Good morning. My name is Bonnie and I will be your conference operator today. At this time, I would like to welcome everyone to the American Financial Group 2011 First Quarter 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) Thank you. I would now like to turn the call over to Mr. Keith Jensen, Senior Vice President. Please go ahead sir. Keith Jensen – Senior Vice President: Thank you very much. Good morning and welcome to American Financial Group’s 2011 first quarter earnings results conference call. I’m joined this morning by Carl Lindner III and Craig Lindner Co-CEOs of American Financial Group. 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 that could cause actual results and/or financial condition to differ materially from those suggested by the 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 quarterly reports on Form 10-Q. We do not promise to update such forward-looking statements to reflect annual results or actual results or changes in assumptions or other factors that could affect these statements. Core net operating earnings is a non-GAAP financial measure, which sets aside significant items that are generally not considered to be part of ongoing operations. These include net realized gains or losses on investments, the effects of accountings changes, discontinued…

(Operator Instructions) Our first question comes from Amit Kumar of Macquarie. Amit Kumar – Macquarie: Thanks and congrats on the results. Just quickly maybe starting with market form, you said you don’t expect the impact to be material. How do you define materiality?

We’re thinking of that in the sort of traditional process against earnings in the 5% to 10% in sort of a subjective view for materiality thresholds would be. Amit Kumar – Macquarie: Okay, that’s helpful. And then may be just staying on Q2, can you talk about the - and I apologize if you’ve talked a lot about the recent tornados and the recent storms, do you have sort of an early view of how that could also impact Q2 results?

Yeah, Amit I think it’s probably too early for us. It’s going to take us a few more weeks to kind of really get our arms around it. We have claims reported from a number of our business units, with the largest activity from our agricultural business, financial institutions, property and inland marine. But it’s going to take us probably a few more weeks to really kind of get our arms around. Amit Kumar – Macquarie: Okay, that’s helpful. And may be just going back to the crop discussion, and obviously there is a lot of talk about delayed planting and it being at an all time low compared to the past history and is half of your top line maybe just revisit the discussion on sessions and losses and what does happened if it is in fact delayed meaningfully?

Let’s talk maybe about preventive planning just for a second. If preventive planning coverage would be triggered as typically 60% of the coverage that would otherwise have been provided that might be one thing to start with. What was backup just for a second, probably for prevented planning coverage is a trigger, you’re going to have to have unfavorable planning conditions that we need to persist until early June for corn and probably early late June, early July for soybeans. Corn goes under the ground before soybeans and corn needs to probably get in by late May and soybeans probably need to get in by late June. So, little early to really get too worry. Why you were asking though, one interesting thing here recently was, as the flooding of the Army Corps of Engineers, the string, the levee in a couple different slots and the flooding I think it was about 120,000 acres in that. We’ve done a kind of quick take on that. I think the industry will probably be talking to the government and around whether there really is loss or not, but let’s assume there is a loss it gets kind of hurt. Based off last year’s figures we probably have about $3.5 million of liability in that particular area. Amit Kumar – Macquarie: Got it. That’s helpful. Can you sort of go back and I know there was a lot of price sort of volatility in 2008 and can you just remind us when you look at 2008 and look at things today how does it compare?

Well I can speak for today. Generally the current prices, futures prices in that are above the spring strike prices by quite a bit. So even if there is some speculation within the market, which would bring prices down that doesn’t overly concern us at this point. Generally it’s when you have a drop in prices that exposes you more in that. So I mean right now if you take a look at the price of corn versus the discovery price I think its up probably 50% soybean is up pretty close to the same now. Yeah if the worry is speculation in that I think there is plenty of room probably for any kind of speculative bubble to adjust there without having some huge impact on us. Amit Kumar – Macquarie: Got it and then just one question then I will re-queue after this. You talked about RMS-11 how does that impact to your reinsurance purchase or your top process behind your reinsurance purchase?

