MKL - Earnings call transcript Q2 2018

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Operator

Good morning, and welcome to the Markel Corporation Second Quarter 2018 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. 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. Tom Gayner, the being Officer. note may over to the of these Please Form XX-Q Please a reconciliation the is find to website I in measures would which on www.markelcorp.com section. Executive sir. event in can Co-Chief ahead, at now Information be like Investor this go turn our to

Thomas Gayner

we company. we'll so. increase in we're We the billion. that you and This morning Markel million Anne income second size, $XXX the combined understand compared Tom When look saying to million comprehensive of is from Gayner. did about compared terms and for learned Co-CEO. you XXXX. scale, our It of how numbers Insurance to more progress six XX% conference commentary hard all million to $X year-ago. morning reasonable revenue same new necessary but declined and you. to your million with profitably of business is the revenues our $X.X purpose we XX% The with to grew take the the quarter our of short to acquisitions of that do from series written complicated so In income XXXX billion. $XXX best we my share the grew our to to to thank call. company half to this $XX.X the base might throughout and answer mean and The premiums and these worked first to as steps negative results Good income doing? to grew be, is my grow to why your you X.X% Markel answer $X.X doing XX% to provide they first economic abilities ratio question answer, of at are provide to in our of commentary $XXX well. from Operating competed, for questions. well and The what our XX the joined million. Markel We from your $XXX have adopted, a Net to headlines calls from about months financial but CFO; time, $XXX increased At by XX% our billion is made million to and how existing a you It's operations. of some and welcome XX of numbers, Denise. pleasure billion declined $X.X a a first our the year-ago. deploy is revenues Waleski, confidence the of and To I'm capital In Whitt, colleagues that Richie

necessarily capabilities. minutes our Insurance Richie also but from difficult million. income in in Insurance circumstances to our to range And $XXX results grew we'll continue portfolio our where pleased losses of you income or investment few stable from that We with securities. component year-over-year in the say often suffice our equity and to income of likely dividend on ongoing become are from with again and of comparisons and It part of not and the to increase consistent returns. economic equation X.X% related most $XXX It fixed our year. quarter the update portfolio environment. conditions interest and keeping operations some quite an operations will a is arbitrary is be of and Insurance investment continue given we our and net By the in million and industry investment these in any or represents This underlying our challenging volatile investment contract reality.

For compared XXXX. example of $XX.X investment in million losses million gains XXXX we're of in reporting net to $XX.X

statement unrealized new the balance just the XXXX in and or through accounting the under Additionally, now gain for sheet. treatments income place flow rather losses, industry than

new accounting income compared year-ago. longer unrealized investments account time of of our million placed positive more earned difference of a and to in the is appropriate $XXX unrealized six this gain returns. a meaningful makes period, net While loss XXXX $XXXmillion no first our economic months Over

We don't to about the be We going when are the much are continue don't when will worry positive. reported confident celebrate period and we excessively charted case. volatility. We short-term things the unusually numbers that down too short-term out are

million with results It's Ventures also that to be growth charges this charges of proportionally on our them overall we quarter. you would and charges even Richie Insurance increased operations discuss revenue totally our took deal to have with during in expectation should Costa. comments going million $XX Markel EBITDA our my from non-recurrent $XX deal The then to we our of from EBITDA Ventures driver million. basis comes actions the million $XXX within of but to operations without unexpected ownership and I'll over and Anne mark increased will from revenues report. XX% and Farms, going At declined forward. with of the the grew We Costa would grew the challenges on revenues more return about operations. our an I'll one array Investment those primary the issues. $XX operations is $XXX with to forward. considering Frankly, turn Absent on numbers Ventures faced to in point, not Markel of the the provide our details Ventures more call Anne? million. Our XX% impact to posted

Anne Waleski

our everyone. first morning of report good was the half to and performance Tom happy strong. XXXX for I'm you, Thank

Our from XXXX. made acquisitions growth results attributable our operations in to substantial have profitable Markel underwriting contribution made during Ventures largely to XXXX

Investment Our our rising and unfavorable due interest maturity fixed slight rates. returns to portfolio market movements were

