MKL - Earnings call transcript Q2 2024

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Operator

Good morning, and welcome to The Markel Group Second Quarter 2024 Conference Call. [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. Actual results may differ materially from those contained in or suggested by such forward-looking statements.

our that projected actual is factors. cautionary most in the under release safe factors materially to included captions, recent about results, the on press those XXXX and Form Form statements from the for quarterly annual information report could as and XX-K results cause risk differ in as on Additional well quarter and our report second harbor forward-looking including statements XX-Q,

financial measures non-GAAP the may call certain We also during today. discuss

You and www.mklgroup.com can the a directly the website being GAAP reconciliation Form on release second our comparable to our our event for the note, in found XX-Q well press in The for or quarter results XXXX release XX-K second be may at measures most most find quarter XX-Q. Relations is measures recent XXXX results as this GAAP section. and for Investor press Form recorded. Please our these Form as our

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

Thomas Gayner

we and by our quarter CFO, good your and remarks second Jeremy Markel CEO. Group, serve is and call. joined results some to opening and My to I'll Insurance open name I'm Operations, to today The Noble. you, morning. Tom Costanzo, as make of things Welcome floor Brian on a Insurance Gayner, the our Thank financial the conference President comments I our Then and over update engine. turn then will few for Brian our you and questions. Jeremy on

goals. the Markel our with spend who build appreciate Group share cannot the owners always We to We time chance without long-term our partners.

the fellow questions, comments as business. your thoughts As such, owners welcome long-term we and of

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the Our Underwriting to quarter. first first in of sequentially grow continued engine the half XXXX. insurance from profitability improved

and conservatism by accounting reserve seen ongoing can development. integrity be also favorable Our ongoing

We of our continue ongoing far class am set dedication in to inflation industry-wide across business. proud every produce Ventures improved results improve XXXX teammates our and in to I we despite loss and almost records operations, their our of pressures performance. so to and sales insurance costs continuing underwriting new earnings. ongoing In of underwriting

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the Markel I be buying in to of last amidst and how the Ventures about and been very prouder prices is on Ventures other years, One were we've high continues several perform the for talking the couldn't well that these businesses. point transaction their conditions, selling efforts and results. team's

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will been remain time-tested successful and have to strategy. our We and committed low-cost tax-efficient

at horizon to want on some the XXXX longer-term I turn Finally, the results, thoughts progress Brian Group. to review provide before a to I Markel our of call over the measurement

the one over do we repeatedly to aspire and build stated fashion. enduring in to we've the we years, great of an world's companies, As so mean

behavior, over annual long-term our internally, constantly accomplishments measure compensation. we performance to X-year on foster to tool one measures. calculate do remain rather and to than quarterly incentive effort performance or focused our an We intervals longer-term judge in so As

Five of at years portfolio June XX, ago, investment our XXXX, total billion. had that we is debt investments, cash entire minus net plus $XX.X

through XXXX, for million, of stands about increase an $XXX XXXX, we earned and At $XXX income XX, underwriting our June As change billion, we lowest ago of of X income earned Ventures XXXX, income, the years Markel XXXX, about million Markel XXXX, increase XX%. XXX%. Through June about XX%. million. XX, number each the increase later, June $X,XXX, on operations. operating XXXX, an of we $XX.X The XXX%. XX, sold an is operating Markel that June June ago underwriting share million XX, XX, XX, At through years price and share for $X,XXX. share number X earned of earned increase of sold of XX, of June insurance years of XXXX, Five of June in page. through each $XXX $XXX an insurance we income at of

the at XX.XXX looking shares. of math majority place and million the million, ago, the shares. it the available repurchases stood X at time It XXXX, more the of of vast calculation deploy divided the own that we've count June XX.XXX XXXX by The to almost productively of value repurchased Markel us shares. me opportunities at share stood decrease of to years intrinsic At took we're indicates array our XXXX of capital, company a to X to response per XX, In frame. share Markel, in fewer these through million seems shares. circumstance

our time. more the ought our way achieved. important than of shareholders the people to the returns and culture efforts of outcome company. the numbers The over and I numbers that the Even is the excellent think results this this the are get for produce numbers, of