Well we have January one renewal so we don’t have anything that we are facing immediately. Now last year our catastrophe cost went up I think low teens, when really talking to our reinsurers, quite a few of our reinsurers actually used a more conservative estimate than what RMS was in that. So RMS itself I think will have maybe some impact, will create a greater demand for coverage. In our case I’m not really sure it really makes a whole I don’t think it’s going to have that big of an impact with regard to our renewal. I think our own experience this year will be a big driver. And then I think probably, overall I think this year there is going to be more pressure just from the worldwide storms. The storms here in the U.S., what’s going on in New Zealand, Australia, I think those are going to be the bigger drivers on what the industries cap, what the reinsures charge going forward, particularly those you get hit hard in that. But I think that will be the bigger drivers in worldwide storms versus RMS ’11. Amit Kumar – Macquarie: Got it. And that’s all for now. I will re-queue, thanks.

Thank you. Our next question comes from Jay Cohen of Merrill Lynch. Jay Cohen – Merrill Lynch: Thank you. Let’s see, I’ll start with may be these political risk claims that you had talked about from market form. I assume first of all there is nothing in the first quarter for these potential losses?

That’s correct. Jay Cohen – Merrill Lynch: And then secondly what are the events that give rise to claims here? I was always thinking about this business more in the form of your nationalization or some sort of confiscation, what are the events that give rise to a claim?

There is two different, we write a small trade credit book, [SCIA] in the United States which is primarily a trade credit and then through market form we write a small book that would deal with things like political risk, contract, frustration. Let’s talk about trade credit first. They are kind of like a contract with a private company covering default or non-payment with no contractual right to do so. So, example if a beef company exports beef to a food distributor in a foreign country and the buyer refuses to pay without the right to do so. That will be an example of trade credit. Contract frustration, the example would be a contract with a government or government owned entity that covers cancellation for non-payment, government intervention or non-performance due to war, civil war and insurrection in the buyer’s country. So, an example might be a major oil company contracts to buy oil from the state oil company in Saudi Arabia. Civil war makes the export impossible. After a 100 day waiting, 180 day period coverage will be possible. Political risk, that might be, one example might be a mobile oil rig that’s destroyed during a civil war. The government taking of a fixed asset or mobile goods following the abandonment because of evacuations, government failing to issue a permit to export, confiscation, destruction due to riots, civil war, that type of thing. Jay Cohen – Merrill Lynch: Got it. So places like Egypt some of these things obviously seem to be happening to some extent and thus you may have some claims.

Right, but it’s important to focus Jim on the fact that even when an event happens there is this 180-day period which is really trying to give time in the contract for resolution of the evenness. We’ve seen in some of these countries from the first sort of hit that there is going to be political unrest, until it’s all over it’s really a relatively short period of time. And so if the asset comes back into production, the trade credit is subsequently hedged, you don’t get hit for it because it was in risk for a period of time.

Like the case of oil if there is a new government in that contract, the insurer renegotiate or the company renegotiates the contract with the new government and the contract is performing then there wouldn’t be a loss. Jay Cohen – Merrill Lynch: Got it.

Segregation also plays a big role in a lot of these claims in that too. Jay Cohen – Merrill Lynch: Right, right, and it sounds like you have reinsurance in place as well.

We do have a reinsurance program. Jay Cohen – Merrill Lynch: Great, second question, you mentioned in the specialty casualty business program business that was down, it sounds like it may not be performing that well. Can you be more specific in the type of program that is?

I guess we don’t write a lot of program business, that kind of a can have buyers against writing a lot very much of it. But they were a couple of programs in particular that we got rid off, whether has been some unfavorable development.

Primarily in the hospitality arena some bread and breakfast type operations and temporary housing operations. Jay Cohen – Merrill Lynch: Okay. And then the last one was in the specialty financial business, again how many little education collateralized mortgage protection business. Can you just kind of go through what that business is and why you’re getting some reserve development there?

