I would like to welcome everyone to the American Financial Group 2009 first quarter earnings conference call. (Operator Instructions) Mr. Jensen, you may begin your conference.

Welcome. I'm here this morning with Carl Lindler III and Craig Lindler, co-CEO's of American Financial Group as well as John Bruning, the Executive Vice President of our American Money Management Investment subsidiary. We're pleased to welcome you to American Financial Group's 2009 first quarter earnings results conference call. If you're viewing the webcast from our website, you can follow along with the slide presentation if you'd like. Certain statements made during this call are not historical facts and may be considered forward-looking statements and are based on estimates, assumptions and projections which management believes are reasonable but by their nature subject to risks and uncertainties. The factors which could cause the actual results or financial condition to differ materially from those suggested by such forward-looking statements include but are not limited to those discussed or identified from time to time in AFG's filings with the Securities and Exchange Commission and on its annual report on Form 10-K and quarterly reports on Form 10-Q. We do not promise to update such forward-looking statements to reflect actual results or changes in assumptions or other factors that could affect these statements. Core net operating earnings is a net non-GAAP financial measure which sets aside items which are not considered to be part of ongoing operations such as net realized gains or losses on investments, effects of accounting changes, discontinued operations, significant asbestos and environmental charges and certain other non recurring items. AFG believes this non-GAAP measure to be a useful tool for analysts and investors in analyzing the ongoing operating trends and will be discussed for various periods during the course of this call. A reconciliation of net earnings to core net operating earnings in included in our earnings release. Now I'm pleased to turn the call over to Carl Lindler III, Co-Chief Executive Officer of American Financial Group to discuss our results.

Good morning and thank you for joining us. We released our 2009 first quarter results yesterday afternoon. We are pleased with American Financial Group's core operating earnings and financial strength especially during these challenging economic times. Craig and I thank God and our dedicated employees for a good quarter. Now let's turn to Slide 3 of the webcast for some highlights. Our record first quarter core net operating earnings of $1.11 per share were up 2% from the first quarter of 2008. The improved results in our annuity and supplemental insurance operations and higher investment income and especially property and cash of the operations were partially offset by lower underwriting profits. Our core operating return on equity was a strong 21%. Our net earnings for the 2009 first quarter were 37% higher than the 2008 period because of lower net realized losses on investments which include impairment charges. AFG generated an overall return on equity of about 16% including realized gains and losses. Our capital adequacy, financial condition and liquidity remain strong and a key areas of focus for us particularly in this unstable economic environment. We have maintained capital in our insurance businesses at levels that support our operations and that are consistent with amounts required for our rating levels. Our financial leverage is at the level committed to the rating agencies and to the capital markets. At the end of April, available liquidity at the parent company was in excess of $250 million and cash and cash equivalents in our operating companies was approximately $1.2 billion. We anticipate continuing to generate additional capital and cash through operations during 2009. Book value per share including all unrealized gains and losses on investments increased to $22.15 from $21.54 per share at the end of 2008. Now let's turn to Slide…

On Slide 10, you will see an overview of the segments of our mortgage backed securities portfolio. We have also updated the ratings to reflect the most recent rating actions on this portfolio. As of April 30, 92% of our mortgage backed securities were rated investment grade with 82% being rated AA or higher. We have provided additional detailed information on the various segments of our mortgaged backed portfolio in the investment supplement on our web site. If you turn to Slide 11, I wanted to review with you this morning the components of risk in our non agency mortgage backed portfolio. From an economic risk of loss standpoint, there are two critical aspects of our mortgage backed portfolio that I would emphasize. First, we invest almost exclusively in the senior traunches of securitizations. The result, there are subordinated traunches below us to absorb losses before our position is exposed to any risk of financial loss. Second, the amortized cost on much of our non agency mortgage backed portfolio is substantially below par. This again serves to minimize our risk of economic loss relative to our book value. For example, on the Altay segment of our portfolio, our average cost is approximately 81% of par. On our non agency prime segments, the average cost is 89% of par. We also thoroughly evaluate our portfolio for expected lifetime loss and have reflected such losses through impairments. We employ a rigorous loan level analysis which among other things assumes an additional 13% decline in housing prices. However, this varies a great deal depending on geography. On a nationwide basis, we have assumed housing prices decline approximately 40% from the peak levels experienced a number of years ago. However, for example in much of California, we have modeled in home price declines of…

