Arturo Raschbaum - President and CEO Karen Schmitt - CFO Patrick Haveron - President, Maiden Reinsurance Ltd. Noah Fields - VP, IR.

Randy Binner - FBR Capital Ken Billingsley - Compass Point Vincent DeAugustino - KBW Matthew Carletti - JMP Securities.

Good day, ladies and gentlemen, and welcome to the Maiden Holdings Fourth Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today’s conference is being recorded.

I’d now like to introduce your host for today’s conference call, Mr. Noah Fields. You may begin..

Good morning, and thank you for joining us today for Maiden's fourth quarter and year-end 2014 earnings conference call. Presenting on the call today we have Art Raschbaum, Maiden's Chief Executive Officer; along with Karen Schmitt, our Chief Financial Officer. Also in attendance today is Pat Haveron, President of Maiden Reinsurance Limited.

Before we begin, I’d like to note that the information presented here today contains projections or other forward-looking statements regarding future events or the future financial performance of the Company.

These statements are based on current expectations and future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from these expectations.

We refer you to the documents the Company files from time-to-time with the Securities and Exchange Commission, specifically the Company's Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.

Some of our discussions about the Company's performance today will include reference to both non-GAAP financial measures and information that reconciles those measures to GAAP as well as certain operating metrics and maybe found in our filings with the SEC and in our news release located on Maiden's Investor Relations Web site.

Please also note that unless otherwise stated, all references to common share data in today's discussions are on a diluted share basis and comparative comments will refer to Maiden's results in 2014 relative to the corresponding period in 2013. I’ll now turn the call over to Art..

Thank you, Noah. Good morning. Welcome and thank you for joining us today. I’m very pleased to report Maiden’s continued strong performance in the fourth quarter and year ended December 31, 2014.

In the quarter and throughout 2014, we made significant progress in continuing to profitably expand Maiden’s highly differentiated lower volatility oriented business model. Last night, we reported operating earnings of $118 million for the full-year 2014 compared to $87.5 million last year.

Maiden’s operating return on equity for the year increased to 13.6% from 10.5% in 2013. We began 2014 with a repurchase of the 14% coupon trust preferred securities in January, which immediately improved our cost of capital and enhance profitability.

Growth of our investable assets helped drive the 28% increase in net investment income during the year, despite headwinds from falling interest rates.

These factors coupled with Maiden’s ability to leverage underwriting results with our efficient operating structure and our optimized balance sheet are helping Maiden continue to strengthen operating return on equity, operating income, and investment income.

Importantly, throughout the year, we saw healthy organic growth from core relationships across the platform, which we believe set the stage for continued expansion. We are focused on continuing to build our business in a disciplined fashion as we continue to execute our lower volatility reinsurance strategy in 2015 and beyond.

Premium growth during 2014 was strong. In the case of AmTrust, the exceptional growth resulted primarily from continued organic growth, the renewal rights transaction with the Tower Group, and rate increases in U.S workers compensation business. During 2014, AmTrust’s net premiums written increased 38%.

Premiums also grew in the Diversified Reinsurance segment with a year-on-year increase of 11%. In the U.S Diversified segment, Maiden saw growth from existing clients reflecting both our increased participation on renewal programs, new programs from existing clients, and also growth in their businesses.

Our U.S business also added a number of new client relationships throughout the year. In Europe, we saw growth in our OEM business. This is auto manufacturer-orientated consumer products reflecting expansion of existing relationships.

Importantly, we are in negotiations with a number of new OEM manufacturer client prospects, which we expect to come online later in 2015.

And then, as I mentioned last quarter, one area of investment in potential growth being generated from our Bermuda based team, targets small-to-mid-sized insurers in Europe who can benefit from some combination of subordinated debt and reinsurance.

With our partner Insurance Regulatory Capital, we can offer clients unique support encompassing traditional non-cat reinsurance and capital solutions in the form of subordinated debt, which receives full equity credit from regulators in Europe.

Our focus is on assisting insurers to meet the potentially more stringent capital requirements in Europe resulting from Solvency II. However, we believe that our opportunities extend beyond Europe as risk-based capital standards expand globally. This has been an area of investment in 2014, and we’re committed to build this business in 2015.

