Q1 2024 Markel Corp Earnings Call

Operator: Good morning and welcome to the Markle Group first quarter 2024 conference call. All participants will be in a listen-only mode.

Good morning, and welcome to the Merkle group first quarter 'twenty 'twenty four conference call all participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then one again.

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Operator: During the call today, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements 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. Additional information about factors that could cause actual results to differ materially from those projected in the forward-looking statements is included in the press release for our first quarter 2024 results, as well as in our most recent annual report on Form 10-K and quarterly report on Form 10-Q, including, under the captions, safe harbor and cautionary statement, and risk factors.

Operator: Joining the call today, we may make forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 there.

Operator: 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.

Operator: Additional information about factors that could cause actual resort results to differ materially from those projected in the forward. Looking statements is included in the press release for our first quarter 'twenty 'twenty four results as well as our most recent annual report on Form 10-K.

Operator: And quarterly report on Form 10-Q, including under the caption Safe Harbor, and cautionary statement and risk factors.

Operator: We may also discuss certain non-GAAP financial measures during the call today, you may find the most directly comparable GAAP measures and a reconciliation to GAAP for these measures in the press release for our first quarter 'twenty 'twenty four results or our most recent Form 10-K.

Operator: The press release for our first quarter 'twenty 'twenty four results as well as our Form 10-K and Form 10-Q can be found on our website at www Dot M. K L group Dot com in the Investor Relations section.

Operator: Please note this event is being recorded.

Operator: We may also discuss certain non-GAAP financial measures during the call today. You may find the most directly comparable GAAP measures and a reconciliation to GAAP for these measures in the press release for our first quarter 2024 results or our most recent Form 10-K. The press release for our first quarter 2024 results, as well as our Form 10-K and Form 10-Q, can be found on our website at www.mklgroup.com in the Investor Relations section. Please note that this event is being recorded. I would now like to turn the conference over to Tom Gayner, Chief Executive Officer. Please go ahead.

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

Thomas Sinnickson Gayner: Thank you, Sarah. I appreciate it. Good morning and welcome to the Markel Group's first quarter conference call. This is indeed Tom Gayner, your CEO. I'm joined today by Brian Costanzo, our CFO, and Jeremy Noble, the president of our insurance operation. As always, we look forward to checking in with you about our results. We view our long-term shareholders as partners. We welcome the chance to provide you with an update on how things are going as well as our plans and dreams for the future. We also look forward to answering your thoughtful questions.

Operator: Thank you Sir I appreciate it good morning, and welcome to the Markel Group first quarter Conference call. This is indeed, Tom Gayner you CEO.

Thomas Sinnickson Gayner: I'm joined today by Brian <unk>, our CFO and Jeremy Noble the president of our insurance operations.

Thomas Sinnickson Gayner: As always we look forward to checking in with you about our results.

Thomas Sinnickson Gayner: We view, our long term shareholders as partners, we welcomed the chance to provide you with an update on how things are going as well as our plans and dreams for the future. We also look forward to answering your thoughtful questions.

Thomas Sinnickson Gayner: As a quick review of the bidding at the Markel Group, we are working to build one of the world's great companies. We view a great company as one that operates a win-win-win system. We want our customers to win because they bought products and services from us that served their needs. We want our associates to win by serving our customers, supporting their families and communities, continuously learning, and being creative. We want our shareholders to win as we earn profitable results on the capital we use to do this work.

Thomas Sinnickson Gayner: As a quick review of the bidding at the Markel group, we are working to build one of the world's great companies.

Thomas Sinnickson Gayner: That's what win, win, win means to us. I'm delighted to report to you that we're off to a good start in doing exactly that so far in 2024. I'm going to channel my inner Casey Kasem right now by saying, in 1972, Johnny Nash recorded a number one hit called, I Can See Clearly Now That the Rain Is Gone. You have no idea how hard it is for me to just say the title without singing it. In 1993, Jimmy Cliff covered it for the movie Cool Running.

Thomas Sinnickson Gayner: We view a great company as one that operates a win win win system.

Thomas Sinnickson Gayner: We want our customers to win because they bought products and services from us that served their needs.

Thomas Sinnickson Gayner: One of our associates to win by serving our customers supporting their families and communities continuously learning and being creative.

Thomas Sinnickson Gayner: We want our shareholders to win as we earn profitable results on the capital we used to do this work.

Thomas Sinnickson Gayner: It's win win win means to us.

Thomas Sinnickson Gayner: I'm delighted to report to you that we're off to a good start in doing exactly that so far in 2024.

Thomas Sinnickson Gayner: I'm going to channel my inner Casey Kasem right now by saying 1972, Johnny Nash recorded a number one hit called I can see clearly now the rain is gone.

Thomas Sinnickson Gayner: You have no idea how hard it is for me to just say the title without singing it.

Thomas Sinnickson Gayner: In 1993, Jimmy Cliff covered it for the movie cool running well.

Thomas Sinnickson Gayner: Well, covering that song continues. The Markel Group is laying down the tracks for another cover, so far in 2024, and we'll do our best to work our way through the verses as the year progresses. Brian will quantify the notes with numbers in just a minute, but let me speak qualitatively about the music. Here's why that song comes to mind for me.

Thomas Sinnickson Gayner: Well covering that song continues.

Thomas Sinnickson Gayner: Calgroup is laying down tracks of another cover so far in 2024, and we will do our best to work our way through the vs as the year progresses.

Thomas Sinnickson Gayner: Brian will quantify the notes with numbers in just a minute, but let me speak qualitatively about the music.

Thomas Sinnickson Gayner: Here's why that Sun comes to mind for me I've got four bullet points in mind, usually I try to keep the list three but I just can't help myself today.

Thomas Sinnickson Gayner: I've got four bullet points in mind. Usually, I try to keep the list to three, but I just can't help myself. Point one, we've got improving results in our insurance. Jeremy will provide you with some details in a few minutes. I want to thank him and his team personally for the efforts they've expended in improving our results. I am grateful for their work. Point two, our venture companies continue to produce excellent results. I want to express my appreciation to the leaders of the Markel Ventures companies and their teams for their accomplishments. Point three, we enjoyed excellent returns on our investment operation, and recurring investment income continues to rise rapidly.

Thomas Sinnickson Gayner: 0.1, we've got improving results in our insurance engine, Jeremy will provide you with some details in a few minutes I want to thank him and his team personally for the efforts they've expanded in improving our results I am grateful for their work. Thank you.

Thomas Sinnickson Gayner: Two our ventures companies continue to produce excellent results.

Thomas Sinnickson Gayner: When I Express my appreciation to the leaders of the Markel ventures companies and their teams for their accomplishments.

Thomas Sinnickson Gayner: Three we enjoyed excellent returns on our investment operations.

Thomas Sinnickson Gayner: Recurring investment income continues to rise rapidly.

Thomas Sinnickson Gayner: We're investing our cash flows from operations and maturing bonds into higher-yielding securities. Dividends from our holdings of publicly traded equities also continue to grow. Point four, we continue to repurchase our shares. We started to repurchase shares in meaningful quantities in 2022 as we believed the share price traded at a significant discount to our calculation of what we thought a share of Markel was worth. In 2023, we think that gap will widen, so we bought more shares than we did in 2022.

Thomas Sinnickson Gayner: We're investing our cash flows from operations and maturing bonds into higher yielding securities dividends from our holdings of publicly traded equities also continue to grow.

Thomas Sinnickson Gayner: 0.4, we continued to repurchase our shares.

Thomas Sinnickson Gayner: We started to repurchase shares and meaningful quantities in 2022, as we believed the share price traded at a significant discount to our calculation of what we thought a share of Markel was work.

Thomas Sinnickson Gayner: In 2023, we thought that gap widened so we bought more shares than we did in 2022.

Thomas Sinnickson Gayner: In the first quarter of 2024, we thought the gap widened more, so we bought more. In fact, we nearly doubled our purchases in the first quarter to $161 million, compared to $82 million a year ago. From roughly 14 million outstanding shares as recently as February 2019, we ended the first quarter with 13 million. And as we speak now, we are below that milestone. Each share of the Markel Group continues to own a greater percentage of our insurance, ventures, and investment operations.

Thomas Sinnickson Gayner: In the first quarter of 2024, we thought the gap widen more so we bought more in.

Thomas Sinnickson Gayner: In fact, we nearly doubled our purchases in the first quarter to $161 million compared to $82 million a year ago.

Thomas Sinnickson Gayner: From roughly $14 million outstanding shares as recently as February two 2019, we ended the first quarter with $13 million and as we speak now we are below that milestone.

Thomas Sinnickson Gayner: Each share of the Mark how group continues to own a greater percentage of our insurance ventures and investment operations as a shareholder myself with the majority of my net worth and Markel stock that seems like a good thing to me.

Thomas Sinnickson Gayner: As a shareholder myself, with the majority of my net worth in Markel stock, that seems like a good thing to me. If we continue to earn the sort of returns that we are now and if the marketplace continues to assign a meaningful discount to our shares, at our current rate of repurchases, we'll get the share count down to one in a little over 30 years. I suspect the market will catch on before we get to that.