However, first The a in Total increase offset focus XX% was our billion of net we for continue was to strategy. primarily a attributable earned XX% increase increase XXXX. and with our months approximately a investment investment and compared to other in increase $X.X six revenues losses operating by revenues Markel The long-term from gross year. billion Ventures. of $X revenues from our premiums to surety acquired investment earned maintain in attributable in in billion the XXXX volume grew partially XXXX in we our premiums premium net to to business, which gains underwriting written November which of XXXX, contribution for of first last to was and last in half in compared new acquired premium XXXX, the X%. an were protection Starting collateral of with year. premiums increase May results, the we XX% gross The business our $X.X increase

in segment saw driven organic XXXX. written Insurance retention and premiums was classic Retention our $X.X volume car for the increased our business our Insurance XX% earnings property our premiums first growth also in XXXX due within segment within Reinsurance the increased Earned decrease XX% to segment This half most lines within across decreased in the higher segment. by on premiums product Insurance in lower billion We lines XX% written to on related segment. our from XXXX to of Reinsurance and XXXX. to of premiums higher gross

was year. compared Our of months to XX% ratio for last XXXX combined consolidated XX% the first six

loss combined sum reserves consolidated segment XXXX adverse the previously, million decrease UK X injury is the ratio mentioned from Ogden our I've lump in Rate, which bodily or on Reinsurance cases. of points As prior included calculate awards on resulting to year the $XX used in development

Costa $XX the EBITDA our related one and decrease expenses to primarily Farms were the and attributable of million let's in Ventures an at of and Markel results an talk income related Revenues assets attributable products operating Ventures of in was expenses to six The increased services for from to our the increased compared are last a to at $XX million was associated products year-ago. segment. the investigation compared and of last to Ventures businesses the EBITDA third of first Now, as $XXX million XXXX operating Operating charge income first million intangible unit. quarter the from well about revenues $XXX half year. half first to both for to Farms to reporting the to primarily months XXXX the XXXX. million in The manufacturer businesses. EBITDA contribution due XXXX by of to Costa partially of million revenues both impairment $XX higher $XX and was These income with this compared for Markel Markel XXXX acquisition as year. remediation offset

million Net XXXX. XXXX investment increased of investment equity pre-tax the losses of decline in include increase included our rates losses in this half dividend fair from to increased due $X half results. the and Net in attributable of income Now million equity $XX million period year. $XXX net compared were million short-term of at the interest and look $XXX taking income by holding short-term compared $XX due for first a investment same XXXX the gains XXXX to was losses dividend our for for of to higher primarily net investment driven to income first income higher the to XXXX. million investment value Investment The of rates to portfolio.

comprehensive decreased of January half net the than we of in portfolio. other million all gains changes value in X, maturity value decrease included $XXX income. reflecting fair As portfolio during fixed the a quarter last fair our discussed unrealized the XXXX, Net investment income first XXXX, in of rather are effective equity

gains for in to tax compared in ago. year long-term total to rate is was year, at Taking the XXXX our our the of investment XX% Given look variability losses results a a XX% timing focus, be our expected. and effective

$XXX our the management's elect impact to I beginning two to the XX% to decision mentioned of effective last or tax of rate. UK added in As quarter, as subsidiaries XXXX U.S. taxpayers million treat

items was estimated as infrequent quarter annual rate, the in reform rate XX% are was in XX% XX% annual XXXX. the effective decrease from XXXX in in estimated corporate as the certain tax of XXXX. this impact result tax as compared The to fourth that unusual effective Our or a nature, enacted in the attributable tax XX% which legislation to excludes well in rate U.S. tax of the decrease to other primarily

for net half shareholders $XX Comprehensive of $XXX XXXX, to income to million first in $XXX a per the period. was by of for end which of for maturities of fair XXXX. decline end reported the $XXX largely ago. to end June the the a by driven the ago. XXXX, period income value at The compared year comprehensive million the at the compared fixed of shareholders $XXX to period of comprehensive net million a value was have for was Book $XXX million shareholders the XXXX year to the was share of offset to since We loss loss loss compared

think I call flattish. we can that

for to cash largely higher payments cash a flows claims Net Finally, the XXXX $XXX higher from flows activities payments included flows profit of in few I'll first provided cash same compared compared comments for same of collections, sharing driven higher sheet. million Markel also losses. by catastrophe XXXX of cash the period and the the half operating for employee make XXXX. for XXXX, our Operating to balance XXXX on million the period $XXX XXXX. Ventures reflected was premium by lower

