $1 billion. Can you talk about why you are looking to deploy the difference in capital?

Sure, Jay, how are you doing. It's Ricky. We continue to believe that we have a substantial excess capital position. We're going to use that capital to fund our buyback program. As John mention in his remarks, should there be a turn in the market place in terms of the insurance rate environment, we think we have enough capital to fund that as well. And then we're going to rework at our buyback program as we always do in December, discuss it with our Board based on our outlook and decide what we are going to do. But part of our strategy is always to focus on capital management. And if we don't have better uses for capital, return excess capital to the shareholders. Jay Gelb - Barclays Capital: Okay.

Jay, I think you have add in the -- when you look at that comparison you have to throw in the dividend in terms of use of capital. Then any premium paid on share buyback which fortunately hasn't been that great so far this year but any premium would go to reduce capital. Jay Gelb - Barclays Capital: That's a fair point. And than on the separate issue would be on our professional liability. One of your competitors last quarter disclosed their net policy, when it's exposed to banks so far in 2009, I don't know if Chubb has gone through that exercise and if you have, if you might be willing to disclose what that would be. And then if you can also touch on the recent trend of increased industry losses from derivative claims on five days if you can provide some thoughts on that, that will be helpful. Thank you.

As you know, we've never disclose net line limits for a particular category of business. I don't think it's a relevant number in terms of what true exposure is. We are pretty happy with way the community banks are developing. They have been about a 110 billions over the last 18 months or so. We are not on 10%. We're on significantly less than 10%. And at relatively low average limits, well to give you a net line total without discussing coverage issues and liability potential and the like would be more misleading that it would be accurate. I am sorry; I missed the second part of the question, what was that? Jay Gelb - Barclays Capital: Second part was on the derivative claim exposure on side AD no coverage?

In the stock option back dating we saw a lot more side A being attacked because there was a preponderance of derivative claims rather than securities class action plans. I would say with respectable credit crisis and the non credit crisis actions have been filed in the third quarter. They are predominantly either securities class actions or other forms of actions at State and Federal Court, bur primarily not derivative. Unless bankruptcy increase significantly, because as you know side A only triggered where the company is unable to indemnify its board or its officers. I don't think that side A is going to be under the same attack now that it was with respect to the derivative coverages that were dominated in investment. Stock option, I'm sorry, in stock option back dating. Jay Gelb - Barclays Capital: Okay. And then, if I can seek one more in. What was the trend on new rising claims and do you know in 3Q?

It was actually DNO for the third quarter, new count was down 5%. It's down 17% to date. ENO was up in the third quarter. But that reflects what I described last time is that likelihood, the credit card disclaims are going to attach more to ENO coverage's written by carriers. Overall, our total specialty book is up a point in third quarter and down two points year-to-date in terms of newer rise counts. Jay Gelb - Barclays Capital: Thank you.

Next we'll hear from Ian Gunnerman with Aegis Capital (ph).

Hi, couple of numbers here, one I guess on CPI the pipe is higher than it's been in a while. Was that over reached or something, it may be a one time?

Yes. that we -- we had broadly favorable prior year development across all three lines in CPI, including a significant benefit from some prior year catastrophes and we did have a fairly sizeable recovery from the California wild fires.

Got okay. Thank you. In CCI the annuity loss was below one that's the first time in at least a while, I came in how long but could you just talk a little bit about that? And has that increased competition? Is that resistance to your price increases what do you think is driving that?

Yeah, I think it's reflects the underwriting discipline that we have had the Marshall to deal with this kind of marketplace, but I talked earlier our renewal business tends to perform better than our new business in this marketplace with the level of competition we're being fairly judicious in our willingness to put new business on the line. We've priced to the exposure. If we can't get the adequate price we're not going to put it under the book. But basically I'd say disciplined underwriting is the primary explanation.

Okay. And out of four lines at CCI or they are below one rate now or there a couple of other various things and loss ratio gat worse than the others? I don't need the exact numbers. But the trend wise.

Yes I don't have it by line but I'd say generally all of them are around 0.9 to 1, among the line to get in CCI.

Okay, then if I could just ask one on the economic impact. I understand the economy will cover that. It to some extent should create more momentum to be able to get pricing there as prices recover and so forth. But I guess I am a little concerned, I am wondering your point of view on this, that when someone's gone hungry for a while and you give them the opportunity to eat, they tend to overeat, right? And I guess my concern is, if we start to see exposure come back, those people who have wanted to grow, but couldn't they're maybe going to get over aggressive for whatever new growth is out there. And maybe we actually pressing averse when the economy recovers?