Thomas Sinnickson Gayner: If we continue to earn the sort of returns that we are now and if the marketplace continues to assign a meaningful discount to our shares at our current rate of repurchases will get the share count down to one and a little over 30 years.

Thomas Sinnickson Gayner: I suspect the market will catch up before we get to that point.

Thomas Sinnickson Gayner: Also, in recognition of our commitment to long-term thinking and progress, we updated our press release format to include five years of data, as well as that of the current quarter. We remain focused on long-term actions and measures, and we hope the new format speaks to that commitment. The format also describes the metrics we use to calculate performance instead of compensation.

Thomas Sinnickson Gayner: Also in recognition of our commitment to long term thinking and progress we updated our press release format to include five years of data as well as that of the current quarter.

Thomas Sinnickson Gayner: We remain focused on long term actions and measures and we hope the new formats speaks to that commitment.

Thomas Sinnickson Gayner: The format also describes the metrics, we use to calculate incentive compensation.

Thomas Sinnickson Gayner: We think five-year measurement periods do a good job of demonstrating our commitment to long-term accomplishments and accountability. We also hope that the report provides clarity as to how we measure progress. Finally, I'd like to reiterate our invitation to join us for our upcoming annual shareholders meeting, which we call The Reunion. We'll be back at the Robbins Center at the University of Richmond on May 22nd, and we'll start at 2 p.m. Last year, we had so many people that traffic got caught.

Thomas Sinnickson Gayner: We think five year measurement periods do a good job of demonstrating our commitment to long term accomplishments and accountability.

Thomas Sinnickson Gayner: We also hope that the report provides clarity as to how we measure progress.

Thomas Sinnickson Gayner: Finally, I'd like to reiterate our invitation to join us for our upcoming annual shareholders meeting, which we call the reunion will.

Thomas Sinnickson Gayner: We'll be back to Robyn center at the University of Richmond on May 20 <unk>.

Thomas Sinnickson Gayner: And we will start at two P M.

Thomas Sinnickson Gayner: Last year, we had so many people that traffic got clogged. We encourage you to come early the annual meeting is the best setting to enjoy the company of your fellow shareholders.

Thomas Sinnickson Gayner: We encourage you to come early. The annual meeting is the best setting to enjoy the company of your fellow shareholders, see what our company is in, ask questions of management, and meet some of the people of Markel from all around the world.

Thomas Sinnickson Gayner: See what condition or condition is an ask questions of management and meet some of the people of Markel from all around the world.

Thomas Sinnickson Gayner: Please make sure you register at www.mklreunion.com so that we can have credentials ready for you to get into the Robbins Center quickly. I love our team, and I am proud of what they continue to accomplish. I hope you feel the same way, and I look forward to seeing as many of you in person in May as is possible. Before I turn it over to Brian, I'll share what I hope to be saying in the next few minutes. As Johnny Nash sang after the first line of I Can See Clearly Now. I can see all obstacles in my way; gone are the dark clouds that had me blind.

Thomas Sinnickson Gayner: Please make sure you register at Ww M. K L reunion dot com. So that we can have credentials ready for you to get into the Robin Center quickly.

Thomas Sinnickson Gayner: Love, our team and I am proud of what they continue to accomplish I hope you feel the same way and I look forward to seeing as many of you in person in may as is possible.

Thomas Sinnickson Gayner: Before I turn it over to Brian I'll share, what I hope to be saying in upcoming periods.

Thomas Sinnickson Gayner: As Johnny Nash, saying after the first line of I can see clearly now Atkins.

Thomas Sinnickson Gayner: I can see all obstacles in my way going to the dark clouds that had me blind, it's going to be a bright bright bright sunshiny day.

Thomas Sinnickson Gayner: It's going to be a bright, bright, bright, sunshiny day. That's what I hope to be saying on future calls. We will do our best to make it so. With that, I'll turn it over to Brian. Jeremy will follow with his comments, and then we'll open up the floor for your questions.

Speaker Change: That's what I hope to be say in the future calls, we will do our best to make it so with that I'll turn it over to Brian and Jeremy will follow with his comments and then we'll open up the floor for your questions Brian.

Brian Jeffrey Costanzo: Thank you, Tom. And good morning, everyone.

Brian: Thank you Tom and good morning, everyone before I dive into the quarter's results I'll make a few comments on the changes within our earnings release and 10-Q for the quarter. We believe these changes provide a clearer picture of our overall performance.

Brian Jeffrey Costanzo: Before I dive into the quarter's results, I'll make a few comments on the changes in our earnings release and 10-Q for the quarter. We believe these changes provide a clearer picture of our overall performance. First, we move to a consistent measure of profitability of operating income across each segment of our business that excludes amortization of acquired intangible assets. We do not consider these costs when assessing the performance of our businesses and believe it helps investors to provide a consistent performance metric across our operating segments.

Brian Jeffrey Costanzo: First we moved to a consistent measure of profitability operating income across each segment of our business that excludes amortization of acquired intangible assets. We do not consider these costs when assessing the performance of our businesses and believe it believe it helps investors to provide a consistent.

Brian Jeffrey Costanzo: <unk> metrics across our operating segments. Additionally.

Brian Jeffrey Costanzo: Additionally, as Tom mentioned, we incorporated a longer-term view of our key metrics within our press release to provide more perspective on our performance, consistent with how we evaluate performance for incentive compensation purposes. In any given quarter or year, there are many factors that can create volatility in results, which is why we consistently measure our performance over five-year periods. We hope you'll find these changes helpful as you review our results.

Brian Jeffrey Costanzo: Additionally, as Tom mentioned, we incorporated a longer term view of our key metrics within our press release provide more perspective on our performance consistent with how we evaluate performance for incentive compensation purposes.

Brian Jeffrey Costanzo: Any given quarter or year. There are many factors that can create volatility in results, which is why we consistently measure our performance over five year periods. We hope you'll find these changes helpful. As you review our results.

Brian Jeffrey Costanzo: With that, let me take you through our consolidated results for the period. Total revenues increased 23% to $4.5 billion, with each of our three engines achieving year-over-year top-line growth, with the most notable growth coming from our investments. Operating income grew by 77% to $1.3 billion during the first quarter, driven largely by an increase in net investment gains in the quarter.

Brian Jeffrey Costanzo: With that let me take you through our consolidated results for the period total revenues increased 23% to $4 5 billion with each of our three engines achieving year over year top line growth with the most notable growth coming from our investments engine operating income grew by 77% to one.

Brian Jeffrey Costanzo: 3 billion during the first quarter, driven largely by an increase in net investment gains in the quarter.

Brian Jeffrey Costanzo: Highlighting our longer-term view, where short-term changes in the valuation of our equity portfolio are more normalized, we have created cumulative operating income of $8.7 billion over the past four years plus the first quarter of this year. Total net income to common shareholders was $1 billion in the first quarter of 2024, compared to $489 million in the same period of 2023, with the change primarily attributable to higher net investment gains on our public equity portfolio in the first quarter of 2024 compared to the same period of 2023.

Brian Jeffrey Costanzo: Highlighting our longer term view, where short term changes in the valuation of our equity portfolio are more normalized we are we have created cumulative operating income of $8 7 billion over the past four years plus the first quarter of this year.

Brian Jeffrey Costanzo: Total net income to common shareholders was $1 billion in the first quarter of 2024 compared to 489 million in the same period of 2023 with the change primarily attributable to higher net investment gains on our public equity portfolio in the first quarter of 2024 compared to the.

Brian Jeffrey Costanzo: The same period of 2023.

Brian Jeffrey Costanzo: Comprehensive income to shareholders in the first quarter of 2024 was $909 million, compared to $646 million in the same period of 2023, with the favorable change in public equity valuations being partially offset by an unfavorable swing in our fixed maturity portfolio. Net cash provided by operating activities was $631 million in the first quarter of 2024, compared to $284 million in the same period last year. Operating cash flows in 2024 reflected strong cash flows from each of our operating engines, with the most significant contribution coming from our insurance and Total shareholders' equity stood at $15.7 billion at the end of the first quarter. As Tom mentioned, in the first quarter, we repurchased $161 million worth of shares of Markel Group stock under our outstanding Share Repurchase Program, compared to $82 million in the same period last year.

Brian Jeffrey Costanzo: Comprehensive income to shareholders in the first quarter of 2024 was $909 million compared to $646 million in the same period of 2023 with the favorable change in the public equity valuations being partially offset by an unfavorable swing in our fixed maturity portfolio.

Brian Jeffrey Costanzo: Net cash provided by operating activities was $631 million in the first quarter of 2024 compared to $284 million in the same period last year.

Brian Jeffrey Costanzo: Operating cash flows in 2024 reflected strong cash flows from each of our operating engines with the most significant contribution coming from our insurance engine.

