Susan Spivak Bernstein - Senior Vice President, Investor Relations Mark Watson - President and Chief Executive Officer Jay Bullock - Executive Vice President and Chief Financial Officer.

Greg Peters - Raymond James Christopher Martin - Macquarie Adam Klauber - William Blair Kenneth Billingsley - Compass Point Research & Trading, LLC.

Good morning and welcome to the Third Argo Group’s Third Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Susan Spivak Bernstein, Senior Vice President of Investor Relations. Please go ahead..

Thank you and good morning. Welcome to Argo Group's conference call for the third quarter and nine months 2015 results. Last night, we issued a press release on earnings, which is available on the Investor section of our website at www.argolimited.com.

Presenting on the call today is Mark Watson, Chief Executive Officer and Jay Bullock, Chief Financial Officer. We are pleased to review the company's results for the quarter as well as provide you with Management's perspective on the business.

As the operator mentioned, this call is being recorded, following Management's opening remarks, you will receive instructions on how to queue. As a result of this call Argo Group Management may make comments that reflect their intentions, beliefs and expectations for the future.

Such forward-looking statements are qualified by the inherent risks and uncertainties surrounding future expectations generally and may materially differ from actual future results involving anyone or more of such statements.

Argo Group undertakes no obligation to publicly update forward-looking statements as a result of events or developments subsequent to this conference call. For a more detailed discussion of such risks and uncertainties, please see Argo Group’s filings with the SEC.

With that, I'll turn the call over to Mark Watson, Chief Executive Officer of Argo Group.

Mark?.

Thank you, Susan. Good morning, everyone and welcome to Argo Group’s third quarter earnings call. I'd like to share my thoughts about the quarter after which Jay Bullock will add some commentary to the financial results.

Also joining us on this quarter's call is Axel Schmidt, our Chief Underwriting Officer and we look forward to responding to any questions you may have during the Q&A portion of the call following our remarks. After the market closed yesterday Argo reported growth in operating earnings to $0.86 per share in the third quarter of 2015.

And for the first nine months of 2015 operating earnings per share were $2.80, up 13.3% from the prior year. These are encouraging results and we remain focused on the ongoing day-to-day challenge of innovating and adding differentiated value to our customers especially given the competitive landscape.

Our results reflect continuing work across all divisions to stay focused on growth of profitable business and identify new opportunities for future profitable growth. Some quick examples include strong results in the casualty area for our E&S segment and Argo Pro.

Our smaller entity professional liability business and the positive turnaround of the results tried in our public entity and surety. Overall, for the first nine months of 2015 we posted a combined ratio of 95%, reflecting continued improvement in all of our operating segments.

During the same nine months we also generated a 24% improvement in underwriting income to $50.4 million from $40.6 million in 2014. We’re making ongoing progress in achieving efficiencies across the organization.

Our underlying expense ratio is showing favorable year-over-year comparisons in both the three and nine month periods particularly for non-acquisition expenses.

Our loss reserves remained strong as we have benefited from favorable loss reserve development now for the last 18 consecutive quarters and a point worth noting each of the last 10 years has shown positive development as well.

From a growth standpoint we continue to find opportunities in our niches to grow intelligently and profitably despite challenging market conditions. Our topline was up 6.9% in the third quarter and up 5.8% in the nine-month period. Like in previous quarters we remained focused on constant improvement in the mix of business.

Part of this is actively managing the book across the pricing cycle and maintaining a high level of diversification. In addition, we’re employing new and analytical and business process tools in some cases increasing demand by making it easier for our clients to do business with us.

That said across the entire business rates have flattened out with some lines of business like property experiencing reductions. Offsetting that pressure somewhat we’re achieving strong retention rates in both our well performing books of business those we’re actively working on improving risk selection.

Our results reflect some of the impact of these initiatives that we expect to see further improvements going forward. Now let me briefly comment on each of our operating segments. In our Excess and Surplus Lines business, gross written premium was up 10.9% in the third quarter and 12.7% for the first nine months of 2015 compared to 2014.

We're achieving growth in our casualty units, our largest business by volume within E&S by nearly 20% reflecting the benefit from our investments and technology and overall process improvement. Our E&S premium growth also reflects the contribution from new teams and product lines.

Over the last year we’ve significantly reduced our exposure to transportation lines and have now returned that much smaller business to profitability. On average, rates were modestly down across this segment other than property, which was down a fair bit due to continued competition.

