ProfitbeforetaxinthethreemonthstoSeptember30theasedto$78。

0mfrom$79。

0minthecorrespondingperiodof2011,butthatdidnotstopthefirmfromannouncingaspecialdividendof90centspercommonshare,animprovementonthe80centsspecialdiviitpaidatthesamestageof2011。

Grosspremiumswritteninthethirdquarterdeclinedto$113。

5mfrom$142。

9mtheyearbefore,whilenetpremiumswrittenfellto$109。

8mfrom$133。

6m。

Ontheratiosfront,totalinvestmentreturnwaspositiveat1。

1%versusanegative0。

6%returntheyearbefore。

Thenetlossratioworsenedto14。

6%from12。

2%whilethecombinedratioameasureofhowwelltheinsurertookonrisk(lowerisbetter)deterioratedto48。

9%from43。

5%theyearbefore。

Thethirdquarterreturnonequityof5。

7%,and13。

2%fortheyeartodate,continuesourrecordofconsistentincreaseinbookvaluepershare,includingdividends。

Wehavenowgeneratedacompoundannualreturnof19。

4%sinceinception,andwithacombinedratioforthequarterof48。

9%,ourinceptiontodatecombinedrationowstandsat58。

3%,braggedRichardBrindle,GroupChiefExecutive。

Fullyconvertedbookvaluepershareimprovedto$8。

47from$8。

20attheendofSeptember2011。

Inourview,themarketoutlookinourlinesofbusinessisstable。

PremiumrateswillcomeunderpressurefortheJanuaryrenewalswithmorethanenoughcapacityinthegreatmajorityofourlines,butwebelievethatouremphasisonriskselectionhelpsustoproducesuperiorresultsacrossthecycle。

Wearesurprisedwiththeoverpositivenotewhichwehaveseenfromsomeaboutrateincreases,aswedonotbelievethatthiswillcarryinto2013formostclasses,revealedBrindle。

TheimpactofHurricaneSandyissuretopreoccupyinvestorsminds,however,butChiefFinancialOfficerElaineWhelanassuredthatthegroupsrecentdebtissuanceshouldallowittoabsorbSandysimpactandstillcarrymorethannormalexcessheadroomintotheJanuary1strenewalseasontotakeadvantageofanyunforeseenopportunitiesthatmayarise。

Asever,ifwecantfindgoodwaystoputourcapitaltowork,wewillre-assessourneedsandreturnanysurplus,shepledged。

JH

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