Brian Jeffrey Costanzo: Total shareholders' equity stood at $15 7 billion at the end of the first quarter as Tom mentioned in the first quarter, we repurchased $161 million worth of shares of Markel group stock under our outstanding share repurchase program compared to $82 million in the same period last year.

Brian Jeffrey Costanzo: With that, I'll now turn to the performance of each of our operating engines, starting off with our insurance business. Gross written premiums within our underwriting operations grew 4% to $2.8 billion for the first quarter of 2024, compared to $2.7 billion for the same period last year. Our increased premium volume reflects new business growth and more favorable rates on many lines within our international portfolio and select U.S. lines of business. We are working hard to rebalance our diversified portfolio of products, which has resulted in contracting premium writings in certain classes, particularly within pockets of our U.S. professional liability and general liability portfolios.

Speaker Change: With that I'll now turn to the performance of each of our operating engines, starting off with our insurance engine.

Brian Jeffrey Costanzo: Gross written premiums within our underwriting operations grew 4% to $2 8 billion for the first quarter of 2024 compared to $2 7 billion for the same period last year, our increased premium volume reflects new business growth and more favorable rates on many lines within our international portfolio and <unk>.

Brian Jeffrey Costanzo: <unk> U S lines of business, we are working hard to rebalance our diversified portfolio of products, which has resulted in contracting premium writings in certain classes, particularly within pockets of our U S professional liability and general liability portfolios, Jeremy will go into more detail about changes in.

Brian Jeffrey Costanzo: Jeremy will go into more detail about changes in the mix of business and the impact of our underwriting actions on top line premiums in his comments. Our consolidated combined ratio for the first quarter was 95 compared to 94 in the same period of 2023.

Brian Jeffrey Costanzo: The mix of business and the impact of our underwriting actions on top line premiums in his comments.

Brian Jeffrey Costanzo: Our consolidated combined ratio for the first quarter was 95 compared to <unk> 94 in the same period of 2023. The increase was primarily attributable to a higher attritional loss ratio within our U S general liability and professional liability product lines within our insurance segment.

Brian Jeffrey Costanzo: The increase was primarily attributable to a higher attritional loss ratio within our U.S. general liability and professional liability product lines within our insurance sector. Prior year loss reserves developed favorably by $77 million this year versus $71 million in the first quarter of 2023. Favorable development in the first quarter this year was most notable within our international professional liability and marine and energy product lines. We remain cautious and conservative in our approach to both current year losses and reducing prior year loss reserves on our longer-tailed U.S. professional liability and general liability lines given recent playing trends in our program services and ILS operations.

Brian Jeffrey Costanzo: Our year loss reserves developed favorably by $77 million this year versus 71 million in the first quarter of 2023.

Brian Jeffrey Costanzo: Favorable development in the first quarter. This year was most notable within our international professional liability and marine and energy product lines, we remain cautious and conservative in our approach to both current year losses, and reducing prior year loss reserves on our longer tail U S professional liability and general liability.

Brian Jeffrey Costanzo: He lives given recent claim trends.

Brian Jeffrey Costanzo: Within our program services and ILS operations operating income increased 33% to $23 million, primarily driven by growth within program services and other fronting.

Brian Jeffrey Costanzo: Operating income increased 33% to $23 million, primarily driven by growth within program services and other front-takes. Moving next to our investments results, we reported net investment income of $218 million in the first quarter of 2024 compared to $159 million in the same period last year. We continue to benefit from higher interest rates as the yield on our fixed maturity portfolio, short-term investments, and cash equivalents all increase. Additionally, we have been allocating more cash to money market funds and fixed maturity securities to capitalize on the higher interest rate environment.

Brian Jeffrey Costanzo: Moving next to our investment results, we reported net investment income of $218 million in the first quarter of 2024 compared to $159 million in the same period last year, we continue to benefit from higher interest rates as the yield on our fixed maturity portfolio short term investments.

Brian Jeffrey Costanzo: Cash equivalents all increased additionally, we have been allocating more cash to money market funds and fixed maturity securities to capitalize on the higher interest rate environment. We expect based on the current interest rate that the yield on fixed maturity securities will continue to increase slightly throughout <unk>.

Brian Jeffrey Costanzo: We expect, based on the current interest rates, that the yield on fixed maturity securities will continue to increase slightly throughout 2024 as lower yielding securities mature and are replaced by higher yielding securities. Net investment gains of $902 million in 2024 reflect favorable market movements, resulting in a return of 9.8% on our public equity portfolio in the first quarter. This compares to net investment gains of $373 million in the first quarter of 2023.

Brian Jeffrey Costanzo: 24, as lower yielding securities mature and are replaced by higher yielding securities.

Brian Jeffrey Costanzo: Net investment gains of $902 million in 2024 reflect favorable market movements, resulting in a return of nine 8% on our public equity portfolio in the first quarter. This compares to net investment gains of $373 million in the first quarter 2023.

Brian Jeffrey Costanzo: As you've heard us say often before, and I'm sure you'll hear me say again, we focus on long-term investment performance, expecting variability in the equity markets from period to period. At the end of March, the fair value of our equity portfolio included cumulative pre-tax unrealized gains of $7 billion. Net unrealized investment losses and other comprehensive losses in the first quarter of 2024 were $123 million net of taxes compared to net unrealized investment gains of $164 million net of taxes in the same period last year.

Brian Jeffrey Costanzo: As you've heard us say, often before and I'm sure. You'll hear me say again, we focus on long term investment performance expecting variability in the equity markets from period to period at the end of March the fair value of our equity portfolio, including cumulative pre tax unrealized gains of $7 billion.

Brian Jeffrey Costanzo: Net unrealized investment losses, and other comprehensive loss in the first quarter of 2024 or $123 million net of taxes compared to net unrealized investment gains of $164 million net of taxes in the same period last year.

Brian Jeffrey Costanzo: These movements correspond to changes in the fair value of our fixed maturity portfolio resulting from changes in interest rates. Recall that we typically hold our fixed maturities until they mature and would generally expect unrealized holding gains and losses attributed to the changes in interest rates through reverse in-picture periods as bonds mature. Additionally, we continue our longstanding tradition of investing in the highest quality of fixed income securities. As of March 31, 2024, 98% of our fixed maturity portfolio was rated AA or better, and there are no current or expected credit losses within the portfolio.

Brian Jeffrey Costanzo: These movements correspond to changes in the fair value of our fixed maturity portfolio, resulting from changes in interest rates.

Brian Jeffrey Costanzo: Call that we typically hold our fixed maturities until they mature and would generally expect unrealized holding gains and losses attributed to the changes in interest rates to reverse in future periods as bonds mature. Additionally.

Brian Jeffrey Costanzo: Additionally, we continue our longstanding precedent of investing in the highest quality of fixed income securities as of March 31, 2024, 98% of our fixed maturity portfolio was rated double a or better and there are no current or expected credit losses within the portfolio.

Brian Jeffrey Costanzo: Finally, I'll turn to our results from our Markel Ventures engine. Revenues from Markel Ventures increased 3% in the first quarter of 2024 compared to the same period last year, reflecting moderate revenue increases at our consumer and building products and construction services business. Markel Ventures operating income increased 13%, driven by higher revenues and improved operating margins at our consumer and building products businesses versus a year ago. Our Markel Ventures companies continue their excellent long-term performance and meaningful contribution to our operating results and cash flows. With that, I'll turn it over to Jeremy to talk more about our insurance.

Brian Jeffrey Costanzo: Finally, I'll turn to our results from our Markel ventures engine revenues from Markel ventures increased 3% in the first quarter of 2024 compared to the same period last year, reflecting moderate revenue increases at our consumer and building.

Brian Jeffrey Costanzo: Humor in building products and construction services businesses.

Jeremy: Margo ventures operating income increased 13% driven by higher revenues and improved operating margins at our consumer and building products businesses versus a year ago. Our Markel ventures companies continue their excellent long term performance and meaningful contribution to our operating results and cash flows with that I'll turn it.

Brian Jeffrey Costanzo: Over to Jeremy to talk more about our insurance engine.

Jeremy Andrew Noble: Thanks, Brian, and good morning. As you heard from Tom and Brian, the actions we took at the start of the year to improve the overall health of our insurance operations are beginning to bear fruit. We spent much of the first quarter implementing the significant corrective underwriting actions that I discussed on our earnings call a quarter ago, which I believe will improve future profitability. These steps addressed areas where we recently underperformed, particularly within our U.S. specialty insurance operation.

Jeremy: Thanks, Brian and good morning.

Jeremy Andrew Noble: As you heard from Tom and Brian The actions, we took from the start of the year to improve the overall health of our insurance operations are beginning to bear fruit. We spent much of the first quarter implementing the significant corrective underwriting actions that I discussed on our earnings call a quarter ago, which I believe will improve future profitability.

Jeremy Andrew Noble: These steps addressed where we recently underperformed, particularly within our U S specialty insurance operations at the same time, we work to meaningfully grow and the products geographic territories in industries, where performance meets or exceeds our long term profitability targets.

