Question-and-Answer Session
Operator
Thank you. And the question and answer session will begin at this time. (Operator’s instructions) Please stand by for your first question. And our first question comes from Mike Grasher with Piper Jaffray, please go ahead.
Mike Grasher - Piper Jaffray
Good morning everyone. Congratulations on another great quarter. A couple of questions here around the surety business. I guess, first question is where you’re finding the growth opportunity here. I noticed it was up year-over-year?
Michael J. Stone
Basically the growth is in our fidelity book that we started in late 2008. That produced, I think roughly $8 million worth of gross written premium year-over-year. And our surety, our extant surety book, oil and gas, commercial, miscellaneous and contract basically flat.
Mike Grasher - Piper Jaffray
Okay. So it’s just dedicated entirely to that fidelity book then?
Michael J. Stone
Yeah. Basically the growth is, yes.
Mike Grasher - Piper Jaffray
Okay. And then on the loss ratio in surety, it looks to be, I think, running in excess of 20%. Can you remind us the typical tail on that type of business?
Michael J. Stone
Obviously it depends on which product within there. Certainly the miscellaneous surety, the transactional surety is fairly short tail. The contract probably two to three years and fidelity probably shorter tail than that as well.
Mike Grasher - Piper Jaffray
Okay. And then as I look at what’s occurred over the last couple of quarters. I don’t know if John or Joe maybe has the numbers just around what maybe paids were on this line versus what went into the reserve bill.
Joseph E. Dondanville
The paid on surety for the quarter on a net basis was a $1.3 million and year-to-date $3.9 million.
Mike Grasher - Piper Jaffray
And those are paid losses.
Joseph E. Dondanville
Those are paid losses for surety. So there is an increase in our reserves as the expectation in the economy is going to create additional loss activity.
Mike Grasher - Piper Jaffray
Okay. And then final question, I’ll get back in the queue, just in terms of the overall expense ratio had picked up higher here in the quarter. I notice property is up at least $2.5 million. Can you comment on what maybe is going on there?
Joseph E. Dondanville
One of the anomalies that occurred on the expense during the quarter is because a lot of our bonus programs for the home office people are based off growth and book value. And the substantial increase in returns on the investment side drove the expense component up, more so than the other underwriting. Although, from your comparison on the property side in 2008 for the quarter we had roughly $24 million worth of hurricane losses that caused the bonus levels to drop on property specially during 2008 that made the difference wider than what you normally see.
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