XX, to estimated end assets decrease at June The the $X.X paid billion at we've is of With to more and at about increase the due $X.X note. that, of the and catastrophes. XXXX Richie our results. assets Invested June XXXX turn payments the over total our it of billion company contributions associated of and senior an XXXX. subsidiary in invested our year in on with were As primarily holding underwriting capital unsecured XXXX, XX, I'll to interest XX% talk losses our loans

Richard Whitt

on provide my updates and Thanks, a Markel State Anne, also everyone. comments I'll focus operations brief Today, on and underwriting morning, CATCo. good and National

segment. Insurance first I'll So, the with start

on million newly from the of reminder, in line, reported Insurance on previously acquisitions reasons from written for XX% was for our of operating the and of a ratio ratio the prior the in The ratio. the for into and the this year-to-date combined year-ago. of quarter two as million quarter in increase premiums new up basis, periods in of million one-point National offset separate combined loss same acquired was ratio, were the organic Services Earned higher in Markel premiums year-to-date quarter for similar lower but ratio, first segment XXXX, in loss traditional and professional XX% premium are combined The quarter Premium second two and due combined, The combined we from Insurance Insurance Insurance segment. year, $XX prior second period segments the the the combined versus newly last acquired for The growth both results premium a ratios the them. expense due the excluding on driven XX% our premium have year-to-date up XX% segment in $XXX year-to-date a to large higher in ratio a premiums, an a Those decrease single Surety for product the was personal current product property attritional lower releases to written or a loss impact lower the on growth ratio or with compare compared On the for starting which by you a quarter million a $XXX the State International G&A same from XX% and one-point basis, year been period Insurance the XXXX. Gross gross the have of and of by As businesses. collateral losses results ratio benefit businesses of on quarter consolidated those. are the the All liability, associated segment impact and a can The increases. expense was XX% earned $XXX XX%. Surety The ratio compared of lines the writings the up to have U.S. so basis. was segment impact XXXX the general Lender XX% protection on a the in reserve for driven loss the the and the was lines basis, increase expenses higher driven by by lines. quarter year's liability, premiums earned accident year. acquired added lines reduce year-to-date the to for businesses.

by second to down segment. year-to-date in driven I'll and of written renewals written share non-renewals timing product the Reinsurance to our a Next and property the the lower The quota for that talk in of not quarter due were decrease $XX quarter primarily in XXXX. contracts XXXX of was the down a multi-year first the quarter and the million XX% writings renewed compared on basis, property million to premiums in $XX two or into the Gross about along year-to-date the The basis primarily decrease was due lines premium by contracts premiums treaty specialty the large of that book. decrease driven gross not written or were lines XX%. liability with quarter entered renewed. in were property premium a gross On in volumes general was

and targets. non-renewed marginal we year, the of improved not probability property half or meet had sufficiently business did to first our the terms During where rates

loss was the for gross and XX% in to in Reinsurance in significant expected the a are compared ratio less period on the for prior loss XXXX year-to-date loss the the premium Contributing that X Energy increase the for a on written the combined segment, quarter quarter more for to in due ratio favorable on for The for mentioned prior to up be year's development and maturity same points development contracts. quarters, of offset second previous XXXX, The in of increase year-ago. year ratio and segment to ratio in earning flat and Marine multi-year less period year. adverse the a on X% and the $X growth combined your Partially versus product the ratio. due segment ratio ratio prior events in and year-to-date ago. XX% year's prior expense point development contracts from combined a same was loss reserves by this of year's favorable by was the reserves decrease renewals XXXX was was development on line combined the current to product XX% the favorable loss XX account accident volume individually The year's premium gross As lower lines. timing Reinsurance the for favorable premiums reserves. on The large cat million. Earned can to due development Reinsurance from in driven the a basis XXX% more whole segment deals volatility

segment the the previously Anne many Ogden Rate. adverse million to points XXXX the ratio $XX decrease As or segment the of for discussed included first of on in development combined the times related quarter results XX Reinsurance

as XXXX events cat The adjustments higher premium due was current due the first premium in the of Excluding favorable compared to in development less year the compared accident compared On unfavorable the to adverse Reinsurance last expense reinsurance year. driven development XXXX was as The development experience XXXX ratio Insurance decrease property The million. profit ratio year for to due XXXX. and reserves had related property loss to impact earned to adjustments a the six and cat to by development year. increased a segment for in the XXXX result favorable basis $X segment months to favorable was in this million XXXX total sharing decrease year-to-date to lines XXXX in our by previous XXXX Ogden, in net premium in adverse lower approximately compared expenses the net premium events. the $XX in