Jeremy Andrew Noble: At the same time, we work to meaningfully grow in the products, geographic territories, and industries where performance meets or exceeds our long-term profitability targets. For the first quarter of 2024, our combined ratio was 95. That result exceeds our ultimate goal, but is in line with where we expected to be at this point in the year.

Jeremy Andrew Noble: For the first quarter of 2024, our combined ratio was 95 that result exceeds our ultimate goal, but is in line with where we expected to be at this point in the year.

Jeremy Andrew Noble: It also shows meaningful improvement from where we stood in the fourth quarter and for the full year of 2023. The impact of our portfolio management actions is most evident in our gross written premium volume for the first quarter. On the surface, we grew a modest 4% versus a year ago.

Jeremy Andrew Noble: It also shows meaningful improvement from where we stood in the fourth quarter and for the full year of 2023.

Jeremy Andrew Noble: The impact of our portfolio management actions are most evident in our gross written premium volume for the first quarter on the surface. We grew a modest 4% versus a year ago. However, you need to disaggregate that growth a bit to appreciate the effectiveness of our underwriting actions.

Jeremy Andrew Noble: However, you need to disaggregate that growth a bit to appreciate the effectiveness of our underwriting action. We use portfolio management tools each quarter to monitor portfolio health and rate adequacy and to evaluate the profitability of each of our products. You might think of this like a traffic light, where we assign a color of green, yellow, or red to each product.

Jeremy Andrew Noble: We use portfolio management tools, each quarter to monitor portfolio health and rate adequacy and to evaluate the profitability of each of our products.

Jeremy Andrew Noble: Might think of this like a traffic light system, where we assigned a color of green yellow or red to each product line.

Jeremy Andrew Noble: Those colors show the degree of rate adequacy and associated combined ratio deviation for the market profitability target for each product. I'll use this construct to demonstrate how we are remixing the portfolio towards our most profitable line, within our green product class, which represents products that are significantly outperforming our combined ratio targets. Our premiums grew by 14% during the first quarter. Around 40% of our overall gross written premiums fall into this category at the moment.

Jeremy Andrew Noble: Those colors show the degree of rate adequacy and associated combined ratio deviation from market profitability target for each product I'll use this construct to demonstrate how we are remixing the portfolio towards our most profitable lives.

Jeremy Andrew Noble: Within our green product classes, which represent products that are significantly outperforming our combined ratio targets. Our premiums grew by 14% during the first quarter around 40% of our overall gross written premiums fall into this category at the moment.

Jeremy Andrew Noble: On the flip side, our red product classes, where profitability is underperforming our combined ratio targets, gross premium volume decreased by 16% during the first quarter. At present, a little more than 10% of our portfolio falls in this category, which is actively being managed.

Jeremy Andrew Noble: On the flip side, our red product classes, where profitability is underperforming our combined ratio targets gross premium volume decreased by 16% during the first quarter.

Jeremy Andrew Noble: At present, a little more than 10% of our portfolio falls in this category, which is actively being managed.

Jeremy Andrew Noble: For many of these lines, we are still operating in an underwriting profit but at a combined ratio that is above our target. For each product, we have a robust set of underwriting action plans to get us back to an acceptable level of profitability in a reasonable period of time, and our plans take into consideration current market dynamics and longstanding relationships. This contraction in the first quarter of 24 focused on several product classes within our U.S. and Bermuda casualty and professional liability portfolio.

Jeremy Andrew Noble: Let me be clear for many of these lines. We are still operating in an underwriting profit, but at a combined ratio that is above our target for each product. We have a robust set of underwriting action plans to get back to an acceptable level of profitability in a reasonable period of time and our plans take into consideration current market dynamics.

Jeremy Andrew Noble: And longstanding relationships.

Jeremy Andrew Noble: This contraction in the first quarter of 'twenty four.

Jeremy Andrew Noble: Focus on several product classes within our U S and Bermuda casualty and professional liability portfolio. These underwriting actions were most notable in our brokerage excess and umbrella and brokerage primary contractors general liability lines within casualty and our large account risk managed errors and omissions and directors and officers lines.

Jeremy Andrew Noble: These underwriting actions were most notable in our Brokerage Excess and Umbrella and Brokerage Primary Contractors General Liability lines within Casualty, and our Large Account Risk Managed Errors and Omissions and Directors and Officers lines within Professional Liability. These underwriting actions consisted of a mixture of rate increases, changes to terms and conditions, evaluation of limits and attachment points, and redistribution of geographical or industry mix. We have also decreased the overall proportion of construction business within our casualty portfolio and improved the profitability outlook for our existing books.

Jeremy Andrew Noble: Within professional liability.

Jeremy Andrew Noble: Our underwriting actions consist of a mixture of rate increases changes to terms and conditions evaluation of limits and attachment points and redistribution of geographic or industry mix.

Jeremy Andrew Noble: We also decreased the overall proportion of construction business within our casualty portfolio and improve the profitability outlook for our existing book.

Jeremy Andrew Noble: In certain instances, we identified product lines that were not expected to be profitable. In these circumstances, we made more meaningful changes, including exiting certain products or subclasses, and discontinued writing several product classes in our insurance segment in the first quarter where we believe underwriting action plans would not enable us to reach our profitability goals. Some of the areas we exited included retail primary casualty, risk-managed architects and engineers, and intellectual property collateral protection. In total, the lines and subclasses we exited represented less than 2% of our insurance segment operations on an annual basis.

Jeremy Andrew Noble: In certain instances, we identified product lines that were not expected to be profitable in these circumstances, we made more meaningful changes, including exiting certain products or sub classes.

Jeremy Andrew Noble: We discontinued writing several product classes in our insurance segment in the first quarter, where we believe underwriting action plans would not enable us to reach our profitability goals.

Jeremy Andrew Noble: Some of the areas. We exited included retail primary casualty risk managed architects and engineers and intellectual property collateral protection lines.

Jeremy Andrew Noble: In total the lines and sub classes, we exited represented less than 2% of our insurance segment operations on an annual basis.

Jeremy Andrew Noble: We also non-renewed a handful of professional liability quota share contracts within our reinsurance business that did not meet our price. Overall, we remain thoughtful and disciplined about how we handle long-term portfolio management. Turning to the positive, we've seen profitable growth within our U.S. specialty insurance operations, including property and Inland Marine, personal lines, programs, binding, and commercial professional liability. Within our international portfolio, we've seen profitable growth across a number of products, including marine and energy, UK, and European, within our global reinsurance operations.

Jeremy Andrew Noble: We also had non renewed a handful of professional liability quota share contracts within our reinsurance segment that did not meet our pricing targets.

Jeremy Andrew Noble: Overall, we remain thoughtful and disciplined about how we handle long term portfolio management.

Jeremy Andrew Noble: Turning to the positive we've seen profitable growth within our U S specialty insurance operations within our property and inland marine personal lines programs binding.

Jeremy Andrew Noble: In commercial professional liability products within our international portfolio, we've seen profitable growth across a number of products, including our marine and energy UK and European businesses.

Jeremy Andrew Noble: Within our global reinsurance operations, we opportunistically pursue growth.

Jeremy Andrew Noble: We opportunistically pursued growth within the London Market Specialty Marine and Energy. With a large, well-diversified global platform, we see plenty of opportunities to grow and enhance our overall portfolio construction, and we are focused on doing just that.

Jeremy Andrew Noble: Within the London market specialty marine and energy space.

Jeremy Andrew Noble: With a large well diversified global platform, we see plenty of opportunities to grow and enhance our overall portfolio. Construction. We are focused on doing just that.

Jeremy Andrew Noble: We've taken strong and decisive actions to deliver improved combined ratio results going forward. It will take time for these underwriting actions to earn through and impact our combined ratio, but we're confident that we're on the right track. Meanwhile, we remain conservative in our reserving, especially in regard to our longer-tail product line. We also continue to increase reserve margins on new business to buffer against uncertainty around longer-term losses. Finally, I'll share a few thoughts on the current pricing environment and overall insurance market dynamics.

Jeremy Andrew Noble: We've taken strong and decisive actions to deliver improved combined ratio results going forward. It will take time for these underwriting actions to earn through and impact our combined ratio, but we're confident that we're on the right track.

Jeremy Andrew Noble: Meanwhile, we remain conservative in our reserving practices, especially in regard to our longer tail product classes. We also to continue continue to increase reserve margins on new business to buffer against the uncertainty around our longer term loss trends.

Jeremy Andrew Noble: Finally, I'll share a few thoughts on the current pricing environment and overall insurance market dynamics.

Jeremy Andrew Noble: In general, we continue to see ongoing modest rate increases across our diversified product portfolio. Property continues to see meaningful rate increases, although at a more moderate level than a year ago. In our casualty lines, we are achieving a high single-digit, and in some cases, a low double-digit rating; across most of our products, rates remain in line or better than our view on loss. We've seen a mild softening of rate increases throughout a large part of our international portfolio.

Jeremy Andrew Noble: In general we continue to see ongoing modest rate increases across our diversified product portfolio.

