Markel (MKL) 5 Feb 202019 Q4 Earnings call transcript

Good morning, and welcome to the Markel Corporation Fourth Quarter 2019 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]

During the call today, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. current unknown opinions risks. on of a based and known are assumptions concerning and variety They Actual contained by in may or results differ suggested such materially forward-looking from those statements.

earnings differ certain that statements forward-looking We report quarterly included and the under Factors actual about Cautionary in Risk is could report financial XX-Q captions, Safe and our information those projected factors results may in Additional to and and materially the on Statement from the X-K. Form cause discuss XX-K Harbor most release on recent call on Form non-GAAP annual measures also filed Form today. in

may You being on recorded. at note, www.markel.com measures most these in is measures GAAP the Relations this in earnings event the our and website Investor which comparable section. found a find press Please to be for the reconciliation GAAP release, directly can

Officer. Chief like ahead. I Gayner, Tom would the Co-Chief to now conference Please go over to Executive turn

to call. might and Carrie, the about today Co-CEO, you, Thank our results your XXXX Richie you I'm We're to any on Whitt, annual is all CFO, by and update Gayner. This year-end XXXX our joined my here and answer and you And Corporation Markel Noble. Tom Jeremy to morning. questions good Welcome company. conference have

chatting of what hope of next happen also suggest last We decade. might will it it decade. and decade. that We new the for perspective in a might this in the we As might theme and upcoming context bit little fun thought that useful were and Richie business has what dream starting we're the emerged, to about thought over I Jeremy happened call, namely a our and a particular that provide be discuss it foreshadowing

The XXXX results now history. are

We're the build continue energy next on and we on over right taking to Markel are focused steps to are now lies ahead. the efforts concentrated Our decade.

they change expect as imagine can more once in and six change than as XX in things months don't As much years. you said, you someone

earned total billion revenues billion. they the XX that XX With XX operations $X in insurance the were Markel and investment $X mind, were our $X returns frame the XXXX, $X.X and of premiums of dividends $XXX portion years about in were XXXX, for $X.X that billion, recurring years ago, In million. ago, the of Corporation recurring dividend XXXX, the billion. interest XXXX, In premiums were earned interest $XXX roughly were million. years ago were billion. the our In

operations. the Ventures were revenues Markel and related financial insurance Markel update and last I will revenues Ventures million update you brief Jeremy $XX you will our circle investments produced And you operations. billion. over Richie XXXX on $X of then year our XXXX, in the our on and in from will on and back results

comparisons commemorate During our comments, XX some we'll year decade. the sprinkle to in

We over last comparisons and and profound give abilities years. next highlight decade to our hope confidence for shared the the dreams will that our XX hopes the the achieve changes about you at will Markel a they

overall our turn I'd call performance. financial to review that, Jeremy like to the to With over

Thank everyone. you, morning Tom and good

As you our all in record-setting Markel engines heard operating with performance meaningful results. to from delivered XXXX, Tom, our contributions three making of

of million operations produced surpassed year-over-year and within in combined Ventures $X in consolidated and revenues a our well X% underwriting premiums written we billion EBITDA. increased ratio Markel $XXX Also Gross our we Within record $X billion, operations, XX%. quarter to And the book driving expand continued of we Security. fourth our and share. investment Fire portfolio income acquisition were through operations, value Ventures & approximately gains Markel comprehensive per on our finally, VSC produced

our increase from point in premium Insurance the higher year compared to recent This one attributable in increased the segment in XX% Retention Insurance was in $X.X within XX%, changes volume in by were resulting to premiums to $X.X XX% written results, gross outwards net at increase an our XXXX, retention an gross XXXX. underwriting our in increase segments. treaty structures. was from billion Looking gross of driven XXXX both the billion premiums which and written Reinsurance for of reinsurance

increased to $X in X% higher in premium by to offset segment, our due written Insurance in premiums lower Earned billion XXXX earnings Reinsurance segment. our partially volume

consolidated losses last ratio combined lower XX% decrease arising compared XXXX. ratio combined XX% by from Our the The for catastrophes a XXXX underwriting driven consolidated to was was year. in in

losses $XXX Jebi or to and of million million underwriting California. compared Hurricane points and Our XXXX in wildfires ratio, underwriting Typhoons Hurricane which points XXXX six two losses combined from and Florence or included and Dorian from ratio included Hagibis, $XXX of our Faxai Typhoon combined Michael,

