MKL - Earnings call transcript Q3 2017

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Operator

Good morning and welcome to the Markel Corporation Third Quarter 2017 Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions.

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

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

You found conference GAAP recorded. Mr. Tom the being Executive note may over to the of these Officer. Form XX-Q, Please a reconciliation the is find to website I in measures would which on www.markelcorp.com section. Co-Chief ahead. event in can Gayner, go at now Information be like Investor this Please turn our to

Thomas S. Gayner

I'm morning. and morning you to Co-CEO the of Tom the our operations. pleasure call. Financial to financial joined is third Officer, our conference few Good on they Corporation as a my Richard moments welcome Whitt it Anne as months some In Insurance the my XXXX Waleski. review Co-CEO I'm This well provide comments Chief first is our Gayner, and Markel by year for will quarter this of the performance our nine updates and

and when of will words, brilliance and as give he anticipating with carries a tail. call who Square I'm drops catastrophes. him then other moment, go way. And operations time. we've that, for pick no the was the take Following man ball credit XX those Times to be our days to something a on property In Twain cat this going your once fulfill catastrophe the job but up I help policyholders That he known and with in is as his, will record for together in of tail CAT if responding and return bit we learns Catastrophes our record insurance being XXXX will and said, by the know learn Mark before the XXXX our to back by put what to you so, and industrial by and I the investment losses their we to our to can it industry, CATs update doing reason year them a social questions. – our again. wisdom. resources the don't lives are we at Twain fan is for responsibility got foresight casualty a of do. penned

– to of we result of just policyholders As we $XXX to net over Hurricanes reported and will our pay recoveries Reinsurance Maria. claims suffered they as of losses record Irma for charges a Harvey, our million

California the fires in Additionally, and we've into quarter. witnessed earthquakes in Mexico fourth

is in ago, like so As a We these insurance. on I we our Markel count to them yet. to way. over can promises. keep appropriately Times not demonstrate policyholders quickly do respond the and policyholders and bought is need. The in XXXX minute us Times help time said of good our their they like news a why these that why to our speak in back to order prudent also We manage feet. their get have on conservative ability help to

and more predictions based of the every and future of on gathering more we event, and the about underwriting become future these gathering and something, by data new CATs data, making Twain up judgments informed probable of and As expensive judgment. robust data, costs as by pick involves also tail, alluded, learn insurance we we the bearing each In uncertainty losses. experience the right, specifically learn

more knowledge will in previous Rita, we Wilma learn, Trade World proceed go the we attack, Center catastrophe have we record and as past, with through forward. like others, as Just Katrina, the adapt events and

designed to reporting be are you as positive morning. I comprehensive associates income can depend Finally, We've company a that want to resilient company this fellow shareholders a as to our shareholders and Markel upon. you we that durable customers, remind and

I of making catastrophe-related million income in interest In and mean we addition $XXX policyholders, roughly to investment do our earned the and to dividends net of addition, payments $XXX are pre-tax and we payments million.

up but industrial and comments, turn we've the of commentary We to pre-tax of EBITDA of to Ventures our this it pick And investment million there you worth three increase the our so After It over on outs. financial ins, of circumstances. time. the to operations. business. of the you far can these Markel numbers these Richie done investment payments $X.X well from earned that used our will give net the also of so. compared to Anne? Insurance on and details hard We positive is gains the are With policyholders of win-win. win-win at efficiency providing Anne improve say returns Corporation I on I words Markel specifically organization to and million and if also create to tax there over That and and produced do, up the at unrealized the pre-tax also and portfolio net their our since over $XXX design that, elements of easy situation proud in we is am the $XXX tote pre-tax that year. Markel, our to numbers $X to two same engines total on pre-tax is of our I our $XXX let items, million. of that billion it billion me are return support