It’s a business that we roll little bit of back in 2002, 2003 and 2004 that’s been in runoff ever since then, where Fannie Mae was a lender and we were ensuring the collateral up to the outstanding loan value and we’re starting to see a few claims on that as we’ve indicated. Jay Cohen – Merrill Lynch: Okay. Does this have the potential to balloon into something, tell me you mentioned mortgage, sirens are to go off, could you just balloon into something potentially much larger?

It could have some additional development, but this is not something that we expect has the becoming something like the residual value of it, you and we’ve talked about over the years now has gone. Jay Cohen – Merrill Lynch: Just because it’s a much smaller business for you or was at the time?

It was the smaller business. The aggregate limits are dramatically smaller. Jay Cohen – Merrill Lynch: Great, very good. Thank you.

(Operator Instructions) Our next question comes from Amit Kumar of Macquarie. Amit Kumar – Macquarie: Thanks. I guess three quick follow-up questions. First of all, just on the discussion on excess capital and its utilization I just wanted to go back and revisit NATL National Interstate. Recently we saw another peer and take out at sub, has your view changed based on the current market conditions or should we expect no change in perpetuity?

I don’t think anything is ever in perpetuity, but we continue to look at National Interstate as a core operation for us and core part of our business in that. And again I think if you continue to take a look at our stocks valuation, we think our repurchasing our shares continues to be more attractive than purchasing National Interstate shares if you just look at the valuation differences in that in the short term. But in perpetuity of nothing's ever in perpetuity. Amit Kumar – Macquarie: I was just trying.

Nice try Amit. Amit Kumar – Macquarie: I guess the two other quick questions are, there has been some discussion on modest change or improvement in the California comp market and maybe we haven’t talked about that in a while maybe we can revisit that in terms of trends?

Sure. Yeah, I think when you look at the industry numbers right now, I mean they’re terrible. But there is modest improvement from the industry estimates I think they’re going from a 129 to 125. We probably with estimate republic at about 115, 116 for 2010 and get up might be modestly better. It’s a competitive market still though there is price being taken and we maybe on the more aggressive price side with an 8% change year-to-date probably to get to get our business back to 13% to 15% return and low 100s combined ratio we need to get 20% instead of the 8% that we’re getting right now. And the market is not allowing us to currently get that. We feel our reserves are solid in our business today, probably some different than others. I think probably the good news is I think Governor Brown is saying that he is not going to look at any new workers comp bills in the next couple of years. So I think you should have a pretty steady environment. The economy seems to be improving. I think the republic renewal payrolls seem to be increasing and the California comp seems to be somewhat on demand. And I think those are all positives. But we need to get more price in order to get our business back to a solid return. Amit Kumar – Macquarie: Recently there was this discussion coming out of WCIRB, and they were planning to issue that notification and it did not happen and that became an informational filing regarding the 40% rate increase. I mean what is the biggest impediment in terms of you trying to get a price increase?

Each individual company can file their own price increases in that. From my standpoint, there probably isn’t too much of an impediment. It is the competitive environment. Everyone needs to file more significant rate increases and renew their business at that for the business to improve. That’s not happening yet. There is still some companies that are too aggressive out there which is hard to explain, hard to understand. I do think California comp and workers comp nationally probably is the, it has to be the kind of the leading edge of price correction, activity really within our industry when you take a look at the results in that. Amit Kumar – Macquarie: Okay, and in terms of, you just mentioned the competition, are these public companies or non-public companies?

Sum of both, yeah. Amit Kumar – Macquarie: It’s interesting. And okay, the only other, this is the final question. I do appreciate your patience. You’re having a lot of growth from the indirect bank annuity segment and the index annuity segment and it’s becoming a bigger proportion of your earning with every passing quarter. I’m just wondering what’s your ultimate appetite for this market going forward?

This is Craig. We don’t have a specific number in mind. If we can earn what we think are the appropriate returns in the business then we’d like to continue to grow it. If we can’t then we’ll slow it down.

