MKL - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to the Markel Corporation Second Quarter 2021 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 statement in Statement included could is non-GAAP and cause most actual and XX-K

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

Tom Gayner

the morning you. morning Co-CEO, Noble. Quarter this joined CFO our to and XXXX thank I'm Jeremy Markel Good by Whitt; Corporation and Call. Second Welcome Richie my Earnings

that's That goal now Markel I'm been quarters provide offer you some about things business. on some how today's report. any to pleased at I've you quarter going to for means have XX.X number are than better. at one always to others those is of here years. better its quarters Our insights are questions Frankly, Markel XXX. your with and is and this especially as answer

And and half even the collection and are We've outcomes lined there. our is growing of great thrust is Ventures People As the an their well are provided Markel solid businesses all time. unique of got underwriting the time. of share results as these periods report long Markel hard a at strong work. first investment time. results flow the three insurance to engines operations underlying profits excellent performed excellent, we've such, producing same should this sorts of and in with red and produce working you. protects it's that as These none that well financial earned that same wonderful results financial the got fun can at directly of that of over the But of financial The produced better Markel business, underpinning got values, reflect that get growing. Markel hard headline they're be and to to the We've from The able people and and news XXXX. in outcomes, operation by the held of Markel. an the financial engines

we organization, business. As to customers, our an provide are with capital us this and dedicated to shareholders, who our the serving associates fellow our operate

national build card Our championship, we're in along report all share individual the over justify win, structure we a have subjects. to a time of We the win begin to win, in of you world's year, long-term or work and one not gain. good the do are to delighted describe do. the order continue to some as truly But and trying quarter, is that you with X/X way. what win, games to winning One do companies half we is win first the the great to to know marks

along are results not continue to half few first us know long-term a should the way, will the that lose We and quarter the we and relegated. This get games have just a but games. few

than appreciate imagine, produce done will results continue so. and financial on our the first to over to you likelihood ventures taken excited excellent At few your will More to I'll questions. then to review and going a thoughtful for back the Jeremy, managers this comments can turn time. call as importantly, I'm the we're as then with look operations the half. Thank insurance about come our you more discuss our that the investment confidence and over results support we've to from and that who Richie point, actions We and your we've improve we ongoing prospects forward will engines.

questions. Following will the we that, open floor Jeremy? for

Jeremy Noble

Thank you, morning good Tom and everyone.

As Tom halfway Ventures Investments, meaningfully referenced, pleased very as the are performance value. build outstanding year and to we each are shareholder engines our to our across three contributed efforts Insurance, with each of our through and the operating operations

the XXXX an XX%. for at of billion gross compared premiums $X.X Looking $X.X results, our of increase to were in underwriting written first XXXX, billion half

XX% across Reinsurance well liability Our our by segments. within point driven increased and the primarily half same up our our trends product written favorable and of to first half in liability Retention liability one billion both was Earned from in as the within lines as period primarily is Insurance higher professional segment. lines, volume premium our Reinsurance new same last lines. pricing business the most premium product XXXX gross changes liability due and increased in general written last for of year of general business XXXX, period first XX% $X.X reflects versus of of premiums ongoing mix premiums growth volume prominently professional most year, both strong the within the in our to which product

to on of $XX of from This losses the losses was Our which million first XX% points same Uri. included the XXX% consolidated ratio XXXX included a Storm for or period Winter combined compares COVID-XX. for a two year, XX last combined of ratio points which half

XXXX XX% loss XX% Winter the ratio partially of of period in a lower compared of reserve half and four-point releases. year improvement was impacts million years, attritional half in reserves our $XXX prior which loss COVID-XX by a compared in the the of improvement developed reserve $XXX Storm point XXXX. offset loss improvement With to our from half year in both development, our expense and to Excluding were year Uri consolidated ratio, one in prior This loss reflects regards benefit the a same a for million XXXX. of combined the favorably ratio XXXX and first half for loss to by an prior first first

investment of value results, first gains fair portfolio, a in XXXX. driven the portfolio million onset significant our were first included unfavorable resulting a half of half in $X.X of the recovery reflected our the of first net value value investment followed movements, to Turning fair movements. of losses by quarter second XXXX of in from attributable value driven of the partial the by by impact favorable and in in compares in of This XXXX, income market of net $XXX increase of primarily which the declines XXXX, billion net pandemic equity equity the an market the to our the to the quarter investment

of low timing in the in continues resulting in our half mentioned we impacted of by expected. XXXX of from long-term gains year. compared taxes is currently Net $XXX I the gains focus in Investment to be period of increase an rate to to decline and by in interest of value face. last fixed first reflecting investment fair income, decreased investment unrealized variability $XXX be a the our given during end regards maturity the of As half XXXX, the the and first environment portfolio, since the interest the the $XXX rates overall million same net With reported to million million net losses prior calls, income we investment year.

