濱特爾 (RNR) 2002 Q4 法說會逐字稿

Good morning and welcome to the RenaissanceRe 4th Quarter conference call. Today's conference is being recorded. At this time for opening remarks and introductions I would like to turn the conference over to your host, Mr. David Lilly. Please go ahead, sir.

Good morning. Thank you for joining our 4th Quarter and year end 2002 conference call. Yesterday after the market closed we issued our quarterly release. If you didn't receive a copy you can contact us at 212-521-4878, and we'll make sure to get you one. We have reserved an hour for today's call. There will be an audio replay of the call available at 1230 p.m. eastern time today through February 14th at 8 p.m. The replay can be accessed by dialing 888-203-1112 or 719-457-0820. The pass code you will need for both numbers is 274622. Today's call is also available through the investor section of our website at www.RenRe.com and will be archived through midnight on April 23rd.

Before we begin I'm obliged to caution that today's discussion may contain forward looking statements and actual results may differ materially from those discussed. Additional information regarding the factors shaping these outcomes can be found in RenaissanceRe's SEC filings to which we direct you. With me to discuss today's results are RenaissanceRe's Chairman and Chief Executive Officer, Jim Stanard and the company's Chief Financial Officer, John Lummis. I'd now like to turn the call over to John to begin an overview of the financial results.

Thank you, David. We're very pleased with the performance of our business in 2002 as well as a very strong start we've had in 2003.

Starting with comments on 2002, our underwriting team was very successful and grew managed cat premium for 02 by over 67% compared with '01 that's resulting in total managed cat premium for the year of $739m. For the 4th Quarter our managed cat premium was over $57m, even though the quarter is normally a light one. I would note that some of this premium, about $22m, was derived from a session from our subsidiary Glencoe to our reinsurance segment.

Specialty reinsurance also produced huge growth, generating gross premiums of $247m for the year and $26m for the quarter.

Finally our individual risk business also continued with very strong growth producing $260m of premium for the year on a gross basis and $75m for the 4th Quarter and those amounts are net of the $22m seeded to the reinsurance segment which I mentioned earlier.

So the key over all take away for 2002 including the 4th Quarter was a period of top line growth across each of our businesses. Net earned premium in the 4th Quarter grew by over $43m compared with the 3rd Quarter as a reflection of our overall growth in our business enhanced by the increase in 4th Quarter premium.

Looking at the loss experience we had another light quarter of cat activity and when you see the loss ratio up in Q4 '02 compared with 2001 I think it's important to note what you are seeing there is a function of increased premium and specialty reinsurance and individual risk which run at higher loss ratios.

For the quarter we estimate that approximately 30 cents of our earnings was due to the light cat quarter representing the difference between the actual cat loss ratio which is in the low 20s and the normalized results in the mid 30s. For the year we're back talking about a [buck a luck] however this time on a post [split] basis and that means about a dollar per share of earnings was a function of a light cat year. So when you go to look at earnings growth rates comparing '03 to '02 I think you should really look somewhere around $4.20 as the normalized level for '02. To comment briefly on our operating expenses you will see that there was an increase in this line for the prior Quarter of over $9m and that relates to performance based compensation accruals.

On the subject of fee income, fee income on a pro forma basis including DaVinci under the equity method rose to$ 54m compared to $17m last year. I would note a change for this presentation for this press release compared with last quarters in that we're now excluding from this line the fees accruing on the capital that we've invested in DaVinci and in Top Layer.

Regarding our balance sheet you're seeing our investment in platinum reflected for the first time that's shown on the line item labeled equity investments and reinsurance company. As a reminder we invested $84m in October of 02 for a 9% equity position and also received warrants. We're accounting for this on a mark-to-market basis resulting in a $32m increase on top of the $84m that's arising from the appreciation in the platinum stock and the valuation for the warrants that we were granted.

Looking into '03 we have completed a very successful January 1 renewal season and we're anticipating very strong growth across our business in the first quarter. Starting with cat premium we see growth of over 20% both in terms of managed cat premium as well as gross cat premium for RenRe itself. The net written to RenRe may grow fast as we currently anticipated that the seeded premium will not increase proportionately with the gross written premium.

Specialty reinsurance premium is expected to increase dramatically in the first quarter of '03 compared with '02 by over 90% to north of over $190m for the quarter. This is driven by our success in various niche segments and specialty.