As we the keeping hard we Markel and in the zealous humor. our pursuit sense in statement, believe paragraph of excellence first Style, of a work while say of culture

the company I and and of for ongoing such am honesty proud build principles. is of around them creed of all thank our their fairness to efforts Markel in our dealings. wonderful people Our I

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to you news some you're share X We're So quarter about review. our good. glad with

Fire, engines have Ventures Insurance, our that X and We Investments they inspire. fuel

mills. some its in showed skill despite engine Insurance Our underwriting

heights Our in Ventures earnings and and buys. engine to sales new new soared

value we tax-efficient low-cost, of X plan our track less and to progress fears. and brand. stuck engine more over years, our Investment Our and We see

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Brian Costanzo

of poem morning to first top here the of Dr. Starting Maybe this with make results Each Ventures contributions X made results. to we off first Excited be that. and half our Thanks, It'd of hard out the Markel can results. Insurance, to XXXX. there. Tom. [indiscernible] our our that for half consolidated to be engines, Investments discuss significant

period first each billion provided $X.XX and half and XXXX by billion total cash to compared half operating cash Insurance XXXX the reflected $X billion income $X.X with from the being period in the billion largest $X.X $X.X to activities contribution in was our same shareholders income first driver flows significant XXXX in was of to XX% in X% coming our operating to Operating operating Net from same income compared of with was first income. of first strong increased most the increased revenues to net $X.X Total increase the our billion investment The in $X.X the XXXX. shareholders year-over-year comprehensive billion of both XXXX, the XXXX. growth of of common for a slightly engine. flows the cash billion. in of to in XXXX Net XXXX half half engines of

$XXX compared same million issued common outstanding debt-to-capital first $XXX bringing unsecured stock to XX%. under Group program period we ratio XX-year Markel our repurchased the we Notes, million year. last May, In in the of million repurchase our of X% $XXX to of of share half XXXX, Senior In

to our now of our engines $X.X of to in XXXX underwriting the by the Gross to XXXX. Insurance written the grew for same Turning X% premiums of with billion operations $X.X period engine. and billion X half our starting performance first operating compared within

within Reinsurance our growth lines and personal including classes targeted on where offset actions and driven Our programs. increased and portfolios premium business by profitability. was volume &nd of by we U.S. to select Marine our business, contraction took Energy This lines International partially liability was and liability professional underwriting in Insurance premium general U.S. select improve

Jeremy actions detail will in these discuss commentary. more his within

remain for recent insurance XXXX consolidated general liability due product development million or X collateral year was Our XXXX same $XXX our consolidated classes point we XXXX. in on General International protection loss lines development Professional million in the million the recognized of trends. in reducing our our to our to Liability the of line. ratio prior on $XXX liability property XXXX. increase and We Liability intellectual as approach trends. year loss improved included compared on challenging reserves year-to-date CPI attritional product higher XXXX XXXX in cautious over the longer-tail and takedowns XX% lines. with of was we adding XX% discontinued first insurance The half remain claim Prior notable loss reserves combined professional Also, we margin on to was Liability prudent half Favorable our period combined given U.S. ratios Professional in product first ratio, our loss $XX.X lines to X losses versus half points of On first most product. in losses of to loss within

$XX XX% strong Within performance growth primarily driven our in Program to operating our by and increased businesses. income ILS million Services fronting operations, and

income on the in million investment earned our the portfolio. income first to to next $XXX million reflects recurring half the year. Net We investment investment net dividends period of compared results. last $XXX of XXXX investment our in same interest reported Moving and

half maturity rates We benefit all cash higher from investments to fixed continue compared the and first short-term yield the equivalents our to interest on XXXX. increased portfolio, of as

securities lower-yielding will based expect, that and securities. as current increase on the securities slightly throughout maturity yield rate replaced environment, interest the are mature to by We fixed higher-yielding on XXXX continue

portfolio months Net At at June yield in gains up half movements, of for of market public investment XX, over last This million the XXXX, on to our was ] $XXX XXXX X maturity gains compares X% million our just the the equity investment favorable of XXXX. of book reflect of from year. on end $XXX a net first [ for X.X%, XXXX. fixed portfolio first X.X% return in the resulting of

heard us investment value performance, markets to equity $X.X cumulative unrealized of investment gains billion. the June, many long-term same of losses taxes investment XXXX. loss the of focus period unrealized the included gains on or $XXX million in fair Net the of taxes end net you've $XX pretax we of unrealized our period. in of As the say times of expecting before, net of portfolio first comprehensive million included other in half compared net in At from equity to XXXX, variability period

