We're here with Allstate CEO, Tom Wilson. I'm Mike Nocerino. I cover property and casualty insurance here at Goldman Sachs. With a market cap of about $17 billion, Allstate is the largest publicly traded personal lines writer by market cap and profile, and overall has the second largest market share in U.S. personal lines behind mutual company State Farm. Allstate writes personal insurance primarily through a captive network of agents and through a recent acquisition of Esurance, also interacts with customers directly. I should also note a relatively smaller effort to those first two, through the independent channel via Encompass. Allstate also has a life insurance business which writes traditional life insurance and annuities, but in recent years has de-emphasized its annuity platform and has focused more on underwritten products, more akin to its property and casualty business.
This has been an interesting year and maybe even longer than that, two years in property and casualty insurance. Pricing in select lines, including homeowners and auto, have been noteworthy. Allstate has been pushing for rate all year, even before the recent losses associated with Hurricane Sandy. I should note also that Allstate is the best performer among our coverage of almost 50% year to date, erasing a discount with peers that we saw over the past year. Tom is going to be here to tell you a little bit about Allstate's strategy, including its 13% ROE target by 2014. Just a few words on Tom. He's the CEO. He's been at several roles at Allstate dating back to 1995.
He's been CEO, Chairman, and President since 2007, held roles as COO and President of each of the company's divisions, protection and financial, as well as the company's CFO. With that, I would like to introduce Tom Wilson.
Thank you, Mike. Good morning. Thank you for coming out to learn more about Allstate. My goal is to give you a better understanding of why now is a good time to invest in Allstate. What I'll do is I'll start by talking a little bit about Hurricane Sandy, which is a major weather event that you're all familiar with. I'll talk a little about 2012 results, give you a longer-term perspective on how Allstate adapts and changes to the external environment. This is, of course, a message from our lawyers, which I'll be providing some forward-looking statements. I also have Steven E. Shebik, who's our Chief Financial Officer, and Bob Block, our Senior Vice President of Investor Relations. They're here with me today. We also have a great website that gives you a lot of transparency into our company.
At the end of October, of course, you are all aware the East Coast was hit with a massive weather event called Sandy. The slide up here shows the path and size of Sandy on the upper left, which is in comparison to Hurricane Irene and Hurricane Katrina, two other hurricanes. The diameter of this event was over 900 miles, as shown in the lower right, and the wind field of the tropical storm force winds at landfall was the largest ever seen in the Atlantic. It impacted 20 states. Current estimates are that it will definitely be in the top 10 of cat events in the U.S.
Last week, we provided a pre-tax loss estimate for Sandy of $1.075 billion, which is net of approximately $200 million of reinsurance recoveries, which is a little more than double the loss from Hurricane Irene and about a third of the Hurricane Katrina loss. While a significant dollar amount, this represents less than 5% of our capital and is about what we earned in the third quarter. This storm and catastrophe losses over the last 5 years validate our decision to significantly reduce catastrophe exposure 6 years ago. Our actions were well timed and necessary, but have had the impact of reducing our market share in homeowners and auto insurance. Our property policies in force are down 21% and 28% in New York and New Jersey since 2006. Obviously, losses from Sandy would have been much larger had we not taken this step or put a significant reinsurance program into effect.
I spent yesterday touring some of the affected areas by Sandy. I cannot tell you how proud I am of the work that our claims professionals do on behalf of our customers. We are there first. We are reaching out to customers with our mobile response units. Sometimes we oftentimes drive up to people's houses before they even call us. We have a nationwide team, about 4,000 people focused on this. We have great technology. We have a great local agency force that is there to take care of our customers. The good hands are alive and well as it relates to the customer value proposition. Our customer focus strategy is to provide unique products and services to the four consumer segments in the marketplace, which you can see in the chart on the top of this slide.
The customers that want local advice and assistance and see differences between insurance companies are served by Allstate agencies in the lower left. This is our largest and most profitable customer segment, and we compete aggressively with State Farm, Nationwide, and Farmers for these customers. The self-serve segment that still wants a quality company in the lower right is served by Esurance, which we acquired 1 year ago. GEICO and Progressive Direct are the competitors that target this customer segment. In the upper left, as Mike said, Encompass serves independent agencies that focus on customers that want local advice, but they see less difference between insurance companies. With Answer Financial, we are the only company that can focus really on self-serve customers that see little difference between insurance companies in that segment. We are the only insurance company that serves all four segments with unique value propositions.