This quarter reflects the significant work that’s gone into improving the results in certain businesses in our commercial specialty segment. Overall premium was up 6.6% in the quarter and 5.8% in the first nine months. Growth was driven by our program public entity, and surety businesses.

In several of our businesses in this segment we continue to achieve rate increases that are in line with the targets we’ve set. Despite this we are seeing a continued increase in competition especially in areas such as the public entity and mining businesses.

Argo Insurance, our retail insurance business is now under the new leadership of Rooney Gleason, who is experienced in distribution and risk management technology applications will strengthen our ability to provide market-leading solutions for our clients and look for us to talk more about this in a couple of quarters.

Turning to Syndicate 1200, while our results remain solid and consistent, pricing and competition remain intense across all the Lloyd's market. We grow our gross written premiums by 7.5% in the third quarter and 4.4% in the first nine months of 2015.

Growth while modest is being driven by the North American binder business and new risks we’ve added in recent years. Growth in these areas is being offset by price competition and U.S. direct and facultative property, energy and also our aviation portfolio particularly airlines.

In addition, the increasing practice of moving open-market business in the facilities has begun to put pressure on acquisition costs to insurers particularly ourselves in fact you'll note a slight increase in our expense ratio year-over-year for the third quarter which was driven almost entirely by increase commission expense.

Overall, gross written premiums in our international specialty segment declined 1.3% in the third quarter and 4.5% in the first nine months compared to 2014. The decline in topline in the quarter reflects the decline in foreign exchange related to our business in Brazil as well as a reduction in our topline for Argo Re.

In our Bermuda excess casualty and professional liability business, we continue to see strong new business flow with higher renewal retention however rates were slightly down across the book.

Just going back to Argo Re for a minute I should also add that the reduction and topline is mainly driven by competition in the marketplace, but no differently than what we expected for the quarter. Turning to investments, our investment portfolio declined just over 1% for the quarter.

As many of you know the third quarter provide to be quite a challenge as markets continue to grapple with concerns about slowing growth in China oil price volatility and uncertainty surrounding the timing of defense first interest rate hike. And the U.S.

equity markets were a bit challenged as was our portfolio just to give you an example a lot of our - we have a fair amount of exposure to energy stocks and they fell over 17% during the quarter some of that’s rebounded since then. In fact as of today, we've made back more in the portfolios and the declines of the third quarter.

Our net investment income for the quarter was $21.3 million, down slightly from the prior quarter, but up from prior year. The prior quarter comparison is impacted by the timing of dividends from a private investment.

However, our book yields has reached an inflection point versus both prior quarter and prior year meaning we would expect higher investment income in the quarters that follow especially if and when risk-free rates move to more normalized levels. Moving on to capital management, our philosophy is not changed.

As you heard me say in the past, our first use of capital is to support the balance sheet and the ongoing business that we have then to save capital for available opportunities as they might arise and to then actively return excess capital to our shareholders in an effective manner.

During the quarter, we repurchased about $4.8 million worth of stock at an average price of $55.27. In the first nine months of 2015, we’ve repurchased almost 600,000 shares for just under $30 million at an average price of $51.58.

In total over the last six years we have returned more than $421 million of capital to shareholders with $330 million returned through share repurchases and $90 million paid in cash dividend. We will continue to balance the return of capital to shareholders with our priority of building the Argo franchise and shareholder value in the long run.

As we look to the fourth quarter of 2015 and more importantly 2016, our focus will remain on an excellent customer service, generating growth and book value and providing stable returns to shareholders. With that, I will turn it over to our CFO, Jay Bullock..

Thanks Mark, and good morning everyone. I'll provide some detail on the financials and then we will open it up to our Q&A.

As highlighted growth were modest was achieving all of our business segments in the first nine months of the year, but perhaps a greater significance was the improvement in the ex-Cat and ex-prior-year development loss ratio and three out of our four operating segments.

This trend has continued over the last three years and is the primary contributor to the growth in underwriting income Mark mentioned. That higher underwriting income unable us to report and analyze net income return on equity of 10% despite a lower level of gains reported from the investment portfolio.

Of note related to loss trend, the third quarter and first nine months of 2015 were characterized by continued overall favorable reserve development from prior accident years and a moderate level of catastrophe losses.

For the quarter we experience net favorable development of $6.6 million which is a few million greater than reported in the third quarter of 2014. In this years third quarter we had favorable development in all of our ongoing business segments.

