Please stand by. Good morning, and welcome ladies and gentlemen to the RLI Corporation Third Quarter Earnings Teleconference. At this time, I would like to inform you that this conference is being recorded and all participants are in a listen-only mode. At the request of the Company, we will open the conference up for questions-and-answers after the presentation. Before we get started, let me remind everyone that through the course of the teleconference, RLI management may make comments that reflect their intentions, beliefs and expectations for the future. As always, these forward-looking statements are subject to a certain risk factor, which could cause actual results to differ materially. These risk factors are listed in the Company’s various SEC filings, including in the Annual Form 10-K, which should be reviewed carefully. The Company has filed a Form 8-K with the Securities and Exchange Commission that contains the press release announcing the third quarter results. RLI management may make reflecting reference during the call to operating earnings and earnings per share from operations, which are non-GAAP measures of financial results. RLI’s operating earnings and earnings per share from operations consist of net earnings after the elimination of after-tax realized investment gains or losses. RLI’s management believes that this measure is useful in gauging core operation performances across reporting periods that may not be comparable to other companies’ definition of operating earnings. The Form 8-K contains reconciliation between operating earnings and net earnings. The Form 8-K and press release are available at the Company’s Web site at www.rlicorp.com. I would now like to turn the conference over to RLI’s Vice President, Corporate Development. Mr. Aaron Jacoby. Please go ahead, sir.

Thank you. Good morning to everyone. Welcome to the RLI earnings call for the third quarter of 2015. Joining me on today’s call are Jon Michael, Chairman and CEO; Mike Stone, President and Chief Operating Officer; Tom Brown, Vice President and Chief Financial Officer; and Craig Kliethermes, Executive Vice President, Operations. I'm going to turn the call over to Tom first to get some brief opening comments on the quarter’s financial results. Then Mike and Craig will talk about operations and market conditions. Next, we’ll open the call to questions, and Jon will finish up with some closing comments. Tom?

Thanks, Aaron and good morning everyone. We are pleased to announce another strong and consistent quarter delivering $0.70 of operating income per share. Starting with the combined ratio we achieved an 81.3 in the quarter bringing the year-to-date combined ratio down to an 82.9 from 84.2 through six months ending June 30, 2015. These outstanding margins were coupled with top line growth as well, 3% growth in gross premiums and 5% growth in net premiums written. In our casualty segment our underwriters delivered both an 87 combined ratio and 8% top line growth. The property segment was more challenged from a premium perspective off 7% in the quarter while the combined ratio was a strong 79. The decline in property premium was not a surprise given the continued pricing pressures in E&S. Last but not least our surety segment turned in 5% growth in gross premiums written and an excellent 64 combined ratio. Consistent with prior quarter’s reserve releases had a positive impact across the segments but primarily from casualty and surety. Turning to investments, investment income remains a challenge as we reinvest new cash flow and bond maturities below the average yield on existing positions. As a result investment income was down approximately 2% in the quarter. It was obviously not a good quarter for equity markets although positive fixed income performance helped offset this impact leading to 0% total returns for the quarter. Maui Jim, our primary minority investment contributed $500,000 of income in the quarter. Though down from last year we remained very optimistic about their prospects and note a write down of a capital asset and adverse foreign exchange movements impacted the quarter. All in all with strong underwriting performance driving our results, operating income through nine months came in at $1.98 up 4% over last year while book value per share is up 7% year-to-date inclusive of dividends. And with that I’ll turn the call over to Mike Stone. Mike?

Thanks Tom and good morning everybody. I am going to lateral this quickly to Craig this is my last RLI quarterly earnings teleconference. Craig will provide the color now forward while maybe less colorful probably more perspicacious. I expect the next stage for me will find an opportunity to do some good. For RLI I am certain this change will have a salutary effect as Craig brings encyclopedic knowledge of the insurance industry end of our business. And he will drive our operations to even greater heights. Thank you everybody, Craig?

Thanks Mike, good morning everyone. First I want to thank Mike for his almost 20 years of service with RLI and for providing a strong foundation from which we will continue to build. RLI was founded on the promise of finding really smart disciplined insurance professionals and aligning their interest with shareholders. The culture of underwriting excellence will continue to be the focal point of our organization. Thank you Mike for your insisting on the best from all the associates of RLI. Now little more about our results, a very good quarter despite some challenging market and economic headwinds. As Tom mentioned we posted an 81 combined ratio for the quarter which leaves us at 83 year-to-date. All of our segments came in under a 90 combined ratio. These very good underwriting margins did come with some revenue growth for the quarter. We were able to grow gross written premium 3% and net written premium 5% in the quarter. We achieved this growth by having a well diversified product footprint and giving our underwriters the incentives and discretion to grow when the opportunity arises and to shrink when the market presents little opportunity for underwriting profit. They delivered again. In our casualty segment we continue to grow both gross and net written premium for the quarter by 8% and 10% respectively. Rates overall have been slightly up about 1% to 2% for the quarter and year-to-date mostly led by rate increases on all wheels based businesses with most other casualty products realizing flat to slight decreases in rates this quarter. Underwriting margins remain pretty stable across this segment. In casualty we continue to be led by our transportation business. We grew over 40% in the quarter and are up over 20% year-to-date while margins remain good. Rates were up nearly…

Thanks Craig. We can now open the call to questions.

