Question-and-Answer Session
Operator
(Operator instructions). Our first question comes from Jay Gelb from Barclays. Your question please.
Jay Gelb – Barclays
Thanks. Good morning. Looking at the underlying combined ratio for the entire property casualty business, looks like it will be up around two points year-over-year 2009 versus 2008 for the full year. Should we anticipate that trends might continue or if you don't want to get into those details, what do you think will be the contributing factor to determine which way it will head directionally?
Tom Wilson
Good morning, Jay. This is Tom. Of course, we're not going to give our outlook for next year until we get to the next quarter. So, thank you for reminding us we need to be there. But when you look at it, it's really frequency-driven this year and I think the thing to look at is frequency, of course, is a little bit unpredictable.
This year it looks a lot like 2007, as Bob said. Looks like 2005. It looks like last year was abnormally low so I don't think we will go back to next year’s level or last year's level in the future, but that will bounce around a little bit. I think if you want to look at the trends really, I think the best analytical approach is to look at both frequency and severity combined, which we, of course, call paid peer premium and then compare that to the trend line in the average premium and that can give you an estimate of what you think the combined ratio will look like next year.
What we're also doing though is as you know this year we've done a good job of controlling expenses, which doesn't show up in that statistic, I just gave you. So, we’re committed to making sure we control our expenses to get to our target combined ratio. So we feel pretty good about the run rate of the business I guess I would say, and when we get through this year we'll give a new forecast for next year, but we feel very good about being inside the range of 87 to 89 this year.
Jay Gelb – Barclays
Thanks. And then my follow-up is looking at the run rate of Allstate Financial’s earnings, are there any items in there we should consider as one-time? And what's the dollar amount of expense savings coming out in 2009?
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