The largest component of this quarter's relates was from our E&S business at $10.1 million, concentrated in causality lines. This development was partially offset by a charge to our runoff segment as this is the quarter where we typically take a close look at the provision for [E&S] and risk management.

The year-to-date favorable development is $15.3 million which continues the long-term trends referenced earlier. All of the relevant figures on loss development are displayed in a table of the press release.

In the third quarter of 2015, we posted a current accident year of non-cat loss ratio of 55.8% essentially flat with the 56% posted in 2014 third quarter.

Catastrophe losses that impacted our business for the quarter were $13.1 million compared to $5.5 million in the third quarter of 2013 and stems largely from the transient explosion approximately $8 million and various other smaller U.S. storms and international events.

As Mark mentioned, we continue to see a positive trend in our expense ratio reporting a ratio of 38.4% in the quarter down from 39.6% a year ago. And while our central focus remains the expansion of underwriting income albeit from loss or expense ratio improvement.

There is a significant amount of work underway in the organization to continue to address our relative efficiency. We are examining each of our functional support areas as well as each business often asking the question what can be supported across a broader area of the group. We will continue to report on these efforts in coming quarters.

For the third quarter of 2015 the effective tax rate for the group was 2.5% and for the nine months 8.5% both forward than our expected 20%. The tax rate for the year has been affected by a number of one time items including certain foreign currency adjustments and credits in our UK operation, receipt of a state tax refund in the U.S.

as well as by an increased level of earnings in 2015 attributable to our operation in Bermuda. Finally, to the balance sheet, we ended the quarter with a pre-tax unrealized embedded gain of $100 million, down from $167 million at June 30 and $197 million at March 31. This decline was related to wider spreads in U.S.

Corporate and municipals, movements in foreign exchange related to certain currency derivatives and the realization of unrealized gains from the sales of some equity positions. As Mark pointed out most of the decline in the quarter has been – more than the decline in the quarter has been regained in the month of October.

Operator, that concludes our prepared remarks and we are now ready to take questions..

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Greg Peters from Raymond James. Please go ahead..

Good afternoon and congratulations on the quarter..

Thanks..

Thank you..

I had a couple of questions. If I look at the gross written premium on a consolidated basis year-to-date up 6%, almost 6% which is a pretty solid result in a competitive market.

When I think about the opportunities for growth next year and the puts and takes with pricing in the competitive marketplace, what kind of result do you think you can achieve a similar type of result next year or do you expect it to step down a little bit?.

Actually I think that in terms of topline next year even with the market where it is I think we have an opportunity to grow at a similar rate and I’ll tell you why.

I think that as long as we continue seeing strong growth in our casualty segment within E&S, it maybe it won’t be 20% next year, because that's awfully robust, but even if it's double-digits I think that moves the needle quite a bit.

Within Commercial Specialty, while I was happy to see us grow a little bit this year, we’ve still been in retooling mode. Having said that, I think that whatever new premium rate will be offset by the elimination of some small counts in our Argo Insurance segment.

We have a number of initiatives going on in the Syndicate that I think will lead to modest growth and I’ll define that as somewhere between 5% and 7%. It's a little early to tell right now though given how competitive things are here in London.

And then in our International segment I think that if the real settles out I think we will see some growth in Brazil. I would expect our business in Bermuda to remain relatively flat both for insurance and reinsurance. So plus or minus 5%, but I think relatively flat.

But I think when you add it all up I think that we still have an opportunity to see similar amount of growth next year on the topline. .

That's great color. Thank you. A couple of questions on the expense side and I recognized Mark and Jay you both touched on the issue in your prepared comments, but Syndicate and International Specialty didn't show year-over-year improvement, your other businesses did and you did on a consolidated basis.

Should we be thinking in the context of eventually you're going to start to show some improvement in those two businesses that are lagging right now or because of the competitive environments we hold out, sort of a steady as we go sort of outlook?.

Well, I think, I’m going to give you multiple answers. I think that in general we will continue to see improvement in the expense ratio across the board.

I think that some of that is going to come from additional earned premium, some of that’s going to come from us beginning to streamline and simplify our operations and I think some cost will actually come out of that, we began working on that a few months ago and I will have more to say about that next quarter.

I think offsetting some of that will be the reality that in this market we’re all having to pay more acquisition costs or higher commissions than we were a year ago. That was the pressure that you saw in the Syndicate that I mentioned earlier and actually that was a pressure in International Specialty as well.