Jeremy Andrew Noble: <unk> continues to see meaningful rate increases, although at a more moderate level than a year ago.

Jeremy Andrew Noble: And our casualty lines, we are achieving high single digit in some cases low double digit rate increases across most of our product classes.

Jeremy Andrew Noble: <unk> remain in line or better than our view of loss trends.

Jeremy Andrew Noble: We have seen a mild softening of rate increases throughout a large part of our international portfolio. Our international book continues to be priced attractively compared to loss trends and combined ratio targets as such we continue to actively grow in many of these lines.

Jeremy Andrew Noble: Our international book continues to be priced to track, compared to loss trends and combined ratio targets. As such, we continue to actively grow in many of these lines. Finally, within professional lines, we see ongoing rate decreases in many classes, most notably in public D&L. As a consequence, we have decreased ratings in these classes.

Jeremy Andrew Noble: Finally within professional lines, we see ongoing rate decreases in many classes, most notably in public GNL as a consequence, we decreased writings in these classes.

Thomas Sinnickson Gayner: In closing, I want to reiterate that we finished the quarter largely where we expected it to. We recognize that it takes time for actions to earn through and create credibility. However, with our refreshed leadership and Renewed Focus, I believe it is only a matter of time before we begin reporting results more in line with our longer-term aspirations. Thank you. With that, I'll turn things back over to Tom for questions.

Jeremy Andrew Noble: In closing I want to reiterate we finished the quarter largely where we expected we recognize that it takes time for actions to earn through and create credibility. However, with our refreshed leadership team and a renewed focus I believe it is only a matter of time before we began reporting results more in line with our longer term.

Thomas Sinnickson Gayner: Aspiration.

Thomas Sinnickson Gayner: Thank you with that I'll turn things back over to Tom for questions.

Thomas Sinnickson Gayner: Super. Thank you, Jeremy. Thank you, Brian. And, Sarah, if you'd be so kind as to open the floor for questions, thank you.

Tom: Super. Thank you Jeremy Thank you, Brian and Sarah if you'd be so kind as to open the floor for questions.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 1 again. At this time, we'll pause momentarily to assemble our roster. Your first question comes from the line of Mark Hughes with Truist Securities. Your line is open.

Speaker Change: Thank you we will now begin the question and answer session.

Operator: You would like to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then one again at.

Mark Douglas Hughes: At this time, we'll pause momentarily to assemble our roster.

Operator: Your first question comes from the line of Mark Hughes with <unk> Securities. Your line is open.

Mark Douglas Hughes: Yeah, thank you. Good morning. Good morning.

Mark Douglas Hughes: Yes. Thank you good morning.

Operator: If you could make any observations about the loss development, you know, some of those problematic lines, I think the GL professional liability. There's been a little more volatility around that. You saw that in your results last year, and clearly, you switched back to kind of your more historical norm of good reserve development, but you highlighted that it sounds like it was international and Marine and Energy. But anything you're seeing in that loss development, again, the GL, professional liability, that is better or worse or about the same as what you saw last year.

Mark Douglas Hughes: Good morning.

Mark Douglas Hughes: Make any observations about the <unk>.

Operator: Loss development getting some of those problematic lines I think good Geo professional liability.

Operator: It's been a little more volatility around that you saw that in your results last year.

Operator: And clearly the switchback.

Operator: Kind of your more historical norm of a good reserve development.

Operator: But you highlighted that sounds like it was international.

Operator: In our marine and energy.

Operator: Anything youre seeing in that loss development again.

Operator: Professional liability.

Operator: Better worse or about the same as what you saw last year.

Jeremy Andrew Noble: Thank you, Jeremy. Would you handle Mark's question, please? Of course. Thanks, Mark. Good morning. So a couple things. You're exactly right.

Speaker Change: Thank you Jeremy would you handle Mark's question. Please.

Jeremy: Thanks, Mark good morning, So a couple of things.

Jeremy: Youre exactly right, we spoke about that a quarter ago, we did a very extensive review in the fourth quarter.

Jeremy Andrew Noble: We spoke about that a quarter ago. We did a very extensive review in the fourth quarter. We would have reviewed an excess of $4 billion of reserves within our general liability and professional liability portfolios in the U.S., and we took action at that time. In the first quarter, in those areas, certainly nothing that was unexpected, unanticipated, or a concern. By and large, in our insurance business, the favorable prior year development was more weighted towards our international book, and that was more weighted towards some of our professional lines in that space.

Jeremy Andrew Noble: You would have reviewed in excess of $4 billion of of reserves within our general liability and professional liability portfolios in the U S and we took.

Jeremy Andrew Noble: Actions that at that time.

Jeremy Andrew Noble: In the first quarter.

Jeremy Andrew Noble: Or are there was very little movement or activity in those areas certainly nothing that was unexpected unanticipated or a concern.

Jeremy Andrew Noble: By and large in our insurance the prior year favorable prior year development was more weighted towards our international book and that was more weighted towards some of our professional.

Jeremy Andrew Noble: With regard to sort of general liability in the U.S., as an example, we would have seen modest favorable prior year activity in the first quarter this year versus modest unfavorable activity in the first quarter of last year. So it's been pretty quiet on that front. Overall, general liability, marine energy, and professional lines in the international space were the largest contributors to our favorable prior year development in the first quarter.

Jeremy Andrew Noble: <unk> lines in that in that space with regards to sort of general liability in the U S. As an example, we would've seen modest favorable prior year activity in the first quarter this year versus modest unfavorable activity in the first quarter of last year. So it's been it's been pretty quiet.

Jeremy Andrew Noble: On that front overall general liability Marine and energy professional lines in the international space are the largest contributors to our favorable prior year development in the first quarter.

Jeremy Andrew Noble: And you mentioned how, in casualty, you're seeing high single-digit, maybe low double-digit, inline is better than lost trends. There's been some discussion of whether those casualty lines were firming, whether pricing was accelerating in early 2024. Are you seeing that, or is it steady or down?

Jeremy Andrew Noble: And you had mentioned Ho and casualty Youre seeing high single, maybe low double digits in line or better than loss trends.

Jeremy Andrew Noble: There's been some discussion of weather.

Jeremy Andrew Noble: Those casualty lines were firming, whether pricing was accelerating.

Jeremy Andrew Noble: Early 2024.

Jeremy Andrew Noble: Are you are you seeing that or is it steady or down.

Jeremy Andrew Noble: Yeah, we've certainly seen a pretty favorable pricing environment within the casualty lines, and if anything, I would say that that's accelerated over the course of the first quarter, and I think that's wholly appropriate and necessary. I did comment on the fact that the rate that we're seeing is in excess of our estimates around loss trends, which we would hope would be beneficial longer term. That being said, we're certainly being cautious and trying to build a margin of safety into our current accident-year attritional selections within the GL space.

Jeremy Andrew Noble: Yes.

Speaker Change: We've certainly seen a pretty favorable pricing environment within the casualty lines and if anything I would say that that's accelerated over the course of the first quarter and I think thats wholly appropriate and necessary.

Jeremy Andrew Noble: I did comment on the fact that our our rates that we're seeing is in excess of our estimates around loss trends, which we would hope would be beneficial longer term that being said, we're certainly being cautious and trying to build a margin of safety into our current accident year Attritional selections with.

Jeremy Andrew Noble: Within the GL space.

Jeremy Andrew Noble: The rate is pretty clear what we're getting. The trend is more of an assumption, so we want to make sure we have an appropriate margin of safety around that, given the backdrop of the last couple years.

Jeremy Andrew Noble: Our rate is pretty clear what we're getting the trend is more of an assumption. So we want to make sure. We have an appropriate margin of safety around that given the backdrop in the last couple of years.

Jeremy Andrew Noble: And if you notice anything between the admitted and ENS, are those, is there still business shifting out of admitted into ENS? Is it more stable? Any observations there would be helpful. Yeah, I think the

Jeremy Andrew Noble: And have you noticed anything between admitted.

Jeremy Andrew Noble: E&S.

Jeremy Andrew Noble: Are those.

Jeremy Andrew Noble: So there is still business shifting out of admitted in Indiana is it more stable.

Jeremy Andrew Noble: Distributions there would be helpful.

Jeremy Andrew Noble: Yeah, I think the E&S market is still incredibly strong, and certainly, we have a long-standing history and a very sizable presence within the E&S space. We've got a wide portfolio of products that we're focused on delivering to the E&S space, and I think those trends will continue. Certainly, a lot of what we're doing in the casualty space is oriented around and focused on our product offerings within the E&S space.

Jeremy Andrew Noble: Yes, I think the the E&S market is still incredibly strong and certainly we have a longstanding history of very sizable presence within the E&S space.

Jeremy Andrew Noble: Got a wide portfolio of products that we're focused on delivering through to the to the E&S space.

Jeremy Andrew Noble: And I think those trends will continue certainly a lot of what we're doing in the in the casualty space is oriented around and focus on our product offerings within E&S space.

Operator: Thank you very much. Yeah, sure. Thanks.

