Good day, ladies and gentlemen, and welcome to the American Financial Group 2013 Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a remainder, today’s conference is being recorded. I would now like to turn call over to Diane Weidner.

Good morning and welcome to American Financial Group’s third quarter 2013 earnings results conference call. I’m joined this morning by Carl Lindner III and Craig Lindner Co-CEOs of American Financial Group; and Jeff Consolino, AFG’s Chief Financial Officer. 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. The 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 quarterly reports 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 significant items that are generally not considered to be part of ongoing operations, such as net realized gains and losses, discontinued operations and certain non-recurring items. AFG believes this non-GAAP measure to be a useful tool for analysts and investors in analyzing ongoing operating trends and will be discussed for 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’m pleased to turn the call over to Carl Lindner III to discuss our results.

Good morning. We released our 2013 third quarter results yesterday afternoon. I will assume that our participants have reviewed our earnings release and the investor supplement posted on our website. We’re pleased to report an adjusted book value per share of $45.36 as of September 30, 2013 that represents a growth of 7% for the year. Net earnings were $0.92 per diluted share and include $0.40 per share of realized gains and a special charge of $0.54 per share to strengthen reserves for specialist and other environmental exposures within our property and casualty operations and related to former railroad and manufacturing operations. Jeff will talk about the special A&E charge in more detail later in the call. Our core net operating earnings of $1.06 per diluted share were 29% higher than the comparable prior year period and include a 59% increase in pre tax core operating earnings in our property and casualty insurance segment and a 13% increase in pre-tax core operating earnings in our Annuity segment. Annualized core return on equity was 9.7% for the third quarter compared to 8% for the third quarter of 2012. Based on AFG’s results in the first nine months of the year, we have increased net written premium guidance and improved and narrowed combined ratio guidance for our overall Property and Casualty Group. We also have increased our core pre-tax operating earnings guidance and premium guidance in our Annuity and runoff segments, the details of which Craig and I will share later in the call. Additionally, we’ve increased our core operating earnings guidance for AFG to $4 to $4.20 per share from our previous estimated range of $3.70 to $4.10 per share. Now let me begin with a review of our Specialty Property and Casualty results summarized on Slides 4 and 5 of…

Sorry, we had a technical problem there. Thank you, Carl. The Annuity segment reported core pre-tax operating earnings of $78 million in the 2013 third quarter compared to $69 million in the comparable 2012 period as you’ll see on Slide 7. Annuity premiums of $1.2 billion in the 2013 third quarter were 61% higher than the third quarter of 2012. This record premium reflects successful distribution channel expansion particularly in banks as well as new product offerings. Year-to-date, 2013 annuity premiums were up 9% from the comparable 2012 period. The focus on our Annuity business is to maintain appropriate spreads on our base of invested assets. On Slide 9, you’ll find a comparison of averaged fixed annuity investments, average fixed annuity reserves, the net interest spread earned and the net spread earned. Our net interest spread earned, which represents the difference between net investment income earned and interest credited was 289 basis points during the third quarter of 2013, a decrease of 36 basis points from the comparable prior year period. The lower net interest spread earned in the 2013 third quarter was due primarily to the run-off of higher yielding investments. The net spread earned represents our net interest spread less expenses plus or minus any impact of fluctuations in the stock market and interest rates have on the accounting for our fixed indexed annuity assets and liabilities. For the third quarter of 2013, the net spread earned was 150 basis points, only a slight decrease from the third quarter of 2012 is a negative impact that sharply lower interest rates had on AFG’s fixed annuity business in the prior year period substantially offset the lower net interest spread in the current period. Our net spread earned narrowed from results achieved in the previous quarter consistent with our expectations.…

