God morning, my name is Latonya and I will be your conference operator today. At this time, I would like to welcome everyone to the American Financial Group 2010 fourth quarter and full year earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions) I would now like to hand the floor to Mr. Keith Jensen, Senior Vice President of American Financial Group. Thank you Mr. Jensen, the floor is yours.

Thank you. Good morning and welcome to American Financial Group's 2010 fourth quarter earnings results conference call. I'm joined this morning by Carl Lindner III Co-CEO of American Financial Group. If you are 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. Factors which could cause actual results and/or financial conditions 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, including the annual report on Form 10-K and the quarterly report on Form 10-Q. We do not promise to update such forward-looking statements to reflect actual results or changes and assumptions or other factors that could affect these statements. Core net operating earnings is a non-GAAP financial measure, which sets aside items that are generally not considered to be part of ongoing operations, such as net realized gains to losses on investments, the effect of accounting changes, discontinued operations, significant asbestos and environmental charges and certain other non-recurring items. AFG believes that non-GAAP measure to be a useful tool for analysts and investors in analyzing ongoing operating trends and will be discussed from various periods during this call. A reconciliation of net earnings attributable to shareholders to core net operating earnings is included in our earnings release. Now, I am pleased to turn the call over to Carl Lindner III to discuss our results.

Good morning and thank you for joining us. We released our 2010 fourth quarter and full year results yesterday afternoon. Although less than our record results last year in '09 our overall core net operating earnings were solid. Throughout the recent economic cycle Craig and I have been pleased that we achieved solid operating results in specialization and segmentation of businesses. We want to thank God for his blessings and thank our talented management team and employees for their efforts this year and for the financial strength that allows us to pursue the plans for our organization to benefit our customers, agents, shareholders and employees over the long haul. I am assuming that everyone on today’s call has reviewed our earnings release and the supplementary materials posted on the website. I will review a few highlights and focus today’s discussion on key issues. I will also discuss our outlook for this year. Let us start by looking at our 2010 results summarized on slides three and five on the webcast. Net earnings were $4.33 per share for the year. This included realized gains of $0.41 per share which included $0.15 per share from the sale of portion of our remaining interest in Verisk Analytics during the third quarter. Our core net operating earnings were $433 million or $3.92 per share compared to the prior year’s record results of $493 million or $4.23 per year – per share. A decrease of $104 million in pre-tax core earnings as compared to 2009 was primarily due to lower property and casualty investment income, a lower favorable development in our run-off RVI business, crop earnings that although very strong where less than 2009 record levels and catastrophe losses that where significantly greater than in the prior year. These items were partially offset by increasing…

Thank you (Operator instructions) And your first question comes from the line of Amit Kumar with Macquarie. Amit Kumar – Macquarie: Thanks and good morning congrats on the quarter. I just have two questions; one is the bigger picture question and the second one is on guidance. Some of the larger commercial companies such as Travelers, Chubb and (inaudible), have talked about modest exposure improvement and rates being flat to modestly down. Can you sort of talk about, what your expectation is for rates and exposure for 2011?

Sure, I think on the property and casualty side, our goal is to try to nudge prices upwards. Realistically with the current competitive conditions if we can end up the year flat that would probably be a pretty good result. I am optimistic that you either may see some pricing traction and maybe later on this year. As far as exposures, worker’s comp business is probably, the place where we have seen, some slight change, there’s been three months of a small – small single-digit increase in payrolls if you include January. With that said unemployment went up in California, I think to 12.9% here recently, so it is still a tough economic situation in the State of California. And I think on other businesses like Home Builders and then on liability I think we have seen some stabilization in payrolls probably don't see quite, we don't see it quite as much as – as far as any small increases as what we see in the comp side of our business. Amit Kumar – Macquarie: , :

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Sure, as it was disclosed at the time we bought Vanliner, there is a portion of that business that is dedicated to moving and storage and that was our net prime interest. We expect it at that time we would have premiums in the $100 million a year range on an ongoing basis. National Interstate has not reported earnings yet, so it is not appropriate yet for us to give specifics but other than to say that we are within a reasonable range of that expectation. Amit Kumar – Macquarie: Got it and then just finally one and then I will re-queue, on the annuity and supplemental life side, you talked about changes in expectations of lowering reinvestment rate and changes in future annutization assumptions, can you just talk what those assumptions are and what the changes were? That would be quite helpful.

Well the changes are really coming – if you look at the table, it is in the press release, you will see that there has been a significant increase in the production through the bank line and that is the result of two major things that has happened in this past year and we expect to continue fuelling the growth on a go forward basis. First of all was as you know PNC bought National City and so we were able to access in the PNC side we are now their leading provider so that means, there has been a multiple of retail branches that we have able to go into that were not previously available. And there is a line that we called Bank Indirect which is really, brokers and agents that write business for other banks and so among the bank we have added portfolio this year would be Regions and BB&T. That continues to be an area of emphasis for us and will be a significant driver of future growth. With respect to profitability, we have made some assumptions and you saw that we have taken a charge during this quarter for deferred acquisition costs, and that is due to a change in our expectations of reinvestment rates over the next few years and we have ratcheted those down a bit from what they were in prior years. That ratcheting down was partially offset by increasing our expectation with respect to expense benefit of changes that we are making in our expenses as well as some changes – I guess those are the two, I'm forgetting one, oh yes, as well as an assumption that there would be a lower crediting rate on a go forward basis that matches somewhat the decrease in that assumption of the reinvestment rates. Amit Kumar – Macquarie: Got it, that's helpful, I will re-queue thanks.