Speaker Change: Thank you very much.

Speaker Change: Yes sure. Thanks.

Andrew E. Andersen: Your next question comes from Andrew Andersen with Jeffreys. Your line is open.

Operator: Your next question comes from Andrew Anderson with Jefferies. Your line is open.

Operator: Hey, good morning. Maybe back on reserves. Just given a couple years of adverse development on GL and professional liability, I think you had also mentioned you were releasing from some recent accident years, so can you kind of talk about these releases here and perhaps why you didn't let them season a little bit longer, given the longer

Andrew E. Andersen: Hey, good morning, maybe back on reserves, just given a couple of years of adverse development on Geo in professional liability I think.

Operator: You had also mentioned you are releasing from some recent accident years. So can you kind of talk about these releases here and perhaps why you didn't let them season, a little bit longer given the longer tail.

Jeremy Andrew Noble: Jeremy, if you'd be so kind. Yeah, of course. Yeah, maybe we could take that off the line, Andrew.

Speaker Change: Jeremy if need be.

Andrew: Yes of course, yes, we.

Speaker Change: Maybe we would take that offline either I don't believe I would say that our longer tail lines of business general liability and professional liability, particularly in the U S that we've done any real releasing on those core reserves on the most recent accident years.

Jeremy Andrew Noble: I don't believe, I would say, that in our longer tail lines of business, general liability, and professional liability, particularly in the U.S., we've done any real release on those core reserves for the most recent accident years. There could be occasions in other product classes where we might see favorable takedowns on more recent accident years, but I don't think there's anything that's standing out as far as that trend. I would say we're more, in the most recent years, we're more in a wait-and-see mode.

Jeremy Andrew Noble: There could be occasions in other product classes, where we might see favorable takedowns on more recent accident years, but.

Jeremy Andrew Noble: I don't think Theres anything that's standing out as far as that trend I would say we're more.

Jeremy Andrew Noble: In the most recent years, we're a more wait and see mode. Ashley commented a quarter ago as part of the reserving actions. We took in the fourth quarter was to increase our reserve positions and that margin of safety on those years on the more recent years. So we're sort of in a wait and see mode I would say on that.

Jeremy Andrew Noble: And actually, we commented a quarter ago that part of the reserving actions we took in the fourth quarter was to increase our reserve positions and that margin of safety for those years, on the more recent years. So we're sort of in a wait-and-see mode, I would say.

Jeremy Andrew Noble: Okay, so perhaps the recent accident in your commentary was specific to international development. Yeah, sorry.

Speaker Change: Okay. So perhaps the recent accident your commentary was specific to international development, Yes, sorry, that's the <unk>.

Jeremy Andrew Noble: That's the other thing I would say. That's a great point, Andrew, that that can be a little bit different in international. In international, as an example, take our professional space. We have a very meaningful professional lines portfolio there. Again, a broad product set offering, but that predominantly focuses on international professional lines, not U.S. professional lines that get placed in the London market. We don't do a lot of U.S. business out of London.

Jeremy Andrew Noble: <unk> Great Plains.

Jeremy Andrew Noble: That can be a little bit different in international and international as an example, take our professional space, we have a very meaningful professional lines portfolio. There again broad product set offering but that predominantly focuses on international professional lines not U S professional lines that get placed in the London.

Jeremy Andrew Noble: Market, we don't do a lot of the U S business out of London.

Speaker Change: Okay. Thank you for that.

Jeremy Andrew Noble: Okay, thank you for that. And then you had also mentioned that Lion's Exit represented less than 2% on an annual basis. Kind of, where are we in the cutting business phase? Is that largely over, or is it an ongoing process throughout the year?

Jeremy Andrew Noble: And then you had also mentioned that lines exited represented less than 2% on an annual basis kind of where are we in the cutting business phase is that largely over is it ongoing process throughout the year.

Jeremy Andrew Noble: You know, it's not that frequent that we fully exit a class of business. We're always going to be focused on overall profitability. We obviously have a broad and wide product set at any point in time. Lots of products are going really well, some things that we're working on. As far as product exits go, I don't anticipate anything else in the foreseeable future. There's nothing else that we're sort of taking a hard look at.

Jeremy Andrew Noble: It is not that frequent that we fully exit our classic business, we're always going to be focused on overall profitability.

Jeremy Andrew Noble: Obviously handled broad and wide product set at any point in time, a lots of products are going really well some things that we're working on.

Jeremy Andrew Noble: As far as product exit Scott I don't anticipate anything else or foreseeable future. There is nothing else that we're sort of taking a hard look at we really acted decisively around those and we took the action in those instances, where we didn't feel like the product was is core to our overall offering and we didn't think we could address the profitability within that.

Jeremy Andrew Noble: We really acted decisively around those, and we took action in those instances where we didn't feel like the product was core to our overall offering, and we didn't think we could address the profitability within that product space in a meaningful time. Our work now is largely focused on improving the overall profitability on a handful of lines that we feel like are either not as rate-adequate as they need to be or, you know, aren't delivering the overall profitability profile we want. And that's a little bit what I talked about in my comments, and obviously from a quarter ago. But I wouldn't expect a further product.

Jeremy Andrew Noble: Product space in a meaningful Todd our work now is largely focused on improving the overall profitability on the handful of lines that we feel like are either.

Jeremy Andrew Noble: Not as rate adequate as they need to be or.

Jeremy Andrew Noble: Delivering the overall profitability profile, we locked in that's a little bit what I talked about in my comments and obviously from a from a quarter ago, but I Wouldnt expect further for the product Texas.

Speaker Change: Thank you.

Operator: Your next question comes from the line of Charlie Lederer with Citi. Your line is open.

Jeremy Andrew Noble: Your next question comes from the line of Charlie <unk> with Citi. Your line is open.

Charles William Lederer: Thanks, Good morning.

Charles William Lederer: Jeremy you mentioned the <unk>.

Charles William Lederer: 95 combined.

Charles William Lederer: Above target, but in line with.

Charles William Lederer: Expectations I guess.

Charles William Lederer: Wondering if you can unpack that a little bit or are you holding more IV and are here in the first quarter to reflect uncertainty or any color. There that I guess should we expect that to improve as the year progresses.

Charles William Lederer: Yes, Jeremy go ahead. Please yes of course, thanks, Charlie good morning.

Charles William Lederer: Thanks. Good morning.

Charles William Lederer: Yes, I would expect that that would improve over the course of the year I'm not going to put any any specifics around that are or a guidance around that but what I would say is as you know it as well.

Jeremy Andrew Noble: Jeremy, you mentioned that the 95 combined is above target but in line with expectations. I'm wondering if you can unpack that a little bit. Are you holding more IBNR here in the first quarter to reflect uncertainty or any color there that we should expect that to improve as the year progresses?

Jeremy Andrew Noble: We've taken a lot of actions it takes a while for that to earn through the book, So where we've exited.

Jeremy Andrew Noble: Profitable products and products that really disproportionately contribute to some of the underwriting loss reported in the fourth quarter, a year ago, and where we're taking underwriting actions to improve the profitability profile of ongoing lines at.

Jeremy Andrew Noble: It takes a little while to give credibility to the actions that we've taken and it takes a little while for that earnings come through and then also to your point. We are hearing more of a margin of safety within our reserves selections as I mentioned before we can be pretty clear on some of the actions that we're taking and we can be pretty clear about the pricing environment.

Jeremy Andrew Noble: Overall, what the actual end of day inflationary environment trend environment that we're going to experience is a little bit uncertain. So we're going to be cautious in that in that space, but I think over the course of the year on a like for like basis barring something unforeseen we should continue to see the results improve as we earn through.

Jeremy Andrew Noble: The effect of the actions we've taken.

Speaker Change: Got it. Thank you that's helpful.

Jeremy Andrew Noble: I guess just within the current accident year picks neither an insurance or reinsurance did you guys have any exposure to the bridge collapsed in Baltimore.

Jeremy Andrew Noble: Okay.

Speaker Change: Yes, I mean look.

Jeremy Andrew Noble: Yes.

Speaker Change: As Jeremy and I were joking.

Jeremy Andrew Noble: Anything you see on television from around the World, We probably have some of because we are a global.

Speaker Change: Book of business all around the world. So when you see a disastrous happens on TV you can count that we probably have some of that but that is the business. We are in and thats, how we backstop, our customers and take care of them in times of need, but that's normal course of business worse I don't know if you want to add anything Jeremy.

Jeremy Andrew Noble: The thing I would add to that is which really is complementary to what you just shared Thomas Theres, nothing thats unusual or outsized about that event for us, which is why we don't call that out separately.

Jeremy Andrew Noble: It is a significant event, obviously for the industry and there'll be sort of ripple effects over time, as we assess liability and we evaluate.

Jeremy Andrew Noble: <unk> exposures and those sorts of things, but nothing nothing that we would point to that's unusual or outsized.

Jeremy Andrew Noble: Yeah.

Speaker Change: Okay. So we shouldn't really think about that as being kind of.

