Noah Fields - SVP of IR Arturo Raschbaum - President & CEO Karen Schmitt - CFO & Executive VP.

Randy Binner - B.Riley Kenneth Billingsley - Compass Point Research & Trading Meyer Shields - KBW.

Good day, ladies and gentlemen, and welcome to the Maiden Holdings Third Quarter 2017 Earnings Conference Call. [Operator Instructions]. And as a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Mr. Noah Fields, SVP of Investor Relations. Sir, you may begin..

Good morning and thank you for joining us today for Maiden's Third Quarter 2017 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 Ltd.

Before we begin, I would 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 may be found in our filings with the SEC and in our news release located on the Maiden's Investor Relations website.

Please also note that unless otherwise stated, all references to common share data in today's discussion are on a diluted share basis and comparative comments will refer to Maiden's results in the third quarter of 2017 relative to the corresponding period in 2016. I will now turn the call over to Art..

Thank you, Noah. Good morning and welcome to our third quarter earnings call. This past quarter proved to be a challenging one for the entire industry given the unprecedented level of catastrophe activity.

This activity has unfortunately brought loss of life, injury and substantial financial hardship across a wide area, and we of course offer our deepest sympathies to all those have been impacted.

For Maiden, as we reported in late September, our preliminary catastrophe loss estimate range was $8 million to $31 million and for the quarter, our results reflect a more refined but conservative estimate of $20 million.

As of this point, we feel quite confident that this level will be sufficient to support our known and anticipated losses from these events.

As one would expect, given our non-catastrophe focus, despite the magnitude of the industry loss and our relative size, the aggregate estimated value is very comfortably within our published tolerance for catastrophe events and on a relative basis, significantly smaller than severity oriented market participants.

Despite the relatively modest losses from catastrophe events, Maiden's results were most significantly impacted by prior period development, primarily emanating from the AmTrust Reinsurance segment.

Within this segment, we've commented previously that we've seen a significant level of claims process changes that have created distortions and loss development when compared to historical patterns.

Although we believe these reflect substantial improvements throughout their claim operation and we're validating these changes through increased and enhanced audit activity, they are influencing the patterns observed in the last several quarters and as a result, we believe it's prudent to recognize much of the loss emergence observed in the quarter as prior period development.

We do believe that these process changes should normalize over time given the implementation of many initiatives, which began last year. While Karen will provide a bit more detail on the prior period development shortly, the total amount of prior development recognized from the AmTrust segment was $61 million.

Relative to the significant historical premiums that we've assumed from our largest client, the development realized in the quarter and on a historical basis is relatively modest. Despite the challenges of recent results, our reinsurance contracts with AmTrust remain profitable on an inception-to-date basis.

Given Amtrust's recent announcement regarding their prior period development in the third quarter, I think it's appropriate to briefly discuss their actions in the context of Maiden's loss reserve actions.

For Maiden, AmTrust development is and has been specific to our assumed portion of the AmTrust portfolio, rather than to the entire pre-2017 historical reserve portfolio which their adverse development cover responds to. For example, we do not reinsure any of the reserve portfolios that are associated with their post-2008 acquisitions.

Additionally, we do not reinsure a number of specific components, such as their Lloyd's business, the more volatile elements of their program business, professional liability other than European hospital liability, as well as other elements of their historical portfolio.

For the last several years, in fact, we've only reinsured around 25%, 27% of their overall writings as they continue to expand in segments that we don't currently participate in.

And importantly, as with all of our clients, we have always performed our own reserve analysis of the AmTrust segment completely independent of AmTrust, and it is that analysis that its sole basis for our reserve booking.

Because of all these factors, their adverse development cover and their use of it does not necessarily have a direct correlation to any reserve actions that we take or vice versa.

That said, we do believe it is important for us to better understand how their actions in the quarter impact their view of the elements of the contract that we do reinsure, and we'll be focused on learning more about the specific components of their reported development.

In the Diversified Reinsurance segment, results reflect the impact of catastrophe losses and a relatively modest level of prior period development.

For our U.S.-based business, we generated a modest underwriting profit, net of our catastrophe provision, which reflects profitable current underwriting business and a modest amount of prior year development.

Consistent with the last several quarters, we've observed a stabilization in the excess of loss commercial auto line, which, as you may recall has been a significant catalyst for underperformance over the last 12 to 18 months.

