Question-and-Answer Session
Operator
(Operator instructions). And we will take our first question from Ed Shields with Sandler O'Neill.
Ed Shields -- Sandler O'Neill
Good morning, Jim. How are you doing today?
Jim Scardino
Hi, Ed, how are you?
Ed Shields -- Sandler O'Neill
I'm alright. I just wanted to, if you could comment on any of the dialog you maybe having with A.M. Best and your thoughts on your rating on the context particularly with revised outlook?
Jim Scardino
We are actually anticipating that our rating will be quite before the rating committee here this week and the conversations that we have had have been positive, obviously the terms of the quota share evolved a little bit, as renewal process went along, until you get your answer from your answer from A.M. Best is best not to say you got too much more, but I believe that the required BCAR for the rating we have is demonstrated in the results we produced as well as the projections that we provided them, so we are anticipating that our rating will be affirmed, we do not believe that the outlook will change as you probably know, we have a negative outlook on the rating, but we do think that the A minus we expect that would be affirming.
Ed Shields -- Sandler O'Neill
Okay, now changing gears a little bit here, going back to the reinsurance renewals, you mentioned that the third-party quota share also affected your outlook, could you give any additional color on that perhaps?
Jim Scardino
Yes, obviously on quota share you share a pro rata on loss ratio and that’s what would change the economics of it or the margin that the reinsurers receive for providing the use of your capital and the ceding commission and in the case of our renewals the margin requirement was higher and our ceding commission was lower. So our net expense ratio will rise as a result of that and to the extent that the margin is earned by the reinsured that's the direct expense to us. So, these are not inexpensive arrangement, and to the extent you can live without them you certainly want to do that.
Ed Shields -- Sandler O'Neill
Right, I think that will take care of me for this point, thank you.
Jim Scardino
Thank you, Ed. I appreciate your questions.
Operator
And next we'll go to Gregg Hillman with First Wilshire Securities Management.
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