I'd now like to cover our expectations for 2009 on Slides 12 and 13. Because of our strong first quarter we've increased our core net operating earnings guidance to be in the range of $3.75 to $4.05 per share. This guidance takes into account our expectation of significantly improved earnings in the annuity and supplemental businesses and increased yields in our investment portfolio. 2009 expected results exclude the potential for significant catastrophe and crop losses, unforeseen major adjustments to asbestos environmental reserves and large gains or losses from asset sales or impairments. We do plan to conduct a review of our asbestos and environmental reserves using an outside actuary and an independent expert during the second quarter. We expect to maintain adequate rates in our Specialty Property and Casualty operations because of our strong underwriting culture and expect to achieve a combined ratio of about 87% to 90%. That said we're targeting flat to modest increases in overall average renewal rates in 2009. We expect net written premiums in our Specialty Property and Casualty operations to be down 16% to 19% from 2008 levels primarily due to increased reinsurance sessions under our crop quota share agreement, lower spring commodity prices and the weakness in the economy. Excluding crop, that equates to a decline of 5% to 8%. The Property and Transportation group is expected to maintain its excellent underwriting track record with a combined ratio in the 86% to 90% range. This guidance assumes accident year crop earnings that are in line with 2008 results. We expect net written premiums to decrease by approximately one-fourth as a result of changes in our crop quota share and lower commodity prices. Excluding a decrease in crop, we expect net written premiums to decrease between 2% and 5%. We expect the Specialty Casualty…

(Operator Instructions) Your first call comes from [Abe – Maximum Group] [Abe – Maximum Group]: I see you've raised your guidance and I see where it is in some of your insurance companies. Just in general, what is your outlook on the economy in general for this year?

I think the economy is going to remain tough. It seems like things have improved here mid year some but a little bit of a change in housing sales on existing homes which is a positive. I think the market seems to be reflecting a bit more optimism. That said, I still think that we're in for a pretty tough economy the rest of the year.

Your next question comes from [Peter Suess – Lincoln Square Capital] [Peter Suess – Lincoln Square Capital]: Can you quantify your level three assets in the quarter?

Level three assets represented about 5% of the portfolio. [Peter Suess – Lincoln Square Capital]: I think you mentioned the foreign trade credit business. Can you size that business for us and discuss the recent top line and bottom line trends.

It's a pretty small part of our business. It's probably around $25 million in premiums and it's been a business where we've made money, made an underwriting profit every year for the last 18 years in that. It's a business right now because of problems in the credit markets where if properly done, particularly one off type of transactions, that we're seeing lots of price increase traction. So carefully done, and our guys are very cautious underwriters. Carefully done in this environment I think there's some good opportunities right now at pretty sizable price increases. [Peter Suess – Lincoln Square Capital]: On the investment portfolio, I think you mentioned you ran a sensitivity and you're currently implying with your valuation that housing prices go down 40% from peak to trough and I'm just wondering if you've run the sensitivity for beyond that level of housing decrease. For example, how big of an impact would it have if housing prices went down 45% or 50%?

An additional 10% decline in housing prices leads to something on the order of $30 million additional lifetime losses in our non agency mortgage backed portfolio. That's how we would model that outcome.

Your next question comes from Amit Kumar – Fox-Pitt Kelton. Amit Kumar – Fox-Pitt Kelton: Going back to the crop numbers, first of all could you break out the crop premiums for Q1 '09?

Actually in Q1 '09 because of the accounting associated with a change in our reinsurance the net written premium in crop would have shown a negative 16 and gross written premium in crop in Q1 is 42.

We record most of our premiums in the second and third quarters. Amit Kumar – Fox-Pitt Kelton: This was a $1 billion book, right for '08, is that right?

That's correct. You need to remember though that in '08 you had commodity prices that were really very high in the cyclical type arena that this operates in and the commodity prices currently are 25% or so off what they were at a similar time last year. Amit Kumar – Fox-Pitt Kelton: I think you mentioned that premiums were up in financial institutions portion. Can you quantify, maybe give some more color on the book?

I think the premiums were driven primarily by our financial institutions business as I mentioned and there being more foreclosures. I think we're feeling the impact in that particular part of our business and a few of our other businesses had a little bit of growth there. But others reflect the reality of the economy. Amit Kumar – Fox-Pitt Kelton: I think you mentioned that the asbestos environment review will be done in Q2 '09. Can you remind us as to what was the last finding of that review?

The last finding was two years ago although we have done an interim review last year and the amount was about $12 million in last year's study.

There are no further questions.

Thank you very much. We appreciate your taking the time to join us this morning. We're pleased to have been able to report to you and we look forward to reporting to you at the conclusion of the second quarter. Have a good day.