And to that end, we’ve already begun to entertain opportunities, and we expect the pace of opportunities to accelerate in 2015 and beyond. Turning now to underwriting profitability, for the year we reported a combined ratio of 98% compared to 97.5% in 2013.

Our AmTrust business was better than target, resulting in a combined ratio of 95.4% with net written premiums increasing 39% year-on-year to $1.4 billion. AmTrust continues to benefit from strong pricing in lines of business such as small account, lower hazard workers compensation, particularly in states like California.

We continue to see very stable performance across the AmTrust segment. In our Diversified Reinsurance segment, the combined ratio for the year was higher than target, largely due to the impact of property losses during the year, some adverse commercial auto performance issues, and to a lesser extent changes in business mix.

Importantly, we’ve taken the necessary actions to either eliminate underperforming accounts or improve prospective terms. These items accounted for 1.6 percentage points for the Diversified Reinsurance segment combined ratio.

In Europe, our international insurance services business performed better than target as past corrective actions and a lower expense base have improved our margins. One of the key drivers of our strong return in 2014 was the contribution from investment income.

We’ve been successful deploying cash into productive investments throughout the year adhering to our lower volatility fixed-income investment strategy, and despite lower interest rates we were able to increase investment income by 28% to $117 million. Before I turn the call over to Karen, there are a couple of important points I’d like to cover.

First, during the fourth quarter, we were impacted by adverse development in our former National General Holdings Corporation or NGHC business segment that resulted in a $6.5 million non-operating loss.

This segment, which is in run-off experience and elevated level of case reserve activity -- in the third quarter and as a result, we’ve increased our ultimate expected loss to reflect that.

Now on a relative basis, measured over the life of our NGHC relationship, which generated historical assumed premiums of $921 million, the program remains profitable.

Secondly, I’d like to point out that in support of our continued profitable growth; we’ve entered into a quota share transaction with a highly rated well capitalized reinsurer, which resulted in $150 million to $250 million of retroceded premium in 2015. This contract will provide additional capital support to Maiden.

I’d like to now turn the call over to our Chief financial Officer, Karen Schmitt, to review the fourth quarter in greater detail.

Karen?.

Thank you, Art, and good morning. As Noah said earlier, unless otherwise stated, all references to common share data are on a diluted share basis and comparative comments will refer to Maiden's results in 2014 relative to the corresponding period in 2013.

For the fourth quarter of 2014, Maiden reported net operating earnings of $35 million or $0.44 per diluted common share compared with $23 million or $0.30 per diluted common share. Net income attributable to Maiden common shareholders was $28 million compared to $21 million.

Net premiums written in the fourth quarter of 2014 totaled $602 million, an increase of 35% compared to the fourth quarter of 2013. The Diversified Reinsurance segment’s net premium written totaled $168 million, a decrease of 3%.

The Diversified Reinsurance segment premium levels were down slightly as a result of elevated premium levels in Europe due to promotional offers in 2013 that were not repeated this year. We are pleased with the 11% growth in this segment for the full-year.

In the AmTrust Reinsurance segment, net premiums written increased by 58% to $434 million due to continued rate increases in workers comp as well as new business from Tower Group renewal rights transaction. For the full-year, AmTrust premiums increased 38%. Net premiums earned of $608 million, increased 24%.

In the Diversified Reinsurance segment, net premiums earned increased 16% to $219 million. The AmTrust Reinsurance segment net premiums earned were up 48% to $389 million. The net loss and loss adjustment expenses of $396 million in the fourth quarter of 2014 were up 20%.

The loss ratio of 64.8% was lower than the 66.8% reported in the fourth quarter of 2013. Business mix changes between AmTrust and Diversified segment’s distort loss ratio comparisons. With AmTrust being entirely quota share, we see higher expense and lower loss ratios compared to Diversified, which is a mix of quota share in excess of loss business.