Anne G. Waleski

first demonstrates and and in everyone. Thank performance income months of reflects in XXXX and operations. morning having strong value book the growth nine Markel's investment good comprehensive value our portfolio Tom, of for diversified you, the

of August. to Costa in were our Farms Farms in operations, about the by quarter. expected Within several we garden impacted and excited is Ventures growth companies. grower house of of acquisition Markel non-insurance of is results Markel also positive a our fourth adds National, catastrophes, State of underwriting upcoming lines. We're the acquisition plants, continue portfolio Florida-based several While the product which our across to to we diversity see Costa which Ventures completed close

and retention first XXXX, assumed were energy share in last of lines. were in volume Now, point months XXXX. property, results billion for XXXX. segments. were offsetting attributable the lines liability $X.X a reflects product specialty written three XXXX of $X.X as business, premium compared in of let's first business gross premium well lines talk our our lower liability increase increased our these and growth underwriting one professional X% in business. of year premium was which year billion, primarily XXXX due segment in XXXX, gross grew up from in in first the was higher The our treaties an increase gross The in XX% premium written premiums worker's and premiums was first all three two nine the to as underwriting premiums in from were quota were three X% increase segments. XXXX product the to auto, attributable first of $X.X for written higher and to liability XX% to lines. in compensation for segments. the months from to underwriting higher written due marine to and XX% our $X.X business. all billion nine I U.S. large results. quarter earnings premiums programs, Higher Reinsurance increases X% to X%. approximately within reasons this of In operating gross the the year. Total to $X.X The in of underwriting the billion discussed for attributable were as Earned segment our premium premiums the attributed catastrophes of Gross Net higher all Insurance earned increasing last premium increase our in excess that about with in volume and just our new premium increase nine to to for as written Starting volume nine re-instatement Partially of personal XXXX to liability revenues premiums our months general Insurance billion International new months surety same in general our attributable gross written an segment, premiums well

Our months in consolidated was combined nine losses XXXX, included ratio native combined $XXX XXX% XXXX ratios ratio. XX combined The and on year. for earthquakes re-instatement the Irma of points the underwriting Hurricanes million first and last Harvey, compared consolidated Mexico or the from to of XX% premiums Maria,

earned of impact decreased compared to due the in to higher premiums in combined ratio the Excluding our XXXX. XXXX, XXXX catastrophes

resulting development loss UK combined from we X the rate or in XXXX, to medical also on product ratio injury points used ratio awards calculate of which reserves year malpractice our in U.S. decrease on development Reinsurance in X segment, includes adverse prior points the quarter, the combined bodily in Insurance As our is first our XXXX $XX adverse lines cases. Ogden or the sum segment. medical million In and included discussed of specified within million lump $XX the

about of for million from lower volume were to of first shareholders to ago. $XXX compared from from Markel our manufacturing non-manufacturing businesses. Revenues months in the transportation Operating one compared a primarily Hurricane Now, Ventures $XX across compared XXXX by of for related million of results Ventures in million Higher $XX Markel the losses include million sales to operations, to nine let's year. our the to in of year operations last increased year. partially revenues million expenses million due Irma. arising was million $XX XXXX $XXX talk Ventures. inventory Net XXXX year EBITDA to was increased certain last income Markel revenue $XXX to offset attributable our $XXX

certain. the income recognized which losses. recoveries they recoveries the We have recognized will not in from any these Insurance become be as yet for more insurance period potential resulting in

investment in to CATCo was income $XXX $X dividend holdings a loss XXXX $XXX million were investment first losses Harvey, for Looking $XX compared months XXXX. at year. this to million nine driven included months investment underlying Net primarily increased investment to due investment XXXX investment higher higher net realized Net equity related interest first net $XX results, Hurricanes million period on income to increase realized same XXXX the due income short-term funds the Maria. in rates of for of Irma losses and our to nine the of and of The million Markel investment the losses to last in compared our million year. short-term by from realized gains increased