Well, we don't tell just price though. I don't disagree with that statement. Historically, you can prove it to me many times, but Chubb is a company that sales a value added proposition. Particularly, in this climate, even if the economy does recover, I think we're more likely to be able to sell our financial strength and ratings today than we nave been. We've navigated those markets before. Many of those companies that you indicate might do that no longer are around to compete with us. In the end, some of that's is about winning economic system that we're still in it and in the end those who do it will pay their fears in price and those of who are strong enough to navigate the shows while it's going on will prosper.

Okay, great. Thank you very much.

(Operator Instructions). David Small, JPMorgan has next question. David Small - JPMorgan: Yeah, just a few questions. You mentioned that frequency was down 9% in the quarter that seems to have improved sequentially based on your comments. Can you just help us understand, is that the level of frequency that you're assuming in your pricing?

No. I don't think. That would actually occur. Obviously, we take, we don't adjust it every month. So what's going on in the market we take a little bit longer time view. David Small - JPMorgan: So could you help us to understand may be the implied frequency trend that's in your pricing?

Got to have differ by every line.

To be honest, it's not a large factor in our underwriting criteria. It's very difficult to predict, we do estimate what costs and right the business that add but don't factor in the minority, single criterion for frequency. David Small - JPMorgan: Well you must have some assumption for and severity that goes into your pricing I would imagine?

Yeah, we tried a loss -- projected loss course that some on historical basis with the help of the actuaries and how we performed. And we projected out based on what our expected guidance is. David Small - JPMorgan: So I guess the question is though, it seems loss costs are coming in lower than you projected, so are you lowering your projected loss costs in the future when your pricing now?

Our loss costs -- usually the actuaries and we take a little but longer term view of loss costs. So and as we talk about people often asked about inflation and the impact on our pricing and reserving. We take a longer term view, the view is somewhat higher in loss costs and inflation would run today. But, because that we don't adjust to every point change in actual in lost costs changes. Again a lot of these lines are long, long-term lines, where severity can change over a period of time and that pay out for a longer period. So we have to take a little bit longer term view. David Small - JPMorgan: And then could you just maybe -- have you seen any change in the rate environment since as the capital markets are covered in the third quarter and I guess is there as some of the trouble players I guess received cover from the governments and then they've been -- and then other players have benefited from kind of credit spreads coming in. Does that change the rate environments at all?

I think the third quarter rates was about positive three for us overall commercial specialty which was precisely what it was at the second, but I don't think the rate environment can easier out there. David Small - JPMorgan: I guess that I am asking you as if you thought about it month by month within the third quarter was better than the first half of the third quarter than in the latter half?

That's tough. We had a -- I think it's fair to say we had an upward trend for negative five, then plus three over a number of quarters. And we didn't see it improve in the third quarter, we're stable in the third quarter and I suspect that we don't expect to see any big improvement as John talked about in the near term. I don't know whether we expect to see anything deterioration either. David Small - JPMorgan: And then you mentioned that obviously pricing varies by line and you said you're getting rate in some lines and not in others. Could you maybe just give us a little bit more color on that comment?

Okay. John if you want to take profession liability, its obvious that through a little obviously you're getting far better raise than most other parts of profession liability but of course there are reasons for that, right.

Yeah. Professional liability rates have went up 3% and the third quarter they were up 4 in the second quarter. So steering up what John said. It's FI that continues to see the most significant upward trends; they're got 22% rate increases during the third quarter compared to 7% rate increases in the third quarter of '08 and 14% for the whole year of '08. We're getting more modest levels of rates and publicly rates went up overall in U.S. professional liability lines 3% during the third quarter which compares to a minus 2 in the second quarter of last year or a minus 2 for the full year last year. We continue to see improved rate movements in the third quarter for all the major professional liability classes except publicly which was flat, but not negative.

And on CCI I think all CMP casualty and property overran by at around a 3 point net increased mark. That are pretty constant, there wasn't huge changes except that our DFI got a deal. David Small - JPMorgan: Okay. Thank you.

Welcome.