Our strategy is to, on a continual basis, try to allocate capital to the places that have the best returns. Amit Kumar – Macquarie: Okay. And then may be just remind us, this is for the brokers who are writing a mortgage policy and can you just refresh us what exactly is the, this indirect product?

There are either fixed annuities or indexed annuities that are sold through the banks but there is a type of a broker arrangement, brokerage arrangement with the banks. So there is an intermediary who is out, who is involved with the sale to the bank’s customers and they’re selling all annuity products. The biggest would be indexed annuities. Amit Kumar – Macquarie: And these bank customers, I’m just sort of trying to get, understand the profile a bit better, are these the ones who have sort of a checking deposit or are these mortgage customers, who exactly are these people?

I mean, they could be mortgage customers, but there is really, there is no relationship between what we’re doing and the mortgage business. Amit Kumar – Macquarie: Right.

They’re typically customers who are looking for a decent return on their investments and if they are willing to go a bit longer buying the bank product then it could be a replacement to CD. Amit Kumar – Macquarie: Yeah, okay, got it. Okay, that’s actually very helpful. That’s pretty much it. Thanks so much. Thanks for the answers.

Thanks, Amit.

Thank you. (Operator Instructions) Our next question comes from Ron Bobman of Capital Returns. Ron Bobman – Capital Returns: Hi. I think Carl commented on California comp, I was curious if you give us some sort of maybe at least directional information and on the sort of rate and coding environment and some of your other commercial lines and sort of not so much necessary first quarter activity, but what you’re seeing sort of towards the end of the first quarter and coming into the second quarter. Is it the rating environment status quo continuing to improve deteriorating maybe some of the major line categories that you’re active in? Thanks a lot.

Sure. I mean, in the property and transportation, I think as we disclosed, our pricing went up about a point and our specialty casualty segment pricing was flat and the property and transportation down 1%. I think if you, overall the lines that we seem to be getting price in California comp we mentioned we’re getting about 8%. We are getting on the program business that we’re staying on. We’re getting some price there. In businesses like all the non-U.S. med-mal and Marketform, we’re getting some decent price there, marine liability because of the various events worldwide they are in our Marketform book we’re getting some price in that part of our book and then smaller price increases in a number of other areas. So I am hardened that it seems like we are getting, there is more of our businesses where we’re getting some price increase versus that being outside of workers’ comp. They’re not being too many places looking backwards. So, I think the rate environment seems to be improving at this point. Ron Bobman – Capital Returns: Are your business unit heads directing their underwriters and field underwriters to be a bit more involved in trying to get rate? Are you getting any sort of commentary from the unit heads along those lines or no change really?

No, I think it really depends on the profitability business-by-business as to the aggressiveness. If we have great continued returns and businesses, it’s a bit harder to your focus maybe more on retention of business versus trying to push through huge increases, businesses like California comp, I think I just spoke to, what I think we really need versus what we’re getting and we’re going to be fairly aggressive. All I know this is our Republic subsidiary we’re losing more market share over the last couple of years than our other competitors. So, that kind of tells you how aggressive we are there. So again, I think the tone depends on the profitability business-by-business in that. Program business I don’t – we have a small part of our very small percent of our business in that, but we’ve been pretty aggressive on the price side and cancel a few accounts and other accounts on the business, we’re taking aggressive approach. Ron Bobman – Capital Returns: Actually, if I can have an unrelated question since the meet went on and on and on, I feel I could follow up. On the crop business should we assume that as it relates to sort of sessions to the government program or even third-party reinsurance that your crop operation might buy, that it hasn’t really, you haven’t changed the amount of reinsurance protection either government or private for the current crop year as compared to last year’s. Is that a decent assumption?

Yeah, that’s a decent assumption. Ron Bobman – Capital Returns: Okay, thanks a lot and best of luck.

Thank you.

At this time, there are no further questions. Carl Lindner III – Co-Chief Executive Officer: All right. Thank you. We appreciate your time today, appreciate your interest, and we look forward to reporting to you on our second period results. Thank you. Have a good day.