As a result, our focus is on the overall combined ratio. The combined ratio for the fourth quarter of 2014 totaled 98.6% compared with 97.3%. The Diversified Reinsurance segment combined ratio was 99.7% in the fourth quarter of 2014, up from 97.0% and 98.7% for the full-year, up from 98.1%.

The elevated Diversified Reinsurance segment combined ratio was driven by higher than expected loss activity in our commercial auto and excess property treaty segments and to a lesser extend the change in business mix. We continue to take underwriting actions as appropriate with some account being restructured or terminated.

The AmTrust Reinsurance segment reported a combined ratio of 94.8% in the fourth quarter of 2014 compared to 96.2% and 95.4% for the full-year versus 95.8% in the prior year.

As reported last quarter, the Company revised its structure of its reportable segments with the results of the operations of the former NGHC quota share segment and the remnants of the excess and surplus lines business being included in the other category.

The combined ratio for the other category was negatively impacted by elevated loss reserve estimates from the former NGHC quota share segment and to a lesser extent additional legal expenses associated with the run-off of the E&S property business.

This category added 1.2 points to the combined ratio for the quarter and 0.6 points to the combined ratio for the full-year. In the fourth quarter, we had record net investment income of $32 million, an increase of 25%. The average yield on the fixed income portfolio excluding cash is 3.46% with an average duration of 4.54 years.

The new money yield on fixed maturities in the fourth quarter was 1.93% with an average duration of 3.96 years. The book yield fell in the fourth quarter of 2014 due to increased pay down activity in our mortgage backed securities portfolio as well as fewer opportunities for higher yielding securities in a declining yield environment.

Including cash, the average duration is 4.07 years versus an average duration of liabilities of 4.40 years. Total investments increased 9.5% to $3.5 billion compared to year-end 2013. Operating cash flow was $652 million for the year ending December 31, compared to $366 million in the prior year.

Cash and cash equivalents increased from $273 million at December 30, to $393 million at the end of the fourth quarter. Total assets increased 9.6% to $5.2 billion at December 31, 2014 compared to $4.7 billion at year-end 2013. Shareholders equity was $1.2 billion, up 10.4% compared to December 31, 2013.

Book value per common share was $12.69 at the end of 2014 or 13.9% higher than December 31, 2013. I'll now turn the call over to Art for some additional comments..

Thank you, Karen. Before I continue, I’d like to just correct a comment I made earlier about the size of the quota share. I believe, I said $150 million to $250 billion. It is $150 million to $200 million, so apologies for that.

We continue to operate in a very competitive environment and while there is continued evidence of enhanced competition in the U.S primary market, we continue to believe that AmTrust remains well positioned to grow in its niche business segments such as small account workers compensation.

During the fourth quarter, we observed evidence of their ongoing pricing power in the workers comp segment. We’ve also observed there are geographies in the U.S that are becoming more competitive and we’ve seen AmTrust responding in a disciplined manner.

In the reinsurance sector, both the U.S and Europe are mature markets with competitors ranging from large multinationals, who may focus a portion of their attention on our target market, to smaller more specialized reinsurers.

Fortunately, Maiden is very unique in the markets in which we operate, because we’re structured to specifically meet the needs of our target small to mid-size insurer prospects and clients who require capital and appreciate the high touch in specialized services that Maiden provides.

Our low volatility focus enables us to use capital more efficiently, while a highly efficient operating platform provides a comparative cost advantage over many competitors. In the U.S., we had a successful January one renewal season which when we typically renew about 40% of our domestic U.S diversified reinsurance portfolio.

We benefited from continued organic growth renewal clients and added seven new clients, despite the competitive environment. We remain disciplined, staying close to clients and ensuring that we deliver value to clients as our primary differentiator rather than using price as a competitive lever.

We are also maintaining our focus on expanding the higher margin components to our portfolio, such as elements of our facultative casualty and regional client umbrella liability business.

Despite the increase in the challenging market around, we continue to feel confident that our competitive advantages and our specialist strategies will serve us well. Importantly, we expect continued organic growth from existing relationships, which drove over half of our 2014 revenue growth in diversified.