Thank you, Craig. Slide 12 shows highlights of our consolidated income statement for the three month period ended September 30, 2013 and 2012 by sources of earnings. This table summarizes the segment results Carl and Craig just reviewed with you and highlights other key items impacting AFG’s consolidated operating results. Starting with core net operating earnings per share; AFG generated a 29% increase in core net operating earnings per diluted share to $1.06 per diluted share in the third quarter of 2013, as compared to $0.82 in the third quarter of 2012. Core net operating earnings for the 2013 third quarter were $97 million as compared to $78 million in the prior year’s quarter, increasing by 24%. Weighted average diluted common shares are 4% lower, $91.0 million in the third quarter of 2013, down from $94.6 million in the year ago third quarter. Looking at our segment results. Our P&C segment operating earnings were $113 million in the third quarter of 2013 compared to $71 million in the comparable 2012 period, an increase of $42 million or 59%. Carl has discussed the factors impacting underwriting income in the Specialty P&C group, which consists of higher underwriting profitability in each of our Specialty P&C sub-segment, lower levels of cat losses year-over-year, and higher levels of net favorable reserve development for the Specialty P&C Group. P&C pre-tax net investment income declined by $2 million year-over-year. As Craig described, Annuity segment earnings were up $9 million or 13% during the third quarter to $78 million. Earnings contributed by other operating segments declined year-over-year by $16 million. As a reminder, the third quarter of 2012 included $10 million in pre-tax earnings from our Medicare supplement and critical illness business. This business was sold effective August of 2012. The remainder of the year-over-year variance is…

(Operator Instructions) The first question comes from the Amit Kumar from Macquarie. Amit Kumar – Macquarie Capital, Inc.: Thanks and good afternoon. Just a few quick questions. First of all, just going back to the discussion on the annuity book, you talked about the expansion in the bank channel. I’m curious, do you have some metrics, some numerics to maybe expand on that in terms of how many perhaps banks you might be in Q3 versus the past few quarters?

Yes, I can, I can talk generally about changes there. First of all, we’ve had, you know, continuing very strong sales in our, the banks that we’ve had longer term relationships with, specifically P&C bank, Regions Bank, BB&T. We have added some new relationships though that have really come on strong here recently and some larger banks. Wells Fargo is really coming on to well for us now and producing a significant amount of premiums, U.S. Bank, Citizens Bank to name a few. So, it’s a combination, Amit, of adding some new banks as well as the bank market just being very strong generally. The majority of our growth has come from sales, from bank sales. According to LIMRA, industry sales of annuities through banks and broker dealers were up 25% to 30% in the first half of 2013 and we believe this trend has continued or even grown in the third quarter. So the combination of, you know, banks really growing at a very good clip in terms of sale of annuities, as well as us adding some new great partners and several new major banks has resulted in very strong premium growth. Amit Kumar – Macquarie Capital, Inc.: And how can you compete against like currently?

We compete against a long list of companies. New York Life is a significant player. I mean, I could get you a list. What I will tell you is one thing that we really like about the bank distribution is that the sub-A rated companies, which are by far the most aggressive pricers, have not been very successful in getting into the bank market. The banks, especially, the larger banks, at least up until now have required strong ratings to be eligible to sell in the banks. So in the non-bank markets, by far the most aggressive pricers have been the sub-A rated companies and they generally are not in the banks where we sell. Amit Kumar – Macquarie Capital, Inc.: Got it, I guess that was the answer I was looking for. And if you look at the size of the book, I mean, do you get the sense that perhaps it’s approaching the optimum level, or how should we sort of think about this going forward?

You know, Amit, what I would say is if we continue to grow the business at the rate of return then we welcome the growth. But as you know, we’re very disciplined in our pricing and we expect to get the appropriate rate of return. So, yes, we can grow the business. Jeff just talked about our excess capital position, so if we can, if we can put capital to work at the right rate of return then we welcome the growth. If we can’t, then we’ll put our capital elsewhere. Amit Kumar – Macquarie Capital, Inc.: Got it. But perhaps the related question and then this is for all of you. In terms of capital management, I know that you’ve talked about this in the past, are we perhaps looking at the wrong way when we are thinking about the consolidation pipeline versus perhaps, we should be focused more on the capital sort of being deployed on the annuity side. Is that fair that the market is anticipating some sort of consolidation down the road versus buy-back?

Amit, I’m not real clear on your question. I mean, what we do when we’re looking at allocating capital is we’re looking at the many businesses that we are in and looking at the ones that have the best prospects to grow and deploy capital with – at the right rate of return. Amit Kumar – Macquarie Capital, Inc.: I guess what I was asking was, has the consolidation pipeline changed in any way over the past few quarters?