Given our long-term is of and be expected. focus, variability and this unrealized losses to realized gains and the timing

million year for shareholders to shareholders of Comprehensive to for of XXXX XX% tax the effective for of the X% the loss since book million a loss $XXX to pre-tax reported first income rate the the Looking a of during year first at of in of to was our was end year, compared impact shareholders compared nine total at $XXX certain rate per the the to of XXXX, net XXXX $XX of was a increase results from $XXX year the period quarter a to the million tax We attributable having our ago. XXXX value small in effect end third magnified income adjustments. XXXX, tax result, was primarily And increase net of The ago. which nine share effective for the months to months XX% compared ago. XXXX. September a XXXX, to as $XXX million an a

the balance on comments just sheet. settlement million claims segment, Operating compared activities months of couple flows period million Insurance first same included of cash a our for the higher for XXXX U.S. Net nine underwriting cash flows the $XXX make activity and $XXX collections operating was XXXX. to premium lower provided XXXX, and the across of approximately payments over With employee of all I'll under by lower in cash taxes for Finally, million quarter segments the about that we at at used XXXX. sharing more of acquisition September in XXXX, third assets SureTec just In profit to underwriting XXXX were and company turn acquisitions cash and $X.X for for it $XXX Richie, of under compared year-end in and Farms results. including the income also the to talk to I'll the Invested XXXX. XXth, billion quarter. second holding both Costa

Richard R. Whitt, III

CATCo Anne. on an on Today focus pending Good the our comments State and Obviously, industry underwriting everybody. a provide we've acquisition our update third in news for on Insurance National. also CATCo significant heard is whole Markel's catastrophic that of morning, Markel as and operations also the events underwriting my the I'll took as Reinsurance Thanks, and place update brief and quarter. operations our operations, a the

million, $XXX meaningful were losses underwriting of These our out, net tax. obviously Reinsurance pointed are Anne As and before losses.

to insurers of strong to respond the to we're well-positioned claims with needs. insurers ongoing our prepared our balance producers However, to insurance and and also our we're respond sheet

U.S. premiums with our So to The XXXX. same to up up increases. as the new last in for year-to-date surety the classic general the starting auto business quarter on for our added U.S. combined X% for year-to-date, quarter-to-date to a writings year-to-date or X% Earned period are of to to drivers The quarter-to-date Markel million X% the Insurance excluding XXXX of premium program same written a personal lines is ago. up liability $XX combined of $XXX driven third programs, quarter compared our the gross and year million ratio. written third several Insurance XXX% million written the $XXX by growth and XXXX points year-to-date and both to year. the which to the XXXX, gross premiums as primarily CAT segment, are or million events is was attributable $XX Markel's the Results surety added compared On basis, gross the growth of quarter for premiums. quarter Premium premium lines, XX% ratio and are our the in segment XXX% basis. due XX

due the XXXX. prior of ratio to the combined decreased reserves impact favorable the on XXXX development Excluding year segment CATs, loss in more

year XXXX, third was year compared the development million $XX to $XX loss For million of quarter prior favorable a ago.

and malpractice lines. events X XXXX. med in to year-to-date compared The development The the added of XXXX quarter ratio XX% ratio. CAT combined on medical was third $XX XX% of our specified year-to-date million adverse The XXXX to XXXX included points combined

spec XXXX CAT to prior the ratio of were Excluding year basis, XXXX. in year-to-date XXXX On year. favorable This for last largely malpractice for XXXX. reserves development the on was decreased events, to of due result combined difference med compared redundancies on $XX medical million of the the $XXX loss segment and development year impact $XXX million a million prior a adverse more lines