In Europe, we continue to target the OEM market and have successfully positioned ourselves for new business in 2015 and beyond with commitments from new clients and expanded relationships with our existing insurer partners.

We believe that 2015 will be a very productive year in the segment with most of our opportunities developing in the second half of the year. I have mentioned our international expansion focused on providing capital solutions in advance of risk-based capital standards.

We expect to entertain a number of opportunities in the lead up to Solvency II implementation in 2016. And we believe that we’re well positioned to deliver meaningful solutions in the regional and specialty insurer market.

Overall, we’re very pleased with Maiden’s performance in 2014 and we believe that 2015 we will continue to see improved earnings power benefiting from the strong profitable AmTrust growth that we saw in 2014, a lower cost of capital, strong investment income and improved underwriting results following measures taken in 2014, particularly, in the U.S diversified reinsurance book.

Our focus continues to be on profitable growth, improved underwriting and enhancing shareholder returns and importantly our specialty focus in differentiating strategy of serving the non-catastrophe needs of regional and specialty insurers remains unchanged. This concludes our prepared remarks. Operator, could you please open the lines for Q&A..

[Operator Instructions] Our first question comes from Randy Binner with FBR.

Hey, good morning. Thank you. I wanted to talk a little bit more about this retro deal. I guess, there is two questions. One, if you could share who you did the deal with that would be interesting.

And then, more importantly would be how we should think about it impacting the income statement and my supposition is that it’s going to help you on the balance sheet by basically keeping your operating leverage at a similar level as it is now, because you’re not going to be writing those premiums, but if you give up those economics, curious how to think about the income statement impact?.

Right. Good question. Thank you. Well, the -- we’ve had a longstanding strategic relationship with a partner on our European business, Allianz. And they’re our reinsurance partner on the quota share.

And in terms of sort of how to look at that, we’ve always said that we want to make sure that we’ve a strong balance sheet, and obviously the ability to absorb profitable growth. And we think this is a tremendous tool to help us continue to do that.

It also actually confirms our view that we believe that retrocessional capacity is a viable option for us as we look at capital solutions, and we believe that this particular transaction in terms of kind of the relative effect, we think that it’s our 2015 key metrics –the effect will be immaterial in terms of our performance and so on.

Karen, is there anything you like to add to that?.

Yes, I mean, the major impact obviously will be on the top line, the premium growth. But this is a strategic quota share for us, and we don’t expect major changes in earnings as a result of it for 2015..

Okay. Can you explain that a more though, because that’s just -- that seems like really a good deal, I think right to get the capital relief without loosing the earnings.

So is there a mechanism or some further color you can give -- just give us kind of the confidence on that -- on how the income statement gets impacted? And then, I guess the other follow-up is, is this kind of a won and done deal or is it standing like retro might be an ongoing solution for potential operating leverage challenges?.

Well, to address your first question. I mean, this was written at fair terms with a strategic partner. When we look at it though -- we’re looking at it as compared to other options to raise capital, to support our continued profitable growth. The contract was written for a single year.

However, we anticipate working with them to renew the contract next year assuming that it works for both parties..

All right. So I’m going to try one more time, so maybe the way to think about it is, if your operating leverage was going to keep moving higher, you’re going to have to raise some kind of capital, whether it is debt or equity anyway.

So, relative to that potential impact, this is negligible, is that the right construct?.

That’s correct. I mean, we view this as an accretive transaction, and we looked at other sort of capital options. We think it is the most cost effective option that was available to us. And we think it actually is a very sort of customizable, very effective tool.

And as I said before, I think it validates our -- we’ve been saying for quite a while over the last year that we’re looking at that opportunity. So it’s nice to see it come to fruition..

Sure. And I’ll just ask one more before I get in the queue, just on the OEM and -- so it sounded like there was two opportunities in Europe that were going to materialize in the second half of ’15. OEM and Solvency II, and those are issues or kind of opportunities really that you’ve talked about for a while.

So, I guess, I’m looking for color on how much more material those would be now versus in the past and if there really will be something that would be noticeable on the top line for the company overall?.