That was in addition to a modest level of elevated loss activity from our non-AmTrust underwriting activities in Bermuda, and we also experienced elevated loss activity in the other category, reflecting higher-than-anticipated claims activity, primarily related to superstorm Sandy in our terminated excess and surplus lines of property activity.

Overall, the impact of the prior period development and the cat losses do mask a number of favorable trends observed in the quarter, including a continued strengthening of our investment earnings, strong growth in our Diversified segment emanating from both our U.S.

platform and our international insurance services brand and insurance solutions business, primarily in Europe, growth in unrealized gains, solid growth in invested assets and reduced share count reflecting active share repurchases in the quarter.

These continuing trends will ultimately strengthen returns as we return to more stable underwriting results. For the quarter, Maiden's combined ratio was 114%, reflect both -- reflecting both the cat losses and the prior period development. That resulted in a net loss for the quarter, which Karen will provide more detail on shortly.

Despite the recent prior period development after evaluating all of the necessary factors, including the company's overall capital position and liquidity as well as expected forward earnings, the preferred and common dividends remain supportable and our board confirmed the current dividend this week.

Through the first three quarters, our net losses is $45 million with a net loss attributable to common shareholders of $65 million.

Book value per common share is $11.30, which is down from $12.12 at year-end 2016, which reflects the impact of prior period development, but it's partially offset by unrealized gains in our investment portfolio as well as the share repurchase activity.

Clearly, today our share price reflects shareholder reaction to our reported prior period development, but it's our view that at the current share price, the level of discount is unrealistic, and it presupposes a dramatically higher future level of prior period development.

We obviously don't agree, but as I stated in the past, we believe that as management, we have an absolute obligation to respond and validate prior period development. We remain committed to strengthen and stabilize our underwriting performance.

As I mentioned earlier, for the quarter, business development activity was particularly strong in our Diversified segment. Overall, however, gross premiums written across Maiden were down year-over-year, reflecting a significant reduction in AmTrust seeded premiums in the quarter in comparison to the third quarter of 2016.

In the aggregate, gross premiums written for the quarter were down 11%. Beginning with the Diversified segment, overall gross written premiums for the quarter were up 13% from the prior year. You may recall that earlier this year, we recorded slower growth rates, which reflected the impact of several terminated U.S.

accounts, one involving a large commutation. Third quarter reflects the successful expansion of existing client relationships along with new account development in our U.S. business, which have fully offset the earlier in the year reduction. Personal auto remains a strong area of focus in growth.

As we prepare for the upcoming January 1, 2018, renewal season, there are a significant number of account opportunities that we're currently evaluating.

While we believe that it's too early to see any impact of market changes that would have a direct impact on our non-cat-focused business model, we do believe that we will see increased demand for capital support across certain geographies and lines of business.

While the market to-date remains competitive, we continue to find opportunities to profitably grow our portfolio and maintain pricing discipline. Our commercial auto portfolio remains relatively modest and business written in this line reflects stronger pricing and significantly enhance risk selection.

In our international insurance services office -- excuse me, business, we also experienced strong year-over-year growth in the quarter, chiefly from the expansion of existing client relationships as well as new original equipment manufacturer and non-OEM affinity insurance relationships.

This has been a solid year of what we believe to be profitable growth, and we have a strong pipeline of new opportunities under development.

And then finally, in our developing European capital solutions business, we added a new account relationship in the quarter and while overall revenue from this activity remains relatively modest, we continue to see a growing level of interest from our targeted regional insurance market. Within the AmTrust segment, gross premium written was down 19%.

We anticipated a drop emanating from the program segment with the prior quarter's news that several significant programs had been terminated as of September 1, along with a slower rate of organic growth, both of which are occurring.

In addition, the decline in premium written reflects changes in 2017 to the mix of programs in the specialty risk and extended warranty business and in 2016, the cession of premium for the first time from a series of acquisitions made by AmTrust in its small commercial and specialty program businesses.

As we indicated last quarter, we anticipate a continued deceleration of growth rates as AmTrust focuses on disciplined underwriting and a reduction in M&A activity.

Overall growth should continue to moderate for the segments of the AmTrust portfolio reinsured by Maiden, and overall, we believe that the opportunities for Maiden remain significant and that our various strategic platforms continue to serve us well as we carefully build our diversified portfolio and support the ongoing needs of our largest client AmTrust.