For 2012, we committed to deliver an underlying combined ratio between 88% and 91% for the full year. That is a measure, that is the total combined ratio, but it excludes catastrophes and prior reserve releases. Far this year, we are at 87.8% through nine months, which is, of course, better than our commitment. We began making this commitment in 2007, and we have been either within the range or better than it for all six years. That performance, though, has been obfuscated by increases in catastrophe losses. Of course, it is impossible for analysts to estimate quarterly catastrophe losses. As a result, our actual earnings were below analyst projections in 2008 through 2010, through many of those quarters. To address the change in the weather, what we did was we started providing more transparency by releasing monthly catastrophe losses beginning in 2011.
Since that time, we have met or exceeded analyst expectations every quarter. While we cannot guarantee that we will continue to do it every quarter, the increased transparency has really enabled investors to get a better assessment of how we are doing on our business when you look past catastrophes. We also established four priorities for 2012 to meet that commitment and keep us on the path to achieve our longer-term goal of generating 13% return on equity by 2014. We made great progress on our 2012 priorities in the first nine months. Auto profitability has been a strong suit for us for a long time. We maintain that performance with an underlying combined ratio of 94% through September. The homeowners' underlying combined ratio improved by over six points. That is the result of five years of hard work trying to reposition that position.
Our annuity returns remained relatively flat due primarily to low interest rate environment, we have continued to reduce the size of that business. Overall Net Premiums Written increased by 4.3% over the prior year. This was due to the Esurance acquisition and that business itself grew policies in force grew 22% through nine months. The Allstate and Encompass brands also had higher premiums, I should note the Allstate brand grew largely because of higher average prices, particularly for homeowners insurance. The overall Allstate brand standard auto and homeowners policies declined due to the actions taken to reduce catastrophe exposure, raise homeowner returns, and maintain auto margins. That is a trend we are going to have to change to create a higher valuation multiple for our shareholders.
Our investment results continued to be strong with a total return through September of 6.3%, and we returned over $1 billion to shareholders through buybacks and dividends. We remain on pace to accomplish these objectives for 2012. Let us look forward to what you can expect when you choose to invest in Allstate. I also find it helpful to look forward. It is often worthwhile to look back for a minute, just to particularly given the degree of change that has gone on in financial services over the last five years. If there was a title to the Allstate story, I think it would be creating a sustainable growth model during storm season. In 2007, we began executing a strategy to create sustainable growth by focusing on the customer.
You know that's not the long suit of the insurance industry, we said we can differentiate ourselves and win. That was in response to increased competition from the auto-only players who were selling direct and spending increased amounts of money in marketing. One of the key elements then was to create a competitively differentiated customer value proposition. We knew there were customers who wanted local advice and assistance of an agent because we served many of them. There was also an increasing number of customers that were prepared to use technology to purchase insurance on their own. Our segmentation of the market into those four segments and the acquisition of Esurance were examples of how we're executing that strategy. That strategy also called for us to maintain excellent returns from auto insurance.
Returns from this business on a nationwide business have been in the high teens or low 20s, depending what you want to assume on capital. This became even more important when we were faced with two external storms beginning in 2008. The first major external shock was a substantial increase in severe weather beginning in 2008. In 2004, 2005, there were a number of hurricanes. We had, of course, four hurricanes in 2004. We had Katrina and a couple others in 2005, which caused us to get more aggressive in reducing our catastrophe exposure along the coast. In 2006 and 2007, I would like to say that was the eye of the storm because we had significantly reduced catastrophe losses. Our net profit exceeded $4 billion in each of those years. In 2008, however, the weather became much more severe, and our catastrophe losses increased significantly.
Catastrophe losses have averaged $2.9 billion from 2008 through 2011, and are $2.4 billion for the first 10 months of 2012. When you compare that to the average in 2006 and 2007 is $1.1 billion. You get a $1.8 billion increase on a business that generates about $6 billion of premiums. You can see the size of change we had to make to improve that business. As a result, we had to expand our strategy to include improving returns from homeowners. In 2008, there was another storm, all of which you are intimately familiar with, which was the financial crisis and the subsequent economic recession. Fortunately, we began preparing for this storm in 2007 by proactively managing our portfolio. Along the way, given these storms, we decided to exit several businesses.