So that's a little harder to control because the market is the market. Having said that I think if we can continue to grow our earned premium modestly that we will continue to see improvement in the expense ratio. And I’m sure Jay will jump in a minute and remind everyone that we’re more focused on the combined ratio as a whole.

But I was very pleasantly pleased to see the expense ratio improvement and the U.S. businesses finally start to play out in the financial results..

Jay on the expense side, in the last conference call you talked about the impact on higher stock price in terms of incremental expense. And I'm just trying to gauge how I should be thinking about that since the end of the quarter the stock has performed quite well and actually has performed well on a year-to-date basis too.

But if I look at the price of the stock at the end of the quarter it was $56 and some change and yet there was a high in the quarter of $59 and some change and you know that the difference between the two based on where the stock is today, can add up to a couple of million dollars or more in terms of incremental expense.

So how should we calculate the formula?.

Well, I’ll kind of go through the comment that I made last quarter and the one thing I'll say is caution everybody that if it were, it’s somewhat of a spreadsheet exercise but it's never perfect we’re dealing with the option math and other things and forfeiture rates and so forth.

But we expect to see in any given quarter the stock to go up call it 2% or 3%, if we expect growth and book value between 8% and 10% a year and it does that divided by four that's kind of what we expect to see in the stock price we had the good fortune of seeing it move up to a more reasonable valuation level recently.

But embedded in that increase of 2% to 3%, is probably $2 million to $3 million of LTI expense.

Beyond on that is kind of every dollar increase is somewhere between $1.5 million and $2 million of additional expense, so the extrapolation to movement in the fourth quarter, our movement in October is appropriate if and when the stock closes out at the end of the year at that same level.

Inter-period is not as impactful as the start and end of a given quarter. Sorry go ahead Greg..

No, no, what where you saying, I am sorry..

Well, Mark was pointing out it is a non-cash charge in the period that we recognized it..

Right, right, so okay, so used at the end of the quarter is sort of boogie or baseline.

The final question is capital management, I think your run rate the last couple of years has been between $40 million or $50 million of stock repurchases year-to-date seems to be like you're a running a little bit below that run rate and I am wondering if now that the stock is above book value, if it’s changing your calculus or if there's a change in your perspective towards share repurchase?.

Remember the third quarter is usually pretty light, because we’re in the Cat season, so we don’t tend to buyback as much in the third quarter..

Yes. So otherwise there's no change in your approach and I think you highlighted in your opening comments. Is that approach….

Yes, if you go back and look historically and how we repatriated capital I think I talked about the last six years.

But if you go back – you can back longer than that and depending upon what we thought was appropriate at the time, looking to bought back stock, we paid dividends, we paid stock dividends and we've also done one time dividends as well on top of our regular dividend.

So I think we have a number of tools available to us repatriate capital depending upon what we think best for shareholders and best for the company..

Fair enough. Congratulations on the quarter..

Thank you..

Thanks, Greg..

Our next question comes from Christopher Martin from Macquarie. Please go ahead..

Hey, guys congrats on the quarter..

Thanks, Chris..

So I am wondering I want to touch on this, you mentioned in the last quarter is that you had seen sort of regarding M&A more resumes coming in - like the first six months of the year than you had over the past six years.

Okay that sort of continued or just sort of cooled down the rest of the market has?.

No, we’ve got even more now than we did the last time, I mentioned it..

Are these mostly smaller like statutory players or sort of globally - can you sort of talk about resumes you are getting in?.

Well, without turning this into recruiting call, I mean we’re getting interest from mainly our global specialty competitors and not just underwriters, but people in all skilled positions across the organization..

Got it. And then sort of looking at the reserves in the runoff book you'd mentioned that that was sort of running off at $10 million to $15 million a quarter.

Is that reserve after your last year view what you anticipate moving forward? And sort of - review this time go more or less as expected?.

Yes, I think what you are, Chris, what you maybe referring to is the payout of those reserves over time..

Yes..

Right and I am going to use some round numbers $200 million is the old risk management book $50 million is A&E, the risk management book has a declining payout pattern because you end up with some permanent and total disable lives that go on for a long period of time.

So that slowed somewhat although we still continue to see decline in the total level of reserves outstanding, it's much less then than 10% of the portfolio today. In terms of what we saw in the quarter, total was about $7 million, it was a little bit from risk management, but it was mostly from the [indiscernible] and environmental.

That’s a lighter number than what we have seen in prior years and I don't read too much into that other than it was nice to see that number declining a bit..

Great, thanks.