Yes, I would say that with respect to the OEM opportunities, we’ll see some effect of that at the end of this year. We think over the long-term, they will be very noticeable top line. We see some very significant opportunities to expand relationships and continue to build that business.

I can't give you a dollar amount at this point, but we think it’s certainly material to that segment of our business. With respect to the sort of international expansion oriented around sort of capital needs, we’re getting good reception in the market, and we’re working with customers.

We feel confident of our ability to kind of develop business opportunities, and to the extent that we do develop them and quota share is part of that solution, they could be sort of chunky transactions, but it’s a little premature to estimate what that level will be.

But we do feel like -- if we’re doing our job, we’ll see revenue and profitability from that certainly in the last six months of this year..

And that’s anticipating an implementation date of -- what is it for your clients? Is it like end of ’16 or end of ’17 for smaller companies over there?.

It’s January 1, 2016. And now, its kind of interesting too because as you begin to talk about capital with customers, we find a lot of times some assume maybe less of an issue, some of these companies may be even having, may be other opportunities to expand their business and they’re looking for partners.

So, it’s not entirely motivated by Solvency II, although it’s the catalyst to begin the discussion. So, there’s always the possibility that Solvency II could be pushed off, although we don’t see that happening. But we don’t believe that it reduces our opportunity. I think this is a permanent approach that we’ll take to the market..

All right. Thanks so much..

You are welcome. Thank you..

Thanks Randy..

Our next question comes from Ken Billingsley with Compass Point..

Hi, Ken..

Hi, good morning. Just I do have one follow-up on the quota share before I move to my other questions.

I’m assuming this is across the whole company, its not segmented any longer to just the diversified business, is that correct?.

Yes, the quota share includes sessions of both active segments, and it’s really designed to maintain the current proportion with AmTrust to diversify it..

Okay. And since you talked a lot about second half growth with some of the OEM and the Solvency, are you expecting some outsized growth in the first half of the year from either AFSI.

I’m asking that specifically since you already mentioned Europe in the second half of the year?.

I would say that obviously there is still premium to flow related to the tower transaction probably in the next couple of quarters. So, we do anticipate some growth, can't really put an exact number, and I know that they have given some thoughts on that in their call. So we do expect to continue to see growth there. As far as our U.S.

diversified business, I think that the headwinds are probably the strongest there in terms of the competitive environment. That said, I mean, we definitely are active and busy right now entertaining opportunities. It’s just a question of how many of those will meet our performance criteria.

As we said before, we don’t really alter our performance criteria over market cycles. We focus on generating a reasonable return for the capital we deploy. But to the extent that we’re actively talking to a lot of perspective clients, that’s a good sign in the diversified segment.

But the other two are more a function of just how we ramp up those opportunities..

And given your comment on keeping the AFSI mix in check, is the ceding commission you receive in line with what you’re paying or given the current market conditions is it a little -- maybe a little bit, is there a premium?.

I would say we think it’s fair. I’ll put it that way. We really aren’t disclosing the specific details of that contract. We think it’s a strategic tool for us..

Great. So, let me just move on, and this is maybe just technical question there. From reading through the press release and the comments on the call, you’re talking about the diversified loss ratio, and how there was an issue there from the combined ratio running higher.

But when you look at the loss ratio itself it did look like it improved quarter-over-quarter. The combined ratio was up 2.7 percentage points, but I believe the loss ratio itself was down 3.5%.

Could you kind of talk about what you are -- maybe you’re trying to say in the press release that maybe I missed since the loss ratio actually was better but you talked about effective commercial auto and excess property treaty running worse than expected?.

Sure. In the diversified segment we have a mix of quota share in excess of loss business. So, if we’re writing a quota share we’re going to have a big ceding commission which is paying those companies back for the acquisition expenses that they incur. The excess of loss business will really just have brokerage, so it’s a much smaller acquisition cost.

So, for a quote share book of business you’re going to have commissions possibly in the 30s. In excess of loss your commission acquisition and expense could be 10 or thereabout, so the mix is really important. Whenever you’re looking at diversified you really have to look at the combined ratio.