April of Revenues Ventures contribution for a our to compared of of reflects billion $X.X Now, The I'll a the XXXX. revenues from increase Lansing in Products acquired comparable period half for Ventures segment. which Markel to significant cover more first results Building the XXXX for $X.X increased Markel ago. the billion year from was

Additionally, in these as equipment due part economic result pandemic and significant reflecting businesses and consumer our in for XXXX consumer more at increased our The a social caused spending. manufacturing demand Lansing. of and operating in to and within the same volumes sales was a further Ventures of building products from last half sales in across as lower volumes the attributed period well building and disruption to is first businesses, most revenues Markel $XXX as of for to compared by transportation-related businesses, EBITDA the increases from increased million businesses, contribution year-over-year $XXX products million XXXX the year. businesses consumer increase increases

comprehensive to results consolidated at XX% loss $XXX shareholders our net income $X.X both to XXXX. in to half billion loss tax for was XXXX a We year of was And shareholders common billion first a and year, a of of $XXX year last shareholders this ago. $X.X the for rate shareholders first reported our million to effective compared the the at Looking of net to year compared this half first of in million income for to half year. comprehensive the common

of the up proceeds by senior retire in of $XX of operating equity the corporate next company half first to of XXXX compared was X%, our $XXX of the $X.X comments year. million and available this May XX-year the at assets for few Finally, notes, million our $XX.X the impact year. reflected year. at billion to Insurance for sheet. capital, Operating end were $XXX $XXX X.XX%, first million at mature at July flows balance year June general with billion the in period Net be to provided the reflects million of of cash the that on higher billion will compared half volume to shareholders' I'll flows, the remainder of Invested a $X.X of June cash last The a same unsecured premium issuance of notes the at $XXX increase with of end being purposes. compared coupon the used which for make holding segment. our XXth, end Total at cash billion stood activities the

shares first of we Overall, months. repurchase half stock, of great first the set our XXXX six each of our XX,XXX repurchased engines through share program. in During numbers the outstanding of under a common our

that, we turned attention our the insurance of our focus against I'll year, the Richie to about on However, more business back to has With executing businesses. it as our talk half plans. over already turn to

Richie Whitt

increases, unusually price me. Excuse had remainder everyone. capture right we throughout set achieve second position double-digit and our achieved or high to year, being for time, in targets the for and XX%, in runway quarter increases and the operations. the due growth At in combined goals to of good and across cat in significant XXXX. we've strong Reinsurance. We've realized importantly, target. our halfway rate months of our possibly our At both growth ourselves first After XXXX same quarter, year. the slightly an to Jeremy Thanks the with premium point Reinsurance six put morning see we Most bring excellent the this line behind the Insurance exceed we a activity, ratio Insurance we to continued an to

platforms, insurance new at Nephila, State our We continue the and National investment at raise of potential find opportunities of to offerings growth capital at the across all completion Lodgepine. expanded program offerings initial long-awaited

While of rest and in and about continues we pandemic we the beyond. realize throw of that curve stand extremely balls, the go XXXX we year there's us way a long to today like and all where optimistic this to are

Insurance I'll and Services our operations, underwriting Now State securities discuss our which insurance-linked Program operations, operations operations. National include

to gross months. and premiums quarter quarter the six kicking were strong both growth our vast continued Earned Insurance for So for XX% periods segment, professional XX% continued majority preferred and over notably product were rate writings lines. the both XX% The insurance business the with in multiple increases lines, liability in due was written general growth premium in months, new several to up of driven most the off the along product premium be under growth total periods six $X.X in our the across liability up by year-to-date across with the continues our in from and with billion just periods premiums in Premium growth prior offerings. segment product for impact quarters.