And then just sort of sticking on the reserves so the commercial book year-to-date still has closely adverse whether a solid quarter result sort of any lines that came in more favorable or unfavorable compared to what your expectations are?.

Well, in anyone of these quarters there's an up and down, right and so that is just as if we spent the time and disclose that much got into the E&S work you see mostly up and maybe one or two lines with small adjustments.

The good news in Commercial Specialty this quarter as we had a couple of businesses that were favorable and the ones that had any adverse development had relatively very small amounts of adverse development. .

Yes, its million of dollars up and down, it’s not big numbers. .

Yes, there is no one big positive number carrying a large negative number..

All right, great. Thanks guys. That’s all I had..

Our next question comes from Adam Klauber from William Blair. Please go ahead..

Thanks, good morning everyone. .

Good morning..

E&S growth is very good to see, could you give us maybe some color how much is coming from business flow just more of business coming through the pipe, how much is coming from the economy more construction, more lives and how much is you just grow in different areas?.

For E&S I think it's all 100% what's in the pipeline, sorry the growth is coming from what’s already in the pipeline and I think I talked about on the last quarter's call or perhaps two quarters ago we are doing a better job of taking advantage of what's coming through our pipeline today.

So we haven't been trying to expand the pipeline or expand product offering too much, but rather do a better job of servicing our clients needs for submissions that are already coming in the door and we’ve changed the way we get work done which has helped a lot and of course the technology investments that we've made had helped as well..

Okay, so there's really not much change in the mix of the business or the type of business products would you say more property, more casualty is it just more of the same?.

Yes, I would say that we’ve been more focused on writing the casualty opportunities that have come in the door than the property, because property is so competitive at the moment. There is probably a bit more property we could write if we wanted to, but we are not so inclined to chase the market down..

Okay..

I mean Adam, the reality is we still got more business coming in the door than we can handle. So our challenge is it to go find customer, it’s to make sure that we can service the ones we’ve got..

Okay, and then on commercial specialty over the last couple of years you’ve done a great job of really managing the margin including the profitability there, over the long-term is that – do that have the potential to be a sub 90 combine some were to the E&S business?.

Well, I guess the answer is it depends on the market, if you go back and look at our financial results in 2006 and 2007 and perhaps even 2005 commercial specialty ran in the 80s and actually generated a better return on capital than E&S did. Was that a fleeting moment in time or was that a reflection of what it can do.

Ask me in a couple of years, but I think that I think right now we've got all the businesses, but one running the way we'd like and I think we’ve got a clear line of sight on getting Argo Insurance back to profitability by the end of next year..

Okay, thanks..

On a standalone basis..

Adam Klauber:.

–:.

Mark Watson:.

,:.

Sure..

A point of commission doesn't sound like a lot, but actually a point of commission just another point of expense ratio..

Yes, okay. Well, thank you very much..

[Operator Instructions] Our next question comes from [indiscernible] from KBW. Please go ahead..

Hi thanks. My congrats on the quarter. I have a couple of questions I guess could you talk a little bit about your expectations for the core loss ratio; obviously it looks good this quarter.

I was wondering to get your thoughts on the loss ratio going forward excluding cat and favorable development, if you think that momentum can continue?.

Yes, well this wasn’t like the first time that happened, our loss ratio ex-cat, ex-reserve developments has been running in the mid-50s for a while now. Jay you can jump in and refresh our memories of how long that’s been going on, but it’s been quite a while. So I do see that continuing.

It may move around a point or two, but I don't think we’re going to see it move up and down 10 points..

And I’d just say only other thing that I would add to that if I might find the chart here in a minute. The only other thing that I would add to it is. There is nothing in the quarter that I find either up or down.

To the extent we had a line of business where we thought, we might have to increase at last pick a bit and that's a $0.50 million or $1 million there or maybe a large loss that might've been more than a large loss loads.

But nothing, I think it’s been pretty consistent for a while so I don't see anything that says that there's nothing fluke-ish about that number I guess is my point..

Okay, thanks. That’s helpful. And I guess my other question on the ROE side obviously the results look good on the combined ratio this quarter, investment income look good.

When can we start to see the ROE start to fill the gap between Argo’s ROE and sort of the specialty peer groups ROE, when do we can expect to see that narrow a bit?.

Well, I think it narrows every quarter so I would keep looking for next quarter and I think you will see it narrow a bit more..

Okay..