Finally the individual risk business continues to grow as we planned and for the quarter we expect over $80m of gross premium. So looking forward for the year we believe that the individual risk business is well positioned to continue with this pace indicating growth of over 25% for '03 compared with '02. We currently expect that the reinsurance growth will moderate a bit resulting in managed cat premium growth in the mid to high single digit range for '03 compared with '02 and specialty reinsurance premium growing by over 20%. So all told I would say the top line story remains very robust.

Finally, I note that the impact of $200m of capital that we've raised over the past week, given a favorable capital environment we raised this $200m to enhance our flexibility as we look at new business opportunities. We don't have a specific opportunity in hand. We're making the judgment essentially as we did at the end of '01 that there is enough potential in front of us for us to want a little more dry powder.

To close I would like to note that when you put all of the various top line and combined ratio assumptions into your model you may come out a little bit light of the $5.30 to $5.70 range that we've talked about. And the way I'm looking at that is that essentially we see ourselves with a variety of new opportunities across each of our businesses, and we believe that some of those will likely hit in '03 and put us well inside the range. So putting all that together, we believe that it's reasonable to look at '03 earnings in the range of $5.30 to $5.70 as we indicated in last week's press release. So with that I would like to turn the call over to Jim Stanard.

Thank you, John. I'm going to try to be brief and just hit three points - talk about our January renewal season, talk about market conditions, and then what that means to us going forward.

In terms of our renewal season, frankly, we were pleasantly surprised how well we did at January 1st in the cat market and I think that was really a result of our strong client focus, our pricing consistency in the market, and our responsiveness really pay off for us with clients because clients gave us great signings on programs that were in a lot of cases over-placed. The specialty reinsurance care, individual risk area continued on their strong growth path that we expected.

In terms of market conditions, I find it really hard to summarize what's a very complicated market right now, but the same trends that we have discussed in the past and discussed in detail with some of our past presentations I think are really continuing. I don't see any big changes in the market that are notable and need to be highlighted. So, to repeat what I said in the past, the market is not as hard on a pricing basis as it was in the casualty market in the '80s and the property market in the early '90s. However, there's more different areas of turmoil, and I think in more fundamental turmoil really than I have ever seen in my 30 years in the business. There's still tens of billions of dollars of losses. I think everyone would acknowledge that are not recognized on balance sheets yet and I don't think the market is going to stabilize until that works its way through the system. And I think this is -- I really see changes in mind set and culture in companies. There's many new CEOs, and I think that this is going to lead to just more disciplined, more focus on return on equity, than we have seen in the past.

On the other hand, I don't think the market is going to support excessive, clearly excessive prices for long, when those pop up in various areas. So, to succeed in this market, it's not enough to just write a cross section of business and think that a rising tied will lift all boats. I think companies to succeed have to have true competitive advantages, and they have to execute effectively on a micro-basis in their specialties. So, all in all, I would say that it's a very healthy market, in the sense that it's, I think, well balanced between buyers and sellers, and but I am optimistic that that state of affairs will continue for a while.

In terms of where that puts Renaissance, we're positioned in exactly the right place at the right time, and I would say that's not by accident. I think we have carefully planned and thought about the positioning ourselves for the hardening market when the market was soft. We had the discipline to sit on our hands through the soft market, and there are still some segments that we would like to enter that we have been studying but we are still sitting on our hands because we don't like pricing in certain particular segments. We've carefully built strong relationships with clients and brokers and as I said those are really paying off for us. So now we find ourselves, basically buried in opportunities, but I think we've got the management team with the focus and the discipline to effectively sort through those opportunities and pursue only the most promising ones.

I think, finally, 2002 was in a lot of ways, the best year we ever had, and I think that of the many things that were important to us about '02, the fact that we are second and third businesses, our specialty re and individual risk businesses really gained traction, and became meaningful contributors to the bottom line is of the most significance. At the same time fee income is also producing a meaningful contribution to bottom line.

Looking forward, particularly in regard to specialty and individual risk, I can't see the ceiling yet on our growth. There are just many opportunities out there. We're only going to capitalize on a few of them, but I think those few that we do pursue, give us growth opportunities that I can't see the end of yet, so that's how I would summarize the situation and open it up for questions.

Thank you, sir. Today's question and answer session will be conducted electronically. If you would like to ask a question you may signal by pressing the star key followed by the digit one on your touchtone telephone. If you are on speaker phone we request that you please turn off your mute function to allow your signal to reach our equipment. Once again if you would like to ask a question, that will be star one on your touchtone telephone. We'll pause for just a moment to assemble our roster.