I'd now like to turn the call over to our Chief Financial Officer, Karen Schmitt, who'll provide more detail on the quarter.

Karen?.

Thank you, Art, and good morning. As Noah said earlier, unless otherwise stated, all references to common share data are on a diluted common share basis and comparative comments will refer to Maiden's result in the third quarter of 2017 relative to the corresponding period in 2016.

Last night, Maiden reported a third quarter 2017 net loss attributable to common shareholders of $64 million or $0.74 per common share compared to net income attributable to common shareholders of $32 million or $0.40 per share.

The non-GAAP operating loss was $56 million or $0.66 per common share compared with non-GAAP operating earnings of $30 million or $0.39 per share. Maiden's gross premiums written decrease 11% to $631 million from $707 million.

In the Diversified Reinsurance segment, gross premiums written totaled $211 million, an increase of 13% as a result of growth from existing client relationships and development of new business. In the AmTrust Reinsurance segment, gross premiums written were $420 million, a decrease of 19%.

The drop in the AmTrust segment gross premiums written was significantly influenced by changes in 2017 to the mix of programs in the specialty risk and extended warranty business and in 2016, the cession of premiums for the first time from a series of acquisitions made by AmTrust in its small commercial and specialty program businesses.

While we do expect a moderation in growth from AmTrust relative to previous quarters due to disciplined underwriting and lower program volume business, we believe this quarter is not indicative of expected run rate. We do, however, expect that Diversified Reinsurance segment growth should outpace AmTrust segment growth for the foreseeable future.

Net premiums written totaled $617 million in the third quarter or 11% lower. Net premiums earned were $654 million, a decrease of 6%. In the AmTrust Reinsurance segment, net premiums earned increased 24% to $218 million. The AmTrust Reinsurance segment net premiums earned were $436 million or 17% lower.

Net loss and loss adjustment expenses of $536 million were up 15%. The loss ratio of 81.6% was higher than the 66.6% reported in the third quarter of 2016 due to prior year development and the impact of catastrophes during the quarter. Commission and other acquisition expenses decreased 6% to $193 million in the third quarter.

The expense ratio increased to 32.5% in the third quarter of 2017 compared with 31.9%. General and administrative expenses for the third quarter totaled $19 million, a 15% increase compared with $70 million. The general and administrative expense ratio was 3% in the third quarter of 2017 compared to 2.4%.

On a year-to-date basis, the general and administrative expense ratio was unchanged at 2.5%. The combined ratio for the third quarter of 2017 totaled 114.1% compared with 98.5% in the prior year with $78 million adding 11.8 points to the quarterly loss ratio.

Most of the development $61 million was recorded in the AmTrust segment, while diversified and our non-operating other category had $8 million and $9 million, respectively. The cash fee [activity added 3 points to the quarterly loss ratio as Maiden reported $20 million of losses for exposures to hurricanes Harvey and Irma.

No losses are expected for hurricane Maria or the third quarter earthquakes. The Diversified Reinsurance segment combined ratio was 107.1% in the third quarter of 2017 compared to 102.3%. The Diversified Reinsurance segment results were impacted by $15 million of losses from hurricanes Harvey and Irma.

In addition, prior year development in the Diversified Reinsurance segment was $8 million in the third quarter. After the impact of hurricanes and despite prior year development, the Diversified Reinsurance segment combined ratio would have been 100.3% in the third quarter of 2017, essentially breakeven. Importantly, in our U.S.

underwritten portion of the Diversified portfolio, we achieved an underwriting profit. A higher expense level associated with our investment in the developing European Capital Solutions business and a modest level of prior year development on run off accounts underwritten in Bermuda drove the increased combined ratio.

AmTrust Reinsurance segment combined ratio was 113.3% in the third quarter of 2017 compared to 95.9%. The AmTrust Reinsurance segment combined ratio was impacted by $61 million of net prior year development, predominantly from the specialty program and small business commercial businesses, mainly from general liability.

In addition, the non-operating other reported category had $9 million of prior year development. Investment in earnings continued to grow with third quarter 2017 net investment income of $41 million, an increase of 15%.