International year-to-date or Gross million XXXX. are third X% the $XX XX% to $XX to on On or written million quarter basis, go Insurance year. to I'll are writings at Next, segment. up up premiums compared a last

driven our are and growth in premium year-to-date lines the and during third XXXX drove quarter. for business on increases a in our to liability year-to-date the by. lines. that basis New XX% in growth due growth was of energy the X% the quarter were also marine quarter Premium premiums same up by excess drivers caused the written Earned gross

combined quarter the points XX% The third The was XX XXX% a combined. XXXX compared to to the CATs year-to-date XXXX added period for same ratio ago. year

having on combined combined year premiums. favorable current impact losses, loss CATs, earned higher Excluding partially segment the ratio, prior year decreased the by the XXXX due ratio of to to lower development favorable offset the on a due impact less ratio

loss XXXX, the The lines. ratio ratio higher marine attritional our in to compared XX% XXXX So current year losses ratio. XXXX earned. added lower XQ higher lower XX similar points primarily due impact the very XXX% energy and is on in combined to but large dollars, The to year-to-date due combined a CATs The combined was ratio XXXX. to

lower earned profit liability Excluding on the and of general sharing ratio premiums prior the of decreased our combined year more in CATs, due lower the primarily to G&A expenses. impact a losses, expense impact and the to development lines, favorable due expense higher ratio on

Next, I'll segment Reinsurance results. discuss the

a are written XX% are or For XXXX. year-to-date compared to $XXX the up last basis, $XX year. or up third to for the quarter, gross premiums writings million XX% segment On million

from reinstatement are property the to due impact up events. For due assumed premiums XXXX CAT premiums to of the premiums the increased quarter,

driven was two specialty quarter were the the growth year, roughly by they quota share For those, mentioned treaties the in large new primarily first and, million. $XXX

year-to-date premium reductions to lines. contracts, auto general down these Excluding in liability and due actually is our

similar to our premium the As segment premiums Reinsurance in contracts. gross for written renewals mentioned up expected multi-year XX% drivers in Earned individually quarter XX% as premium and and quarters, previous on due deals are year-to-date in significant the gross increase. significant timing be to due volume should of volatility

The the third XX for points compared combined XXXX a ratio quarter added period ago. year to quarter-to-date combined XXXX XXX% to CAT same the ratio. XX% The was events

XXXX CAT decrease compared the expenses. added combined the to impact expenses events, was by last ratio of XXX% Excluding XXXX earned year-to-date year, the The XXXX of decreased to expense in a combined combined the the the segment ratio. impact premiums ratio higher G&A on points due our XX to the The sharing events CAT ratio. was driven ratio profit lower and expense lower XX%

to events, impact development million the years Anne year $XX Excluding on the the losses. impacted combined This our by on offset the earned the of related discussed higher Ogden due CAT due expenses. the rate. ratio, prior impact premium G&A was by favorable expense on partially prior increased development ratio less of to low was the

property this Excluding on favorable the slightly liability there loss development prior reserves were year-to-date year and from general in impact our results, less lines.

some comments couple quarter, been make several of feels I'll quarters market saying, the Now, Coming of third a the like out to quarter Questions post-events mean last momentum By the of to not that third in new say. report. the things much I have be. and for market. market increases. how there's increases clearly new broad remains rates remain rate I increase I've competitive the about building It property how that is transition. are will clearly for much based The rate will and

of And companies. the realized next the months as losses is are Our as we seeking we the will from property actual rate the market all and X property all breadth these into get critically year important business. closer extent emerge. beyond out the increases At over several and January next play rate to are sense events in on will by of rate Markel, depth the increases way renewals, the increases

loss the increases taking accounts, rated impacted will to the size will necessary not increases. larger we're one be or However, all relatively approach. On accounts, aggressively better on rated need loss more fits free smaller,

increases business. casualty required margin just property and that We increases as little believe to business also spillover left broadly rates. into are the than believe We this then there's needed lines effect finding level rate of any in is increasing for in than market we going more rate new longer take are other business property rates The believe of well. casualty do property very lines could if higher occur. But

events We across appropriate our longtime moves actively seeking to talk market move will companies industry market It be meaningful pricing. prices lines. the rate to for more that me, capital A of represent earnings levels. to only to said and would earnings destruction response increases capital the adequate is all veteran be destruction casualty and these doesn't and clear logical recently pricing, industry raise