Remember, what part of the message and I don’t want to lose side of this, but part of the message at beginning of the year was we have changed part of the - and change over a four, five-year period, but added an element to the investment strategy that takes what used to be some income and runs it and now comes to recurring gains.

We think on an average year that's probably going to contribute meaning average markets, average year $15 million, $20 million or so. So I would encourage not to overlook that when you're thinking about the total return, the ROE..

Okay, that’s fair. And I guess finally you guys talk a lot about the technology investments that you have made.

And I know it’s hard to quantify, but to what extent do you think that’s really fueling some of the growth that you've been seeing, is that a major contributor?.

Yes, for the businesses where you’ve made that investment I think it allowed us to stay in the game and be very competitive. Had we not made those investments? I think our topline would look a lot different in the U.S..

Okay. Thank you and congrats on the quarter..

Thank you..

Thank you..

Our next question comes from Ken Billingsley from Compass Point. Please go ahead..

Good morning. I’d like to just kind of add on to the technology question. You talked a little bit about some potential expense savings and technology investments and you’ll give us some more color in the next quarter.

Can you talk about maybe the cost and maybe where that's flowing through in the income statement and maybe how much that might be moving the needle little bit and how long you expect the cost to be in the model?.

Well, the comment I’ll let Jay answer the second part. The point I was trying to make a minute ago as I think that we've done a good job of leveraging – building something we can now leverage and we are just beginning to.

We’ve changed our workflow and as we if I get it’s like a lot of things right the minute you change one thing then you realize other things that you can change and one of the things that we’ve realized over the last couple months is at the rate of change that we've got going right now with our ability to leverage technology not only what exists today, but what's coming next and the way we do work we think we can continue changing the way we do work and streamlining the way we do work and we think that will – for the last couple of years can you heard me talk about how we are building a platform that we think we can leverage and the expense savings or I should say the positive change in the expense ratio is likely to come from revenue growth as opposed to cutting expense.

And I think we now discovered that actually there's some expense to be taken out and I don't want to speculate on that right now so you can ask me that question again in three months, but I think there's some opportunity to pull some expense out over the next year that will move the needle as well that’s complementary to some of those things we’ve already started..

And could you talk to me has there been I mean can you talk about what you spent that maybe how far are the normal recurring expense over the next two or three years is that maybe able to come out that maybe is in these numbers, is that half a point or a point that you’ve spent on these initiatives or is there some more that you need to spend that we just need to be aware of over the next 12 months, 24 months?.

Yes, so like with all big capital projects, they are amortized over a period of time. And the expense load that’s in the U.S. business for that in anyone year is several million dollars. We haven’t said exactly and I don't think I want to be any more specific than that..

Okay. And I would imagine just in the current market environment, you talked about there might some players actually pull some expense out. But it was a lot of - come from growth.

I guess it's kind of a struggle in this current market not for you for everyone given the competition to really look the model workout properly with the leverage?.

Sure, yes, and that’s why I was trying to make the point a minute ago that I think that before I said look don't count on the expense ratio to come down until revenue goes up and what I'm seeing now is that I think there's an opportunity to not only grow revenue but cut expense.

So I think we’ll have an expense ratio benefit on non-acquisition expense ratio benefit from both..

Okay. The other question I just had was on the comments that you made earlier, sorry to bring you back to the beginning.

But you talked about transportation and you reduced your exposure, there is been some commentary this quarter already about that certain lines of transportation I know it’s pretty broad are looking like fundamental are starting to improve and make some rational pricing.

Do you see that in your own book as a place to move back in because pricing is better or do you see that you still need to reduce your exposure right now with the current mix of business you have?.

Yes, so we’ve seen the same thing I don't - so there's nothing else for us to reduce what we expand our transportation book a little more, we might, I mean we didn't cancel everything, we just cancelled the things that we thought for sure don't make money over market cycle. So the easiest one to talk about of course is long-haul trucking in the U.S.

even if rates go up there I don't think you'll see us come back into that. I think we’ll spend the next six to nine months just watching what's really going on and the transportation market if there's a class of business that we really like that we think we can do more than we absolutely will.

We’re not afraid of transportation we just know there's certain parts that empirically don't make money..

Great. And thank you for taking my question. End of Q&A.

This will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Watson for any closing remarks..

I would like to thank everyone for joining the call today. And I would also like to thank everyone for their patience I think that we’re now finally starting to see in the financial results while the work that we've been doing for the last couple of years.

We still have a lot more work to do and we look forward to talking to you at the end of the fourth quarter on how we are doing. And again thank you for your time today..

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