The components really are not that meaningful because depending upon how much business is in those segments, it really distorts any kind of comparison to loss ratio or expense ratio. So, when we say diversified is underperforming, we’re saying on a combined ratio it’s not where we need it to be..

Okay. I understand.

So, it was 30% on the quota share submitted business?.

I’m using that really as a broad -- I mean, every quota share is different, but you’re going to see for Quote Share business you’re going to see acquisition cost in the high 20s to low 30s, and on excess of loss business because you’re really just paying broker -- the business that we produce through brokers we are paying brokerage.

The businesses directly have no acquisition cost on excess of loss. So, those expenses are going to be a lot lower. So, when you average together premiums coming from those two different segments, it really causes a lot of distortion. So, we really always ask you for, particularly for diversified to look at combining ratio.

But then even when you look at Maiden overall depending upon how much AmTrust business we have versus diversified, that really makes a difference too, because AmTrust is all Quote Share. So you have the higher expense ratio from AmTrust and the lower loss ratio of course.

Does that make sense?.

The other question I have is on the NGHC, the $7 million of losses that developed. You said that was from the third quarter.

Is that correct?.

We saw some increase case reserves coming through our statements from the third quarter. So, as we evaluated those reserves and looked at our position we booked the increase, it was a $6.5 million into the fourth quarter..

And are there -- obviously more claims can come in, but you haven’t written any premiums in there for a while.

Do you see any other legs that can impact that segment, the other segment now as you’re reporting it?.

Well, it’s always possible, but that segment should settle out pretty quickly. We think its relative -- relative to the other business that we write as pretty short tail business that we would expect. It really can't drag on very much longer..

Barring obviously surprise, should it in most cases be put to bed by like the second quarter of this year, any major issues should have developed by then or could this last through the end of the year into 2016?.

Well, I guess the one thing I would caution, in the E&S property we do have -- we still have a number of claims from Superstorm Sandy, and those things are going to take a long time to settle out. We did book some additional legal expenses related to those. I don’t expect all of those claims to settle by the end of the year.

And as we get new information on them, if we need to make a change we certainly will. But at this point we feel like we’re properly reserved for the entire segment..

But outside -- but again on the NGHC side, most of that exposure should be pretty well wrapped up this year, by mid year?.

I would expect it certainly by the end of the year, but possibly by mid year..

Okay. Last question I have and I’ll turn it over. On the investment side just on our -- the way I calculate the yield, looks like the yield was a little bit higher than last quarter.

Is there anything -- and I know you talked about a little bit about your yields, but is there anything different on the investment front that’s going to keep that yield as a whole running higher. It looks like you’ve expanded the duration on new money, given the lower yield.

But is there anything different that maybe we need to build into our model to assume higher yields than maybe than what the market is showing?.

Well, our book yield actually went down a little bit from 3.56 to 3.46 and some of the new money came in a little bit lower. The one thing that was a little bit different during the fourth quarter is, we did have call premium from some bonds of about $2 million in the fourth quarter.

We had a $1 million of that in the prior quarter, so maybe a $1 million elevated from that standpoint. But we are holding a lot of cash, and as we invest the cash the run rate will increase from that as well. But we’re being pretty selective in how we make those investments.

During the fourth quarter we found more opportunities in some of the shorter duration instruments and we’re just looking at it very carefully..

There’s been no fundamental change in the investment philosophy over the last few quarters..

No, not really. I mean, we did pull duration down a little bit in the last quarter, but philosophically no, no change..

Now, Ken as we said we’re sitting on a bit more cash, and I think that’s the function of the environment we’re in today and we think that’s prudent to do, and as Karen correctly said, we’ll look for the right opportunities to deploy it. But we’re not uncomfortable with that level of cash given where rates are..

I imagine we could assume that maybe cash can even go a little bit higher over the next quarter or two, given where rates are sitting?.

It depends what the environment is, Ken..

Okay. Very good. Well congratulations on the quarter, and thanks for taking my question..

I appreciate it. Thank you..

Thank you..

Our next question comes from Vincent DeAugustino with KBW..

Hi, Vincent..

Hi, Vincent..