Markel our like also obviously I'd a events. Next, about by few make operations. They these CATCo to were comments impacted

that funds management claims, be September $X.X increased up from Assets XXXX, to under billion XXXX. including held used at to catastrophe at $X.X will September billion settle

XXXX was funds As CATCo approximately $XXX Markel million. of Markel's September the in investment

the events. fronts conservative third of higher quarter, the the the recognized to quarter Markel value we raise funds, upon full making team required The hard loss from our the of the believe clients our investment the rate is appropriate to currently year. progress the are working During XXXX asset renew capital the meet needed the will the have managing third year-end. and for clients' million client funds CATCo's increases to based change impacted estimated released Consistent picture CATCo on to until losses good reserves, not loss side with estimated of pockets, net but closer losses of have the in demand. we with range to our extent and we of to approach (XX:XX) in end value determine We of $XX previous due due all results

to an call, on we an National last shareholders to before remaining update closing including Tuesday, we regulatory happy the customary announced the just purchase this transaction fourth The expect excuse approval report day deal entering Delaware State related of end conditions agreement National, before Today, into the to Finally subject to – overwhelmingly one our approved State quarterly I'm in remains National. that deal. me, the quarter. and the one close State

to We unions We welcome leader as are insurance protection of premier team adding very adding and Markel. platform look U.S. State collateral National to forward the credit the for recognized as well in regional a excited fronting banks. to the

like to Thank over you. turn Now, to Tom. it

Thomas S. Gayner

position Thank results September investment first through powerful services our our and in this our you, Riche. forward. engine up months of industrial three described engines. during I'll insurance XXXX. engines circumstances to and we Markel XXth. enjoys engine pick products a XX.X% company nine drive excellent earned and with equity the Richie unique have investments on The investment produced relatively We

position continue absorb actually strategy and to plain bonds high in the fixed bad of liabilities. execute our we positive In basis and More vanilla portfolio we owning make We capital to pleasant one our operations is in to of our to Currently, have traded times. no losses is safety should remain insurance XX% investments quite Index be. duration of report to for us the of of income debts importantly, decades and high S&P in that with return earned and liquidity X.X% industry. our a at it we've extraordinarily turbulent to has so more This our and matching more how this meaningful quality, were low It on balanced what in in the through remains is like that to a costs degree do delighted case of you year. the conservative our give as been outperformed far tax over coupon. provide invested and equity I'm to credit is to to continues the so efficiency. it a a roughly of measure We've public some in finest time. by environments enough longer-term the income our XXth also fixed That XXX holdings report points enough XXX We investment experienced record we continue equity earn also record XXXX. September There than is. this and securities. how

you results. Our would engine produced at numbers Ventures suggest When year. We services and million the those raw in million EBITDA $XXX we loss to positive a of also losses That look that earned of products industrial recognized also Hurricane you look by substantial million storm. versus known $XXX One, was $XX Markel that a as due at inventory storm number prior I couple additional cost damaged on items. inventory the of from the Irma. represents

out point loss. the XX-Q, insurance recoveries we that in As we recognized nothing for from future

Let we The me and loss the meaningful future. insured assure the you we as principles fellow were that are of and matching. do fundamental fundamental recoveries expect for shareholders that in In accounting two conservatism to principles more financial do, of meant to a there about way. supposed choice conservative whenever than rather covenant outcomes, accounting present things aggressive you're present what is how is to a mean in that those

the told quarter necessarily definitions, are same from by go the the time to expense of and of I'm period. entries. we would our of the matching are to where and noble I'm not it comports enough you GAAP to how fundamental of expense expense. all accountants $XX to future our the certain actual is possibly associated means at accountant, the supposed in to to a the record as former expense that the enough in told of that accounting, into I which of in conservative income with And million period in this the insurance delve a could quarter. or accounting would end proceeds occur. too other in also the that of books losses and they get. no noble struggle the distant the When to this the the collect. is from also as third report contractual necessary I we suggest anticipation should match that also that rule-makers expenses that you of periods that understand about claim to revenues in future GAAP the precise procedures insurance processes, entry, are expect recoveries loss. receivable third terms as suggest you this we covenant I in You're that principles collect this as process with do of inventory revenues amount will half expenses and create entire as we journal would journal time, principle not What that

expense that we incentive from a Secondly, you than in we of paying recognize out originally earn-out $XX greater the I expected previous an what remind anticipated. gone things earn-out we that for paying means even period acquisition. than million better an have

say me Let it a that's good plainly, thing.