mature generally holding rates to change periods our as typically we future mature. reverse bonds they attributed and in and that interest Recall gains would to losses until the maturity unrealized investments expect in fixed hold

investing fixed quality our long-standing the continue We precedent securities. income in of highest of

portfolio. As our are of or within credit no XXXX, XX, was current and the losses expected of better fixed AA June rated there or XX% portfolio maturity

from Ventures building at businesses acquisition by of X%, our the income operating our as an XXXX. and of well products first cover revenues by our as X% higher many Ventures period contributions Markel half of of XXXX first one increases Revenues margins XXXX, quarter revenue increased businesses. at in results from Finally, the consumer from made the engine. improved Markel of driven I'll and our the operating Markel versus moderate businesses products in reflecting Ventures increased same

Ventures. As Valor family Environmental in our late acquisition Tom we also mentioned, completed the Markel adding quarter, businesses second of to the within of

begin results quarter. from will the of in third Inclusion operating Valor

assets. million to our about to For turn Jeremy $XX the intangible includes I will goodwill it With engine. to and preliminary talk June of financials, that, allocation price to our purchase insurance over $XXX more million

Jeremy Noble

I'm to within Thanks, Brian, be here the progress of to over engine half and year. you this pleased with the everyone. good morning, insurance our discuss first

coming Our year's elevated year, due off half results XXXX combined insurance of results reserve continued prior to ratio strengthening. this the latter improve to during

where this for is intellectual sequentially ratio in is the half portfolio combined the our runoff. ratio second we combined first at which higher to within in our property and Our improved year point expected protection losses quarter despite be collateral

we of written year we experienced months our reserves further in the Overall, year we greater operating meaningful growth on the of have premium achieving in have As our umbrella our and contractors products grown where revenue generally growth where previously action aggregate. improve discussed liability over half development the satisfied to are not adequacy the taking prior namely actions rate books general lines us and we a and and at improve have with levels Brian of shared, and the X% liability, we year's the risk-managed classes, segment, our significant development to our professional remainder profitability, have in I within in products seen XX%. excess underwriting and Within Insurance reflects X good profitability year-to-date segment, gross taken favorable brokerage ago, decreased by first through year-end. XXXX underwriting than are brokerage writings Insurance The addressed of our profitability.

me first Now our take the the of of year. divisions briefly for you half each let through

premium premium and from benefit areas. the evident corrective including to cautious we lines, and personal will specifically, within First and accident reductions managed our we picks continue to contraction is have lines in earlier. binding are levels. increases. in seen where off, liability attractive select current these remain of but exception these property, This reliability continue marine, select growth months, profitable select and at commercial, in while Specialty on our we mentioned also business. pricing loss product is division continue certain in professional pursue corrective Division, books. and most small classes, met our our a in year casualty of mix taken classes past to in improving not within the rate still is in casualty growth meaningful books, action The our these on lines the classes overall programs low the the achieving single changes. written have pockets professional classes, product where inland professional An gross But back portfolio, results execute our few property, rates digits the our earnings Within of I casualty Many actions underwriting combined our as within and we expectations. and to ratio liability mix of plans

to Collateral due the defaults by During impaired. the on the impacted in property ratio that collateralized recently frequency increase became negatively first our product intellectual half line discontinued of loans performance. an Property our Intellectual year, combined of Protection

second relating which loss ratio During $XX quarter, we by $XX of we line, to impacted points. Through recognized loss points. expense our half activity adversely million X the XXXX, increased the this by discontinued ratio additional claims first X recognized which claims our in million product of have

losses year. resulting product, loan claims of attritional an That probable strain on occurs are the clip a defaults. Changes higher ratio. the at the trending and made loan on claims capital which higher on expense defaults at conditions a to intellectual in time impact current both default our the than property at nature collateralizing less access level loan the claims meaningfully macroeconomic are beginning accident impairment early-stage both anticipated have loss faster in the loan. at of of said, this businesses, a the put and recognized these there considered when Given most and year the is We

the also assets, held the have in to loans of up process. Valuations not collateralized intangible workout