last rates. benefits ratio compared months higher the decrease The quarters, we exception current of liability in current achieving premium year XXX% And within ratio segment four-point of to year. favorable quarter part for first combined continue product lower segment for the versus COVID-XX, lines, combined Insurance was or losses look $XX capitalize in losses in property attritional due from environments the first year the the again to due quarter six The conditions. Storm two combined lines, or the rate in for to XX% from of and prior see within market underwriting of workers' year professional last which our points in year. XX% includes ratios prior Insurance of the to of underwriting ratio with includes $XXX to ratio discussed from XX to Uri XXXX. for an The compensation. second on points million As ratio XX% recorded the Winter general were the liability the primarily most quarter while million the was continue The combined was loss combined

property Excluding lower attritional catastrophes combined the liability decreased the professional Higher impact on expense from a our points, driven premiums from in general COVID-XX year-over-year an on ratio segment earned quarter impact by ratio. loss our product and our the and -- liability, year's driven Insurance impact lines. and both primary by favorable prior loss losses ratio our four a within year-to-date unfavorable for primarily had ratio and

our if results. try there's in unpack a turning segment, Next I focus they're Reinsurance year-to-date our best on understood to to think And lot results. we to

transitioned underwriting Reinsurance our we begin reminder quarter Reinsurance Nephila ILS Let in operations with by managed -- year this to operations. first a starting that line property our me be the our of

from lower to of were on will experienced reinsurance expense in X Uri prior the attritional and And the of year. COVID-XX casualty or natural premiums cat our of quarter in losses historically XXXX. from Insurance lines. million very our with areas X/X between X These of was no the reduction $XX and opportunities. accident was being in due year $XX our losses reduction and the points losses movement $X XX% the and ratio relates within of transition development And driven quarter first liability COVID offset a premiums exposures. was by XXX% The X-point year-to-date million was due was reserve property lower year to our property in by up throughout increases was transfer a recorded this catastrophe last strong loss to Reinsurance months and the lower finally partially in and remainder just due premiums or Winter ratio XX% basis. Through in higher lines. driven also liability by and X-point accident general accident lines of for prior higher had lower premium see our COVID-XX no year the We years on Markel. Reinsurance Almost accident and of overall we continue growing liability professional loss lines that on compared year-to-date been lines. Gross million prior -- impact and to the change this were the a accident That the offset was our to business Storm ago. growth There reduction are the at have the we're second ratio by the this Again last in events. in higher earned the $XX of interruption events the property ratio new in XXXX on we expenses estimates. from general months the Premium ratio combined XXXX. year partially growth are current written general that six a points lower development business property portfolios to ratio. Insurance rate recoveries. first compensation XXX% The and places we growth year in year's ratio Reinsurance due both a in driven Reinsurance segment prior year's six professional that COVID-XX recoveries was professional current adverse liability underlying a up of earned impacts reallocation ratio premiums double-digit year segment property reinsurance reinsured this There's from by in of first loss to and The current reallocation year, loss loss versus million unfavorable a of expense Premium year's line premiums. year loss reinsurance

from our year you the prior runoff reinsurance losses of accident retro is benefiting portfolio. If of and combined and our exclude development our loss the year-to-date catastrophe portfolio ratio natural property performance attritional

will that and believe core the return meet achieving we we ongoing XX% better. combined casualty professionally or in our our reinsurance XX the For are year underwriting ultimately specialty objectives on lines of pricing underwriting

to going recognize to written to recent in years we than reserves our require is several as earnings execute in we of this more quarters are continue establishing materialize contracts from less that However results our profitable reported and more redundant likely philosophy deficient.

are We hard position for forward. to this working moving profitability book

the as we resulting At Next the was to part new I'll of million State premium programs from the year-to-date $X.X touch and onetime are XX%. ILS for program. Premium on also billion growth expansion of reported growth premium which of million operations. by operations quarter unfavorable impacted volume and and XXXX Premium Program operations additional National of in-force programs. adjustment in and both both in continue periods production of strong to see first year-to-date volume those gross current with was $XX written $XXX of to a of other the quarter cancellation due the existing a Services of related

almost reminder is within premium Services a gross the As operations our written all Program ceded. of

to We see a pipeline for market conditions. strong opportunities the Program continue Services current with

our ILS operations. to Moving

expenses consisted results operations ILS to start-up Lodgepine. Nephila plus and operating the Our of related

our within revenues our operating MGA ILS quarter in Nephila the to increased operations. growth operations due For

from six management XXXX versus from to ILS in in revenues are first at lower operations Nephila due down year months operations. the assets the our six growth offset the partially For of XXXX, MGA part the under months average first of by