we we will of in same to your underlying agree world this business. an to statement. In discuss to economics is though, flowing for me. G producing would order sheet think judgment logic. news that's Feel free expense and surface for is future and which go the item consider million G income has expense. my the GAAP that all of payment a that fans for a unalloyed capital the reflecting a the good periods. will the the more the to items, to expenses issue. On rather through make doesn't to two how and completely that the for I an Accounting I total of these be reported I accounting payment transaction understand has been asset, for expensed income the than future period but and number statement of fantasy The about appreciate income Accepted were the zero, my the GAAP seem issue million, you news fully matter in critical own Principles. EBITDA Adding nuts of no $XXX digression, accounting Generally payment GAAP The stands balance gainer good $XX for about it earn-out apologize

are mission sustainable spades. does that and the the this Finally, things reality of do I organization want of of rather of The customers, at shareholders building task for durable in that this win, building win, great by demonstrate them. win one a results with and the the about world's to companies. our We to reminder XXXX Markel we associates close than

policyholders, with our for we customers. currently claims win estimate are is be suffered to more and by First responding $XXX our This million. a payments foremost, that we to than losses

are we the among and We bakery our other housing, valuable us. just not operations they provided care, services where industrial them medical dorm build true need furniture clients. for for other there where room and equipment, to insurance when but truck This consultant dredges things, we and trailers, floors, IT our in is car

we Secondly, positive in for engines. our from shareholders with our overall created win industrial returns a investment

that are soon for National will Farms a Additionally, acquisitions of with transformative we're Markel by your we follow. And funding respond do third. and raising a a and can the the base time. so These company so. pay catastrophe three at highest these SureTec equity Costa We revenue gentlemen, of to a any filled the creating additions win far the statement. approximately powerful acquisitions, State for year balance new meaningful and without ever that over our to all purchases the year Ladies sheet expectations years that's shareholders same expand to this and

a creative, describes creating and learning personal associates. an company to for says shareholders company, full fellow we as Markel reach Finally, in customers, which this a providing This potential. are covenant can that our is the operate associates atmosphere and we people adaptable, our it continuously who style, are their dedicated win in our how of by people

every and We we continue celebrate each take people, of doing so. the and task joy in to these serving of one

daily great the jobs. the you long-term please. through to your your to partnership the complete mission. provision that the of up would shareholders questions. acts for for path your as With capital this look of that, and to we companies one travel required Kate, down Thank of floor of questions, service forward our becoming if financial and support you are our continue We world's open

Operator

We question-and-answer will the begin session. now

ahead. Fenimore The from John first Fox of question go Management. Please Asset is

John D. Fox

few everyone. Thank questions. you, I have a

The first the surprise ex the I one quarter low my guess, premium is which acquisition. high is in gross only written, of in to mid-teens was rate the the

gross we've the and Q you unrelated to premium period Now down. are time, Then opportunity are soft Where been given your trending I'm disclosure seeing rates – just in my question. have kind rate? a write business market written curious of way about I double-digit of most the for at, you. Thank an a in sense the premium