to product quarters. X each experienced to in be of than by this The future quarter of of more impact resolve has the past the significantly loss any XXXX. unlikely in on what been expect We majority is end activity the

portfolio For of by we its just refreshed trading which of team context, recorded of recently of individual partners loans. claims and management and our corrective Overall, division led to Specialty under quickly improving our have for XX actions insurance. loan our Alex done consists of the under while expense half attending tremendous profitability, transactions approximately Martin, job a executing on has our needs the

we product grow. value for focused we tenacity our and commitment. our applaud I specialty team collective We can where resiliency, their very and now feel can capabilities are on add

growth and fantastic year. Our X% of International premium over the sub-XX division continues significant of both first for combined results, this half just produce to achieving ratio a

push broadening organically through offerings and existing as product growth both to continue expansion for our geographic We across well as our operations.

While competition we have specifically seen within at levels standpoint. our and adequacy still rates these a pressure from our cyber and are increase downward in meet book, on energy classes professional an in liability, believe our that portfolios, we rate some requirements priced lines international

profitability. State achieved operations Our growth while of the levels high half, of premium program producing for services significant National first consistent XX%

continue also with ourselves differentiate our facilitate the transactions. to place and within We market complex ability fronting to

continues team best-in-class be capital, and with risk Our to managing efficiently our matching exposures.

team our year. responding catastrophe been to losses constructing work portfolios of hard this levels attractive heightened natural anticipated Nephila operations, the at has Within and

hedged both term. current revenues for short our risk in operating premium have lower will We reduced writings, capacity modestly deployed which and overall the

while being we we've pockets deals the the our In is in our also the combined and the are lines In adequacy for deploying. the general, current book, targets where lowered excited and particularly we Reinsurance reflect energy interest However, walking long-term to inadequate. on pricing believe opportunistic are business. we these of within of we our In are we ratio division, market of pricing and about remain actions our investors, environment, caution, from Global in best our marine away required future focused steadfastly prospects class. remain pricing

their our the X,XXX across I'd like over year, our With results for for operations, clients. to associates serving our half that, first exemplary Insurance the delivering improving of efforts thank and

turn it back Tom. I'll over to Now

Thomas Gayner

Thank you, Jeremy, and Brian.

the with if we will floor may. As open questions, that, we for

Operator

Andrew comes Kligerman Your with Securities. TD [Operator Instructions] line the question of first from

Andrew Kligerman

-- around you release release each seems reserve it trend Markel quarter. Question consistent often prior Markel year reserves that the like seems that X.X%. is for It a can

not initially way? not why is, lower? thinking thinking set picks I'm what loss right about Or so the am the it I And

Thomas Gayner

this Tom. Andrew, is Yes,

prove Let for now, at even me that important reserves chime have we XX what's over more Brian pass take I again at to this important and humble owned years go levels are of forever, Jeremy IPO was unchanging the And ability than to really I in the redundant that, over and the would been an likely forecast be deficient. your I've to that phrase and history statement been company. the modest before hugely Markel it's and to at about And value in think [indiscernible] XXXX. our for the set hear that that's invite on. That's to as my because IPO, going first stocks since to for you well.

our So look at business, what at what we of look we to be. exposures. ultimate our we are at the guess the going at book our do risks, look best take costs we think is loss We we

it safety, basis. we to right ourselves, wrong providing know on surprises right a be yet margin going some still what's be likely day-by-day to and we of then or absorb do the able be way, to some report you error we to fairly number margin is of on, And wrong, the And way. wrong want the way because that wrong is to wrong ask

which potentially loop The reserves cause happen. business decisions other they're that new And underwriters setting writing and between to reserve get a tight, really to and loop them number as a advantage a what a write that should going that making introduced you've little at would skinny pricing is today you new little business rate if there's or your data forward. than that a and perhaps on underwriter, thinner feedback feedback to

philosophy. we run that the insurance a way has the back been to and to always relatively it an because following right find just you'll go be you you're always know time, Markel. matter new if that's But will case operation. I that's So of think case, in the

Andrew Kligerman

that And helps okay, better forward. frame combined and makes going me ratio I a of lot Tom. the guess that -- sense, That

heard excited at around right in I very as you Valor Markel million I forward? $XXX are potential right seem it on industries of price but call, right. the move tags in about And genuinely the and you looking now was think, Ventures valuation on What You terms opportunities plus.