Speaker Change: <unk>, a meaningful contributor to the Attritional loss ratio.

Jeremy Andrew Noble: Increased year over year since margins to higher loss picks.

Speaker Change: Good afternoon guys.

Jeremy Andrew Noble: I think like Tom said large losses are happening all over the world all the time across a broad set of Av.

Jeremy Andrew Noble: Our products and classes.

Jeremy Andrew Noble: Obviously more acutely aware of the significance of that event that we might be in the U S. Around loss events are occurring elsewhere around the world, but whatever might be happening. There is a chance. So we're going to have exposure in our portfolio. So I just think I think that's true for US I think that's true of most of the global players we don't tend to call out every single.

Jeremy Andrew Noble: Individual losses and to try to carve that out from our underlying results.

Jeremy Andrew Noble: Okay.

Speaker Change: Alright, Thank you I'll get back in the queue.

Jeremy Andrew Noble: Yeah, Jeremy, go ahead, please. Yeah, of course. Thanks, Charles. Good morning.

Jeremy Andrew Noble: Your next question comes from Charles Gold with <unk>. Your line is open.

Jeremy Andrew Noble: Yes, I would expect that that would improve over the course of the year. I'm not gonna put any specifics around that or any guidance around that. But what I would say, as you know, is we've taken a lot of actions. It takes a while for that to show up through the book.

Jeremy Andrew Noble: So where we've exited unprofitable products, and products that really disproportionately contributed to some of the underwriting loss reported in the fourth quarter of a year ago, and where we're taking underwriting actions to improve the profitability profile of ongoing lines, it takes a little while for the actions that we've taken to be credible, and it takes a little while for that earnings to come through, and then also, to your point, we are carrying As I mentioned before, we can be pretty clear about some of the actions that we're taking, and we can be pretty clear about the pricing environment.

Jeremy Andrew Noble: Overall, the actual end-of-day inflationary environment and trend environment that we're gonna experience is a little bit uncertain. So we're gonna be cautious in that space. But I think over the course of the year, on a like for like basis, barring something that's unforeseen, we should continue to see the results improve as we earn through the effect of the actions we've taken.

Speaker Change: Thank you.

Jeremy Andrew Noble: Congratulations to the three of you and the whole Mark Hill team for the.

Jeremy Andrew Noble: Performance you just posted.

Speaker Change: Tom I wanted to follow up on a comment that you made.

Jeremy Andrew Noble: About shares outstanding.

Jeremy Andrew Noble: After the quarter end being below 13 is that from.

Jeremy Andrew Noble: The number.

Jeremy Andrew Noble: <unk> 13 million and $1 37 or is there another number that was the starting point.

Jeremy Andrew Noble: So that comment no it would be reflective of the fact that we we're darn close to 13 as of March 31, and we have purchased shares between the time of March 31, and May 2nd where we stand right now.

Speaker Change: Alright, well I was asking what number was at the end of March.

Jeremy Andrew Noble: It was 13 point something Brian might have the exact number there yes. The 13th the 13, one that you quoted that was the number at the end of March yes at this point.

Jeremy Andrew Noble: Yes, the comment was that the subsequent purchases.

Jeremy Andrew Noble: The number in the Q, which will be the March 31st number at brought it below.

Jeremy Andrew Noble: Right.

Speaker Change: And Tom I would enjoy building out some of those tunes.

Speaker Change: Reunion, if you'd just give me some of the lyrics.

Jeremy Andrew Noble: That would make a hell of a party songs so thats alright.

Speaker Change: You got yourself a deal.

Thomas Sinnickson Gayner: Got it. Thank you. That's helpful. I guess just within the current accident year picks, either insurance or reinsurance, did you guys have any exposure to the bridge collapse in Baltimore?

Jeremy Andrew Noble: As Jeremy and I were joking, anything you see on TV from around the world, we probably have some of it. We have a global book of business all around the world, so when you see disasters happen on TV, you can count that we probably have some of that. But that is the business we are in, and that's how we backstop our customers and take care of them in times of need. But that's the normal course of business for us. I don't know if you want to add anything, Jeremy.

Speaker Change: Alright. Thank you appreciate it.

Thomas Sinnickson Gayner: Hugh.

Jeremy Andrew Noble: Your next question comes from the line of John Fox with Santa Morris Your line is open.

Jeremy Andrew Noble: Yes.

Jeremy: Alright, thank you.

Jeremy Andrew Noble: The only thing I would add to that, which really is complementary to what you just shared, Tom, is that there's nothing unusual or outsized about that event for us, which is why we don't call that out, you know, separately. It is a significant event, obviously, for the industry, and there'll be sort of ripple effects over time as we assess liability and we evaluate contingent exposures and those sorts of things, but nothing that we would point to that's unusual or outsized.

Jeremy: Morning, everyone. Good morning, John.

Speaker Change: So I'm curious.

Jeremy Andrew Noble: In the other insurance operations.

Jeremy Andrew Noble: It looks like there was a $17 million reserve increase.

Jeremy Andrew Noble: And I think I remember for meeting the Q last night that it was an asbestos and environmental which we haven't heard from in a long time.

Jeremy Andrew Noble: And I recall, you used to review that in your third quarter.

Jeremy Andrew Noble: So maybe Jeremy can comment on on what's going on there and is that a one off or what's happening. Thank you Jeremy could you give the details on that but yes of course, a good morning John.

Jeremy Andrew Noble: Okay, so we shouldn't really think about that as being kind, you know, a meaningful contributor to the nutritional loss ratio increase year-over-year. It's more just a higher-loss pick.

Jeremy Andrew Noble: I think, like Tom said, large losses are happening all over the world, all the time, across a broad set of products and classes. We're obviously more acutely aware of the significance of that event than we might be in the U.S. around loss events that are occurring elsewhere around the world. But whatever might be happening, there's a chance we're going to have exposure in our portfolios. I think that's true for us. I think that's true of most global players.

Charles William Lederer: Your next question comes from Charles Gold with Truist. Your line is open.

Operator: We don't tend to call out every single individual loss event and try to carve that out from our underlying results. Okay. All right. Thank you. I'll get back to you.

Operator: Thank you. Congratulations to the three of you and the whole Markel team for the first to this posted and. Tom, I wanted to follow up on a comment that you made about shares outstanding after the quarter end being below 13. Is that from the number in the queue, 13,000,137, or is there another number that was a starting point?

Jeremy Andrew Noble: You're exactly right in your in your memory is very sound on with regard to how we used to approach our annual reserving. So in the other discontinued segment, we did recognize about $15 million of strengthening associated with claims ongoing claims handling costs for really a large outstanding <unk>.

Thomas Sinnickson Gayner: comment? No, it would be reflective of the fact that we were darn close to 13 as of March 31, and we had purchased shares between the time of March 31 and May 2nd, where we stand right now.

Operator: Right, that's why I was asking what number it was at the end of March.

Brian Jeffrey Costanzo: It was 13.0 something. Brian might have the exact number somewhere.

Brian Jeffrey Costanzo: Yes, the 13-1 that you quoted was the number at the end of March, yes. And to Tom's point, yeah, the comment was that subsequent purchases post the number in the queue, which would be the March 31st number, have brought it forward.

Brian Jeffrey Costanzo: Gaining ath or special environmental.

Brian Jeffrey Costanzo: Exposure.

Brian Jeffrey Costanzo: That hasnt moved in some time, we regularly review that.

Brian Jeffrey Costanzo: We would look at that in some ways more frequently than an annual we don't have as much of an outstanding part of reserves in as many ways that we're monitoring. So we don't have that annual study of the way that we use to we just view that nothing I would not expect any more.

Brian Jeffrey Costanzo: In that in that space anytime soon.

Brian Jeffrey Costanzo: To put that behind us.

Speaker Change: Okay great.

Speaker Change: Tom I have a bigger picture question.

Speaker Change: Yes, it's interesting with the change in the proxy this year moving from book value.

Brian Jeffrey Costanzo: The operating income.

Brian Jeffrey Costanzo: And.

Brian Jeffrey Costanzo: My sense is there's a lot of shareholders of Markel that think about 10 20 years ago. When you were primarily insurance and.

Brian Jeffrey Costanzo: Book value was a good way to look at the company.

Brian Jeffrey Costanzo: But youre really signaling a change going to operating income.

Brian Jeffrey Costanzo: And could you talk about how you think about how martell as a better stronger company right.

Brian Jeffrey Costanzo: Being more diversified specialty insurance.

Brian Jeffrey Costanzo: Alright.

Speaker Change: <unk> are Mark correct. Please correct me.

Speaker Change: No I think your observations are spot on.

Brian Jeffrey Costanzo: Yes, you go back 10 years 20 years ago, when the business was dominated by the insurance engine that we didnt even call. It that then because that would have implied that perhaps there are other engines, which there were not and book value is a pretty darn good proxy for describing economic progress.

Brian Jeffrey Costanzo: Insurance operation.

Brian Jeffrey Costanzo: Bank of financial institution like that as we have emphasized investments and we've emphasized that for a long time and the growth of the ventures businesses.