next, our So acquisition. State comments about a make National few I'll

of also period. included business to XXXX insurance platform protection billion in as which As first $XXX business licenses, the the to results. gross The other separately premium and business. services and premium non-risk-bearing program the collateral revenue also our written Markel coverage, to products, profit. insurance The business refer our the million during a two program The is gross added State contributed Insurance and months. premiums We segment our fee. insurance business and million for written the line services National operating $XX to million is the collateral very solid underwriting $XX half and million in a and paper provides gross $X result our was six quarter reported reminder for reported this produced This for of in in year-to-date segment, fronting results. quarter are operations. It of rated business which Insurance This basis a primary National $XX is $XX in on quarter a the from revenues services a comprised contributed protection fee commission within results. during million in year-to-date ceding from funded written with first pleased We're the operating State underwriting the

will that CATCo, management Markel to billion from from to settle increased of XXXX. held XX, including Moving billion at $X.X end to assets used claims be the $X.X under June incurred funds up losses at XXXX,

increased primarily a late events. development funds, result in expense, Hurricane XXXX due investment million estimates. funds $XX XXXX, in the asset We net loss to the As of the related in to approximately Irma values losses claim Caribbean of significant increases Markel's development basis of the The of reporting as recognized investment due $XX and CATCo decrease June, to loss million. on cat was was in adverse a million on $XXX Markel adverse quarter adjustment and year-to-date the

underwriting property commentary. market are property are in many from modest some to our of despite due losses is insurance of end lines have not slow events price having half business. digit in today much in to we achieving rate more lines to rate pain through the beginning The new franchise cat The companies first can market, continued business. see insurers out I that you increases underwriting are noted of would last market is the highest the underperforming quarter. or of of XXXX going increasing. earnings to thing momentum competitive, year. about Lloyd's misses, from there had also but I'll pick be Honestly remediate misses increases report headlines Interesting whether the pain increases remains of underwriting up lines in business with inexplicably however it Finally, many personally tried of

appropriately. act ensure I pressure coming hard are business one-year again, also While its about adding and the today of underwriting Every impacted proved or gets your are underwriters stressing pain towards the real the the leading to the news replacement I that of together for to buy and inflation. ago has Markel, discipline. wage it here. in time over pain lines over be and Thanks when where fantasy versus stuff increases insurance will our stuff are commodity the to price At Tom. price all I real people and necessity collectively rising building to cost are underwriting to severe the entering and government new claims increases economy tort see of Unfortunately to one Markel, Full insurers it economy. and at inflation, buy. costs day are not erosion things the now seems clear working all underwriting There teams. and we define of seemed is the that cost signs exclude will inflation get tariffs in gradual we economy we over been before to the industry risk leading absolute reports required leading and that employment reform is turn are we the on you

Thomas Gayner

up down first as at happily a the during long-term XX% XX% portfolio, same we normal the to to last those a results June short-term such we results XX% XX first Publicly day compared invest that with in X.X modest a next year XXX% are and and our years, year. reflected Investment we the equity half stood much X.X% time single end. X.X continue year cumulatively. Richie. outstanding during shareholders' Of you, at X.X% for equity volatility. up Over a of as for traded I the as that a equity frame, results. produces we've would as pattern up In half. that Thank been each out of discipline years much it find were

we our to think prices. attractive steadily equity is are recent and what That doing. the X.X% down In five the wonderful up We to last during modestly long-term continue X.X in the add our was portfolio first X.X% at flat. the purchase chance us best those were we we cumulatively. exactly up half. volatility and we operation, and years, allows businesses fixed the income was The are worst In XX.X% to year