Works. Markel I'll driven in part Markel by in from Ventures the billion products last increased to year. $X.X increased Ventures higher our of revenues XXXX, Now cover to revenues Brahmin fourth reflect businesses, of Leather $X.X the compared XXXX The Revenues across acquisition segment. quarter billion results our

million Ventures in year. $XXX compared million XXXX, last Markel was from $XXX to EBITDA

EBITDA improved strong within consumer reflects Our results in and businesses. operating products building XXXX our

maturity the of $XXX unrealized our during fair year. our $XXX portfolio billion Turning value increased Substantially, net XXXX, were in Net last net to investment the resulting in of declines rates million to for investment compared reflecting included year. our taxes an million increase an increase in XXXX, gains during net the of value our over were all net to in in portfolio interest gains investment fixed income equity investment $X.X from gains fair of attributable net investment period. the results, XXXX losses of

be Given our long-term is investment the gains expected. variability timing of focus, in to losses and

billion and was of of comprehensive XX%, our $X.X due tax compared net was was comprehensive reported a year to million results pre-tax shareholders for for rate XXXX compared to billion year XXXX a shareholders of consolidated the $X.X deferred in effective to XXXX, not income million for one-time small tax a to that discussed ago. Looking a net for XXXX. a shareholders year loss loss at charge the income for effective previously. meaningful loss the rate for $XXX We year, tax to And the to $XXX our we've

of the last income XXXX excellent $XXX billion of end $X.X with today. we back keeping was Comprehensive in looking the had the And result. million also investment versus the to decade, theme where

make sheet. our a on few I'll and Finally, capital balance flows, comments cash

the was our we provided $X flows $X.X for XXXX by the company for reflected operating billion issuance company to in cash in to unsecured higher Invested growth nice cash part in to $X.X Insurance Net at XX, compared year, assets XXXX December XXXX activities to for as see were at in XXXX. increase activity September. $X.X notes Operating billion $XXX this of asset May premium senior including million collections and segment. at holding was XXXX. December billion invested holding due XX, billion the in compared The financing continue

a to repay these used of portion in We $XXX unsecured million that of senior proceeds notes September. matured

notes, the XXXX capital million. unsecured these and purchased maintain meaningfully the its rates. company mid-XXs totaled activities senior outstanding which redeemed of net principal We also The duration position extending of in to low interest the debt-to-total maturities to effect debt historically XXXX on on our and $XXX various financing positioned our the

shareholders’ XXX% end we at XX% end increase in equity $XX.X of of the equity the shareholders' of last roughly It's reported $X.X increase an billion stood a also compared XXXX. the at XXXX, to of the at billion Total decade.

billion period, And XXXX, a up We from more have XX, sheet $XX.X Our approximately as established the consolidated XX total today resilient businesses. acquired that billion over at assets, included stand more of diverse, $XX.X of balance December end XXXX. or we larger, organization. at

XX%. rate annual period – and December share to growth five-year in book repurchased compound We in XX, XXXX, our ended December price shares during share was was XXXX repurchase X% share programs. XXX,XXX XX the value per Over pursuant our

services results. underwriting turn With about over ILS I'll talk it more and Richie that, to to our program

operations. good I'll operations, everyone. National our operations on our and focus services and underwriting morning, insurance-linked operations, Jeremy, Today Thanks, comments program which include State my Insurance securities

like review premiums. a as accomplishments insurer we years. as last our first, billion start operations of to of I'd the premiums. global written last $X.X we quickly specialty billion global a the gross reinsurer Insurance XXXX, We ended and underwriting specialty $X.X written the as XX decade decade decade, new insurer began In this gross underwriting over But

program of gross added revenues our of million $XXX added revenues $XXX We capabilities added operations services the in million securities services and of and insurance-linked premiums Program ILS also decade. written and XXXX, in billion $X.X during XXXX.

expectations hard realize to it small the effective the sources be a capital compete are they to tell capital aspect solutions add day, and part our are story. While Most that times changing significant We would best capabilities. risk to tougher serve the risks each served best to right entering was importantly, we job needs the knowing competition worked connect rapidly customers' would of third-parties. capital, transfer The decade new our and and our and in other capabilities last of really industry. over market. to adjusted sometimes that more important it and mindset of our be the to needs accomplished increase only numbers interesting, including the by our has efficient to Customers’ been Markel’s changing provide gets is what toolbox

our – growth a the losses. and written results price Bringing a premium more organic to underwriting resulting gross cat combined within solid focus and back moderate volume combination year underwriting improving the XXXX, for include headlines momentum segment, and record from of