XX, billion were Nephila management XXXX. under June Assets as of $X.X in

capital to the XXXX have We in of first the into several XXXX. of half continue to identify new second opportunities and opportunity areas works and for of half deploy the

Lodgepine. regarding comment a make to like we'd Finally,

reinsurance to that our $XX into book approximately Markel of this this of will at Reinsurance move product the in reinsurance ILS July fees portion third retaining results of transition excited our participation from management will as Lodgepine of X year, contributed retro the Starting the of with to we of part very as our our million an year, results a with quarter $XXX operations time investor. investor raise capital all over which within retro were our investor. Markel expectation as as from underwriting ILS from the million that results segment are We operations, a able an

with I'll happy a also get market up talk to finish comments, that about when into obviously Finally, we but questions. few

almost see in we the enter all pricing momentum we quarter, third As continuing lines.

insurance Our have believe as as in economic insurance will a lagged and are and as discussed, We this continue in year XXXX. Reinsurance the momentum multitude of previously the inflation, low such to continue now factors, primary elevated social rest low-double-digits. uncertainty, to rate pricing increases into rates, low-double-digits. which persist we've rates, CPI average also that averaging interest cat are likely recently and the losses throughout COVID-XX of activity, pricing

of COVID-XX. sum of all close and and We of recovery see your in the showing economy up, the the writings. today, in like our excited from into to it the we're benefits I'd we attention we're our premium portfolio, very to we year To businesses continue business the over for position half business, to see. are parts continue time it opportunities a turn it which Thanks we are move Obviously, to Tom. showing up second for and great as with to are is as impact signs all delta variant. the construction our developments to recovers Small of meaningful paying and

Tom Gayner

numbers, I them. belabor the you, and Well, won't gave Jeremy Richie. Thank you

As Larry believe pretty, long-term. over sustainable they're be say, them might pretty I the good. to David And

point takeaways view. here the main from are my Now, of

a shape. sheet with maturities We May. million $XXX is issuing First, at extended rate our great in maturity our by balance XX-year in a X.XX% of debt

so. liquidity to the very $X.X suggest to stands as stands balance roughly liquidity Our we businesses pretty investment that following use at report our our as $X reality, would equity been acquire against that sheet of Ventures we've financial at additional and overall of conservative Despite the in four-part able that describe, portfolio cash a annual and short-term somewhat what and laid the Investment we've markets numbers levels billion. Markel Those to years. opportunities find cost billion to $X.X many we've pricing. billion remains to and of over and triage do got limited, plenty deploy capital, opportunities strength to over deploy high due I out that

growth we've The businesses. premiums internal our fund to it. to business and Ventures opportunities insurance continue and in we solid First, capital requires in write Insurance got growth our

premiums we underwriting become As profits those profits Markel. of the underwriting written enjoy time, allocate across produce available at range XXX-degree opportunities over to allocation capital

Ventures and capital and also produce Markel tend grow Our capital growing are they acquisitions, Absent Ventures same producing results. to the time. at efficient. the Overall, quite excellent businesses are operations

As Martha Stewart thing. would say, that's good a

of existing we're any many opportunities while our during Second, already XXXX, the first we acquisitions see of continue are team. to from and participate half we in already on and not who people unique network did we in the our that make discussions come businesses

a deploy for long-term Our reputation a grow as to see Markel result. home dependable oriented is to partners to grow. unique direct great opportunities and continues businesses continuing capital We're productively people and as and

competitive growing productively The to time. partners our a opportunities dependable that is deploy believe trustworthy our this think It's and future value time. of I being long-term, advantage over factor. X to will formula is over magic this for produce continues capital I compound us.

level the well-priced traded securities. equity to equity to of record Third, publicly continue opportunities. modest investment of find we overall Despite the make and purchases continue attractive we market,

I still it to be more to Fourth, do support your in your they Markel the as and systematically delighted look for of world's and continuing that, invest in questions. come. room making of to the answer the report to stock attractively delighted again categories shared public dedication to we way got to Markel XXXX, they you work we With first against We've and will. of the the as first over that We believe to equities. present forward we over repurchase We're and have three left in half and opportunities have ability we'd and to priced. continue companies. to great goal shares continue have years time regularly at progress one money thank your methodically close, to our To fund the find themselves circumstances Markel,

