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Previously, you said you felt the greatest challenges to surplus lines in 2013 lie in the standard market’s ability to enforce discipline in pricing, terms and conditions, but that discipline has not always prevailed. Do you think it has this year? What are the results that you’ve seen?

The overall insurance market responds to economic and financial conditions. We have seen better discipline as returns on investment income continue to be difficult to achieve and combined ratios have lingered at levels that are higher than most would like. Reserve redundancy is beginning to climb again, however, and the industry remains overcapitalized. Many companies are sitting on cash that needs to be deployed. I think we will see some downward pressure on rates in the coming year. Reinsurance treaty renewals seem to be holding steady or in some cases are coming down. All of these factors speak to carriers’ appetites, and that drives what is available in the specialty markets.

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