In 2006, we were concerned about the aggressive pricing and structure of the variable annuity business, which resulted from the high returns on equities we had seen early in the decade in a regulatory capital requirement we just didn't think made any sense. As a result, we sold our variable annuity business in 2006 for $660 million, a business which some companies now are paying to exit. We also began significantly reducing the size of our fixed annuity business due to low returns. New premiums and deposits peaked at $7.6 billion in 2004, and we had cut those in half by 2008. Now if I'd had a real crystal ball, we have exited the business completely before 2008, although I'm glad we took the action that we did.
While these storms are not over, we've adapted and changed our business model and are well-positioned for the future. Looking forward, our strategy remains consumer-focused. This is the market segmentation slide that we looked at earlier with the specific actions we're taking to create a sustainable growth platform that serves the entire market. The Allstate agency business has not grown as we've been working to reduce catastrophe exposure, raise homeowner returns, and ensure the auto business generates sufficient returns until we got the homeowners business fixed. As we'll discuss in a few minutes, we are well on our way to accomplishing our objectives in the homeowners business so we can begin growing again in this customer segment. This will be done three ways. First, we'll start to improve customer loyalty since retention rates have declined over the last five years.
For every point that retention increases, we get a point of growth. Strengthening and expanding the Allstate agencies will also support a return to growth. Over the last three years, over 1,000 of our lower performing agencies have left the system. That was intentional on our part, and their businesses have been merged with stronger agencies or acquired by new owners. That required a tremendous amount of work, and unsettled some customers, part of which has impacted their retention ratio, but left us with a much stronger and higher performing agency system. A measure of agency performance on behalf of their customers was up by 5% in 2009 and 4% in 2010. We've also worked with our agencies to create a new compensation system that's consistent with our customer-focused strategy that will be effective in 2013.
All of this has created some angst for our agencies, but overall, we're in a much better place for long-term growth than we were five years ago. In fact, our agencies at a recent agency conference we had, over 40% of our agencies were there. Over 80% of them said they felt good about the company, they think management understands them, and they feel good about where we're going. We've had a lot of turmoil and change, but we're in a much better position to grow. Growth will also come by leveraging our brand and differentiated product portfolio. We launched Your Choice Auto in 2006, and have sold over three million policies. Many of its features, such as declining deductible, new car replacement, are now being copied by our competitors. We're rolling out Drivewise, our telematics offering, to capitalize on the opportunities presented by that product.
Last year, we launched Claim Satisfaction Guarantee, where auto insurance customers get their premiums returned if they're not completely satisfied with their claim. Nobody else offers that product. Nobody else offers Good Hands Roadside, which is another first that we started last year. We now have three-quarters of a million members in that business. We have a broad product portfolio, which appeals to this customer segment in the lower left, such as renters, boats, personal umbrella, life insurance. Those people like to bundle their stuff all together with one person. Esurance in the lower right, had a 22% increase in policies for the first three quarters of this year as we launch new advertising.
Future growth will come from expanding the risk profile to preferred auto risks, where Allstate has very strong pricing expertise, broadening the product portfolio beyond auto insurance, and utilizing Allstate's claims expertise and our scale to provide more value to customers. Encompass began to grow modestly this year by deepening its relationships with independent agencies and focusing on its unique package policy, which combines auto insurance and home into one bundle. Answer Financial in the upper right there will leverage the rapid growth from Esurance since customers that are not appropriate for Esurance are routed to Answer Financial, who then places those with third-party carriers. It's basically an electronic broker. As Esurance grows, so does Answer Financial. On a longer term basis, we need to create a unique customer value proposition for that emerging customer segment.
At the same time that we're creating a sustainable growth platform, we've successfully maintained the profitability of our auto business. As you know, the auto business is highly competitive, relatively rational from an overall pricing perspective, and dominated by large, well-capitalized firms who spend a considerable amount of money in advertising. At Allstate, we generate excellent returns and have done so for a long time. The graph on the left shows our combined ratio in blue, and the lower it is, the better. As you can see, we're amongst the industry leaders and at least five points better than the industry average. Just to put that in perspective, five points of margin on $17 billion of premiums is $850 million of incremental underwriting income annually. The returns on economic capital are shown on the bottom of the right-hand table.
You can see that we're well in excess of our overall cost of capital and corporate objectives. Improving homeowners is critical to achieving our return targets. As the chart on the left demonstrates, in the past, when the weather was benign, we made money, and when it wasn't, we didn't. Over the entire period shown, the cumulative return was about 2%, obviously not acceptable when that's one-third of your capital. Our focus has been to improve returns such that when the weather's bad or good, we still make money. We've made significant changes in this business while reducing our exposure to mega catastrophes such as Katrina or the Sandy event. That included a large number of actions specific to Allstate, such as reducing the number of homes we insure by 1.2 million since 2008.