I’m not sure I understand what you mean by…

If you are asking about acquisition opportunities…

Or perhaps startups. Amit Kumar – Macquarie Capital, Inc.: Candidates, yeah.

We of course are always looking at that kind of opportunity. We are seeing a very good flow. I think the Great American brand and the culture we have here makes us a very attractive place for people to come and build their businesses and build their careers, but we are quite selective and with the growth we’re seeing in the Specialty business, especially the Specialty Casualty business, and our ability to grow our annuity business quite substantially, we are seeing really great opportunities to deploy our capital internally. That would mean for the right opportunity to bolt on or start a new division, that we wouldn’t be enthusiastic. And we have met some great people over time, but we’re really going to wait for the right opportunity before moving ahead with that and not just make acquisitions or bring people in for the sake of doing that. It’s all about trying to make the right return on our capital. Amit Kumar – Macquarie Capital, Inc.: Got it. And the only other quick question I have and I’ll stop is you do the LTC, so the long-term care study and reserve study and assumption study in Q4. Do you have an early view on that?

As you know, we did the study last year. Amit Kumar – Macquarie Capital, Inc.: Yes.

As you know, we did the study last year and we have said previously that our expectation is that over a long period of time, that we don’t expect that line to produce any significant earnings or losses and at this point in time, we feel the same way. What I will tell you is there can be blips and claims, or other items that affect profitability in a given quarter. But over the long period of time, we still expect to have an operating result of something around zero. We don’t expect any significant profits or losses out of the line.

Amit? Amit Kumar – Macquarie Capital, Inc.: Yes.

A little bit on that, the long-term [indiscernible]

In the annuity business, you have to study your assumptions and see if you need to do an unlocking, which can be a positive or a negative. The adjustment that AFG took in the fourth quarter of last year for the long-term care business was a loss recognition adjustment, which is different. You don’t have the opportunity to have positive unlockings. So the major change in the environment since that loss recognition charge for the long-term care business has been an increase in interest rates, which improves our reserve position and the profitability of that business. So I would say the underlying trends since the last recognition charge, generally have been running in our favor with the caveat that Craig mentioned that you can see what’s in claims from time-to-time in the loss recognition charge…

Annuity unlocking.

I do have a list of some of the other companies we compete within the – in the bank market and I’ll just name a few, a few of the large ones certainly AIG through Western National, Jackson Life, Midland, New York Life to name a few. But it’s some – there are a number of highly rated companies that sell through banks. Amit Kumar – Macquarie Capital, Inc.: Got it. Thanks for all the answers.

The next question comes from Jay Cohen from Bank of America Merrill Lynch. Jay A. Cohen – Bank of America Merrill Lynch: Yes, thank you. A couple questions. First, in the Specialty Casualty business, you talked about that growth being driven by workers’ comp and the E&S business. I’m wondering if you could drill down in the E&S business, because that obviously encompasses a lot of different lines of business. Where specifically are you seeing the opportunities? The second question, if you look at both the Specialty Casualty and Specialty Financial business, it appears you are retaining more business. And I know quarter-to-quarter, that can jump around. But is there a change in the reinsurance strategy that changes the net to gross equation there relative to a year ago?

Good morning, Jay. This is Carl. First of all, I would say that we are excited about the opportunities for growth in almost all of our Specialty Casualty lines. When you look at the actual dollars, the biggest dollars are coming from workers’ comp and our various E&S subsidiaries in that. But we have opportunities in almost all of our Specialty Casualty businesses that we are enjoying right now. As far as the E&S opportunities, in a couple of our subsidiaries we’ve been taking advantage of kind of our market hardening in New York contractors, that’s been a focus. But besides that, we are really just seeing, as others, quite a bit of business of all sizes coming back to the E&S marketplace from the standard market. So we are getting more looks on a broad array of business also. In worker’s comp, that’s primarily driven by opportunities in the California comp marketplace right now driven by opportunities competitively with things that are going on there, and I think things to come, and rate increase and all. And then our large deductible business, the strategic comp business, we are seeing quite a few opportunities because of the pullback by some of the larger national markets in that particular business. So we are enjoying opportunities in lots of our Specialty, Casualty businesses right now. As far as the – would you repeat the second question as far as, was that a retention question? Jay Cohen – Bank of America Merrill Lynch: Yes, in both Specialty Casualty and Specialty Financial it appears relative to a year ago, you’re retaining more of the premium rather than ceiling it into reinsurance companies. And again, I know things can just change year-over-year depending on business mix, but is there any strategic shift to keeping more of that business and reinsuring less of it?