And we'll have our first question today from Michael Smith, Bear Stearns.

Good morning, Jim. Early last year you lost one of your partners on your managed cat program. OP Cat. Do you envision replacing this relationship eventually?

Well, not specifically because we have put DaVinci in place. We've got, you know, several very strong shareholders in DaVinci. We're certainly in a position that, if we wanted to increase the capital to DaVinci, I think we could do that pretty easily, so there's really no need. And, you know, frankly, the OP Cat transition went smoothly. I don't think we lost -- we managed to retain virtually 100% of that business and move it into DaVinci.

Okay. Thank you.

We'll take our next question, Michael Lewis, UBS Warburg.

Hi, I have two questions. Jim, could you give a little more detail on the January renewals. You said you were surprised by what you saw. What's been the impact on the new capacity in Bermuda, are you getting any anything because of the changes in the European market? I understand you have good relations but obviously price counts and I'm just surprised, we were getting indications that things were going to get a little bit softer in January and you seem to be indicating -- is this a situation you think it's just you, or do you think we'll see this across industry? That's my first question.

And the other one has to do with, will you give us a little more flavor as far as rate and unit growth by your businesses, and are you changing year prospects, with what you saw three months ago?

Okay. Well, in terms of year end conditions, there was a bit of sloppiness around the edges in the market. It's pretty stable in the cat market on average, but there were some ups and some downs involved in that. But we provide pricing consistency to our clients because we price on an exposure basis, so in a soft market we're considered to be an expensive market, but in the hard market, when it's starting to overreact we become, frankly, a competitive market, from a price perspective. And so I think that stability and consistency served us well. And when I say I was surprised, I think it's just a question that we had a number of potentially significant transactions, and we just ended up getting orders on a high percentage of them, a higher percentage than maybe our normal hit ratio would be.

The impact of the new capital, clearly, for, once you hit a market price, programs are well over placed. I think that -- the new capital is basically behaving reasonably, in terms of the market, so that it's not causing any huge problems. I mean, of course, we don't always agree with prices that our competitors put out, and they don't always agree with our prices. But, in general, that did not cause a problem so I guess that's how I would elaborate. And I would just say in general the -- our growth is unit growth because our prices are basically consistent. Our portfolio quality is basically consistent.

Thanks very much.

We'll go next to Marco Pinzon, Salomon Smith Barney.

Good morning, Jim. A couple questions - Number one, can you give us some insight on how your limits that you're offering have changed year-over-year? I heard as far as most of your growth coming from unit growth but I'm wondering how much of them might relate to your putting out more capacity on your core property cat business?

Number two is can you give us your views on talking about the pricing power shift from reinsurer to insurers, particularly as it reflects what you are doing in the specialty reinsurance area?

And then finally if you could just elaborate on the new growth opportunities that you spoke about before?

Okay. Your first point is correct, and we use -- when I think of unit growth, I would also count larger limits on the same program in my mind as unit growth because that's more exposure as opposed to more price for the same exposure, so we have -- we're the largest writer of property cat excess business in the world. We have between ourselves and our joint venture partners one of the largest capacities, if not the largest capacity, in terms of the limits that we can use. That helps us in the market, in terms of being an important lead market on programs. And on programs that we like, we use large limits.

Yeah, I agree with a lot of what I have read about the general market conditions and the turmoil in the market. I mean, I think, in general, the analysts have got it. I agree with their assessment of a lot that's going on, although I think this issue of the shift of power from the reinsurers to the primary companies is a little overemphasized. I see it -- I mean, I didn't feel so much power as a reinsurer 12 months ago, and I don't feel like all of our negotiating position has gone away now. I see it as a balanced market, and I think it's been fairly balanced, where it's -- I think there's an appropriate amount of negotiating ability on both the primary companies and the reinsurers. And I think it's a healthy situation, and it's one that builds strong, long-term relationships.

In terms of new growth opportunities, I think the growth is going to come -- I certainly -- as I said, we expect to grow our cat business in '03 over '02, and that's the one thing I'm so pleasantly surprised about versus where I was late last fall. I was a little more cautious about that. The specialty reinsurance, individual risk business, we see very strong growth opportunities, and beyond that we have a handful of joint venture opportunities that we are actively pursuing. -And I would expect that it's quite likely that we would complete one or maybe two sometime over the next 18-month period, so that those are things that -- we're looking for areas where we don't have -- I think in this market it's important to have a advantage in specialties you go into rather than just playing a cross section of the market, so in areas where we don't have specialty expertise we like to partner with companies that do bring that to the table. And so if we're looking to enter new areas one of our likely ways to do it would be partnering with somebody who's already got that expertise.