ILS program businesses. solid We with and results services continue report to increase synergies our and within

versus for with the XX%. ratio. year. by start cat across by are I'll The year, strong lines products. the largely notably So loss segment. XX% growth decrease liability, year organic this for up Premium and product less premiums prior continued $XXX favorable year general a combined by lines, XXXX professional personal driven Gross most growth last ratio our or offset one XX% losses year was for written the out was driven million Insurance liability point The several lower was

We expense due – premium the year's favorable our prior on changes unfavorable volume an ratio commissions Reinsurance earned in from the a had experienced structures. on higher loss in expenses ceding and part outwards variable arising ratio. our Higher for we expense impact lower impact to year

gross product premiums X%. Premium by are lines, our professional was growth million to liability year lines. driven offset Reinsurance property by for the next segment, $XX compensation Turning general the and year written liability, our for or the re-underwriting workers' up within partially

premium timing previously, growth expected in can renewals. to significant deals segment significant due individually and of our volume mentioned be Reinsurance volatility As in

development in and the was higher segment catastrophe accident for ratio partially prior lower versus year The more losses losses, current Reinsurance ratio accident was decrease to line, nine the year in offset for by decrease in property due year combined loss year and Reinsurance property favorable XXXX XXXX. driven year current development driven by in XXX% was favorable general The lower to from full year XXX% the property losses. losses XXXX. in – the catastrophe attritional product The developmental in point our loss changes in ratio structures. compared on development prior was arriving our favorable losses property on increase outward lines, in primarily adverse catastrophe arising liability The including by prior

We're years. over the well in losses as XXXX the aware consecutive catastrophe a that significant result activity third year Reinsurance of primarily segment, of represents underwriting our three

fully to While reinsurer. We don't be also being to we an be able losing are year, a the make are experience volatile over single volatility we to disappointed we to is assume in price for could business our but paid long-term. price the expect underwriting must we in what Reinsurance profit volatility able product that a we any recognize this to is streak, and as

the diligently trends making to Throughout underwriting and the last been profitability. to adjustments our three has achieve catastrophe casualty respond years, team to increased Reinsurance activity

can We Markel for that are a be profitable volatility. its despite Reinsurance inherent business confident

touch our ILS other Amounts ILS on and revenues and services program are I'll operations. for within and operating services Next, operations our reported results. program within expenses services our

$X.X services driven Gross up year, State across National XX% premium organic the for growth volume existing our several programs. by billion to for program operations are

is expenses this due Ceding related program decreased of higher premium ceded were to for last the third-parties. premium all year. almost acquisition fee year volumes revenues to growth multiple for reminder, a continued quarters. the up As written expenses XX% year Operating in to due over gross

With operations. platform. ILS under a we grown I'll year Markel’s our of discuss Nephila have significantly Next, full securities insurance-linked our belt,

operations as billion December of $XX.X XX, ILS combined under Our have of net XXXX. approximately assets management

program XXXX, our to working Starting program significant and with Nephila CATCo services. in synergies our acquisition State have build We our and XXXX, services and we underwriting in Lodgepine the launch been of possible and of in XXXX insurance-linked capabilities between hard businesses. National securities see in ILS XXXX,

partially year offset pocket for million operations due under of revenues on charged increase operations year. XXXX, Nephila a XXXX our for side Markel management lower management full Total in fees in for CATCo reduction is due to by in and million versus the $XX ILS the were The a revenues from in year $XXX shares. lower having prior revenues assets to

In Nephila, ILS to pockets are of continue expenses overall XXXX. and the of results, in items while fee reported operating picture of terms results delayed side accounting the operations purchase a impact a of create number complicated impacted profitable, performance. adjustments negatively Related to recognition on on

these the the were for and year. with excited net internal future. through the in the year by resulted with expectations largely Nephila’s business Sifting the of our have noise results caused and litigation we're the run-off CATCo, review the of cost in loss Markel line the for to Related for items, very along a

quickly We and as focused investors continue possible. capital as to to efficiently remain on as returning