At the end of the quarter, total investable assets were $5.5 billion and the average yield on the fixed income portfolio, excluding cash, was 3.17% with an average duration of 4.7 years. The duration of mainly total invested assets, including cash, was 4.4 years as of September 30 compared to the duration of liabilities at the same time of 3.6 years.

In the quarter, we purchased $346 million of securities with a weighted average yield of 2.8% and an average duration of 4.86 years. Our investment focus remains on high-grade corporate debt and government sponsored enterprises. Cash flow remains strong in the third quarter, totaling $151 million compared to $161 million.

Cash and cash equivalents were $314 million at September 30 or $165 million higher than at year end 2016. Total assets increased 9% to $6.8 billion at September 30 compared to $6.3 billion at year-end 2016. Shareholders' equity was $1.4 billion, up 4% compared to year-end.

Book value per common share was $11.30 as of September 30 or 7% lower than at December 31. As Art mentioned, we remain confident about maintaining our quarterly dividend. Cash flow remains strong as the prior year period development is non-cash and does not impact available equity.

In addition, the board sets the dividend rate based upon expected future earnings rather than reported earnings. And we do not believe recent results are indicative of future profitability. We are encouraged that the U.S. reserve movements in our Diversified segment have moderated, particularly as they relate to commercial auto.

During the third quarter, Maiden repurchased just over $2 million -- 2 million common shares at an average price of $7.11 per share. Maiden has had a longstanding share repurchase plan in place to opportunistically buyback common shares in the event that the market value of Maiden shares is viewed by the company as dislocated from our book value.

Maiden's efficient capital structure is not appropriate for maintaining an active share repurchase program. But from time-to-time, we may have the flexibility to buy back shares when it creates value for our shareholders. As of September 30, we have approximately $86 million remaining in our share repurchase authorization.

I will now turn the call over to Art for some additional comments..

Thank you, Karen. The reinsurance market is clearly in a period of change as many participants in the market absorb the significant impact of both third and fourth quarter catastrophe activity.

And while there's little doubt that the catastrophe reinsurance market is responding with increased rate levels, the question remains as to whether the upward pricing trends will be reflected in non-catastrophe reinsurance pricing.

At Maiden, our pricing activity is always focused on developing the appropriate loss cost for the risk reinsured regardless of the market conditions. We've shown the discipline to retrench when appropriate risk-based pricing cannot be achieved.

Of course, we focus on leveraging our significant competitive strengths, such as our client-focused approach, our specialist orientation in serving the needs of our targeted regional and specialty clients, providing collateral declines for reinsurance recoverables and of course our highly efficient operating platform, which have all allowed us to maintain many long-term relationships through the variability in the market cycle.

That said, our growth rate is clearly influenced by market conditions. Should the market react with a drive for rate increases across all lines, Maiden should benefit in providing consistent, stable pricing for its core clients and target market, while also maintaining our focus on responsible risk-based pricing.

Historically, Maiden has benefited with strong growth in these periods of market rate strengthening. Again, it's far too early to conclude that this will occur.

We do, however, anticipate the need for some companies, as I mentioned earlier, in some regions of the country to seek out reinsurance for capital support, and we'll be prepared to offer them solutions.

In our AmTrust segment, we do expect to see continued moderation of growth with a focus on disciplined pricing and underwriting and of course, less M&A activity. From an underwriting perspective, it remains our focus to ensure that we deliver appropriate risk-based returns to our shareholders across our entire portfolio.

And it's clear that we've not done so in recent quarters as we've responded to prior year adverse trend within specific segments of our historical underwriting portfolio.

The bulk of that prior period development has emanated from our diversified access of loss commercial auto portfolio, and we've observed a significant moderation of that adverse trend in the last several quarters, giving us increasing comfort that our actions have been responsive and appropriate.

It's also important to note that for over 30 years, we've never observed the level of prior period development emanating from a single line of business as we did with commercial auto. Going forward, our risk management and the underwriting processes have changed significantly to avoid a similar occurrence in the future.

In the AmTrust segment, where we maintain a long-term profitable relationship, we've also responded to prior period development over the last several quarters, which, while not significantly undermining our long-term profitability, have influenced our most recent quarter's performance.

As I indicated earlier, we continue to see significant improvements in claim processes that could be underlying some of the identified prior period development, and we'll continue develop a better understanding of these trends in the context of historical and future performance.

