Harvey Bowring reacted to the terrorist events of 11 September 2001 by increasing capacity allocated to those classes most affected: per risk property reinsurance and large commercial property insurance – areas which witnessed very significant improvements in rates. Our ability to provide increased capacity for large commercial risks in the aftermath of 11 September 2001 placed us in a strong position with brokers and we saw £104.0 million of new business. In the short tail classes of large commercial property and per risk property reinsurance, rates per unit of exposure reached exceptional levels in 2002 and it is not surprising that these classes have begun to come off their peaks. However, rates remain very favourable and in other classes, such as smaller commercial property and casualty, continue to improve. Gross incurred loss ratio represents the sum of paid and notified claims before deduction of reinsurance recoveries expressed as a percentage of premium before deduction of reinsurance purchases. TONY HOLT DIVISIONAL UNDERWRITER