[Operator Instructions]. And we go to Randy Binner.

Hey, good morning. Before I start Mike, congratulations and it has been great to work with you. And I wish you the best in your next.

Thanks Randy, you got a really good early education in your career, so well.

That's right, that's right. And so on the commentary you are just looking for market color from Craig now. The wheels comment was interesting and it is something I think we have been tracking for couple of quarters. You know you are talking about I think in a midsized commercial auto accounts when you say that, is that right and how much higher is your pricing basically when you are re-pricing these books and they are coming over. I would like to hear more about that because commercial autos has been kind of a disaster for just about everyone?

Randy this is Craig. In regard to commercial auto our biggest segment, our biggest product is transportation which includes trucks and public autos mostly and some specialized commercial autos. But we also write recreational vehicles and some commercial auto business through our package business. So it is fairly broad. I can tell you the rates are up across the board, across all of that wheels based business. Some places little more than others. As far as the price, the price is maybe a little higher than what it left us for but I think a lot of people found out the service was not nearly as good for the price they were paying.

And where does that service fall apart because I think of these claim as being mitigated, that usually I guess is the problem with them, where do others fall down on that servicing claim side versus what RLI can offer?

This is Mike Stone I’ll try that one. I think it’s a whole host of things. First off it's an understanding of the risks associated with transportation with trucks and buses from things like MCS90 to collateral to claim handling and the ability to properly manage litigation. So when I think all of those things I mean the guy that runs our transportation businesses are a 35 year expert. That’s all he’s done all his career through a number of companies. He has been with us for about 20 years now and has had stellar results while the industry has performed rather poorly overall. So he is an expert, we have expert claim handlers, and this is a good business. You’ll see his volume is what will actually vary as opposed to his rates. I mean he is getting a rate now but when you hear people talking about getting 25% or 50% rate they probably need 200%, okay. So we’re getting 5% to 10% and we were profitable to begin with. So we are getting a little extra rate. We are getting new opportunities because of the turmoil in the space. So we like this business and it has performed well for us over time.

That’s helpful and then just one more just jumping in property, I know its maybe hard for yield answer but if you look at the model, I mean the decrease in gross premiums written in the property area seems to be kind of moderating and its coming in roughly around 50 million a quarter. Is there, is it possible for us to think of there being a stabilized level of property or are we in a situation where there is so much alternative capacity coming in that it could go a lot lower than this from a premium written perspective. I mean it is kind of like a how low can you go question?

Randy, this is Craig again, I mean certainly we have a certain amount of business that we probably need the right to stay in the business to be relevant to our brokers. I don’t think we have reached that floor yet. And we do -- remember a big part of the drop in property this year is the loss of the crop program. I mean our premium is down if I think about 6% year-to-date and maybe is 10 in E&S property and mostly that was rate driven. So I mean I think we still have a probably a little way to go before we get the floor to cover other fixed cost.

Okay, that’s all. I’ll leave it at that. Thanks a lot.

We’ll go next to Mark Dwelle.

Good morning. I’ll extend my congratulations to Mr. Stone as well. I don’t know if Craig will be more perspicacious but at least I understand him when he says we love trucks?

Thank you Mark. I don’t even know what that means perspicacious, I can't say it.

The question I wanted to ask first was you counted on the healthcare facility and the business growth there. Can you just expand on that a little bit in terms of what we are writing and kind of what the expectations are there overtime?

This is Craig, Mark. We just started this year getting that up and going. I mean we have grown a little bit and hit on a few accounts. It is a tough market. It is facilities based business, assisted living type business as Mike would say. We used to call those nursing homes. And so I mean we are hoping to grow that business to a relevant size over the next couple of years.

And it is primarily liability business or…?

Yes, it’s all liability business. E&S liability, so it’s all written on an E&S basis.

Okay, alright, that’s a business that’s definitely been challenging to people in the past. Is there a particular edge you guys have or just other than your general skills.

Oh, we think we are pretty good about picking people to support our business. We think we’ve got a pretty good person to leave that effort under the guidance of our E&S casualty leaders who has been with us for quite some time.