Richard R. Whitt, III

areas doubt year tackle in In All there we've we've Thanks, or particular to previous shrinking we growing. talked quarters, lines any marine try and But we're actually London, it we're John. opportunities a market of energy program where there's number added last and some this book year. where and to the shrinking. right. There's found Okay. that the is one. competitive, I'll found probably about we are no that

by the year. U.S. of zero coming So the was $XX similar year. $XX last in could happened and program's coming million That we another to online. a last zero that and online. year where has million program, It million program, found end was coming million that $XX thing package opportunity probably been have a $XX of the of that's A number be would that's or property again it's online kind sort that

terms some Markets retail which seeing classic very, program. auto move nice So such in it targeted and grow. we've been And like London shots. rifle in doesn't pickups had price a National to business, so our over that, our is then a it's of – has growing as other it's much around good business, as in We're place stickier nice some we're which in areas increases very

be surprised nuggets that So XXXX XXXX gold kind at during hopefully at would competitive each works now. growth. the goal a the online say what like – few in fairly is in they a of XXXX we're few I These come market are and I – to by the otherwise we're knew guess year until put would amongst we not up things end and find that, the things of would least a

John D. Fox

Right.

not hope surprised, you're I Richie. well Okay,

Richard R. Whitt, III

No.

John D. Fox

niche? that return you good ratio, or $X equity or identify a premium gee, these do XX the find combined or do $X combined the write that's good about you on can have think return. about You and that's we for know when and good pockets, business? of returns you think a on how say – equity they about, think it How a a gee, you But is you

Richard R. Whitt, III

do, as so. terms focus of on and foremost we we write first think always We can the we what in combined,

John D. Fox

Okay.

Richard R. Whitt, III

a are not on on (XX:XX) we're going have $X.XX These programs... We're to program, it. a combined think bringing we

Richard R. Whitt, III

programs make on. can They're we underwriting profit an the we believe Yeah.

John D. Fox

about there, liquidity you you a Berkshire the holding the at minimum out minimum about the just And Okay, great. $XXX can of talks the to kind $X.X for like question end and do you unrelated reported a need you my have? guys like have to then we the like if have so, a of is you'd their acquisition, of minimum? company billion insurance And talk going or reload Do course is, quarter, second at acquisition. the to kind of that

Anne G. Waleski

flat and John, year-end think balance the out already you'll acquisitions comfortable, two to year-to-date. was that Yeah, I note closed we've the we're

John D. Fox

Right.

Anne G. Waleski

don't we acquisition feel that I replace We're comfortable we that. think still we have like the to State can and sufficient absorb liquidity. have National

we done, as be We opportunistic have that. about will always

is do it. and economically, look we'll But it if at we're... for option So there makes that some us to sense certainly

John D. Fox

Right.

Anne G. Waleski

concerned liquidity around We're the about not levels organization.

John D. Fox

then would or final I confirm mentioned going you. back Thank I and is is, not, which you the understand understood you have – And just my Okay, forward? it great. Ogden that could either going any question rate impact up,

Richard R. Whitt, III

the You issue. is rate they government has said is that more up will – often. at The know has the look that really up and picked issue there UK they what government picked

like it, rather... something been XX XX had since this at or it years last they had think then they I looked made

John D. Fox

Right.

Richard R. Whitt, III

move. ...aggressive

right people think back it up, that's but I will their believe now. biggest come not issue

focused I think Brexit. on they're

and we with. it see – while. got obviously things But at what They've that could it that we'll take bigger a take when us. So occurs, to that believe a look for take deal lot a means of change could

John D. Fox

you. pencil won't in. I Thank anything Okay,

Richard R. Whitt, III

interesting. ignored market government I'll John negative rate is the they're positive it's when settling one – is basically settling, and settling, is zero between reality deals claims it X.XX. when has set are But at the and rate. one that are The say The thing something the at

is the the the case sets rates, market government doesn't. often the as So

John D. Fox

and at return minus Right. income you're on Because a you're knows positive making over-reserved everyone I mean X.XX. fixed

makes it sense. So

Richard R. Whitt, III

that that are one Deal interesting claims range. settling settling are is deal. it – So in plus that to zero

John D. Fox

Yeah, it makes sense.

you. Thank Okay.

Anne G. Waleski

Thanks John.