Operator

session will today We now begin Instructions] question [Operator Blair. the first from with Schmitt Jeff comes Our William question-and-answer

Jeff Schmitt

good morning. Hi,

looking growth for time. and adequacy rate in now. several compounding levels segment, insurance you've years liability, been general have at been I some the But Just seeing are signs there increasing efficient? you your still the you of a any good expanding to seems think there. competition rate do mean opportunity for I your liability, of kind professional levels rates it continue margins rate like presume is or market

Richie Whitt

Hey, been Jeff, adequacy quite very may I in professional that happen things – do sort. in the we inflation, social and we've yes, inflation at good of have think think think with is And rates a been do around I industry for just I and what claims casualty. there rate concern while.

has pressure I think that And rates. kept on so

it also generate fact takes rate today environment. lower a think I just given combined that the the to ratio acceptable returns, interest

there's So at of lot factors think play. I a

I that's professional remarks, we is liability really casualty, where in we when its name we the grow well and performed have mean prepared extremely like to is Markel and like there. decades. business that made mentioned my where and over I As the opportunity always

continue solid. Rates be So to

other them see falling think but plateaued they've is I nice we see. to have I said, which think don't as off, people

those areas both and profitable we years to side. continue the So to for Insurance the comfortable on in have both are those be seemed and going and Markel are we're the most areas to over push forward that Reinsurance most hard

Jeff Schmitt

speak inflation? so Products the contraction just and Building sort you Ventures, maybe with from a company, then costs thinking costs mean you about Okay. of you through those going from that? in inflation, just margin Are much Markel Lansing pass completely? The Can can seeing building is that I up business on –

Tom Gayner

Tom. This Yes. is

have see everything able everywhere press inflation inflation. there's for we've pass sort throughout or as there, we all running can in interesting person to the a seen to in responsible you of commentary. businesses, as that reporting academic increases I and the dimension. It's price tell real every been through governmental Ventures of Markel far So the really

the business. simply getting those So getting there's passing Everything doing too. to costing but alternative vendors our from We're through, not that we're customers that of and that. It's costs more. our from us is are reality no

Jeff Schmitt

that's of all Okay. across sort Ventures, And not pass those to costs about you're through. able in just you're talking Markel Lansing

Tom Gayner

Yes.

Jeff Schmitt

Okay.

you. Thank Okay.

Operator

[Operator Instructions] Deutsche Bank. comes question Our next Phil from with Stefano

Phil Stefano

that acquisitions makeup like broker agent operations to applied to there at the this usually was well the idea conversation this feel is least frothy But the their Yes. good way I about or was to I bit just I independent change was But here? I any venture rate given the potential at hoping tax potential in acquisitions does or the feel acceleration comply of get wasn't morning. are you've to Thanks market. the wondering, create most least a in ventures any I as sure valuations. if business, personal always an of the and of to the talk acquisitions potential had way recently?

Tom Gayner

five I Right. paying multiples people know are been general and Well, And I've saying last, this out acquisition terms the don't higher. for or prices years. of there, in that are in they four

thing. of So that's aggressively buy the if really really that who people from, looking lot networks and based family, long-term the reputation that does very describe coming join does general market, deal with calls continues. up looking not is who way thinking specific for Markel think outgoing trying the spreading on done to and I fortunately, what people know go where make we've and calls. of a whatnot get or are that's That already things people the to describes values there out And and and friends set we've inbound possible. some not But flow contacts are the and out part we been they the fascinating of really and of

factor. So that's X part of the

Yes, yes, people someday, of calls, and rates thinking driving day much changes very in of selling right and are now. terms I frequency the tax was that. those maybe now My is that. thinking that In sense potential about intensity phone maybe is

yes, a of getting calls. we're So lot

Phil Stefano

lap way forward So we growth should how Lansing the like about in ventures and coordination? Okay. the there things business? move But whatever us think about And versus we in how might you for to rebound growth days. these that means it two think is "normal" moving do be and help these economic a acquisition feels

Tom Gayner

Right. $XXX now when and encourage since top just you that you it's can as as of possibly but EBITDA. Again I and at Markel would line started term zero, on for to track a $X long, take billion XXXX recognize Ventures million view

of If that's not just where half multiply it the forecast, of and stand. the just by it's took math you first a kind two but things

to growth if So without a you specific you better, to execute a world trying about we're to always can be specific being or do. plan, tends give better. growth more target the And