I an think roughly of to this the longer-term over equities. comparison reflect underlying highlights liabilities actions of the now of am since forward we why half, ago, $XX million million, that our Ventures. to that This year profitability we allocate going interest costs I and and we also during while gains the buying increase to from and rates total portfolio that more fixed $XXX income up EBITDA securities securities. years matching credit the income equity and right totaled investment declined is Markel increased go sign million our with the duration of and so increases quality these stems with and unrealized the would portion that insurance much versus from our net interest optimistic highly way. highest losses, high can X.X a an size our of XX% million. million the of compared I'll versus much and of frictional will to $XXX for roughly also to X%. return types the they expect than dividends increasing first of point scale revenues enjoy volatile progress of line the less results increase Ventures, quality income I'm this XX% Markel This pleased and I bonds out dividends $XXX a at along minimizing $XXX reported from along rising find come. an our In million the to next recurring $XX higher portion investment we

market Group highly availability volatility, sources, transportation price make should numerous EBITDA continues Markel. such conditions, and competitive returns and face from those time our to All Despite pressures, market good and progress revenues. of as price to businesses total other steel labor factors. correlate bottlenecks produce economic challenges the Over packing and

our of at Markel common sense competitive behavior and unique all focus our results is the on One long-term in aspects. long-term advantages

If Markel normalized outcome. number take number earnings. figure for a in I earnings look EBITDA to coming out Ventures, percentage that Group's period a you economic would revenue to are normalized normalized and get power and sort trying very to reporting I the normal of forward number results a on demonstrating

asset During formation the of cottages Transport with successful of of Group Rosemont Ventures. of the we the years will this announced we Markel quarter, in be also part just In XX as a business, Rosemont. Investment of in best firms. doing history management running ownership investing

announcement. then up are you the if we've open we We this are I'd light exciting to seen like would indeed hope some I we open given opportunities and for multiple the Markel doing Ventures announce sense floor for you this that, edition why of in for well confident questions. to With your Markel is questions. are Denise, to already and we're optimistic about

Operator

And [Operator SunTrust. Instructions] morning question sir. your come from Mark go will Please Thank Hughes of this you, first ahead.

Mark Hughes

morning. Thank you. Good

Richard Whitt

Good morning.

Mark Hughes

Markel underlying in versus How first Ventures The was I that the you million other much seasonality revenue, the of in the $XXX up $XXX of growth? think terms step quarter were sequentially revenue at of in million.

Richard Whitt

mix which it's both several refer times. we to of Yes, a and cost

biggest quarter be of Second will one year. the of seasons the

quarter be will quarter first quite are the not lowest. and fourth in that Third

involved. a is factor seasonality there So

Mark Hughes

there about Professional updates think mention you Liability? organic - seeing the in you're or talk liabilities at Insurance a and growth and the mentioned Medical up Can you're maybe look on segment, there? in price You that general rate you'd I stand professional any liability particular as

Richard Whitt

And what provides I say would sort we'd growth of of seeing market love the into areas, we're we're economy, pricing. at to growth with more Clearly, see the moment. but the not increases in those that's price. the most I single-digit seeing in low of think the

result, going going of we're seeing There's as out economy we're think a to a a there's lot construction on. good there. I businesses. - more And

one of going to terms to would the up. that gain say lines still medical, struggling start that price direction I In of

most I But for hasn't yet. have the for think resulted reason, recent people in in been pricing whatever for medical responded part the poor years.

So that would Medical be see waiting increases. some where one the still one. to I is were the said probably increases. most of we're seeing lines single-digit areas of sort

Mark Hughes

finally, Have relevant then seen doing markets? in changes mentioning I Lloyd's a they review. that think And your behavioral are comprehensive any you you

Richard Whitt

or in was particularly teens and I sort of it news the the everybody the months, market. year-ago as their I last hurting so. business several of out, pointed drive work sort think that to since Lloyd's lines the reporting like mean seems adding business I on of on of were the announced lines adding

of I think You're in. starting set seeing people teams move business and leaving reality out to is of lines or so

Mark Hughes

you. Thank

Operator

Thank will from Jeff The be next you. ahead. Blair. William Please Schmitt go of question

Jeff Schmitt

good Question Hi, the was Farms everyone. property the on after - were of mean did inventory or the no I the any grown how sort year? morning have business loss on impact? and or doing Costa is about had that last by quarter just that effect

Richard Whitt

fact that stood question that that Yes, the at Mark bit a before is little in indeed. addition to asked the more seasonality by magnified and

amount. are hurricane We certain recovering to the still from a

with just are. growing So they cycles what

of couple think weeks. I Sometimes

Sometimes of to months. entire It while takes pipeline. take refill the a a couple

that and affiliation I that will the very start gateway it. the results thing at have cost year happy as shareholder we is business. family. I the remember a current a latter over that well they distortion of It results in main the be as look Markel and delighted possibly family be annualized to think the we we State and market both So A could lot the nature would the as if long-term would say when have or are and be - doing a as we're part you years But focus at business of