As we've commented in the past, while we can never say that there will be no future prior period development going forward, we are committed to respond in a prompt and a transparent manner.

In response to our recent volatility, we are actively evaluating potential reinsurance solutions that could help to stabilize the operating results going forward, but of course, we can't guarantee that the transaction will make sense and of course, we'll be guided by what makes the best sense for our shareholders.

Regardless of any reinsurance solution, the underlying trends in the business should strengthen profitability going forward. Importantly, we're committed to restoring profitability and delivering exceptional performance to our shareholders. This concludes our prepared remarks. Operator, could you please open the lines for Q&A..

[Operator Instructions]. And our first question comes from the line of Randy Binner of B.Riley..

I just had one and it kind of -- it relates to AmTrust and that their -- they've done a series of transactions that are increasing their capital base, in particular the deal with Madison Dearborn will result in a lot of tangible equity, increase their early part of next year and so that may put their capital base in a position where they could retain more business.

And so I don't know -- just kind of looking for perspective from you on how you see that relationship developing over the next 12 to 18 months considering there was top line decrease there this quarter, but also their need for capital might be changing relative to the strategic moves they've made?.

Yes, obviously, they're an important customer, and to the extent that they conclude that they have adequate capital and don't need as much proportional reinsurance, we would certainly entertain that.

Obviously, we would have to negotiate that prospectively, but we've always commented from time to time to shareholders that there's certainly a possibility over time that as our capital needs to grow, they may reduce the need for quota share.

From a Maiden perspective, it certainly -- we've been focused on trying to kind of rebalance the mix between Diversified and AmTrust.

We're very proud of our relationship with AmTrust, but it's important that and I think we have an increasing balance of Diversified and the growth in the quarter, I think, reflects some of our progress in that respect, but we've got our ways to go. Obviously, if the quota share reduced, that would certainly change that mix.

And importantly, if we found ourselves in a position where AmTrust required less quota share and we didn't have a use for the capital, we would certainly find the more shareholder-friendly way to deal with any excess capital.

But even if the quota share were reduced at sometime next year, it would take a while to kind of bleed down the required capital, but we would certainly listen to our clients' need and work with them to develop a solution..

That's helpful. And then I think you talked about reinsurance transactions.

Is that talking about like an adverse development cover or additional quota share, what -- I guess -- what is the adverse development cover? What would that look like now given the amount of PYD you've already taken?.

That's a good question. I mean, I don't have any specifics to report. And in terms of your view, I think certainly an adverse development cover be something that we're looking at in addition to even a quota share potentially. But again, I don't think we necessary need a quota share because of capital strain.

I think probably something looking more like an adverse development cover would be of our greatest interest immediately.

And in terms of the prior year development we've already taken, clearly, we react to what we see and to the extent we're seeing volatility that's coming from things like changes in claim practice, so on, having an adverse development cover might provide us the ability to stabilize operating earnings.

And that's the reason we're kind of thinking and looking in that direction. Again, no assurances we can deliver something that makes sense, but that's certainly kind of an area of focus right now..

Our next question comes from the line of Ken Billingsley of Compass Point..

Obviously, I want to follow up on -- just on the reserve charge. And specifically, I know you have said that you set your loss picks independently of AmTrust.

But the fact that they recognize the full ADC so quickly, did that -- does that force your hand as you have to go back and reevaluate the timing of how you -- the timing of what you would allow those losses to develop?.

Well, first of all, I mean, we try to reflect every quarter what we believe the ultimate liabilities outstanding in our portfolio are. We don't kind of -- we don't plan to sort of drip it out, if you will. So our reactions and what we do in terms of reserve activity are a direct reflection of what we see in the data.

As far as AmTrust and kind of their utilization of the ADC, I think they gave a pretty good description of kind of why they did it and what they did. From our perspective, that sort of was information to us at the same time it was to the market.

So we'll try to spend time and understand the moving pieces of the recovery or the session or, if you will, the expected recovery from their ADC and determine whether we're missing anything that could impact us. But our view is that we get data specific to the pieces we reinsure in sub-level of granularity.

We review that as we do with every client and we establish loss picks. We wouldn't necessarily believe that ADC movement portents for us a similar movement..

And I realize that they don't -- you don't reinsure all of AmTrust's business. But given the mix that you do insure, it looks like you've taken about $90 million of charges just on the AmTrust book in the last two quarters since they put ADC in place.