Okay. Good. That's helpful. Thank you very much.

We'll go next to Jay Cohen, Merrill Lynch.

Yeah, I have a couple of questions. First, you commented that the growth in January, the first quarter, would be higher than net versus the gross, I meaning that your buying less reinsurance, or paying less for it, less retro coverage, I'm wondering if that reflects a change in strategy at all, or just kind of a comparison against a year ago.

It's not an explicit change in strategy. It's just, sort of a tactical question of what we found available. Our strategy, with regard to managing our portfolio, remains the same.

Okay. And I guess that comment about higher net versus gross, is that kind of growth in the net versus the gross, is that true for the full year as well? Or is that just something you saw in the first quarter?

That is principally a first quarter phenomena, Jay.

Okay. Second question, as you look at some of the non-cat reinsurance businesses, specialty business, are you at this point seeing any opportunities in more of the traditional casualty lines of business? I know you have avoided those businesses because the pricing has not been adequate, in your view. Is it getting better? Is it getting to the point now where you can earn an adequate return for RenaissanceRe?

There are certain specific areas that we are looking at that we're interested in, but I would not say that we are heavily into the casualty market at this point. And that was part of our logic on the Platinum investment, is they've got a very good platform to access that business, and so our investment in them is a play in that market.

That's great. Thanks.

We'll take our next question from Alain Karaoglan with Deutsche Banc.

Good morning. First congratulations on a great 4th Quarter and 2002 results. Could you give us a little bit more information on the profile of both the specialty reinsurance and individual risk business and what sort of combined ratio should we expect for each of the segments going forward, catastrophe reinsurance, special reinsurance and individual risk and if you could break it down into loss and expense ratios?

Okay. In terms of the profile of specialty reinsurance, it hasn't changed much since previous communications. For example, we had some Terrorism business, some aviation business, some workers comp catastrophe business. There are some other specialty lines in there, too. As in the past, we prefer not to get into a lot of detail of exactly what we're writing for competitive reasons because we don't want to provide too much detailed information to our friendly competitors about the type of business that we like. On the individual risk side, it is property business, primarily cat exposed property business, although there's a all-risk component also.

And comment on the combined ratios and loss ratios, as you asked. Looking at the cat business on Renaissance, I think we historically indicated around a 60 or so combined with a low to mid 30s loss ratio assumption. On the specialty reinsurance, 80-ish combined, down a little bit from our prior assumptions, the loss ratio there, mid 60s or so. The individual risk business, we're looking to see that in the high 70s or so with a loss ratio in the 40s that's going to be running at a higher expense ratio relative to the other businesses.

Thank you.

We'll take our next question from Brian Meredith with Banc of America Securities.

Yeah, thanks, good morning everybody. A couple of questions here: One, John, I may have missed this, negative taxes in the quarter, any specific reason why?

That's just a modest [tracker] from our U.S. operations. Nothing worth commenting on.

Okay. Is that something we should expect going forward, or just assume zero percent taxes then?

Well, I think that that as our business grows in the U.S, if we're successful in kind of building a U.S. leg to our risk business, there could be a tax dimension to that.

Right.

For now I would say that it's appropriate to just exclude that from your models, but that could move into the mix if we see a greater ramp up on the U.S. side.

Okay.

The short answer, Brian, for now, is I would assume zero on the tax line.

Okay, good. And then could you talk a little bit, both sides on the retro front. One, you mentioned that sessions were not going to grow as fast as your top line. Are you finding it's more difficult to buy retrocessional capacity or are you finding that it's not worth the price of admission right now for a lot of that cover?

Well, I need to start with the disclaimer that the retrocessional market is very inefficient market so we can't look at it as monolithic and say that it's either expensive or cheap. It's individual deal by deal. There could be a lot of miss pricings in the market because many participants don't have good tools to analyze the underlying exposure. I mean, that's our real competitive advantage is our modeling ability to understand the exposure in the retro market. So, we tend to have a small number of large relationships on the retrocessional side that tend to be not open market relationships. We're not as competitive on sort of just sort of typical open market retro business, and it was an interesting market. One major player pulled out of the market. One other major player pulled back, but a new very prominent major player jumped in with both feet, so it's the kind of market that one or two gorillas can move it.