Thomas Gayner

terms Group Markel sometimes what the a I'd know in or we're industry, Markel most somebody holding that Well, potential does company, I'm cocktail people we in things Group? party to of say touch. when and a won't wants hold

the So we wonderful we do talent, use way. have a management and We businesses have can desire returns Insurance integrity of we that teams not debt of and types vertical that an a and industry seek operation. produce reinvestment opportunities different good They risks strategic that write that like the get you Ventures a our don't price. at do too in of includes from that the in them things own have we it. much lot on both and to capital we with can fair that see things And in array

built And talked We've years. consequence, to lot of our We've lot with stuff. a a people. degrees open. interesting XXX over of a as we're So rings relationships the phone

literally fact, was business called somebody of his you " opening was this so and was where I there immediately". In line me one weird, thought business

years. So reputation a earned over and fortunately, developed the we've

of are Our they today more the couple did years. ringing phones last for than

getting over that's and So look why the things excited to some line. forward I'm

Operator

of line the from comes question next Andersen Jefferies. with Andrew Your

Andrew Andersen

continue changed, touch should study at fourth how you quarterly Or approach on about quarter could studies fourth the studies You've has reserve we But all? talked to to expect conducted annually in-depth fourth 'XX in if quarter? quarter the conducted in you reserve a widespread larger reviews and 'XX.

Jeremy Noble

it's I'll Hey, take Jeremy. that.

quarter a stood the and in of What the of products each divisions. do year, past quarter fourth targeted you dive and every years because actually specific So study of including deeper the was mentioned, some comprehensive we in areas reserving trends reserving more quarter out seen. analysis the we in fourth our last have this across a various of period

not there fourth is there reserve say to is annual So study. a quarter that

consistent deviating but reserving comprehensive that consistent over actuarial at from new lines also looking in of is trends very developing we're is data. Our seeing what that and anything the approach our to time, review the that's time, always expectations we're product over are or and

And deeper regular want do on, very on a we those dive if sub-class studies basis. and we to a anything there's examinations that do

the the the reserve at what did year, and second that end of well. year, analysis selections and the In work we've we this quarter they've seen of first up the held and that quarter the is the we made

And coming sequentially higher so our shorter development that's what some is across lines year, seeing of the year driven part favorable our well to by space you're as last through this portfolio. in international in as U.S. and tail

Andrew Andersen

of XQ good in Property are primary session on to expect higher insurance kind Would segment, growth you a GL, but just the in within though then that, with being like insurance rate the on has And run rate? a still getting the ticked favorable. still some X% And accelerate growth cautious. rate the bit quarter, sounds is the second half? it you're then maybe pretty just pretty returns

Jeremy Noble

Yes.

space. So in is sort exactly number tails of right, And you're the of are that things portfolio. happening insurance are One the there's stories that two happening. any about in of sort about intentional and taken that One different of kind areas those to and re-underwriting really outcomes. wanting actions focused the in we've of been reshaping the and drive is some and we've

think, product within year-over-year. can and growing of I XX% that the we grow. many The see that aggregate confident actually that were down is in the I over lines portfolio portfolio mentioned the we feel, in pretty rest those pockets

feel and the -- and Reliability and Property we Lines in pretty U.S. Programs and Inland Managed the a International in see opportunities we'll and Marine, space that and space, bunch the to on Small in So classes then focus we in Commercial Personal of good continue about. Binding and

the taken portfolios. targeted some in and reposition actions, and we've even where we're reshape trying Casualty to Professional So those portfolios,

opportunity So of areas still growth. we see for

those towards I'm focused in a top and the products. that portfolio pockets priced not are we proposition, value good feel in are kind confident figure, Markel our we that So line a that are certainly there teams on guide there's and are to feel very of growing going but profitable, adequately,

Operator

question comes of Fox with next John Your the from Fenimore. line

John Fox

did a release which between deal in River, July, reinsurance James the In and didn't National on you a you address State press Q.