Insurance the the expanded of its completed our seen leverage combined momentum I'd We issuance spend recently couple first to our like to of kind note to and risk. against on updating you protect remote of efforts tail around operations. successfully catastrophe capabilities a we've a minutes

protecting our We returns. efficiently the It improves think for goal received notes balance Nephila. risk rarity grade the of securities, buyers risk development case that effectively solutions capital. transferred these National's the the that's a remote new the This State the of markets, uncorrelated portfolios with aligns this with to and institutional while Our for connect logical test stratosphere is sheet recap deal with capital transaction, investors of right investment perfectly an rating, bonds, which tail $XXX National State sheet. million balance and right Markel a creating Markel Bermuda, that seeking to from involved cap investment

to low second involves and the infrastructure investors. returns by and on to into execute Markel collaborating cost the help market. this for Markel’s The Nephila example insurance in Nephila, growth leveraging at increase deploy capital Markel’s capabilities accomplished Nephila goal, insurance strategic to capital allocating its markets primary primary support recently,

Insurance investors and important of volatility on in underwriting of market. to economies a more rewarded managing to with our being property are improving our form while strategically Markel Nephila’s scale benefit operations the expenses broker, balance Insurance quick made partner access insurance reduced the Markel’s possible by broader sheet. by trading

to the to underway pipeline, on additional forward initiatives in excited we there are that calls. already you and which during report updating I’m future look

As and X the in been themes an conditions the during the Market throughout year important continue fashion. January fourth market quarter mentioning the the improve conditions, I’ve renewals. continued in to incremental

to continue in pricing all We improvement almost month-over-month lines. see

market claims to and of their creating and It’s with transition reassessing continues clear the for improvement. continued expectations renewals gradual the that trends January carriers cat severity, frequency professional trend price casualty X and uncertainty.

been there at property increases renewal. some reinsurance has was As rate disappointment noted around by others, this

reinsurance price the tell sense will the us Japanese at renewals more that Our much momentum in at Florida the April the X and June X, health of is market. about renewables

We rating are XXXX. incremental will improvement during optimistic that this continue environment

our amount globe. and for We a focused achieved our our So to unique We XXXX program sum enter profitability, ways commitment momentum the very work was capabilities good gives as to new of decade. hard it a on year in Thanks leverage solid remain and around employees operations. improved the services underwriting up, and XXXX ILS to us organic intently growth, of finding Markel’s tremendous customers. pricing which for the we

Thanks Tom. for and today, I’d to to time turn it like your now over

terms, and percentage income investment our our return engine, a earned years. of we it earned dollar in X.X%. in return a XX% operations, best return XXXX total you, Thank terms investment our equity our we enjoyed of in ever XX our in results In total portfolio, investment best Richie. fixed and we In was in total

XX.X%. in pleased aggregate, I’m results. very those we For earned the portfolio

year. portion allocating very so. starts we’ve a to Every returns meaningful and X% returns of in we’ve that More importantly, portfolio earned per XX.X% quarter, results timeframes, relative rolling earned that our we’ve Over schedule investment fixed XX-year of equities a excellent earned doing year update equity returns absolute income plus longer and we basis investment timeframe, XXXX. an good by per on of returns and of over from

and More decision. conservatism safety we investment Markel, excessive is us in and believe disciplined in sheet performance. and for while the short chase term every balance each take we risks matters first I At following earned will mindset most returns importantly, we’ve first, these not a believe

I’m we our pleased returns. did. on with practices, that investment our changing of XXXX made bull investments well discipline our or the with especially Frankly, XX% up Given without I’m as as surprised We kept equity the rip-roaring approach. XXXX we market

traded equity through add We to so the to regularly expect XXXX. to in I publicly continue our to this and continue portfolio do year. methodically

enjoying a and at now where growth. are our rapid Insurance point, we’re said, profitable That operations

we that and liabilities expect roughly our making allocations would that are longstanding that actually practice currency our quality income portfolio our duration sure to fixed I with matched by assets characteristics. given income will matched more than such, As high fixed increase of insurance

of told ago theme investments, call about have I went and looked this ago. you exact the years With XX said I back what in what we at would XX years

In exact that XXX Personally, last less earned our XX.X%. with result Here words are and year, call. portfolio, modestly we equity in pleased my this both sense. I’m from the return of an S&P relative absolute than XX.X%

and blue return portfolio for By the quality we businesses, contrast, our highly largely year consisting near-death wonderful market us was of the credit firms quality chip, XXXX, Companies higher those matched leveraged a durable, manyfold balance to portfolio own results. sorts shake that and S&P with steady circumstances, by a it oftentimes leverage companies rebounded nearly and sheets posted your is low when from rally sizzling high eddy, have In one led of with experiences. outcome.