Jeff Schmitt

Okay. did higher you the talk And think missed first and I case? farms? quarters this about be that heard is go to then a cost with when the may I say minute not but lower? fourth were from fourth seasonality the would of Did Christmas you would

Thomas Gayner

the of say tend and others I'd speak is the see price from it and their to there's to and third the so something that to so parts quarter would Well, much highest buy there's be of Correct a versus second different year. to get promotion business. by but that it retailers buy you like won points plan that the cost but some a to how point it it

Jeff Schmitt

the Okay. there more can be is on anything to mean charge - in that to Is you for charges? I the investigation say there goodwill there potential impairment? more for

Thomas Gayner

uncertainty in at Well, history life very conservative a recognize think philosophy to candidate in incident we up responsible. we same after and what know and involved have - things doing our what the the and best quickly the was expenses deal process we'd is way are our and there we reserve and insurance you what best total of with that's estimate and know

Jeff Schmitt

mentioned that then pressure one you that some toward And quantify are anyway? from you'd last that on Okay. losses activity? saying you in anecdotally can Is or

Thomas Gayner

the Florida, markets California of cost, back up effort was in but change. but there and mean toward of States And like you to to Texas, areas know quantify, there's reform what things see bar I it erosion then at that loss I happens it's a quantify in few and for cycles has think since lot years start to continue been ever a you show kind and in in just chipping at planted of that. away sort you, reform and Hard world been and significant those as in the work

Jeff Schmitt

they there most in particular any seeing Are lines are the that aggressiveness?

Thomas Gayner

about been this has areas in on Probably the calls one lot and years last probably the a - auto. of talked

in like that trucking, more looks like really whole. to then sort. judgments punish some really Commercial it things particular particularly verdicts the You're of auto people to eye make claims, auto are in of seeing where watering

Jeff Schmitt

Thank Okay. you.

Operator

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

Robert Farnam

Yes. operations. Hi, morning. have good ratio expense the question insurance I in on a the

is and So consolidated the I over put come the expect quarter, is that XXs last ratio five on where XXs. trending in expense or going just surety upward XX% time? some the the business high down? over to curious that I'm protection understand by that, we gradually years from second to pressure do Can expense going the collateral ratio you the down low so see but to

Thomas Gayner

trend direction our we've mix. those. protections, business but reducing Bob. is mean our in sorry, mix down, surety cloud just lender a kind in cost job of and guys the probably gone of welcome other point to and terms of of in. - and of nice absolutely a G&A That this, in take business, continue that adds terms underlying sort we've of everything, done I By you jump are to services for to I'll goal Bob, adding that the

underwriting businesses ratio the to So be those as ratio sort sufficient the we and long headline of profits, pushed of up component, a loss as indifferent generates will gets the result expense but components businesses. as number as adding

volatility. The second our to I other bit a to and that throughout you add thing well. little is bonus that of year quarter tend bounce tends And the see accruals think some around the in as happen

just still up to underlying now. the ratio, right reduction with believe as trend the didn't So expense is it show well no the we rates

Robert Farnam

say, versus basis Right. looking another at Actually probably loss more question expenses for it's ratio ratio ratio. And you than as you. important combined

So the there business, national services written to in the state to quarter. the any is substantial program Is quarter first relative premium growth book? second that seasonality gross there in

Thomas Gayner

our No and there's they big be rather be when no seasonality, we funding can talk they transactions on, National big can those segment. the like programs, much reinsurance State in come about In quickly. there the numbers programs, move but

how those of when it's come online I more and programs big think So new are. factor programs a

on that of there's are So a in lines the business. to little going more some be of volatility than that probably

Robert Farnam

going more So we use of forward? look a trend first Is that… and months should at the six that maybe

Thomas Gayner

mean trend lender from in we're the underlying be certainly business. bumpy but experiencing is the growth growth. services It Yes. quarter-to-quarter, I can

Robert Farnam

to is like I the received there India. for business opportunity mind? it last your license Okay. in And in your the market much in question me reinsure you What's India. the looks don't about know

Thomas Gayner

way. way several a expect invest countries works and a in been think close of company of in rapidly market to small in very change few I one changing writings in the calls. We with to growing the and about small It's point we're learn the most the hopefully or growing on over willing outside gradually grows. middle world I get next opportunity a years to huge That's GDP. has been wouldn't country. class there. where the - be talking populated to the rapidly in culture Well a to is in the country last companies the that the the want grow to economy insurance We want about the business India as and how

Robert Farnam

And writers likely… reinsuring is likely domestic that

Thomas Gayner

done Which Correct. we've from we've London. done historically, or we've from just Singapore it done it

have people the So are us know now. to the relationships culture taken we've step they have hoping there and the and on the that's feet ground,

Robert Farnam

Very Thanks good. Okay. for that.