Using reinsurance, providing customers with options with other insurers to then overall public solutions. Since 2005, we've significantly reduced our probable maximum loss of 1% to below the goal we've established. As the weather became more severe starting in 2008, we'd led the industry seeking rate increases. We underwrote the book and recently introduced a new product called House and Home, which is designed to give our customers the flexibility on choosing products, but still will generate a very adequate return for us. We've improved the underlying combined ratio in this business. While this five-year journey is not yet over, we are on the path to adequate returns. The other external storm that required us to adapt and change was the financial market crisis and subsequent recession. Insurance companies historically have been sort of buy and hold investors, somewhat like a storage company.
Broker-dealers, on the other hand, were more like distribution companies, they bought investments and used their salespeople to distribute them to storage companies like insurers. Of course, when the financial crisis hit, the broker-dealers unwillingly went from distribution companies to storage companies at a time when their investments were spoiling. Many of them lost tremendous amounts of money. As a result, they changed their models. At the same time, we chose to adapt our investment model given the increased economic uncertainty, market volatility, and extremely low interest rates. We've become more proactive in the management of our portfolio. We've shifted the composition of the portfolio, reducing real estate, structured securities, and municipal bonds. As you can see from the chart on the left, in 2007, we began to reduce our real estate exposure, which is shown in green ahead of the financial crisis.
I wish we would've got rid of all of it, but we weren't that prescient. Since then, we've further reduced our dollar investments in real estate to where it's now less than half of what it was in 2008. Similarly, we reduced our exposure to municipal debt, which is shown in purple, because we did not think the return was commensurate with the risk. At the same time, we increased our exposure to corporate credit in the face of widening spreads in 2009. Those changes worked quite well for us. As you can see on the bottom, from 2006 to 2011, the total return on the portfolio over that period of time was 25%. Through September, we generated another 6.3%. More recently, we've begun to reduce our exposure to interest rates.
While we don't expect interest rates to increase dramatically in the near term, we don't think that the risk of holding long bonds is commensurate by the current returns. Constantly, we've been reducing our holdings of bonds with maturities longer than 10 years, as shown by the chart on the right. We expect to continue to reduce the duration of our portfolio, which is likely to generate capital gains but will result in lower current investment income. In a sense, we're pulling that operating income forward and locking in the economic gains we've realized by being long corporate bonds. At an Investor Day 18 months ago, we introduced the objective of achieving an operating return on equity of 13% by 2014. That's a goal we're still striving to achieve. In fact, we've gotten there over the last 12 months, but it needs to be a sustainable level.
There were four main sources of return, maintaining auto margins, improving margins in homeowners, raising returns at Allstate Financial, and maintaining portfolio yields. The primary driver of the increase, however, though, comes from return improvements in the homeowners business. I put an assessment of our progress on the right here. We've maintained auto margins. The homeowner improvements are on track as a result of the proactive pricing and underwriting actions. While we're not where I want us to be yet on returns, we've made substantial progress. As I said, that component of the plan is more than a majority of the increase to get to 13%. The results for Allstate Financial are not where we want them to be, primarily because of extremely low interest rates. We continue to shrink that low return deferred annuity business and increase sales of higher return underwritten products.
That's not been enough to move overall returns. As a result, we have more work to do on that component. The low interest rate environment is also a challenge for investment income. That's particularly true as we harvest investment income as capital gains by shortening the duration of the portfolio. Overall, we're still committed to achieving a 13% return on equity by 2014. In summary, when you're evaluating Allstate as an investment, you have a company with an unparalleled brand and franchise, an effective strategy to offer unique products to different customer segments, an ability to focus and execute effectively on operating priorities, leading to an operating return on equity of 13% by 2014. Longer-term goal is to position our products and distribution platform to meet the changing needs of customers and growing our market share in personal lines insurance.
As we successfully adapt and change to the market, it will continue to generate additional value for our customers and shareholders. With that, I'll take any questions you might have. When you do, just raise, I guess you have mics, just raise your hand, maybe somebody brings you a microphone.
Here at the back.
I think I read on Bloomberg recently that you're looking to, in terms of your investment portfolio, move up your private and public equity exposures. I can't remember what the number was, maybe 20% eventually. Can you talk a little bit more about that target and where you're looking to go?