-- about talk you in is development. I'm my And So of some wondering sharing type there's risk if understanding that? could of terms future

So the about not what downside if the risks Jeremy, maybe to as could deal? expected? And developing that talk you are things are

Jeremy Noble

Yes. Sure, is John. this Jeremy.

me comes of let a that the one the on was that. by the transaction Obviously, transaction. garnered So side on attention that counterparty touch from

portfolio that is and entered So the contract State with loss Company deal National Insurance you this party National that mentioned. in a deal into adverse State cover reinsurance development

and laid So out. there's are -- obviously, conditions terms

Now actually, fronting with the plays transactions. this very is National State that role consistent in

retroceded, So and high-quality that obligations transferred XXX% development deal of the cover loss all reinsurer. were transfer a with to portfolio and that adverse agreement associated was

-- management contained risk features that would typical state contract, that mitigation we credit nationals be retrocession long-standing of practices. those risk the same And

state see fee-for-service the long-standing that risk National also reason it's still are but platform, transaction. So great arrangement. risk the that's complex State capital actually, is mitigation because agreement disclosed efficiently that and our also a space I in would State That's wouldn't of services transactions, where it large utilizing of a within taking capabilities credit within fronting national a example support match say, to It's and approach. the very those we preeminent leader our as you Markel, part really market-leading state of that, of the features believe typical we're this more able at type capabilities National, national

John Fox

Okay.

when says away look release, $XXX adverse at from which the out Markel's reinsured sheet? provides been million that's development, balance I So National State River's James

Jeremy Noble

National. the sort what on very with counterparty And It's we all right. match model the that's to another the back contract There's end. deals another into with in fronting similar That's those State State one all We of contract There's fronting is on space in terms. end. enter would the a front that that model, counterparty up about. that really National

John Fox

Great. Okay.

out like And looks reinsurance. there on In Page so staying the of type like some reinsured it looks deal XX, in and you the Nephila was with that Q also. weeds on it

talk could Markel Nephila in about quarter? and So you between deal the the

Jeremy Noble

our to language Nephila. on unique directly But other and seen of quarter we've front the fronting however, have don't don't picking there, up and products Nephila was where you associated of within sheet have to balance regards with its That anything support features in platform. enhanced what our those that in I that may think are fee acknowledging that some uptick investors. of in in I an the its there uses premiums is premiums with is we're operations, Nephila Yes. rated me, some the

of leveraging paper, But the be ultimately those capabilities platform again, products we of So wider capital investors. that some Markel and would be tools rated has. have the within and to that but again, Markel and some using supporting would the support Nephila it's third-party arrangements capabilities

Brian Costanzo

of add transactions Yes, you all to but real When the not of attributed in the Nephila quick. fronting John, described. the I'll just the press that release, maybe to it, Jeremy see other of Q is or kind referred that majority

Operator

Your next with question of the comes Charlie Lederer from line Citigroup.

Charles Lederer

I product? trigger claims that with value. process guess, I its us know the that the so IP here? discontinued, and Is the have the you a amount these claim the some few I that of policies of of business full part you But that is severity regardless understand correct? of through a on that And questions collateral apologize. can we walk I

Jeremy Noble

Yes, Charlie, it's Jeremy.

-- the a right. does trigger. you're a mean have I is dual sort product So of

So default the the needs impairment backed also the really, so you the have intellectual have secures to loan, in collateral and loan loan, property And on to that then is by the a that the that itself. is there be IP.

to reacting So loan. as claims the the when impairment loan loss of secured the entity that default we're that on the property and a both well or recognize we intellectual to as activity,

Charles Lederer

long And collateral? or to IP of how the the it. value of that I Got process is determine a guess the

Jeremy Noble

contract regards trigger a to to claim. would could to bit that from the Yes, emerging doesn't be be but and actual an something contract, things default. period, of what happen. I that kind then If companies out to with next. And of could sort start-up, to happen the with is actively potential sort X- settlement comes months of the regard of the to tends trigger there's X-month settlement occur to say the in a work And of like that point there of X or what early-stage X -- default. little to period to number it want able any something

Operator

of the Kligerman Securities. from Your Andrew question line TD comes next with

Andrew Kligerman

intellectual the on Just property item.

there's that You in right there's X see a quarters. mentioned, possibility that XX-Q think charge kind subsequent could good not on the in reserve loss call a take and you that, chance of I will you that the similar this levels to occur? a believe, just Why now that capture if