Hi. Just a couple of follow-ups.

Again on the diversified expense ratio, I just want to make sure I’m understanding that correctly, is there any seasonality with the business mix between quota share and XOL that we should be thinking about? And then just to confirm that I heard it correctly, we also had 1.2 points of the E&S legal drag that fell into the diversified expense ratio bucket this quarter as well?.

Well the E&S we had about $1 million of loss in that bucket for legal expenses. On the seasonality there can be seasonality, it’s a little lumpy really and it really just depends on which contracts we write and when they incept, and relative sizes, I mean -- yes, that ….

When we write an excess contract typically, we have an upfront premium that we establish and so, that -- and then it earns out kind of pretty stably. Quote Shares are sort of reporting basis, so you can get more volatility in the reporting.

So we do get a little bit of noises that occurs mostly what you’ll see occurring at 11 are a lot of the excess or loss accounts that gets booked that are 11 and those have a more stable pattern. Quota share is a little more unpredictable..

Okay. And then, thank you for that.

And if I recall, Allianz itself has some OEM focused business strategies there, and so I’m just curious if there are any concerns with possibly reinsuring with the competitor or maybe if you could help me understand what they do versus what you do differently, and if that overlap isn’t a concern at all?.

Well if you think of our model there, Vincent, what we -- we do not -- we are not a primary company in Europe. We have a team that is quite expert at working with OEMs to develop consumer branded insurance products, many of those auto, life related products, sort of credit life.

And they find local partners, local insurers who have capabilities and we think can deliver the best product to the consumer, and it may not be a surprise to know that one of those partners has been Allianz for many years in our relationship in Germany, and we find it to be a formidable company and one that can really deliver value to our clients.

They are not the only insurer we have a partnership with, but it’s certainly an important one.

So, that’s the sort of the beauty of this model is that, we’re kind of creating the opportunity for ourselves by managing the distribution and managing the product development along side of our insurance partner, so its sort of on the contrary its actually, there maybe opportunities for us to work closer with Allianz on a broader basis..

Okay, sounds pretty complementary there. And then just the last one, just sorry to beat the retro deal question, I know you guys look at all the options kind of on the table, and I’m assuming this one provided the best economics.

But just curious if there was a lot of demand from the alternative market versus the more traditional route with Allianz?.

We actually didn’t spend a whole lot of time with the alternative market. I mean, our preference was to develop a relationship with a very established company with a strong balance sheet.

That’s not to say that the alternative market isn’t an option for it and it’s not something we will pursue in the future, but we really view this quota share as a strategic tool, and it was important for us to establish that with someone we knew and understood and understood us..

Okay. All right. Thanks very much. Best of luck guys..

Thank you very much. I appreciate it..

Thank you..

Our next question comes from Matt Carletti with JMP Securities..

Good morning..

Good morning, Matt..

Good morning, Matt..

Just a quick one, the down premiums in diversified year-over-year were credited to onetime increases a year ago in Europe due to promotional offers. Can you quantify how much you kind of view that onetime piece is being and I apologize if I missed it in the opening comments..

Matt, we didn’t actually quantify. It’s probably in the range of $4 million to $5 million somewhere in that area.

What happens is that, so there is a normal distribution process where products are sold at the point of sale in the dealerships, but in addition to that from time to time the manufacturers will actually launch programs where they sort of link the insurance with the sale of the vehicle more closely, and those can come at sporadic times.

In the previous year there was a push at the end of the year with one of our OEM clients and that’s really what drove that. So, it’s hard to time those and predict them perfectly. But it doesn’t suggest to us in our view that that’s a prolonged effect that we’re going to see in that segment..

Got you. That’s very helpful. Thank you, and congrats on a nice year, and best of luck this year..

Thank you, Matt. I appreciate it..

Thank you, Matt..

I’m not showing any further question at this time. I’d like to turn the conference back over to, Noah. End of Q&A.

Well, that concludes our call for today. Thank you to everyone for joining us, and we look forward to speaking with you in the future. Have a great day..

Ladies and gentlemen, that concludes today's presentation. You may now disconnect and have a wonderful day..