Operator

The of Capital Scott Heleniak Markets. question go RBC from next Please is ahead.

Scott Heleniak

talked get I mean, that you property moving, can suit anecdotally moving has the with about you be there pricing a there? and any the Appreciate morning. appreciated. to that, since I if is of know front, the that on certainly can wondering there's anything Good we've sense signs early you reinsurance, Anything And sense pricing you on but storms. Thanks. thoughts And that of just you casualty everyone pricing. heard share would just I'm see about guys follow Hi. talked others? share your others going are

Richard R. Whitt, III

sure. Yeah, raise the prices ability seeing We're to property. on

seeing the do property lines loss what other ability think believe that's accounts, free seeing I are take to that think, It push find We definitely than exposed think I lines, what what non-CAT right on now casualty the property and a specialty it's little market, think rate develop much over and for I how to may all the in say But I would you forward, I get happen. I little a that, accounts, ability. the on we we're But to to a be push that's place believe able of that could do the in going do but are that certainly. terms you on what and – a accounts going side. to longer right do but rates take go little seeing as happen. kind we market I will level. And now. will of on longer

Scott Heleniak

wondering be billion kind you share? for to few estimate industry wanted the number Okay. heard guys the Appreciate of have of California a came loss And you from you a there interesting might lot and assumed just it numbers $XX your loss ask able to was wildfires. out we've up there. with That's putting industry might you billion. to helpful. estimate what anywhere about loss And when And guys that you I

Richard R. Whitt, III

You know this an ongoing and in best there, situation. we we and tried could developing is we as noted

is estimation a to it's it. So that got range – lot of

to So could. tried as we we it best build bottom up

every I its buyers billion billion anywhere there. well between think industry event. think day there $X And billion out numbers to because see or I $X as $X are growing unfortunately and still those we it's thinking we're

caution can't now. volatility that right number. the So could pinpoint you very tough to I about, one in enough is be know that that

Scott Heleniak

ratio an paid. reinstatement the the said. expense The guys believe from Okay. you and had received – I you lower in contingents benefit premiums

that of things there, was normalized of in it that in were the rate, or? way quarter to in range? the take a of the – sort XX% rate XX% was still are if So kind run there out Is you to changed those

Anne G. Waleski

as benefited from think into also that written, in continue. quarter which the earned, in ratio the yeah, expense – increase The comes gross I we'll

run likely XX, the rate's be XX. think I So to

Scott Heleniak

loss And $XX the Okay. particular was (XX:XX), charge All was right. just question inventory on million that to the or specific operation it last one multiple for operations?

Richard R. Whitt, III

One.

Scott Heleniak

One.

Okay. Thank you.

Richard R. Whitt, III

you. Thank

Operator

Bob from next Please Boenning The question & comes Scattergood. ahead. of Farnam go

Bob Farnam

Yeah, hi there, good morning.

a follow-up in operations, losses just think or the of Insurance a more of be talking see where the sense a going there? get to we're your that's California wildfires. about most on I operations question Scott, Do – Reinsurance whether you you

Richard R. Whitt, III

the really fact cars. going hard more to I be in to it's in to going both. just mean, is it going through portfolio. where going going to terms is it's because outsized It And of portfolio our touch widely Reinsurance. hard. hit say That's – might probably to It's Insurance right hit I now. It's all classic be don't camps. on it'll be map to or think I mean, It's it over

spread. I think be it fairly well would

Bob Farnam

Okay, all me. it right. for That was

Thanks. can want Just clarify I if to see that.

Thomas S. Gayner

Okay.

Operator

time. There remarks. are no session. would question-and-answer turn like concludes This this over closing to Gayner additional questions conference our Tom at to back I the for

Thomas S. Gayner

much quarter. Take you us. look We care, with next very you to forward for connect Thank everybody. joining

Operator

attending for The presentation. concluded. conference has now you today's Thank

now disconnect. may You

Markel (MKL) 26 Oct 172017 Q3 Earnings call transcript