TONY MARKEL: I’d be glad to, Lee, thanks. Markel Corporation is a 78 year old specialty insurer organization, NY Stock Exchange traded. Contrary to popular belief, I haven’t been here all 78 years, but for most of it. We started off with a large and growing U.S. presence and early into this decade made an acquisition in London that gave us a footprint into the international community so we consider ourselves sort of a worldwide organization these days. We do about 2 ½ billion dollars worth of specialty insurance, including our international operation, on a gross basis. We went public in 1986 and as I indicated, it’s publicly traded on the NYSE and I am vice chairman.

McDONALD: OK and Chris, tell us a little bit about Mercator Risk Services.

CHRIS TREANOR: Surely. Not so long and proud a history as Markel. We a specialty wholesale broker based in New York. We were formed in January of 2006 with backing from Stone Point Capital which is a private equity firm that focuses exclusively on insurance and financial services. Our goal is to provide specialty solutions to retail brokers around the country. We’ve got five offices throughout the United States, 55 employees and do the traditional wholesale, specialty, property/casualty, management and professional liability.

McDONALD: OK. E.G., could you fill us in on R.S.U.I.?

E.G. LASSITER: Certainly. Good morning. R.S.U.I. was started in 1988 and at that time a subsidiary of Royal & Sun Alliance. We were acquired by Alleghany Corporation in July of 2003. We are an underwriting facility solely dedicated to the wholesale distribution system. Last year we wrote about 1.2 billion in premium in property/casualty, professional liability and D&O and some binding authority business. We’re based in Atlanta.
A.M. Best Perspective
McDONALD: A.M. Best, of course, is a rating agency and a publisher with a great deal of focus on the insurance industry and we also do banking and some other areas as well, and from A.M. Best we have Dan Ryan, and Dan is in our property/casualty division. So, Dan, could you just take us through Best’s assessment of the E & S market?

DAN RYAN: Sure, Lee. Thank you and thanks to everyone for being involved in the call. We do appreciate your participation. Before I get into the market overview what I’d like to do is just take a moment to thank NAPSLO and it’s membership for giving us this opportunity, which we’ve had over the past 15 years, in being involved in this collaborative effort and putting this study together, which we think has been successful and very constructive for the industry, the E & S market and the constituents that look to the E & S market for that hard-to-place business. So, we thank them and look forward to working with them in the years ahead.
Sizing up the E & S market: we believe the sector remains strong, thanks to folks like Market and R.S.U.I. We believe they are poised for another profitable year in 2008, despite Hurricane Ike, Gustav and some of the competitive pressures that we see in the market, particularly in the first half of 2008 and the latter part of 2007. We also believe ROEs will be down, sitting somewhere around 12%, down from about 12.4% in 2007. Although a lot of that it is good information, all is not well – completely well - for the surplus lines market in that the challenges are there that have always been there when things get rough. In that the admitted markets begin to play in some of the specialty admitted business lines. In recent years new offshore capacity is beginning to play a bigger role and certainly the economic slowdown that’s occurred is likely to dampen top line results in growth prospects into 2009 and certainly the latter part of 2008. In 2007 the top line premium was down roughly 7%, giving everyone an indication as to softening and some of the business that’s being lost by admitted carriers. Nevertheless, Best believes the surplus lines market should be able to withstand some of this recent turbulence and that’s more a near-term prospect and a lot of it is based on the healthier balance sheets that surplus lines insurers have been able to get to over the years, over the hard-market years,including some of the substantial up-pricing that’s taken place from 2001 to 2003. As you can see in the exhibit displayed,