Question-and-Answer Session
[Operator Instructions]. Your first question comes from the line of Amit Kumar with Fox-Pitt, Kelton.
Amit Kumar - Fox-Pitt, Kelton Cochran Caronia Waller
Good morning.
Carl H. Lindner III - Co-Chief Executive Officer and President
Good morning.
Amit Kumar - Fox-Pitt, Kelton Cochran Caronia Waller
I guess, just quickly going back to the discussion on your life operations, and recently there has been a lot of focus on risk-based capital and RBC ratios. If I go back and look at your '07 RBC ratios for your life operations, they seem to be in the I guess 3.30 to 3.50 range. And I was wondering if you could just sort of update that number for us and maybe just talk about what your target range is. That's my first question.
Keith A. Jensen - Senior Vice President and Chief Financial Officer
As a practical matter... this is Keith Jensen... as a practical matter, what we do, Amit, is target our capital based on the Standard & Poor's capital model, because over time we found that to be a more constrictive capital model than the RBC calculations. So as we manage capital and target how much to have put into each of our businesses, we really use that as our primary measure. And in that regard as you probably know, S&P has been in the process of changing that cap adequacy model. But we have over the past several years and now in this period of transition continued to target 150% of S&P cap adequacy as our target. And so from that perspective, I would expect actually that during the course of this year, the RBC level at the life operation to actually increase a bit because of changes in the S&P model that are driving us to put additional capital in.
Amit Kumar - Fox-Pitt, Kelton Cochran Caronia Waller
Okay. That's helpful. In terms of maybe just expanding the discussion and maybe moving on to the P&C operations, what's the target premium to surplus in the current cycle for you?
Keith A. Jensen - Senior Vice President and Chief Financial Officer
I'll give you a similar answer to that. We actually don't use a targeted premium to surplus. Again, with the P&C side, we have... very similar to what we do in life, we target to meet the Standard & Poor's and A.M. Best cap adequacy ranges that would be at the level above our current rating, because what we've tried to do is take cap adequacy off the table as a rating factor. So it tended to be at the high end of the ranges.
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