Yes, I'll give you a little clarification. It's really, we'd like to own things rather than lend on things. That could be private equity, it could be owning a toll road, it could be investing. We bought some timber in a joint venture. We bought some shopping. Our logic is as follows, that with interest rates where they are, we just don't like the risk and return. We can't predict when rates will go up or if they will ever go up, we just don't like the risk-return trade-off. Rather than lend to people who then buy those assets, we said we'd rather own the whole asset. That way, if inflation hits and rates do go up, we don't get crushed on our investment. That's what we're looking to do.
I also said in that article there's a food fight in the fixed income market today, which it is, because everybody's clamoring for yield. It's a tough market to break into. We've not made as much progress as I would like there, we're going to do it right as opposed to do it fast.
Just one more follow-up. What do you plan to do with your corporate portfolio? Perhaps triple BBBs, cyclical type of things. Are you looking to take that down at all or keep it pretty stable?
You're talking about structured security. We still own a couple billion dollars of structured securities. You might actually talk about what we did earlier this year on structured.
Yeah. As you know, we had a reasonably large portfolio of a variety of structured securities, RMBS, CMBS, and CDS along the way for at the beginning of the financial crisis. Over the last 3, 4 years, we've brought that down. Specifically this year, first quarter and third quarter, we've sold in total about $1 billion of RMBS, primarily floating rate securities that we thought were improving in value to a point where it makes sense economically, given their floating rate. We're earning 45 basis points to reinvest out the curve, realize modest losses, some losses that were already baked in, and move that portfolio into the corporate portfolio.
In terms of your question, I think where we are, we feel pretty comfortable with the current structured securities, we'll continue to monitor and look at that portfolio to find the right opportunities to continue to move into probably A-rated paper and corporates from the structured.
You'll have to choose who you give a microphone to, because
You've done a good job in terms of bringing down your exposures to the large events, it seems like what historically people have called 1 in 50 events are happening more like one in every five years these days in terms of Katrina, Sandy. Is that your assessment as well, that maybe these PMLs are wrong? How do you look at weather going forward in terms of large losses like this?
Well, you're correct in terms of saying the weather is different. In 2008, let me go back a little bit. 2005, after Katrina, we looked and said, "Should we just get out of the homeowners business?" Because right now, you get these big, giant losses of whole home insurance. We broke the business into three components. One was large mega catastrophes, hurricanes, earthquakes. Two was severe weather, tornadoes, wildfires, and stuff like that. The third is just slips, falls, somebody drives through the garage door, stuff like that. When we looked at the risk and return on those, the third one was pretty good business, just like auto insurance, and we could handle it well. We knew how to price it. We could settle the claims well.
The second one, severe weather, we said, "We need to do a little better job on it, but it doesn't seem out of control." The first, hurricanes and earthquakes, we said, "We got to just fix that." That was the first step. We just said, "Okay, we got to move out of that." We do not believe people's forecast that this isn't going to happen again. I used to be quoted as like I've had, I don't know, four or five one in 100 year events, and I'm only 55 years old, so it's got to be different. In 2008, we guessed that the weather was going to be different for severe weather as well as it was for hurricanes. We moved pretty aggressively in 2008. Got a lot of grief for it, actually.
If you look at the losses last year, we had $3.8 billion of catastrophe losses, not really much in hurricane losses. Most of it came from tornadoes and wildfires. We are believers that the weather's different. You need to act differently. You need to price the product differently. I don't know what the new normal would be, but I know that we're in a much better place. Our average homeowners premium today is about $1,000 versus $800, four or five years ago. We're up by 25%. Of course, taking in the right amount of money is the key to making money in that business. I think it will continue to be, the weather will continue to be bad.
If it's not, what we've tried to do with the business is take it from a business which loses money some years, and you make excuses to make decent money in a good year, to have it be in a business where the weather's really bad. You make some money, maybe not a lot, but you make some. When the weather is really good, you just coin money so that you get an average return that reflects the risk. We do think the weather is different. We've been acting appropriately, and I think now the market's with us. I would have said to you three years ago, many of our competitors were not moving as aggressively as we were. Today, everybody's there.
I was just wondering if you could go into some of the details and thoughts for the Allstate to turn around the retention and the growth in that brand going forward. Obviously, you still need price in property and some of the auto, yet obviously consumer incomes are very sluggish. Along with that, if you could just comment on current actions from customers. Are they still looking at trading down? What is that going forward that you're seeing with the customer right now?