In terms of our purchases, really nothing new to report there. We still have a good retrocessional program with people we have been trading with for long periods of time, and that is, we lose some capacity as some people pull out, but then others come in and we gain some capacity. I mean we're just -- maybe on a quarter basis, we had a little downturn in capacity we could purchase, but I don't think that's a trend.

Okay. Next thing - Multi-year deals, any multi-year deals in the quarter? What's the progression there? Are we seeing a sort of increase, decrease, status quo?

I'd say status quo. I mean, we are always happy to do a multi-year deal with a client. We've never, in any market, whether it's a soft market or hard market, we've always said that we were happy to do a multi-year deal, as long as it's at the price level that we think is appropriate for the exposure. It's part of our philosophy on marketability to our clients.

What about the general? I see more multi-year deals being done right now given the pricing where it is.

No, I wouldn't say that's a big trend one way or the other.

Okay. And the last two questions. One, can you comment where the growth you're expecting it to come from, is it international, domestic, equal [inaudible]?

And then the last one would be Lloyds, how disciplined are they being right now? Are you seeing any pockets of area where they're being more competitive, given all the capital they've got now?

Well, the first one -- you're asking on the cat side?

Yeah, mostly on the cat side, yeah.

We did well across the board, but I'd say we did particularly well on the international side through some very strong relationships with some non-U.S. clients, so we were particularly happy about that.

With regard to Lloyds, I want to maintain my policy of not commenting about individual competitors.

Okay. Thanks.

We'll go next to Adam Klauber with Cochran Caronia.

Good morning, growth in the individual risk premium has obviously been impressive. Could you give us an idea of what are the sources were that -- who's generating the growth? Where are you getting the premium from? And are the sources expanding over time?

Okay. The answer to the second question is, yes, the sources are expanding.

The first question, we've got two types of business in there. One is through the traditional surplus lines brokers that we do on a risk by risk basis, and we have been in that market since 1995. The second is a small number of relationships with client companies who have access to a lot of that business that we've -- in one way or another partnered with to access the business. And we want to have a small number of those relationships because each one requires a lot of management to keep it on track, so we can't do a lot, in terms of count. But we see many opportunities. As I said, we're buried in opportunities, I think more so on that business than anything else, is where we just -- I'm looking at a white board on the wall here where we've got it full of different potentials that we prioritize, that we have team leaders looking at, and, I think we're going to have some percentage of those we'll end up hitting.

Jim, when you said companies are client companies. Are those agent-type organizations or are those actually insurance type organizations, where you're getting the premium, the category B?

We have both types of relationships.

Okay. Thank you very much.

Our next question comes from Vinay Saqi with Morgan Stanley.

Good morning. Most of my questions have been answered. One question of market share and where you guys are in terms total property cat on a managed basis. If you could just give us an indication of where you think you are on overall market share. And at what point do you start to hit some constraints even taking into consideration that you are writing this business through other entities and not taking balance sheet risk?

We're still -- we're not near an area that I'm concerned about hitting the ceiling on market share. You know, if our market share roughly -- I don't have the numbers right in front of me but in my head I can say we're in the low teens percentage of the cat market, in terms of our managed cat premium. The cat, certainly in the short term, that cat market itself has grown -- the premium in that cat market has grown and although it will go through cycles up and down, I would argue that long-term that is a growth market, as there's more cat exposed properties being built and insured all around the world. So long-term, I think, even if we just kept a percentage same-market share of that market I think that would produce nice growth for us.

But on top of that I think we have a comfortable amount of room to continue to grow our market share before we start hitting a ceiling. And the final point I would like to add is whenever you talk about market share, I was referring to market share of premium. That's not necessarily equal to market share of exposure, which I'd say is less.

Okay. And I assume setting up additional vehicles such as Top Layer Re or the old LB Cat would possibly help you increasing your market share, or give you additional latitude to do so?

Yes, but I would not say it's a priority to set up additional vehicles. I think, actually, with the two companies that we have, with Renaissance Reinsurance and with DaVinci and with Top Layer has it's own specialty focus, but in terms of the general market -- operating with two vehicles as opposed to three, I don't think that putting a third vehicle out there helps us gain more business. I think we can gain as much business as, we're going to get with two vehicles, so I think it's more likely, if we wanted to expand capital, that we'd expand DaVinci rather than start something new.

Okay. So just increasing the capital base of DaVinci would be the strategy?

It would be a more likely strategy, right, unless we found some special circumstance as to why we wanted a third company.

Okay. Thank you very much.