by should impossible and to an it continue That wipeouts less taking earned excellent pay-off return has recover. to while lot which nearly time over from We risk. avoiding approach is a

good once Investments it. fondest my now. how case. Lafayette And namely are comments the conference ability friend story from thrilled tell wish XX Mark mine, am from you and that my I’m Hughes told to I call be that’s Well, the as sticking of my me boring that A years just can’t boring. to that’s I is

over of Markel XXXX, engine Ventures reported revenues to billion in just $X our $X.X total And year. compared we last billion

Speaking in compares $XX again, number, never be it in this that billion will since million revenue XX-year $X number probably the dramatic XXXX. to

comprise collection us $XXX and from operations. to very are a the with $XXX run that insurance and our to Markel with EBITDA and businesses of Ventures. million that flows million pleased I’m Ventures of investment continues diverse provide totaled cash year maturity separate and compared rate ago and our specialized Markel distinct

As such, of they contribute to and Markel. durability the resiliency

and the VSC fourth family. Meehan VSC, legally During we the They’ve the the part welcomed XXXX produced report. family. quarter, glad now and success business that Mike and operates we’re will they’re fire Their business and and safety that results services. into included fire led required products a wonderful safety necessary Ventures provides Markel often by in of be of our decades financial

the books business Ventures order remains for outlook and Our companies Markel encouraging.

variety We revenues to last billion and $XX the of the of sensitive Ventures and over $X growth over EBITDA in million and The with profitability have decade encouraging. economically generation exciting way along double-digit Markel is recession businesses. a cash resistant from flow free

phone We remain ability market current given on firms add financial ring. Markel but new our our to to somewhat cautious continues to conditions,

enjoy lot years the from – of to a organic themselves call about now. organic tell to companies you XXXX acquisition these able acquisition in growth and opportunities. I XX our expect be Additionally,

Markel. Thank ongoing support you commitment to again and for your

to our forward continuing the communities, people customers, do opportunity we and look so. to grateful to serve love our to and with we and delighted work We’re colleagues for our

I’d like point, the you. open floor questions. to Thank for At this

question The Phil Deutsche Bank. from will of Instructions] [Operator first come Stefano

investors. just little which extent I about morning. And AUM a which at update hoping there a you was And provide status you to the any investigations. pace to on CATCo us Good the could give – ILS can wanted I be could various the bit. the talk thoughts returned Thanks. businesses to around the the

but in filed there’s development material we’ll of updates point, at no any include as of a Well, course the developments. normal if XX-K, no the are quarter. this time, we material XX-K, the and I said CATCo in them really And investigations, when since at terms that there last

that CATCo, at now right with AUM with [ph] working them. CATCo are contracts The in with has accordance obtain we teams the to releases

front years, be that So a investors. of a they’ll here remaining next I I to capital should as first quarter. be end this the have the can. we years good much Markel be think But in to capital returned, number three returned possibly point. as to at over return don’t investors CATCo load a at two the two should Hopefully,

there that the three thinking funds? it the out more side, funds. bit is in extent Got Nephila a are volatile less results years times? last volatile Is other times raising there’s been it. seen on raising going from reinsurance in How about I those two, of And conversations of guess, the based Lodgepine the the that we’ve

Yes.

– XXXX. a cat think, was XXXX average XXXX, more And I of pause certainly, was a took in obviously, of the an year, investors bit quite after ways some honestly. better year. a

out there Given around I investor as to is And pricing, be there the to raise think Nephila will looking be Lodgepine raise looking obviously, interest capital. I will capital. opportunities good and potentially think

the attracted So of investors I because space, think uncorrelated returns. to the are

the market. think, property rapidly because the attracted I they’re of to space, improving

have to the year. more there talking them later hopefully we’ll So and in be report with we’ll out

opportunities for there larger I to years, a acquisition look the good. sounds companies going in you is can phone right, be to that three get us. common, a frame digits, comes two is like because platform somewhere the calls business? What then does maybe feels From platform Are and Or the that a margin the large there’s a and maybe perspective, maybe pop EBITDA some expansion? are success All low commentary suggesting have bolt-ons growth place. mean, Markel coming. help in about And that about we right in isn’t in. the or or is you on if that the thinking think there way like Ventures single organics probably it the two

