Question-and-Answer Session
[Operator Instructions]. And our first question comes from Keith Walsh of Citigroup. Please go ahead.
Keith Walsh - Citigroup
Hi, good morning everybody.
J. Hyatt Brown - Chairman and Chief Executive Officer
Hi, Keith.
Keith Walsh - Citigroup
I guess first question for Hyatt, in your pricing commentary, a lot of talk about flattening maybe just generally overall like what... how would you tie this all together, what's causing or we had a bottom here in the pricing cycle? And then to follow-up on that, maybe any gains in pricing, is that going to be offset by slowing of exposures due to an economic slowdown? Then I have a follow up. Thanks.
J. Hyatt Brown - Chairman and Chief Executive Officer
Okay. Number one; don't forget sales people have a tendency to be optimist. And so, when I'm hearing this pushback it's there, but, is it a momentary thing as a result of all the things that are being happening in the financial markets, or is it truly a change and we are not really sure at the moment.
It seems like it's a change because a number of the companies are looking at higher combined ratio, some over a hundred particularly on an accident year basis. So, that's that piece. It is definitely changed, that's the first thing.
Second thing is relative to the economy itself. That's a really difficult question to answer. We are looking and we have been, don't forget, this downdraft in building didn't just start, last month, it's been going on, coming on now for six to eight months. So we've been having downdrafts on renewal pricing really probably since the first of the year, but it's got a little worst.
So what do I think about the economy, I think the economy is going to continue to be fairly difficult in Florida, Arizona, Nevada, and Southern California, elsewhere it seems to be different. And so, it's very difficult for us to try to say okay, if the flattening is truly flattening, but the downdraft in the economy is down 5% to 10%, what does that really mean?
And we have no way of prognosticating that. So my sense earlier is the economy is going to probably bottom out in this quarter meaning Q4. And, then, next year is going to be kind of tough, but it maybe tough like for the whole year. And, if so, and if the rates are truly sort of bottoming, then you can draw your own conclusions.
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