Okay, that’s good answer. Second question is on the surety business. This is second straight quarter in a row where the results have been beyond excellent to nearly spectacular. Are there any particular products there that are accounting for kind of the better the margin improvement. I know there has been a little bit of rate there and I know there has been a little bit of growth there but it is kind of more than a 10 point improvement over the last year or two.

This is Mike Stone since I am the surety head for a few more months, I’ll try to answer that. Actually we got basically four different products there and they all performed well. Obviously the oil and gas, the energy surety and what we call commercial surety performed very well. Not a loss activity. And our contract surety business which can be pretty volatile has performed okay. So when it performs okay and the other businesses performed the way they do you are going to see pretty good results in that space.

Mark it is Tom Brown, I will just add too on the expense side you are seeing I think I would call a sequential decline in expense ratio. As we’ve seen that kind of consistent modest growth over those four points that Mike just mentioned, the fixed cost if you will has remained relatively stable and support that growth and you see that quarter-over-quarter decline in the expense ratio as well.

Okay, that’s helpful. Last question I just -- you guys anticipated some of my question on Maui Jim, so the capital write down and FX those were the primary reasons there wasn’t any change in sales trends or anything there that might be notable in terms of thinking ahead?

This is Jon, no, that is -- we are very happy with Maui Jim, their sales were actually up for the quarter and year-to-date without the FX drag.

Alright, those are my questions. Thanks.

We’ll go to Jeff Schmitt [ph].

Good morning. The property book, the tax that your loss ratio ex-cap looks to be quite a bit lower. Is that just the crop book coming off or what might be driving them?

Jeff, this is Craig. I mean it’s driven -- as I mentioned the marine results have been exceptional and over the last I’ll say year but particularly this quarter and our RV results have gotten much better than they were last year at this time. Now those are the primary drivers of the improvement.

Yes, okay. And then are you seeing any increased competition from any of the standard writers coming into the E&S space at all?

We are always seeing both standard and E&S specialty writers increasing competition at this point in time. So both, yes.

But there is no sort of pickup in flow from…

We don’t see any measurable, I mean the competition is tough. So we aren’t seeing any measurable increase in that but it has been tough for a while now so...

Okay. Unidentified Company Representative: It’s hard to get top line growth.

Yes, right. Okay, thanks.

We’ll go next to Christopher Campbell.

Yes, hi, good morning. Congratulations on the wonderful results this quarter. My first question relates to margins. Do you anticipate that property business you’re writing these margins will stay at their current level or will they glide down overtime?

Christopher, it is Craig Kliethermes. Obviously without a cat, the margins look pretty good. If you looked at it on expected basis for a catastrophe business certainly you would expect the loss ratio and expected loss ratio to go up overtime. In our marine business as I talked about before we’re actually still are getting some rate that’s holding up pretty close to what we think loss cost trends are. And RV is more of a getting our underwriting rights so we’re seeing some improvement there. And we are getting significant rate increase in that space. So, I mean overall you have things moving in different directions I think. Cat obviously on an expected basis margins would be thinning but if you don’t have a cat it still looks pretty good. Marine holding steady and RV improving which is most of it. And then you have the loss of crop which is booked at a fairly high loss ratio and deservingly so. And that's, obviously that mix change has improved overall margins or end results and loss ratio.

Thanks, that's helpful. My other question relates to M&A, so you have a very attractively valued stock that could potentially be leverage for acquisitions, do any opportunities look particularly eye catching in the current environment?

This is Jon Michael, Chris. We are always looking at opportunities, for opportunities, and we will continue to do that but obviously we are not going to make any announcements here or in the near future that we can see.

Okay.

Yes, we constantly look for M&A opportunities as we have in the past and we will continue to do that in the future.

Okay, thank you very much. Best of luck this quarter.

Thank you.

There are no further questions. I would now like to turn the conference back to Mr. Jonathan Michael.

Yeah, another good quarter. Thanks. Thanks for joining us. We had 81 combined for the quarter, modest growth. Written gross premiums were 5% net written premium growth and our book value is up to $20.36. You know there have been headwinds this past two or three years but we have really persevered, been able to get through this storm, and our underwriters have just delivered solid results quarter-after-quarter and we are pleased with this quarter's results. And I too would like to thank Mike Stone for his nearly 20 years at RLI. I think Mike would tell you or give you point to the -- as he does about every morning to me that ever since he has been at RLI, RLI has been below 100 combined every year. So, Mike thanks to you and we will miss the multi syllable words but I think Craig will do just a terrific job in your stead. Mike will still be around. We hope to keep him around for a while. He is going to continue as a Board member and probably find some other things for him to do. Thanks again and we will talk to you next quarter.