Right.

just right businesses inbound to of continued on bit new operations that me of the three But you’re surprise the our said, would what the that add be have to a wanting growth opportunities about we’re part that think said years because single-digit people and I has as organically a is. track were in pricing ago we and ringing I upside. phone on the of calls cautious high. range doing and seemed thinking

So I outside hope. we’re conversations would current process. even traditional And frankly, the are though, we that having There are environment. cautious are that the in auction

about teens And profitability, a where finished we on out, bunch not your question would the I a that’s higher or low rate. EBITDA expect lower, good be multiyear number. me, a To to it run especially

so Thank much. quarter. Understood. you the Congrats on

Thank you.

The next of come William Schmitt question will from Blair. Jeff

backing just what margin in margin morning good looking drove a a Markel XX%. big that operating $XX million, a And million, there? in into, big everyone. there, it On and jump jump Hi, income such $XX at Is that pretty like looks correct? Ventures, the

to that. by last The we somewhat was suppressed year big the didn’t jump correct. do this in that that math drove charges What took have was is year a we

year So with more fact good books to a that the that made me. coupled had largely across a book normal XXXX pretty year the the we

that’s it But in are the fair rate but this, you coming areas main missed environment? are maybe, obviously from Insurance Where and even I of – business, really what there. if type good be and up sorry adjusting year, the but growth to okay, amount, in a this getting last seems

in liability liability professional also personal a growth our lines. our seeing in we’re and As some general we said, and

terms rate of rate. about in run probably X%, of today We’re

we’re so difference organic. the achieving that growth And in the that that that’s and

us market the So – pleased right to to rates now very and in XXXX. I have a would continue with favorable expect have

a underlying like ratio it rates loss seems pressure, trends, of looks loss just like. high loss trends, had X% bit you’re and it pretty cost but if flat so that And upward X%, the is cost seeing X%, little

wouldn’t X% trends. reserving I in terms say, seeing thing one just of our loss X%, is the recognize No, philosophy. you need But cost we’re to

rate going and getting take to to be a wait deficient. always And approach to we’re than redundant more we’re going increases when see We’re them. likely

for loss take achieving quarters wouldn’t data Whatever differences to kind increases are as I to able between in and comes wouldn’t of going several look the the rate at expect cost So I earnings actuaries we’re increases. the it that up rate bit. That’s expect trends, to show our in. as the a

Okay, the answers. great. Thank you for

you. Thank

The will from Mark Hughes come next question of SunTrust.

one – Mark is doesn’t think comes. this who Hughes, one Well, the

So…

duke it you out. of two the let I’ll

Yeah, yeah.

have that’s talked like about as the investors to ability that does kind or operations to You Could with Markel get synergies How of help to you working talk if look property what correctly. your that your more about I little meaningful exposure the that? emerging? Nephila heard a market, if

Sure.

I is as to As doing and said, what business. wholesale retail case we’re Nephila in commercial basically this working distribution for property

of earthquake could and basically property at the deal hurricane million to over And and premium. $XX Nephila send length Nephila. folks premium to that between pure is So premium, that year cat say was cat that when we’re folks. the pure million Markel our premium and arm’s negotiated the And hoping over course $XX its the I of

looking We the sheet balance are of So looking for. looking are volatility. that is are investors in Markel’s that manage to they the for risk their actually terms that and

a and can So at be but that. that middle there cost to brokerage low business of this friends example in We access I probably the and of we protect will is our win-win. this, costs broker have and also an balance them hearing distribution my is using the get sheet, the volatility the don't reduce – capabilities mentioned Markel upset

both sides. nice win for a it's So

speak you're taking broker the a that to you're so case? essentially So fee, in

doing for we're taking X% we're those what paying National risks. we're the across for a front fronting arrangement. pay they them State And is fee, What a basically which pure premium at multiple is that

So to Nephila funds. the can as cost low see, you it's pretty

want business? And curious you medical of that of professional and comp or at on point, at then couple then specific lines liability, more do workers' just this a less

each of for and professional and comp liability. those comp lines, Workers' workers'

Yes, yes, each.

