Question-and-Answer Session
Operator
Thank you. (Operator Instructions) We’ll take our first question from Matthew Heimermann with J.P. Morgan
Matthew Heimermann – J.P. Morgan
Hi, good morning everybody. A couple of quick questions; Michael or Neil, could you speak to, it looks like the loss ratio in the Casualty segment ex development increased, could you just speak to that a little bit?
Neil Schmidt
Sure. There are two main items Matt. You may know that we had exposure to automobile, residual value to one contract that we wrote, we determined in the current quarter there’s a high likelihood that we would have a maximum loss on that contract, so we recognized full limit loss there.
During the current period, the impact in the quarter there on losses was about $25 million and after earned premium and acquisition cost, the effects on the bottom line was about $19 million loss. All this is booked in the current accident year. That’s the largest impact.
The second item within our U.S. companies claims made excess-of-loss class were we reviewed the 2005, 2006, 2007 underwriting years and we feel very good about the pricing of our contract, the experience to date has been better than expected. We have a relatively small P&L book, but we do have some exposure to credit crisis claims so we have a very little in the way of reported losses of to date, mostly in the 2007 underwriting year.
So as a result of our review, we lowered the 2005 and 2006 underwriting year loss ratios and raised the 2007 underwriting year loss ratio. Now the changes on an underwriting year basis were largely upsetting; however, on an accident year basis, it resulted in about $10 million of prior year favorable development and about $10 million of current accident year research strengthening.
Matthew Heimermann – J.P. Morgan
Okay, very helpful. Thank you. The other question I had was, with respect to crop, I missed the number, but I’d also just be curious Michael, where the opportunities you see, is that mostly just picking up from share gains from competitors who might be a bit wounded and people are looking for other partners. We just would like some color given that obviously crop prices aren’t what they were year ago or at six months ago I should say?
Michael Price
Sure the amount again for reference is about $125 million of expiring premium and the suggestion was that there maybe an opportunity to write a little bit more of that. I’m hopeful that we will write for a little bit more of that, but it remains to be seen as the [cedents] are still determining the exact nature of the programs that they’d like to buy for the current period. We saw a 1-1 incepting contracts, but they don’t get resolved for another couple of weeks yet.
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