Good morning and welcome to The Hanover Insurance Group third quarter earnings conference call. (Operator Instructions) I would now like to turn the conference over to Oksana Lukasheva.

Good morning and thank you for joining us for our third quarter conference call. Participating in today's call are Fred Eppinger, our President and Chief Executive Officer; Marita Zuraitis, President of Property and Casualty Companies; and Steve Bensinger, our Executive Vice President and CFO. Before I turn the call over to Fred for a discussion of our results, let me note that our earnings press release, statistical supplement and a complete slide presentation for today's call are available in the Investors section of our website at www.hanover.com. After the presentation, we will answer questions in the Q&A session. Our prepared remarks and responses to your questions today, other than statements of historical facts, include forward-looking statements. These include statements regarding expectations of after-tax operating earnings per share, segment earnings, pricing, accident year results, premiums, expenses, development of loss and LAE reserves, estimates of expense capital, returns on equity and other projections for 2010 and beyond. There are certain factors that could cause actual results to differ materially from those anticipated by this press release, slide presentation and conference call. We caution you with respect to reliance on forward-looking statements and in this respect refer you to the forward-looking statement section in our press release, Slide 2 of the presentation deck and our filings with the SEC. Today's discussion will also reference certain non-GAAP financial measures such as total segment income, after-tax earnings per share, segment results excluding the impact of catastrophes and development, ex-CAT loss ratios and accident year loss ratios among others. A reconciliation of these non-GAAP financial measures to the closest GAAP measure on a historical basis can be found in the press release or the statistical supplement which are posted on our website as I mentioned earlier. With those comments, I will return the call over to Fred.

Good morning, everyone, and thank you for joining the call. We're very pleased with our third quarter results, especially our continued progress on our strategic initiatives. We posted after-tax operating income for the quarter of $45 million or $0.98 per share, a 10% increase over last year on a per share basis. We also continued to deliver very strong growth with net written premiums of 17% in the quarter, driven largely by gains in commercial lines, principally as a result of the OneBeacon renewal rates transaction and continued growth in our specialty and niche businesses. Marita and Steve will review our quarterly results in detail with you shortly. First, I'd like to take a few minutes to step back and review our progress and business outlook, given market conditions. Specifically, I would like to make three observations about our situation in the market. First, we believe our company today is in a very strong and improving competitive position with winning agents. Second, given the financial leverage available to us, we believe we can continue to improve our financial performance over the next 12 months regardless of the general market conditions. Finally, we believe we will see growing market disruption over the next 12 to 18 months that will create increasing opportunity for the strongest competitors. In 2003, we set out to build a company that combined the financial strength, talent and product capabilities of the best national companies with the local market knowledge and the responsiveness of the best regional. Since then, we've maintained an intense focus on that vision, making unprecedented investments across our organization and people, products, technology and service. We accelerated those investments, as you know, over the last couple of years, taking advantage of the market disruption to improve our product mix and expand our geographic…

Thanks, Fred. Good morning everyone. I'm glad you could join us today. This morning, I'll review our operating results for the quarter, and while doing so I'd like to build on the main themes that Fred mentioned in his remarks. Our third quarter underlying results provide evidence that our focus on margin improvement is paying dividends. Starting with Slide 7, our third quarter combined ratio was 97% all-in, and 93.7% excluding catastrophes. Our ex-cat, ex-development combined ratio, which is a better indication of our underlying quality of our earnings was 96.6% this quarter, representing a significant improvement from the 99.8% in the third quarter of 2009 and the 97.2% in the second quarter this year. Our ex-cat, ex-development loss ratio has improved by 4 points on a year-over-year basis and is flat over last quarter. At 51.5%, it's the lowest it's been in several years. At the same time, we increased our net written premium by 17% in the quarter and 18% on a year-to-date basis. Our results demonstrate progress in all of our key financial metrics. Last quarter, we talked about the notable improvement in our Personal Lines core profitability. We also discussed our strong loss performance in commercial lines despite the persistent soft market environment. And we're pleased to see that these trends continued this quarter. With that in mind, I'd like to discuss the drivers of our performance in more detail, starting with Personal Lines on Slide 8. Personal Lines Pre-tax segment income, excluding catastrophes was $59 million the quarter compared to $42 million in the third quarter of last year. This improvement was driven by better underlying loss ratios in auto and homeowners, as well as lower expenses. Our ex-cat Personal Lines accident year loss ratio improved by 4 points in the quarter. We attribute this…

Today, I'll review the company's financial results representing the slide presentation starting with Slide 13. Fred and Marita noted our solid core underwriting trends. Our strong underwriting performance coupled with our stable net investment income in the strong balance sheet allows us to drive improving operating earnings. First, I'd like to comment briefly on the reserve development. Our pretax P&C segment earnings for the quarter included $21.4 million or 2.9 points of favorable loss reserve developments compared to $38.6 million or 6.1 points in the prior year quarter. The third quarter of 2009 included a benefit of $10.5 million relating to favorable reserve development from our run-off voluntary pools business primarily as a result of a third party actuarial study that's conducted every four years on a reinsurance pool in which we participated. In our ongoing P&C operations, we experienced slightly lower favorable prior reserve releases as compared to the prior year to the prior quarter. In the third quarter of 2010, we also benefited from realized investment gains of almost $6 million resulting from some portfolio repositioning. Turning to Slide 14, I'd like to briefly touch on our investment portfolio and yield. As of September 30, we held $5.5 billion in cash and invested assets, an increase of approximately $300 million from year end 2009. This was mostly driven by market appreciation and to a lesser extent, an increase in assets under management due to the company's overall growth. The composition of our portfolio remains largely unchanged from the second quarter of 2010. Cash and fixed maturities represent 97% of our total invested assets at the end of the quarter. Roughly 93% of our fixed income securities are investment grade. The average duration of the portfolio is 4.2 years. This quarter, net investment income was approximately $61 million compared…

(Operator Instructions) Our first question comes from Cliff Gallant of KBW.

I just had a quick question for Steve. And it just came down to the investment income number. It seems like there's a lot of moving pieces there, you outlined that new money yields are weak. You've got the buyback, which if you execute early will put some pressure on investment income. But it seems like you're actually not too much of the portfolio is turning over. And you should have some cash flow benefit of all the growth. So when I look out to next year, should I be modeling for a little bit of investment income growth?

Cliff, thanks for the question. I think as we look forward, I think what we're sort of seeing in our own model is that the pressure from lower and new money yields. Although as I said only about 11% of our portfolio will mature next year is going to be more or less offset by what we're expecting in terms of new money to invest. So I would look at it right now, probably as consistent with this year.

(Operator Instructions) We are showing no further questions at this time. I would like to turn the conference back over to our speakers for any closing remarks they may have.

Well, I want to just thank everybody for joining the call today. We obviously are excited about this quarter and we expect continued improvement on financial returns, as we continue on our strategic direction. So thank you very much for participating today.

This concludes today's conference. Thank you for joining. You may now disconnect.