Med-mal, sorry. and writing We're medical that. be we seeing improvements of more will in healthcare malpractice, so

the XXXX. rates I but while a It moving to for they now. those start of took quite think move course to are during

some decreases, still write profitable. would terms Workers' workers' of rate is but decrease more, the we expect would cautiously and comp rate medical and think despite I we health. So in still

So workers' grow the we would like responsibly to continue comp to area. in

your And inflation within loss more there? med-mal, in announced inflation see terms has public emerging of issues peers perhaps. one of Do some you

healthcare I and is of Yes, this on trend. it. there's exceeded to larger verdicts business of at issues the hopefully up catching with med-mal that that mean, point because some and are Pricing have and absolutely.

in health to medical and I bit that write we'll starting areas. now a little so inflation and there And recognize are believe prices the do the more claims of impact

you Thank very much.

Thank you.

will question Fox from Fenimore come John of next Asset Management. The

everyone. morning Good

Good morning, John.

What makes? start Richie, a you're and you've the do is a Like to past year? to broken difference the that Nephila, of CATCo something the with the out end at that it AUM in year willing

I be don't K, John. – in the that would

to I'll Okay, wait. have

Yes.

Could Stratosphere, the see you name through I'm and Lodgepine those cat think about I profitability remembering we of then the two the bond. financial do talk the statements? How

Lodgepine. all of happen, as kind start Well, – was now We our raising at or Lodgepine setting of nothing the let's a We slow effort. to things right is which got because were raise working with tremendous the up year. to costs a the just capital busy capital that doing fund needed speak. and start end but we we're out were

cost, X, interested in And investors we're if So but all the out write good book that our going is feel XXXX and is January in about in participating now at we are that. did wrote. there we seeing very book we

the come in terms move more through Lodgepine. as of year So to we

item? ILS totally to to – interrupt, Would assets that – is I'm just under that would add management the to add except line that or sorry

a it assets positive will. be hopefully Yes, to management. That under will

does? of what Stratosphere Stratosphere a is of In cost But well. a things. Stratosphere does actually as number terms that

about an existential to right Remote capital. tail First, the to the is companies. we connecting right risk talked risk risk insurance

You too of just deeper cannot It's capital it you – balance keep much diversifying a the in on broader, markets. risk your sheets.

to to us we of of So on think continue move by the to Eventually, transaction and risk hopefully point to operations. we we operations. us grow broader financial a is what balance into financial some our risk risk done and our It that have broader, know and do continue we move to remote about that doing not do we continue others that it remote a to And will to to that what that will any deeper allows this markets. get created take is markets. ILS ILS the up room could Markel’s working warehouse more grow open into tail sheet, would gives market where tail

it. the we we're was go a as dipping It we huge really about the in forward. potential excited water, So think was but toe

been a end understand I over summary? access and would working but you focus time. I fair extreme probably think could their capital larger of which more pool. be thing strategy layers, on that the the I could a risk, if catastrophe Well, has don't, And Is Nephila type that, securitized high real that the tower of

it, nailed John. You

am or find have lately what ultimate, just that X%. the very there question. for that? harder business you year-over-year In anything it's healthy new Okay. your the slowing. done competitive, Is over We're State National, happening growth I I to noticed is analyzing there

we I've to around used terminology a think when Reinsurance they tend be bring that on, sizable. that, I we the Well, program same say

and matter pipeline. it's see down programs, really strong. the when of The think up the the But add running. very I it's to is takes long opportunities through State pipeline, it they big comes We how you great we National moving are State good continue feel grow opportunity just them at about pipeline to National how that then platform. a the statement so pipeline and get And and a it fair to to

just on back of million, but of add great. to million, $XXX $XX I revenue $XXX million want GAAP confirm, to amortization. Okay, ILS, expense I need And of to

right So ILS the look it? roughly at to Is million way in that $XX made XXXX.

know accountants. don't at sits. expense I'm my amortization where the I looking

appreciate. Well, out which I it's really now, broken

one John, us will of we the call give numbers. you through after a walk

Okay. Tom, that growth I mentioned question. significantly, on the EBITDA, working terrific. the have and question are with a Gayner in the Tom you revenue while you're EBITDA for tough is which growing ventures

what grow. to allocation invest that's talk numbers, on about you you've been you you on to round taken course, shareholders. feel Can think and the how Of part the about for about, capital what – investment the your return returns invested, how in

Sure.

here. for noticed the specific round You around number conversation. asked guy the number and things one we ways that's right the you split for which the asked conversation in of I Richie