Yeah, I think there are a couple things that drove the Allstate brand auto business down. The first and largest was, of course, what we did in the homeowners business. When you tell 1.2 million customers, "We're sorry, we can't provide you insurance anymore," if they have their auto insurance with you, they're typically not happy about it. We've been able to keep some of those because then we say, "Well, we can't do it, but we got somebody else for you." That's helped us some, but not enough. That's been the first thing. When I'm looking at our homeowner business now, the rate of decline has been in the 4%-6% range in terms of policies in force. You should expect that number to get smaller, and we should start to turn that business around.
I think it's positioned enough now so that I'm comfortable that if it doesn't get smaller, maybe in fact, we can start to increase it over the next couple of years. That should help customer retention. Secondly, in terms of pricing, we've worked hard. Given the homeowners business wasn't making any money, we said we got to make darn sure we make money on the auto business. We've been very prescriptive and precise in getting the right amount of price in auto insurance. In some states, I think that has not put us in as strong a competitive position as we might be if we were thinking about over a longer-term basis. I think we'll have some flexibility, given that the homeowners business is coming up on returns, to look at pricing differently. Thirdly, we just need to do a better job for our customers.
Whether that's claim satisfaction or whether that's agency satisfaction, we have a whole bunch of things going on to just make our customers happy because we are seeing them. You don't see as much trade down in deductibles today, but people want value for their money. There's not that much money going around this phase as people are focused on it, and they want to make sure they get value from it. Now, the good news is when things like this weather happen, and they see how good we are, it actually helps us quite a bit.
One last question here. Alan?
Yes. Tom, could you comment on your reinsurance program? Are you content with the levels that you chose, and did it work well for Hurricane Sandy? Going forward, to achieve your targets over 13% ROE, do you need more reinsurance, less reinsurance? I guess it all comes down to any comments on pricing when your renewals come up, I think, middle of next year. I also have another follow-up.
Okay. First on reinsurance. When we look at our reinsurance program, which we've really recovered very little from over the last five or six years, we still look at it as a source of capital. I looked at it and said if business is not earning adequate return, I want to have less capital in it. Reinsurance was basically a way to divest the risk synthetically without having to get rid of the policies. When we look at that reinsurance cost us about what we think a return on capital for that risk would be. At the same time, it also helped us with our pricing because we could go into regulators and say, "We're paying for this reinsurance. We got to raise prices to pay for reinsurance." When you're just talking about your own capital, they're less flexible on that.
The reinsurance program with no recoveries was an okay deal. We'll get about $200 million back, which I'm glad because it's sort of like our own customers. When you buy insurance, you don't like to have a loss. When you get some money back, you at least feel like you got something other than the capital and pricing benefit. When I look at our reinsurance programs going forward, we're considering resculpting them. Our reinsurance programs really were nothing on that first category, slip and fall. Some at a state-based level on sort of severe weather and catastrophes. We had an overall program of $2 billion over $2 billion. $2 billion of reinsurance, over $2 billion of losses on a nationwide basis. That's a program where we're covering, and that was really a capital program.
As we look at those three buckets of risk and look at our reinsurance programs, we're trying to figure out how do we want to best go back to the market and shift the risk the right way. We're in a much different position today than we were five years ago. Five years ago, I felt we needed the reinsurance. Today, I think we can provide reinsurers a benefit to take on risks. I'm feeling like we should get a better deal. I don't know what that means for pricing next year, Alan, but we'll see.
Since you brought up capital, with your stock selling barely, I guess, probably right around book value, doesn't it make more sense to have more reinsurance because we can arbitrage that somehow and buy back more stock? Number 2, just what are your thoughts on share repurchase looking out to 2013?
Well, of course you know we've always been a big returner of capital to our shareholders, whether that's, I think what's our number in 10 years, $22 billion? Something like that. We'll continue to do that. We have a share repurchase program going on now. Reinsurance is probably not a good way to trade it because you get operating earnings impacts, and it impacts customers and stuff. We have looked from time to time. First, we have plenty of capital. We have looked from time to time, do we want to source capital differently? There's some securities you could do in the market today which get equity credit which are not common. We've looked at that from time to time. We're always looking to do that. We'll continue to buy back stock as long as we have extra capital. Okay. Anything else?
I think we're good. Thank you so much, Tom.
Okay. Thank you very much.