Jay, this is Jeff. You’re right. If you look at the Specialty Casualty sub-segment, our retention ratio is 70% net to gross this quarter versus 65% in the year-ago quarter. The dollars are pretty stable at 136 million seeded this quarter versus 133 a year ago and since we’ve had differential growth rate within that each of those units within the sub-segment have different reinsurance buying philosophy. What you’re seeing is a change in mix rather than a change in philosophy. Likewise, Specialty Financial, the retention ratio is 77% this quarter to growth versus 71% a year ago, and again, that reflects mix plus also some modest change in reinstatement premiums that would have been flowing through that a year ago. So that’s what’s driving that. Jay A. Cohen – Bank of America Merrill Lynch: Great, very helpful thanks.

The next question comes from Ryan Byrnes from Janney Capital Markets. Ryan Byrnes – Janney Capital Markets: Hi, great. Thanks for taking my question here guys. My question was the Property and Transportation segment, I kind of calculate the underlying loss ratio kind of deteriorating a little bit year-over-year, but then I can look at some of the pieces already National Interstate, it looks pretty stable year-over-year then you guys also mentioned the crop has been booked at a better actually this year versus last year. Just want to see what else would be pushing that deterioration year-over-year on underlying basis?

Hi, this is Jeff Consolino again. I think the place you’ve got to start is what you mentioned last which is crop; we booked a significant amount of premium this quarter. And as Carl said we’ve been very conservative in terms of booking profit emergence. And so the underlying accident year combined ratio on that is very close to breakeven. Once you strip that out, we do have as you said National Interstate being relatively stable year-over-year. We do have continued erosion and our Property and Inland Marine business which they’re working on. And some as Carl mentioned adverse movement year-over-year and non-National Interstate, Transportation business but overall far and away the biggest contributor to that is the dynamic of the crop premium coming through this quarter, which has a disproportionate impact. Ryan Byrnes – Janney Capital Markets: Okay, great. I just wondered with the crop as well and I know you guys tend to earning more in the third and fourth quarters, but this quarter did you guys – did the third quarter loss pick elevated off from adjusting the first half of the year loss pick as well?

We look at things different than our competitors on our booking approach, Ryan. We generally don’t book anything until the third quarter and then usually the third quarters not very much respectively compared to the whole year. And then it’s really the fourth quarters when we book most of the accident year, the current crop year type of profits. You’ll find, sometimes you’ll find in the first quarter some adjustments related towards the crop hail part of our business, which reserves are held back or you don’t know what you really have until you get through some of the winter freeze types of exposures in that. So or if there is – sometimes you don’t know on the even the main harvest, so you settled all the claims exactly what you have. So I know in the past years there have been – in the first quarter there has been some true-up once we really know what the answer is for the previous crop year, but generally on the current crop year we don’t book usually anything in the first half of the year usually a small piece in the third quarter and then the biggest part in the fourth quarter. Ryan Byrnes – Janney Capital Markets: Okay, and then just one last just a mechanical one there as well, I guess with the delayed planting in this year versus last year, I guess the crop earned premium mix be as opposed to last year be a little more way to the fourth quarter versus the third quarter again just comparing it year-over-year just because of that delayed planting?

Possibly, I think most – again most of the premiums are recorded by the end of the third quarter. So there is not when you look at how we record our premium. Second and third quarters would be the big quarters when we record premium in that. So the catch-up you see is somewhat related to the delayed planning and reporting this year, the catch-up in the third quarter.

