Question-and-Answer Session
Operator
One moment please. Please standby, thank you. Thank you. (Operator Instructions). And one moment for our first question. Our first question comes from Robert Albert [ph]. You may ask your question and please state your company name.
Robert Albert – Atlas
Atlas [ph]. Good morning. Could you give us –?
Prem Watsa
Good morning, Robert.
Robert Albert – Atlas
Could you give us a quick update – I guess I have three quick questions. Could you give us a quick update on ICICI Lombard with the rebound in the markets and values, how should we think about that in terms of market value as related to book?
And then, two, do you have any views on the dollar gold – U.S. dollar gold and U.S. treasuries, and from an investment landscape perspective? And then, three, could you give an outlook on the business in terms of the underwriting, tightening of the market or continued weakness in the market? Kind of how long do you think that weakness will last and what you see happening from the operating perspective? Thanks.
Prem Watsa
Thank you, Robert. And I’ll start from the third question first. In term of business, I think Greg just mentioned that the combined ratios are running at about 100%. Accident year combined ratios in the industry are running in the 100% area across the industry. Interest rates are low, so it’s very difficult to make a good return on equity with those conditions. But having said that, we are not – there is no sign of a hard market. The markets continue to be soft and when they will change – we know they will change, but we don't know when it will happen. And we’ll just have to wait and be patient and that’s what we’ve done in the past.
As far as U.S. dollars and gold and treasuries, we don't invest in gold, Robert. I have nothing to add. The U.S. dollar, foreign exchange markets also, we don't really invest. We hedge our exposures and on treasuries, we’ve resold it about a year ago, significant amounts as you know. And we haven't gone back again. So nothing to add in those areas.
As far as ICICI Lombard is concerned, the revaluation, I’m going to ask Greg to just give you a quick update.
Greg Taylor
Sure. You can see in our quarterly report that we have shown the fair value of ICICI Lombard, fair value of our stake at about $198 million. And again, that’s just for disclosure purposes. We carry that on our books at a value of $80 million. So the unrealized appreciation there is not in – it’s not on our balance sheet.
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