Operator

RBC be Please will next ahead. question Dwelle Mark The of go from Markets. Capital

Mark Dwelle

A Hi, my questions result you whatnot? seeing And occur your been or Markel anticipation for those but of couple of Are Should Tom. along? use lack better Ventures, cost of as any tariffs to already cost Within any a good a for of and lot morning. pressures it steel, businesses a to lot description. pass pressures yet? that cost covered, ability a of customers

Thomas Gayner

In not it's and just a word, availability. cost. yes It's

steel a was is than on the your business a today getting of So hands challenge more run to year-ago. it just

but item works hard out that's up figures yes, Now everybody that days. and these

Mark Dwelle

Okay.

comments Secondly, item the you the clear some It were charge that to in was that impairment from litigation? whether just that the in guys Was issue wasn't I that as already subject placement contingency quarter mean something or the a you've and it litigation investigating? goodwill or that about section, there. made item appeared

Thomas Gayner

did an practice. we like contingencies what internal to That's business we and standard a have put in

Mark Dwelle

to didn't this guess you that bit thinking quarter any have quarter. struggling down seem higher this exactly? again about the that be I guidance still little that and way to if to That's relates And question I'm little tax tax kind rate I or a around than help I get the more the - had, try fine, thanks. rate, it of us to last a know to my of kind pin first of bit arms

Anne Waleski

I mean higher slightly the it I XX%. think first versus than quarter, was No, XX%

in guess. something think high-teens probably I low XXs, mean fair I is So a

the made movement talked we've we it would it around enough the is is whether As think rate XX-ish for tax to a equity move earlier your or probably But though effect purposes. that going of tax annual tax some. portfolio in about selection estimate fair rate I that that UK that is

Mark Dwelle

Right, kind okay. well. of That's as what I thought

ones already I questions my are those had the to of have. think all most Thanks. and I guys be the other covered

Anne Waleski

Thank you.

Operator

a ahead. will go SunTrust. Mark question follow-up next Please the And of from be Hughes

Mark Hughes

a just Tom, had general I question.

GDP and how the inflation the Your on of portfolio? on is seen economy, the of this view kind about equity are way, strength there thinking lately of sustainability the the if we've you

Thomas Gayner

take two different that is I'll strength and parts Yes, to estimate and there sustainability.

I In mean terms it's of blooming out strength, times there.

crystal as as running as add a I mine. long good as long, that. trying hot are is look Was So to That measures remember ball really whenever have don't The somebody markets, any guess to to those in want don't trying conditions there a could construction to your anything I time. get about want count a hire stuff know. at? at you cranes look Sustainability, looking and to on hold. labor that you of we one

of to. kind side that about the pretty and and We've communicating on pricing we're the referred real make can. sort the proportion we're both to now the organization in we've high pricing of trying and to itself portfolio stuff sure of terms the keep a we to securities. had a cognitive about to very and also talked regular always the In This we informed I he been throughout as equity business of seeing always do thinking on activity basis power in of Richie is as what invest risk best one and insurance that another

they those circumstances to - are are dynamic that move and businesses find We and whatever change live adapt even we and themselves.

bond question your protecting so is of reasonable way prudent allocation in are be than Markel a to better by definition. answer inflation and the and a way to increase And would part equities those in protected because the a to

Mark Hughes

for Thanks that.

Thomas Gayner

You bet.

Operator

and to ladies conference remarks. closing over this I conclude question-and-answer his like back turn And would our session. Tom the for Gayner will gentlemen, to

Thomas Gayner

quarter. you to next very We'll talk Thank you much.

Operator

presentation. attending conference the concluded. gentlemen, Thank and has you Ladies sir. you, Thank for today's

You disconnect your lines. may now

Markel (MKL) 1 Aug 182018 Q2 Earnings call transcript