And from Sandler O'Neill & Partners, Paul Newsome. Paul Newsome - Sandler O'Neill & Partners L.P.: Good afternoon and thanks for the call. I wanted to home in a little bit on the economic sensitive topic. My recollection please correct if I am wrong, was that historically some lines benefits, some lines didn't from a claims perspective. And it seems like this time around the economic sensitive lines like the surety that would ordinarily get bad or worse in the recession to be almost gotten better. And, do you think that recollection is correct and why would lines like surety in particular do so well when you would anticipate normally deteriorating results and obviously there is some underwriting going on, it looks like it's a broader trend because you're not alone.

Maybe some lines of business are more sensitive to economic conditions. But the payroll driven part for example would be one property and commercial lines whether a fewer plans in addition towards the another. Let me talk to surety for a moment, surety did slowdown its growth in the U.S. and Canada in the third quarter. We have modest growth outside the U.S. through September year-to-date. But overall surety is a line of business that looks better on the numbers, but it's lumpy and it's highly volatile. We had a very large loss in the third quarter of last year. That didn't replicated so this year we have combine and enviable combined ratio here income 35.2, I think which is just modestly above our expense ratio. So we essentially have now losses but it's a lumpy business. It is economically sensitive in many ways and increases the burden on the underwriters to be more intensely involved in monitoring the business plans of the companies for whom we write surety. We generally been a very conservative, but significant surety player. And we're watching developments now as people who have been stressed by the economic conditions this year, beginning to bid on jobs next year. We get involved in those bids if it will involve a certain dollar threshold they have latitude to write, if they are is sustaining the account for us bids below a certain threshold by $5 million. Above that we get involved in the actual bids we underwrite them above a certain level we actually get involved in review and contracts and assessing a right way to profitability. We're watching very closely their position of credit burdens on them. The GAAP financing is prevalent in the marketplace today; a lot of surety insurers are not capable of sustaining that kind of balance sheet debt. And we're working and it will affect our willingness to surety going forward. So our surety is much better in the third quarter, and I wouldn't necessarily agree that it tends to do better in a poor economy. Paul Newsome - Sandler O'Neill & Partners L.P.: So, I would imagine so there is actually there is worse in the poor economy, yet it usually don't?

Yeah, that would be the normal expectation we haven't seen it yet and I think that really is a function of the way which we underwrite is accounts; surety is one of those lines of business which is particularly sensitive to the credit ratings of their carriers. And frankly carriers have a lot more leverage in selling surety then they do in selling standard property and casualty premiums and we're leveraging that very well today in our relationship. We added more accounts when we dropped in 2009 but we have dropped several accounts because we were no longer satisfied with the credit ratings as of the rest. Paul Newsome - Sandler O'Neill & Partners L.P.: So do you think it may be that you squeezed out some of these. And I can imagine that for example the surety line that we haven't see bankrupt construction companies that can't finish buildings. They can get a few outside like window.

Well they're not our surety accounts, we haven't seen it. Paul Newsome - Sandler O'Neill & Partners L.P.: Okay.

But we very well may. And we're underwriting for that possibility maybe even as you suggest probably.

Okay. Thank you.

And Matthew Heimermann from JPMorgan. Matthew Heimermann - JPMorgan: Just to quick follow up was, can you just with respect to lost cost trends embedded in pricing. Are weight increases that you're seeing across your segments big enough now that they're actually keeping pace with loss cost trend or do we need more to actually get ahead of that?

Let me go back. Each individual line is different of course, but just as a rule of sum, if you think of maybe last question is running from three to six points depending on what line you end. And again as I say that's a pretty conservative approach in a world when CPI is zero; but take that into account if somebody's paid for a longer period of time and you have to look at longer term trends. If you look at that and you took pricing of three points then I'd say you probably about covering, because again loss costs are based on your loss ratio, not your full premium. So obviously four or five points of loss escalation is equivalent to about three points of price or rate I should say. So, for the last two quarters, I'd say that for the first time we've seen probably almost no margin compression, but its two quarters, I mean that before that of course for two or three years we did see margin compression. Matthew Heimermann - JPMorgan: That's very helpful. Thank you.

And gentlemen there are no further questions at this time. I'll turn the conference back over to you for the additional or closing comments.

Thank you very much for joining us. Have a good evening.

Ladies and gentlemen that does conclude today's conference. We thank you for your participation. You may now disconnect.