Major change in our earnings pattern. What you did see a change in our writings pattern with the delay in the premium coming through. Ryan Byrnes – Janney Capital Markets: Okay great. Okay thanks for the answers, guys.

(Operator Instructions) The next question comes from Vincent DeAugustino from KBW. Vincent M. DeAugustino – Keefe, Bruyette & Woods, Inc.: Good afternoon and thanks for taking the questions. Carl, one of the things that you had mentioned was the loss cost trends have been rather benign across the various units. And I’m curious if that holds true even if we look down to AFG’s transportation book excluding our National Interstate. And then the second kind of related question to that would be, if you look at the industry, from your guy’s opinion, do you think the industry is beginning to establish reserves and pricing based off of expectations for this benign environment to continue. And whether or not that potentially sets the industry up for some issues even if loss cost trends only normalize from here?

I think your first question was in the Property and Transportation, overall loss cost trend and then Property and Transportation kind of excluding National Interstate. Our overall loss cost trends are in the range of 2% to 4% in that when you – I guess if you look at the Property and Transportation Group, overall – I don’t know probably the Property and Marine might be 3% or 4% somewhere around in there and our trucking outside of National Interstate probably somewhere in the same category now. So, I’m not sure there are huge differences from the overall. Vincent M. DeAugustino – Keefe, Bruyette & Woods, Inc.: It’s good. I was just curious that some of the severity issues that the industry has been kind of talking about on the commercial auto but was an issue, but it seems like things are pretty benign. So on the industry kind of aspect though, do you guys maybe just don’t want to talk about kind of competitors’ books, but at least from an overall reserving and ultimately a pricing implication kind of angle. Do you think that that’s something that’s going to ultimately stress reserves if we see some normalization in loss cost trends especially on the medical side?

Are you relating to future pricing or future reserve adequacy? Vincent M. DeAugustino – Keefe, Bruyette & Woods, Inc.: More on the future reserve adequacy, ultimately moving the needle on pricing.

Vincent M. DeAugustino – Keefe, Bruyette & Woods, Inc.:

In worker’s compensation is that was your…. Vincent M. DeAugustino – Keefe, Bruyette & Woods, Inc.: I mean, just with the note in the press release on the sense cost kind of being a contributing factor to the higher asbestos reserves. I’m just curious of the litigation trends both within asbestos and then more broadly in the other P&C units, but worker’s comp would clearly be one of the more right lines for that type of issue?

Yes, I mean outside of A&E, I don’t think. Overall, I don’t see any – too many disparaging undercurrents or trend changes with regards to litigation that we are seeing, you go to state-by-state, sure. There’s issues that you identify that you adjust you’re claims handling approach or your pricing approach and that. But in general, overall, there is not lots of – not very many overall trends or issues that are disturbing to us right this second. Vincent M. DeAugustino – Keefe, Bruyette & Woods, Inc.: Okay, great. And then one last one for Craig and it’s a – really just a follow-up from earlier question. On the annuity business, when we think about having over $1 billion in sales in the quarter. If we think about there being a split between new distribution partners and new products versus just improved demand from the legacy products through kind of the existing channels, would we have a breakout just roughly and kind of how that $1 billion would get allocated to those different drivers?

I mean, the biggest part of it is from existing relationships, but it is nice to be bringing on new partners who have helped to fuel the growth at the right rate of returns. Vincent M. DeAugustino – Keefe, Bruyette & Woods, Inc.: Okay, perfect. Thanks for all the answers and talk to you soon. Joseph E. (Jeff) Consolino: Those of you who want, by the way, to follow-up on Vincent’s question, Page 14 of the investor’s supplement, to split the statutory annuity premium, by source, year-over-year, the annuity premium grew by about $450 million. And you’ll see the split, indexed annuities in banks grew by $280 million, indexed annuities through retail grew by about a $100 million and fixed annuities in financial institutions grew by about $70 million. So there is three really account for 100% of the dollar growth, with the lion’s share being in fixed annuities and financial institutions.

The next question comes from Amit Kumar from Macquarie. Amit Kumar – Macquarie Capital, Inc.: Hi, just two quick follow-ups. Going back to I guess that slide, which you were just referring to, can you talk maybe about, I guess the relative to commission levels which are paid on these premiums versus the competition?