And just a reminder for everyone if you would like to ask a question today it will be star one. We'll go next to Susan Spivak with Wachovia Securities.

Hi, Jim, I was hoping you could talk a little bit about what's going on in Tokyo right now with the April renewal season on Japanese business?

Yeah, unfortunately I'd say it's too early to really opine on that. We've got our guys leaving this weekend for a trip over there. And, I think just in general, though, I think the cat market is roughly stable, and there are some ups and some downs, but I don't expect dramatic trends one way or the other.

Do you expect that Japan has been a small market, so that one of the spots that the cat market hasn't risen as dramatically as other markets? Would you say that's correct? And could that market be moving more in the way of other markets, the way other markets have?

Well, I think just on a -- a specific comment there, that we think that the market has underestimated the exposure to windstorm in Japan, not in all cases but in general I think that's a market that we're surprised how the market prices that business versus the exposures that we see there. So, I mean, that's the business that went up substantially in price and in a lot of cases still wasn't anywhere near what we thought it should be priced. Whether that's going to -- but that's just one sort of segment of the market.

Otherwise, we have some very strong relationships in Japan. We have some significant business there both in Renaissance and in Top Layer Re that we think is adequately priced, and we're expecting -- once again, we like to provide stability to our clients, and I think our clients appreciate that.

Okay. Thank you very much.

We'll now go to Sam Kinsen (ph) with Black Rock.

Yeah, just one point of clarification. In DaVinci, do you guys keep the profits in there, or do you pay them out at the end of the year? In other words, is the capacity increasing every year, or does it stay static?

We make a decision about what we want to do. So I mean it's -- there's some flexibility, whether we either -- we adjust the capital base to correspond where we see the business prospects.

Okay. So, in terms of 2003 over 2002, are you writing with more capital in there than --

Yeah, it -- okay. To give you a specific answer, at this point, we have chosen to leave the capital in because we did see growth potential there.

And would you tell us how much capital is in there or not?

It's -- the initial equity capital was $400m, and the retained earnings at the end of '03 totaled, I believe it was, $50m.

Okay. Thank you very much.

From a client perspective there's also a $100m of debt in there, so the reinsurance -- John is referring to the holding company figures. The reinsurance company capital is in the mid $500 millions now, five --

I'm sorry, Sam, I misspoke. The retained earnings as of year end was an additional $80-plus million.

Oh, okay. Great. Thank you.

We'll take our next question from Alice Cornish with Prudential Securities.

Thank you. John, when you were talking about earnings guidance you mentioned when we put in the assumptions for top line and combined ratio we may be short of $5.30 to $5.70, I haven't done the calculations yet. Can you tell me how short that number might be, in other words is it 10 cents or 20 cents.

I think it depends on exactly how exactly dial the top line on the combined ratio but I think you can end up, 20, 30 cents light of the bottom end of the range, and so we're suggesting that the delta is -- reflects our sense of optimism for new business opportunities, and we see a range of different things in front of us across each of our different business units.

Okay. So about 20 to 30 cents then of the earnings for 2003 are coming from brand new opportunities as opposed to the various current lines of business, is that right?

That's a way to look at it, and that gets you to the low end of the range. Again, it depends how much optimism you want to point to, instead of how far up into the range you get.

Okay.

This also depends as well as to how you dial the top line and combined ratio assumptions, but I'll giving you a sense of how my model is working, and, that's the kind of answer I see.

Okay.

Yeah, I certainly feel it would be unrealistic projection to assume that, of all of the new opportunities that we're spending a lot of time on now, that we ended up with a zero hit ratio. That just doesn't seem likely to me at all.

Okay. And then also, Jim, can you give us an idea of the geographic distribution of your cat business now and whether there has been any significant change as of the January renewals?

There has not been a significant change, and I don't have those specific figures in front of me, so I can't -- -- roughly, we're running, a little more than 50% in the U.S. and Caribbean and, you know, a little less than 50% for the non-U.S. and Caribbean, and there's no major change in that distribution.

All right.

I will say that over the past several years the international component has risen somewhat, if you look back over a multi-year period.

Okay. Thank you very much.

And there are no further questions at this time. I would like to turn the conference back over to you, Mr. Stanard for any additional closing remarks, sir.

Well, thank you. I really don't have anything to add, beyond what we said so far, so I'll thank you for the questions, and we'll sign off.

Thank you. Once again, everyone, that does conclude today's tell conference. We appreciate your participation. You may disconnect at this time.