Brian Costanzo

we product. is about recognize of philosophy, it's would that's different -- a a mean our product unique was fact Tom I bit terms And we back you in little The if do. a this expense. claim tricky that to talking wasn't is this the in Andrew, a claims-made this probably it's if think reserving Brian. introduced what product, And when trigger of what Yes. a

Jeremy have as trigger really looking mentioned, dual it's a that when at we loss So under probable mechanism.

of ultimately impairment on default the of to front-loading IP collateral not backing upfront. of would also along loan. you are going a ahead finalize when the with there's So when That's everything that's it's pay loan, an kind the well and loss, the but the workouts

out The best product of on kind where of how defaults don't of over loans kind on the is spread mortgage X. that the analogy out mortgage day They are a works all mortgage the the to length life you there. anticipate product of that a

Andrew Kligerman

see. II

the policies does going So year. given through claims-made of that the not that a last it's then balance probably that are product, imply to these

way over about this fair of as and be end to think the that well? will by claims come in Is that the So with? year, a done it

Jeremy Noble

The X-year loans typically are terms. X- or

the policy the the So of loan. duration over written is

the repayment for that the loan the lasts including of loan, to end. of coverage at entirety ultimate the So the

throughout these the it that loan And a out. deals that so basis monitoring on laid duration I and of criteria you're measure quarterly the of against each

Operator

Your next question comes from Fenimore. the line Fox of John with

John Fox

I limited I getting questions. was guess two to

just didn't Is cat I disclosed any losses to in see the that confirm, So Q. want correct? I

Jeremy Noble

That's We the unless as tend far Jeremy. in attritional that night there's -- go in John, out. bump correct. really bit to of tend things bump just stands always in it's little a record that something We that go. as to the there's catastrophes

Operator

of Your from comes with the Lederer next question Group. line Citi Charlie

Charles Lederer

stuff IP think on I more. out in on it was XQ, you of what understand there XQ to the top and year, being that losses just a credit kind I called But the trend. those be. some bit losses were think little to I last want figures Sorry not to to losses year? last related purported collateral Were of the make I sure harp

Jeremy Noble

Charlie. It's Yes. Sure, Jeremy.

as the both year's last quarter are the as most disclosures, in and -- recent in XX-Q third specifics XX-K. So documented well our

XX% would So would the last have we more rate said that fraudulent Approximately than associated been to a X those product our spoke have losses X on we amounted credit letters year, combined with on ratio. total of that point CPI little of consolidated to.

did there of losses we in the fourth acknowledge were also associated some with defaults. and third and underlying So the year highlight of quarter last that

size And latest a the defaults to we've then material what's significantly of And said activity that we've unlikely And X the at seen year. this you in and quarter. portfolio as this the how quarters done of talked potentially in experienced that and given more a end XXXX could we've quarter happened. be through from sense any quantified happen have many and the of be than activity, we've about total first of standpoint, future the as by should obviously we've that far what

portfolios. for be and out the a sort as the of the of pointing hard so across is to lot proactive wider in of of attractive. I the the We've transparent levels that some possible the is as view inputs necessary, CPI there's think, been grow questions, you out, And seeing much profitability that's your So as take market to I I important. really where think masks current of we've around that specifics to losses allow I because what do to otherwise, diversified we're navigate business own laid reason come think it we conclusions. working think kind on it's conditions, primary be insurance improvement to many as providing worth lines IP core actions possible ongoing where of

and CPI been some put Specialty has certainly that turned we've that operations. we're Our Insurance I'm tough There the lessons specialty page runoff. in confident moving team laser-focused, well our we've learned, in forward but positioned are

Charles Lederer

I I you and can season? growth definitely sense segment just guess, us in the your cat just just understood. I insurance the I a property, a appreciate into heading different of, given in guess, it give question, can wind guess exposure

Jeremy Noble

that Yes, sure. Thanks for question, Charlie.

that. consolidation have some a open Nephila, years We removing through about reducing space within period reinsurance and of over our years time. an property number property in international recent the of Obviously, was our of example of of volatility aggregates So the we've capabilities Exiting some actively property of market the managed as an our would book. example talked in ago, that.

or of time. something actually We've Now modeling down average across space. or our sort But like capital out those equity, sort have portfolio, amounts the out of in of of event continued XX come you an on or really core loss of over in in to X property of annual or portfolio. writings of terms X to if of shareholders' that that, grow are take opportunistically sort a terms terms aspect our in a the percentage

larger more a from advantage larger and So also the balance taking but opportunistically benefiting well-diversified a portfolio of market, sheet.

