Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Our first question comes from Jay Gelb of Barclays Capital.
Jay Gelb – Barclays Capital
Thanks good morning.
Frederick H. Eppinger Jr.
Good morning Jay.
Jay Gelb – Barclays Capital
In terms of the guidance outlook for 2009 being taken down just a bit. What are the implication with that, are there for that for 2010 especially looking in terms of the expense ratio as well as capital management, the stock ratings [and intangible value]?
Frederick H. Eppinger Jr.
Yeah, I actually feel like for 2010 the conversation we had that in yesterday still [over]. So I mean obviously the company has three levers, Jay that are pretty clear for our improvement of our returns. We have the capital lever, expense lever and the mix and margin lever. And there is no question that the economy and kind of the uncertainty around this kind of non-CAT weather has made us feel little bit more conservative in the fourth quarter, but if you look at the rate we are achieving and frankly what's already been approved we feel very, very good about the increasing margin in personal lines, as some uncertainty around how the weather enforced, but we have assumed that is significant above the average weather continues.
And so I feel like while there is some short-term issues there, I feel like the vast majority of that we have transparency to overcome. So I’ll look at our action here as and I say we will see improvement next year. And I feel good about the mix in commercial and that we are achieving obviously the economy in the written premium like our places that comp little bit of pressure on that, but we are achieving rate increase and our mix is improving a lot.
So I feel pretty good about 2010 and how that will unfold. On a capital size obviously as I said one other things that I’m watching is the particular opportunity that presented itself to us both organically and inorganic, we are seeing some interesting opportunities present itself to us in the market place partly because of our upgrade, partly because of this west coast expansion, we obviously have started doing some capital of action that give capital back as I could have transparency the excess if you will.
We will continue to move in that direction if its appropriate if there is opportunities to increase shareholder value I will do it, but we are obviously not shy of how moving in the direction of giving capital back to shareholders if we feel that its excess and I think we have signaled, we’ve shown what we’re doing and as these opportunities either come above or don't, we'll react appropriately and that’s why I feel confident then ad, on the run rate by the end of next year. I think I have some transparency the significant improvement in our return.
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