I mean, theoretically, would the charges that you've taken match up with what we would anticipate you wouldn't need to have if you were just trying to match, dollar for dollar, the lines of businesses that you do reinsure or given your comment that you just made that this was news to you about how -- that they were going to do this, does that mean that there could be some more development as you evaluate how vague at least for looking at their own book of business?.

Yes, Ken, obviously, we find out about their charges the same time that the market does and we definitely listen -- we listen in on their calls and to the extent they call out something that they're seeing movement and we will definitely take a look at it. For example, they mentioned hospital liability this time.

We did not see any movement in hospital liability this quarter. We'll certainly take another look. So we are interested in what they say about their prior year development, but because we're setting our own reserves, our starting points are different, so it's pretty hard to match up a change that they take with the change that we take.

Not only our starting point from the reserve's different, but just the composition of the business included in our reserves is different. For example, every acquisition that they made, if they've taken a more severity-oriented premium portfolio or a loss reserve portfolio, we have not chosen to insure those or at least the ones since 2008.

So any kind of development that they have on those pieces would not be development for us or even if they started to merge in differently, they wouldn't necessarily cause any development for us..

So I guess the other thing I would say to that Ken is we obviously look at what our client communicates and we look at in the context of what we've developed, but we feel comfortable with the reactions that we've taken and as Karen said, we have a fairly granular process to understand all the moving pieces from our perspective..

And I know this is only proposed from a tax law change perspective, any comments on just how you see whether that would affect you or where you would be excluded or how you could negotiate some of the potential proposed tax law changes?.

Well, I know that there' s a lot of active discussions underway, and there are a lot of at least preliminary thoughts on what might occur. So it's kind of premature to put anything forward. At least based on what's being discussed, I think there are a host of options we would potentially have.

Our immediate read on it is that in terms of our business model, we don't expect it to be that dramatically effect on us, but obviously as more is revealed and more is negotiated, we'll get a better sense of it.

With the company that has probably a lesser underwriting margin than a more severity-oriented company, I think the impact is a little less profound for us..

[Operator Instructions]. Our next question is from the line of Meyer Shields of KBW..

So one question. As the mix changes with Diversified accelerating its growth and some sort of deceleration expected in AmTrust, historically, there has been an expense ratio differential favoring Diversified.

Should we expect that to continue?.

When we price our business, we low that with kind of the actual expected loss -- expected -- the actual expenses there associated with that business activity, we don't necessarily subsidize because we have a lower blended operating expense relatively. So certainly, you might see a moderation in G&A, but it shouldn't affect our performance..

Yes. So I think that what you're seeing is Diversified has the mix of pro rata in excess of loss contracts. So on pro rata accounts, like AmTrust, you got big ceding commissions to go back to the ceding company. For excessive loss, you typically don't, you can but you typically don't.

So when we look at Diversified expense ratio, the commission and other acquisition expense is going to be lower since they write pro rata and excess That's really the biggest difference..

Okay. No, that's helpful.

Can you give a sense with regard to the growth we're seeing in Diversified? Is there any change in the expected catastrophe losses on this growing book of business?.

No, we were actually quite pleased at the work of the team in effectively risk managing the cat exposure.

As we've talked about in the past, Meyer, we very carefully make sure that we're mitigating catastrophe risk by placing occurrence limits on contracts and the way we determine sort of our expected value is we know where all of our clients are and we know where their businesses is and we have some fairly granular information and we typically get on the phones fairly quickly, not to be a bother but to offer assistance to the extent that clients have loss activity in the recovery.

And so we get a pretty good sense of things fairly quickly because we don't have big aggregated portfolios, and we've actually, on a relative basis, relative to premium growth, not seen a significant expansion of our cat exposure.

Karen, you want?.

Yes, we're not looking to. That growth is not coming from cat expose business. We do know the cat prices are going up, but that's not causing us to enter into the cat market..

And I would add to that, Meyer, that in the case of AmTrust as well, because of the reinsurance program, which you know is to our benefit, we have pretty modest retained losses there as well..

And I'm showing no further question at this time. I'd like to turn the call back over to management for any closing remarks..

Thank you, everyone, for joining us today. We look forward to speaking with you in the future. Have a great day..

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day..