Phil Stefano

I appreciate long-term quarterly models view on unfortunately the a my basis.

take someone as in the well. I So server

Moving over the… to Richie on

Tom Gayner

model, something than more On suggest would multiply I X.X. your you by just

Phil Stefano

Yes. through. rate the Got Richie, the you to you. historically on talk the I mechanics gap hoping underwriting we philosophy. Thank a of we're which Look, was extent could realizing about and versus side it. I you've reserving conservative And earn there as trend the had mean,

improvement is for but rate it entirety rate versus business not me to seeing attritional maybe the trend, be versus trend benefit the we're you could or so just you us -- What's frame of driving a the And here? realizing might mix? help that

Richie Whitt

the is -- Yes. believe between trend are starting some and we achieving margin I rates to clear, of recognize it that mean, we we're are we is. where

comfortably picked like I that most more felt calculate got I trends of they data, estimating two what this We increases we sort already have to I it's were I because increases, of point But started last -- years enough as probably picked that, would reason of best, At over say some up but started XX an But we we're months, They three years we mean, estimate. to nothing think enough we've up substantially. and recognize we think rate we is. ahead when have started We rate or that ago. margin. at certainly continue be initially. that we trend think trend last And the about within forward. spectacular the can of we'll margin information recognize that lines careful in were to

or of much the inflation. all XX% it's I given we're out or of really is XX% couldn't some actuaries course terms a and if know. tell social as how So going play in to sense it is I better moving of give in of XX%. or seeing inflation CPI you trend baked there. don't then XX% That's what

Phil Stefano

you. Thank Okay.

Operator

Our Scott Heleniak next question RBC. from with comes

Scott Heleniak

I morning. be past the about quarters. much you had higher few unit can that running talk can it had growth which significant the lumpy. I appreciate wonder reinsurance in Good been premium Yes. if that And was than

sounds should you're You that but your of second wondering seeing few in expect any more continue out see on given the it if rates the commentary a year areas, terms little was but the just thoughts in to we that? of upbeat half like to mentioned there, you're a

Richie Whitt

absolutely first -- mean, contracts a fairly is lumpy. comment operations. base I It's our it's Well, it's especially can growth, reinsurance low the premium your correct. to insurance Individual lumpy. It compared

the is large first So changes saw large contracts year. we on to reinsurance a can half small heavily to is. lead this The base weighted reality premium business the and of The percentage that quarter.

rest comes I here so that's half in a looking year. probably year. than we're we've and business already or lower the trend we're just not to really the of the out this the deal One, expect there, second growth year to of other going grow of And there rates because for the the at would amount contracts unless up added

much want mean, the I don't tomorrow business way of can't of anything. in A promise great come could of rest But piece year, I expect half write the second I growth of to transom and we the across the it. year. the really So for might

Scott Heleniak

-- the how year beginning I there any Is sort as the appreciate update that take of a helpful. doing that? -- takes you it definitely reinsurance. efforts out, while play the but of to of And can then, that was in impact guess discontinue the to the was much the year the That's first on, half mentioned, of you I also property Okay. an it started

Richie Whitt

as Yes. premium January unit X. in It's stopped the going we expected. writing We on Reinsurance

they renewing stopped operations. in by they we've didn't. to ones Reinsurance those were the And renewals, one didn't the they wanted Nephila. And did at looked January with starting renew the So ones

been by to to of exposed So for down over terms is runoff Probably six that's you limits in best last just the the explain at point. the way we've in on side underwriting XX% it this months.

which we renewed half season the be year year. would that of the renewals next not X close on property because of next renewals X wind zero XX%. quick And first the year, we to of the April by and end limits size a pretty enter renewals So it by as the exposed over now January are was down Florida, expect that sometime would X June those fairly are having the the through then of by

So moving along at pace.

Scott Heleniak

just flesh half the good I talk some definitely on you mentioned investors back And And little you wondering maybe that more. for wondering you feel retracted. time? then how wonder And of in that -- if opportunities That's about you the launch. opportunities like could detail fill new Okay. the you kind to can build -- where more that you Lodgepine, on congratulations a if the detail. then over could any of many year. And the that

there Just as any color well?