XX-year a shareholder, out. I Well, as figured that

which not pretty that years $X guy. a including But end, of year, VSC, to the we've as the In You're year the end smart over put round calculation. didn't done written round of to number was the so Ventures, billion. close terms Markel in of that checks would

$X billion million of business it we last built cash of it about have and and a for have balances up $X generative. back so that worth EBITDA net-net-net billion, in We produced $XXX the cash at year companies dividend

Thank Okay. you.

welcome. You're

John. Thanks

Scott will Markets. Capital question Heleniak from next of come RBC The

of advantage lot morning. Good I Yes. guys historically and just seeing of everyone kind really are you a taken else has out Markel that. like dislocation about talked there, imagine has of

wondering impacting about what a activity seeing you're competition in out if I of side. more your for And of lot can competition talk kind kind just quote just imagine you're the how submission on far pulling how and could you playing you ILS that's that's if So new from whole opportunities as Markel. the getting looks as on comment wondering back,

markets. Sure. The to is into right. the business XX re-underwriting the absolutely last a E&S been Yes, place that's clearly organizations of number driving months taking over you're XX at

about seen the probably XX-plus the offices in up, stamping numbers, You've percent in cases. being activity reports large some the

a in yes, it's you And, no on a still certainly is up significantly. readjustment to it than as but we've more doubt, market favorable willing a is seen not there realignment So long a is market, expect, hard going there market. the submission I'm in activity would call time. much

obviously growing nicely. are very We

of job, all down going would work them. will exciting you that take staying say now need underwriters such we're say, about But, were I get when today. I about we these of time. a take the our to opportunity. really markets a of of they're feel did don't to and history I did it's think job often, so our this as inundated. it to market And proven I lot discipline because is say, for folks you an I a right nice advantage have good nice advantage excited position happen, in they very because hard So they're it's but our opportunities, great

there one just you helpful kind if continue the over everything doing you've a more in was business. growth definitely the quarter any attachment or years. other a And color have And this some but points large big one-two on get drove detail assuming you've then there. may of that Reinsurance Reinsurance, XXXX. specifically side, Yes. limits any done see what changes can on And mix again, made It's there. had you in past detail you some had of you're mentioned that growth contracts whether three on you there, or that, in in I'm that and

expect for wouldn't would when not XXXX. Reinsurance up growth I that significant on sure. in Sure, to was of expect sort a various able were contracts – contract. we think or in I new I get came renewal a do

been talking experienced three the than doing to and been will And Florida about hurdles less that because don't on less we But in renewals than we've in XXXX property happens to renewals. continue I we'll less are what the and because given refine what net, last both wrote years, book write just of we places those the not we certain for wrote the three over So expect great approach growth our continuing work that Japanese looking if we've last XXXX, we see activity kind have XXXX. we're we years. the cat property of the to in

So property flattish XXXX change general we right market my less and unless a bit for more if overall, will we attractive in beyond I rates the the we expectation want write the may what those we professional But Japan areas. accelerates don't seeing and liability be in because in we And movement now. in Florida. write pretty Reinsurance see are we're seeing in rate would say would

Yes.

Okay. focused one That so and side. the guess just the wondering Tom, can anything kind market equity now. portfolio just is adding of equities, to property if your more kind for sure given fixed less fund to capital or positions right last now? then I – the And are at funded, make that you sense, to or Insurance comment makes are you you particularly stance Are operations on just one on you on of – just income shifting where different just more to you existing just mentioned positioning to defensive

to given collateralize generalized at okay the the foaming I'm in protect equity not to And we its business hasn't been over stick what it's let's like would the usual, mouth XX% we securities. criteria between balance profitably and are make buy go a I about really the to to high, equity that going not We'll we own, has the out of our to I happening now. sure that it slower. so. change. around shareholder's equity years. the say The knitting recognize and way as way That's first, the XX% it's No, selection the up over little sort prices in I've sheet pick to and on percentage on particular is side equity think and Yes. of the not allocation the that. just Insurance there inclined we discipline some and It's changed, or think that markets, which things the growth XX% right that's but

Yes, that answers. Appreciate Thanks. the all sense. makes

You bet.

And this to our over closing I conference Tom Gayner remarks. concludes to like the turn for question-and-answer back session. now would any

in We much very Be with connecting you you. XX well. joining look Thank Thank for to us. days. forward you about

sir. presentation. attending you, is now conference Thank Thank concluded. you today's The all for

lines. You disconnect a day. may Have now your great