Thank you (Operator instructions) And your next question comes from the line of Jay Cohen with Bank of America Merrill Lynch. Jay Cohen – Bank of America Merrill Lynch: Yes thank you, I guess the question was on your estimates for what you think excess capital is and I think you said $850 million, you got to maybe remind me what – I thought that number was quite a bit lower when you talked about that number in the past, but remind me what have been saying if it is an increase in excess capital, what is the source of that?

It is somewhat of an increase, although not dramatic, as I think back, I think in the third quarter we were talking in terms of 600 to 650 a number if I remember right, but excess capital, were really defined that is parent company cash plus the amount that we could borrow against our line of credit and still stay within the 22% commitment on financial leverage that we have made it to the rating agency. Plus any excess capital that is in the insurance companies that could be taken out of the insurance companies and still meet the capital adequacy requirements that rating agencies for the surplus of the insurance companies, so today I got those three components in it Jay. Jay Cohen – Bank of America Merrill Lynch: I guess what happened – as you continue to buy back stock that excess capital number continues to grow. I remember that being, I think it was $400 million may be three or four quarters ago, then 600, now 850. Where is the growth coming from, is it in the insurance subs, It’s simply not growing and thus freeing up capital?

Right, because as you say flat and in terms of the size of your premium you are not creating additional capital demands in more of the earnings flows directly to excess capital. Jay Cohen – Bank of America Merrill Lynch: Got it, I guess your buybacks have been less than your earnings.

Correct.

And to a lesser extent we have, the equities have gone up some and particularly the list – Jay Cohen – Bank of America Merrill Lynch: Got it, and what is the kind of go forward plan for the investment portfolio at this point?

One of the general action, you will see us taking a little bit more of a position in equities, not dramatic but a little bit. We have increased our penetration in municipals. We think that this is an opportunistic time to be buying as long as we are very disciplined in those purchases. We are continuing to have some annual run-off of the mortgage-backed securities which we are taking primarily into higher grade corporates. I don't think we should expect this year a dramatic sort of earth change but those would be the trends that I would expect us to see over the next year.

And some selective real estate, increasing our real estate investments on an opportunistic basis. Jay Cohen – Bank of America Merrill Lynch: And it sounds like – seems like a number of those moves are opportunistic in nature, which I guess does state your past MO from an investment standpoint. That's helpful.

All right.

Thank you. (Operator instructions) And we do have a follow-up question from Amit Kumar with Macquarie. Amit Kumar – Macquarie: Thanks, just three quick follow-ups, so first of all just going back to the discussion on growth from markets on – I know we have had some reserve additions from that segment operation and now you know you are talking about growing from that, maybe just talk a little bit about what gives you comfort that you won't see some of the issues we have seen in the past regarding the reserve additions.

Again, the reserve changes have been from Italian Hospital business which we haven't been writing for really about two years. Our non -US med mal business is not really substantially growing, where the growth is coming from or in a few business that we have –that we wanted to expend our foot print and where we done very well, historically things like Food Stock, Equine, Fidelity, Species, Ocean Marine, where we’re just accessing the international market where we didn’t have any access what we seeing is, in the past, where we dint have a platform to write those. We have invested in over the past couple of years, we invested in top notch talent underwriting talent in each of those areas, and the real growth in the market form is really coming from those lines, not med mal. Amit Kumar – Macquarie: This is when you say it's top talent, so essentially it’s the older relationship, which these people have which will result in the growth or do you think.

A lot of these people came out of syndicates that came out of syndicates that were well known and where the individuals were well known with what, good underwriting track records and experience and we’re the largest writer of Equine Mortality in the United States were insistence. But there is a quite a few horses in that-particularly on the thoroughbred side that we weren’t getting access to that Lloyd’s and that market really had access to. So we’ve been able to expand our footprint and use the knowledge base that we already have to access business in other countries that we couldn’t access before. Within them – I believe we probably then one of the top three armored car and casino writers in fidelity and crime in the world. We have been able to access the world markets some – again Lloyd’s that’s one of their historical specialty, and we have been able to access business that we couldn’t access before. Ocean Marine, we were doing a strategic review of Ocean Marine it was about a year ago or so and there is a kind of startling number when of the – when you look at where the worlds Ocean Marine business is sourced, I think 50%, 60% that was 50% or so was sourced out of Europe in that. And only having a US operation you just didn’t get access to the larger Ocean Marine market, so for us that was really a necessity to gain access to data for a business that is going to grow, a lot of the worlds growth today is outside of the US. Amit Kumar – Macquarie: Hopefully you're not growing in around Suez Canal right?

There you go. Amit Kumar – Macquarie: And just two other quick questions one on the capital management, does your guidance and I apologize if I missed this factor and any buy backs.

I think it assumes similar amount of buy backs what we had last year. Amit Kumar – Macquarie: Okay that’s helpful. And just finally some companies have talked about, probably passing the inflection point on the lost trends, can you just quickly talk about the frequency and severity of trends in your minds.

Yeah, I mean we have 25 different business, we could spend a lot of time. California comp again is only 4% so the 5% of business, but that’s probably the business and the stable of businesses that we have what we seeing frequency and severity kind of began to pick up after, 4 or 5 great years after reform where it went the opposite direction. Almost couldn’t get any lower and that. And I think that’s probably the line business where we’ve seen a distinct change. Most of our other businesses have excellent profitability and loss cost still seems in pretty benign. I think we’ve definitely been helped as well as the industry by loss costs, the inflation of lost cost which has been more benign than what all of us would have gone. Amit Kumar – Macquarie: Got it. Thanks, thanks for all the answers.

Thank you there are no further questions at this time, I would like to return the floor for closing remarks.

Thanks you, we appreciate your taken the time for this morning and we look forward to reporting on our first quarter.

Thank you and have a good day.

Thank for participating in today’s American Financial Group 2010 fourth quarter and full year earnings conference call, you may now disconnect.