Richie Whitt

for to be in interest of lot in I say careful things because But a a is marketing funds. little terms you Yes. be -- have of the doing. seen SEC bespoke I reasons as investors what from we've viewed you're can can't

very interest risk done the funds those certain multi-investor strategy. profile profile. kind and return in investors but interested may more have ESG well We They opportunities. more certain establish seeing a own over years, interested a in versus their from we're be may have to trading be of They and

XXXX we're been those into end up in and trading hopeful towards we're the with seeing and we're strategies get them we'll try those. So from to together as to and bespoke of try more a that as have we set to interest able definitely few we to the of put year get investors working

raise that moves In Lodgepine terms capital the the Lodgepine, of fund. into about of book retro current XX% the

to balance XX% exposure Markel about the an or of either as on sheet committed keeping have investor. our or We

current ways with a got the go portfolio. we've we So could

conditions. we the grow add underwriting now. good, And had market we done be terms depends the really -- to could portfolio, portfolio, want we're -- on we're in but grow right committed profit. certainly an to be In it underwriting and retro that writing they ability retro investors, new our of Market continue conditions to to are if an good

we it towards through stands is date go so And X see renewal renewals really big as and January depend the that. on market we get the will conditions the retro on approach as market business and where we'll

Scott Heleniak

-- heard Okay. one. and social I I seeing you on outpacing ratio right, enough. earlier inflation. little saying general think trends. increases you rate inflation just improvement. cost on if are And Fair the I bit inflation then touching we're a know We're loss just Wondering were loss last core

confirm continue to expect just continued year the second into the kind XXXX into so improvement? to of And that half the then of you

Richie Whitt

I been think, increases pretty now. in mean I modest rate it seeing rate so. three almost the for and admittedly I've Yes, was but mentioned think increases we've been I beginning, years we've compounding

I think Inflation mean said it see we there. as Tom is believe see I you out all can -- can you everywhere.

ahead where will point are we We deficient, that have are think here. starting was that redundant likely philosophy cost so our of exactly recognize be trends. want more much we trends. But don't too cost trends But cost know comfortable because than of of to and to loss careful. don't that I their loss impact is what we we are loss

results. going bring as that And margin to that we're seeing careful we're so we be into our

Scott Heleniak

All right.

the Thanks. Okay. answers. That Appreciate sense. makes

Richie Whitt

Thanks.

Operator

follow-up Deutsche question Bank. from Phil next with is a Stefano Our

Phil Stefano

was could about Yes. hoping Thanks for capital management. taking the talk you usage and follow-up. I

as should philosophy and we this refresher is are repurchases, and is repurchase run capital investing, think for So about how underlying we're I looking And that of guess, is just creating consuming you at think maybe capital over maybe you one-third you Ventures is, creating, on ahead, year it we, underwriting could the consuming the can about point? obviously course. us tell the that give then guys a the company us

Tom Gayner

Yeah. for we we've the number talked I report earlier. referred a in And about written triage, it about annual four-part of to and the years

the So top and capital, that is you list. your opportunities we on foremost people to are that and team proven the already those thing have have. first want fund you are first of grow to support organic they the winners The people when deploy that opportunities

Second insurance done thing, the and acquisitions. acquisitions, the over acquisitions. We've do can we years the Ventures have done and

So to we when opportunities they as opportunities to seize present we want have capital see themselves. there

to years, should us Markel disciplined last is be And fourth modestly now. additive. of investing thing And through investment we start set do which We think that time dramatic to consistent continue us hope we be middle modestly thing this to that second we operating always because sort excess steady I undervalued, from robust to but steady the just our and public buckets. of continued capital appears after not that repurchases we pretty opportunities the in then quarter. the in a thing of stock. we so, but the the when of it this three third then, had expect buying suspended have we're portfolio. at for We've the funded able is very modestly you publicly the and very were is quarter-after-quarter in in The first repurchased year, If stock massively the nothing behavior in we've over three under is conditions, started appropriate And a traded different year or quarter and should and buckets. equities year-after-year, right first first

Phil Stefano

I appreciate Thank right. you. All it.

Operator

This over closing the to for like Gayner, back concludes question-and-answer our session. to turn I Tom would any remarks. call

Tom Gayner

We Thank or us. And catching appreciate forward you very we XX you you. much. look days up Thank so. joining to in

Operator

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

now disconnect. may You

Markel (MKL) 4 Aug 212021 Q2 Earnings call transcript