Operator

from Your TD Andrew line next Securities. with Kligerman question comes of the

Andrew Kligerman

my This long very record you question and is being of is a my is on Ventures. Last third for round, career exciting. queue. This around

time? slow kind of a businesses growth. kind ball businesses did of kind going park good out you curious, a the about and do of feel line are revenue really kind knocking might And of is You think of within forward? of the X% which little And this like to this Ventures, at I'm be kind trend what

Thomas Gayner

Well, let thanks, your this tackle questioning of medal And round in Andrew. for Spirit. and Olympic gold me

just bit, So slowing I would the sit rate overall you now to right of economy. the what in and is a see in as growth we attribute that basically Ventures

inventory stuff couldn't people So fast think trying or get enough, inventory. fast I door. We and X labor. that to I there enough. and order in. meant years, to that because in were there one; have labored. were short. were if and Factor we in inputs about of for getting short stuff times were build about. We talked last stuff our And conditions We times out long we getting the And short couldn't in were day, every the were get we two, lead trying had, things we people books. just that getting We the were X lag orders long X the orders hire factors: Three, things all think long door great,

in environment rates. of operating an percent And then we interest fourth, X-ish were

could they positive So the anybody world that who thought was returns. just had make some idea funding

bit. of we I As little look now, are labor markets points, X at would those each a conditions on right softening say,

a markets unemployment is than and So they're see labor an they with lot operations. than crisis, places in own last bit, a we up softer. stuff lots not rather but inventory building see we what little Two, of warehouses X little cars were. is little a are not softer this more things there's it, a we are see course years. we internal the didn't in see Order that over books some and our in of But on the

start being shaken that I I line In are are And in top external conditions be interest that growth up. things X-year expect loose are that bit we to cautious the kind four, I to more like tougher. add anything about going of love But the numbers to rates on team the fully environment the talking a in little people's love rates by the which the to that's when said, hurdle environment, operate do that things behaviors exist on we good. this, field. these an and the are

than have aggregate. in about to market would point group other commentary I current to or don't I So the specific really say any businesses what

Operator

comes question of next line Jefferies. Andrew Your the Andersen with from

Andrew Andersen

like but ratio still around target size Reinsurance get of bounced this pass The the really help us combined a segment kind Can is ideal a has you I'll premium on guidance question, another in here. growth about type mid-XXs for one. Reinsurance? here? think And Sorry hopefully,

Jeremy Noble

Thanks Yes. of things. a for that, couple

certainly really due So in changes I deals. that timing inception quarter looked in is larger -- the favorable pretty some on significantly. of suggest be some up would to the premium date to

by some We renewals. several was selectively And Some a lines. favorable nonrenewals honestly, requirements. opportunities in some of where deals increasing few didn't it were across on product was that modest profitability saw offset our meet that participation there part new business

and we across opportunities, been product we've see in Net-net, what that's I to the seeing collection capabilities modest portfolio of some reinsurance. So growth to in had the continue date.

excellence we because good really ratio -- far several have large, feel take of trends, reinsurance a been a last We the the one what would we're and prior the the in ratio going for would specialty believe observe take means given down noise capabilities we several years, professional to about But of to year combined and particularly it's we casualty to the after property before seeing oriented of and has any underlying quarters going portfolio look shop. we longer Markel which be our hopefully to improved while center and long-tail became to tail, in sort development. under it sort very combined Nephila, collected umbrella the As shifted to period, with coming really as pretty the any by ago, a in at sort place. we're be steady goes, we it's we over the story because of credit, an portfolio, years current when underwriting

the underwriting of smattering creates anything to deals, years, in as reacting instances, uncommon longer a areas noise. product deals support well. no but smattering no we smattering and a that it many that we see, were That we're lines. longer And across support product tends be to too of Not across across

the the see reported foreseeable for in -- future, likely we've in period, you're to likely for that range the given any in part you're most recent quarters. So

Operator

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

Thomas Gayner

back look to XX very we and joining you for reporting Thank days. much in us, forward well. to Be another again you

Operator

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

now may disconnect. You

Markel (MKL) 1 Aug 242024 Q2 Earnings call transcript