Amit, what I can tell you is we move to consumer centric model probably three or four years ago, and I would say on average, our commissions would be below the average of the industry. Amit Kumar – Macquarie Capital, Inc.: Got it. So the reason you’re growing is because there are others who are not growing because of their rating structure, that’s what you said right?

In the bank market, there is a barrier to entry generally. The sub-A rated companies have not been able to penetrate the bank market at least to date. Amit Kumar – Macquarie Capital, Inc.: Got it.

[Indiscernible]

Away from fixed income and…

Yes. There are several things that have – that we believe have really helped our growth this year, certainly the stability of ownership of our business, the stability of ratings, the rise in interest rates has been a positive thing. We began the year with 10-year treasury at 190 and that popped up above 3% and now it is around 250. But I think bond investors were a bit surprised when they got their statements and saw that they were way under water on the bond holdings and clearly, some of the money that moved at a bond funds moved into annuities. Principally, the indexed annuities where they had the chance to earn significantly higher rate if the market perform well, but they had downside protection, you can’t go below zero at a given year. So I think we were the beneficiary of some money that was moving out of bond funds. I believe that – our belief is that banks have not had strong demand for loans. So as CDs were maturing at banks, you were not very competitive. They really didn’t care about retaining those funds by selling new CDs, so I think some of that money is rolled into annuities, the banks get an interest and not just seeing the money go out the door. They can earn a fee by selling annuities. So I think we’ve done a beneficiary there are also, and there are number of things that I think if benefited the industry. Our principal product is a fixed-indexed annuity product that’s our biggest seller. And that product is – sales of that product have just grown very significantly over the last couple of years.

This is Jeff Consolino, if I could add one thing, elaborate on Craig’s commentary. First thing as we state that we expect acquisition expenses as a percent of average annuity benefits accumulated to be in the range of 70 basis points to 80 basis points. You can see that in our disclosures. In terms of commission levels, when we measure up our annuity products against the industry as a whole, typically we’ve shorter products in the industry, and that gets to what Craig was referring to consumer centric. Now, we really don’t play in the high commission, long surrender penalty period in our market, and the bank markets tend to have shorter products, where you have the lower upfront commissions and therefore lower acquisition expenses. And so the very nature of where we position ourselves versus the industry, we’ll drive a differential in both maturity profile and the commission profile of our product. Amit Kumar – Macquarie Capital, Inc.: Got it. That’s actually very helpful. The only other sort of clean-up question I had and I don’t know if I missed this. I think in the opening remarks there was a comment that two-thirds of the P&C business is getting rate increases. Can you talk a bit about the remaining one-thirds?

Yeah, I think probably, one of the major businesses that placed mortgage property for our business there have been a number of states, California, Florida… Amit Kumar – Macquarie Capital, Inc.: I’m losing you, I can’t hear you.

Yes, the lender-placed mortgage property business would be one of our larger businesses where we are not achieving an increase because of California, Florida, New York where there been some rate declines that have been filed within the industry. That would be one place where we’re not achieving rate. A little business, equine mortality, we are not achieving a stated renewal rate increase that we, for instance there our approach with that business has been to eliminate health insurance and medical insurance for horses under at smaller values and that’s the way that we’ve achieved rate there. So on our price sheet, it doesn’t show – it shows up as no rate increase that through another means we’ve gotten some rate there. On smaller business, our environmental liability business continues to be pretty competitive and we wouldn’t be achieving any rate there. It’s really kind of the exception rather than the rule in that we have a kind of a specialty equipment warranty service oriented business where we don’t have any, we’re not showing any rate. Crop-hail, we include crop-hail as zero kind of in our overall renewal rate kind of data. So those would be a few of the business that we’re not achieving rate. Amit Kumar – Macquarie Capital, Inc.: Got it. Thanks for all the details. Thanks for the answers.

I’m showing no further questions. I would now like to turn the call back over to Diane Weidner.

Thank you for joining us this morning. We look forward to talking with you again when we report our results for the fourth quarter.

Ladies and gentlemen that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.