Brian Jeffrey Costanzo: The economic value being created.

Brian Jeffrey Costanzo: This business doesn't get well reflected in book value. So they do make money. They are they are worth something and we think the operating income line that we'd give you over multiple years and with the multi year horizon that.

Brian Jeffrey Costanzo: It's sort of a separate component of the overall value.

Brian Jeffrey Costanzo: Sort of accounting presentation in trying to pencil out what it's worth to the meta point of the Markel group being a more resilient and robust company I like the idea of three distinct streams of income that are flowing into the coffers and in any given period.

Brian Jeffrey Costanzo: One of those engines might not be firing to those engines might not be firing but usually at least one is in the first quarter was a case, where all three work. So it makes things more robust more resilient more able to absorb volatility in any one.

Brian Jeffrey Costanzo: Your line of business and in fact, I think one of our major competitive advantages is that throughout the entire Markel organization. When we're faced with a business decision oftentimes it.

Brian Jeffrey Costanzo: It's pretty clear that there are things, which might cost you something in the short term, but it's better for the long term now if you are under pressure to pay our short term bill or to meet a short term quarterly estimate the temptation to take the short term decision exist. We try everything we can possibly do to not have that.

Brian Jeffrey Costanzo: Temptation, we want to do things that are in the right long term interest of the Mark Calgroup, our shareholders our customers our associates and we've just taken away a lot of the noise.

Brian Jeffrey Costanzo: And I think it's a beautiful piece of architecture that underpins what we've been trying to do for a long time and it's nice to get to a quarter like this where you you see all three engines firing and it's it's clear.

Thomas Sinnickson Gayner: Right, and Tom, I would enjoy belting out some of those tunes with you at the reunion if you'd just get me some of the lyrics and make a hell of a party song. Well, that's right, you got yourself a deal. All right. Thank you. I appreciate it.

Speaker Change: Alright, great. Thank you I just have a suggestion on the presentation.

Operator: Your next question comes from the line of John Fox with Fenimore. Your line is open.

Thomas Sinnickson Gayner: I think Brian referenced like a five year.

John Derwin Fox: Cumulative investment gain or something maybe you could put the five year cumulative on your releases.

John Derwin Fox: Yes, because one quarter of investment gain which was nice to make $1 billion last quarter, but.

Operator: Some of that has already gone in the month of April in stocks and bonds. So.

John Derwin Fox: Thinking about that and showing it on a five year and what the cumulative Saar.

John Derwin Fox: Might help communicate that so that's all Joseph alright, good stuff.

John Derwin Fox: Good morning, everyone. Good morning, John.

John Derwin Fox: Thank you.

Operator: So, I'm curious, in the other insurance operations, there looks like there was a $17 million reserve increase. And I think from reading the queue last night that it was in asbestos and environmental, which we haven't heard from in a long time. And I recall you used to review that in your third quarter. So maybe Jeremy could comment on what's going on there. Is that a one-off, or what's happening?

John Derwin Fox: Your next question comes from Scott <unk> with RBC capital markets. Your line is open.

Jeremy: Yes, good morning.

Operator: Mentioned the rate increases picking up and casually just wondering.

Operator: Seeing that across the board is there any lines were.

Operator: Sticks out in it.

Operator: Looked up a lot more relative to the past few quarters and then just the second part is.

Operator: Any sense on where just generally in loss cost trends.

Operator: And casually I know.

Operator: Tough to Dubai.

Jeremy: Given your product set but.

Jeremy: Anything you can share on either one of those.

Jeremy Andrew Noble: Jeremy, could you give the details on that? Yeah, of course. Good morning, John.

Operator: Jeremy PBC glad to address that yes, sure sure Scott and Kate and good morning.

Jeremy: I would say that the.

Jeremy: The biggest pockets of our overall casualty portfolios the ones that we're working on most focused on and the ones that probably are my comments on our rates are really going to be in the primary casualty and excess and umbrella space within the within the U S.

Jeremy: And that would contrast from and also our larger risk managed excess casualty offerings, both in the U S and Bermuda.

Jeremy: Contrast that with a little bit with floods say, what's happening in the pricing environment per se are buying gain lines or.

Jeremy: Other sort of casualty offerings be it <unk> be in the sort of health care space in the environmental space, where the rates wouldn't be quite as strong as what I commented on.

Jeremy: But across the portfolio that's the case.

Jeremy: As far as loss trends go.

Jeremy: Said high single digits to low double digits for rate and I would tell you. It's the loss cost trends are are a few points below that.

Jeremy Andrew Noble: Okay.

Jeremy: That's definitely helpful. And then just switching to the reinsurance and I know you've been kind of remixing that business for a while during the non renewals.

Jeremy: Just kind of getting at getting that book to where you wanted to be do you feel like it's pretty close to that point and maybe you could see some growth in there.

Jeremy Andrew Noble: Later in 2024 and 2025.

Jeremy: Just anything you can share there on.

Jeremy: Just the reinsurance side sure Scott So I mean overall youre exactly right and worked really hard we have been remixing our portfolio, taking a lot of actions over the last several years.

Jeremy Andrew Noble: You're exactly right, and your memory is very sound with regard to how we used to approach our annual reserving. So in the other discontinued segment, we did recognize about $15 million of strengthening associated with ongoing claims handling costs for really a large, outstanding, remaining APH, or Special Environmental Exposure that hasn't moved in some time.

Jeremy Andrew Noble: We regularly review that. We would look at it in some ways more frequently than on an annual basis. We don't have as much of an outstanding plot of reserves in as many ways that we monitor, so we don't have that annual study the way that we used to. We just review it from time to time. Nothing, I would not expect any more in that space anytime soon. We just try to put that behind us.

Jeremy Andrew Noble: I'm pretty pleased with our position within reinsurance and I think the market conditions are pretty favorable.

Jeremy Andrew Noble: The moment in the current trading environment over overall up.

Jeremy Andrew Noble: We have walked away from renewals, where the pricing wasn't a levels required to support so I know that the team is acting with discipline and we're certainly being prepared to pushing to be exactly around pricing and terms and conditions and structure. So.

Jeremy Andrew Noble: We need to continue to see a favorable trading environment within reinsurance. So our overall focus is absolutely on par.

Jeremy Andrew Noble: Bottom line financial performance in underwriting profitability.

Jeremy Andrew Noble: That being said.

Jeremy Andrew Noble: We certainly had.

Jeremy Andrew Noble: Broad portfolio within the casualty professional and specialty space.

Jeremy Andrew Noble: We're writing that on a global basis, we're seeing pockets to grow I think marine and energy is a good example, right now in 'twenty three 'twenty, four where we're opportunistically growing so well.

Jeremy Andrew Noble: And we're exploring other other product areas are our clients. So we can support so we're certainly not at all opposed to growth.

Jeremy Andrew Noble: But we're also not chasing growth right now we want to act with a great deal of discipline, we want to really see that at total performance underwriting profitability come through there is really a disk.

Jeremy Andrew Noble: A sort of a contrast between having to address as older accident years, which we talked about where we've seen some of the reserve development over the last couple of years and reinsurance and that current portfolio that you point to that were.

Jeremy Andrew Noble: We all forget about.

John Derwin Fox: Okay, great. Then I, Tom, I have a bigger picture question.

Jeremy Andrew Noble: Okay.

Speaker Change: Okay, Great and then just.

Tom: Just lastly can you share what the new money yield is I know you mentioned.

Tom: You have higher yields now and money market and some of the fixed income can you just talk about what.

Tom: Give the spread on what the new money is versus existing and.

Tom: Maybe any kind of major shifts that are going on in the investment portfolio.

Tom: Not at all.

John Derwin Fox: This is Tom the new money.

Tom: Yields are basically what you can see on your Bloomberg or Yahoo finance it when we give the bargain route and we.

Tom: We are buying treasuries and government securities and the high high credit quality. So there's really nothing new that happens for us that you don't see on a day by day basis I don't have the numbers with me on what the rolling off in the quarter, but we do have a continuing increment of investment income.

Tom: Coming on the books.

Tom: As the time goes by.

John Derwin Fox: Okay, but nothing really new happening on the fixed income side in terms of just.

John Derwin Fox: Repositioning at all there that's pretty steady state I can assure you that.

Thomas Sinnickson Gayner: No, I think your observations are spot on. Yeah, you go back 10, 20 years ago, when the business was dominated by the insurance engine, and we didn't even call it that then, because that would have implied that perhaps there were other engines, which there were not. And book value is a pretty darn good proxy for describing the economic progress of an insurance operation, a bank, a financial institution like that. As we have emphasized investments, and we've emphasized that for a long time, and the growth of the venture businesses.

Thomas Sinnickson Gayner: You know, it's interesting with the change in the proxy this year, moving from book value to operating income. [inaudible] My sense is there are a lot of shareholders in Markel that think about 10, 20 years ago when you were primarily insurance and book value was a good way to look at the company, but you're really signaling a change, going to operating income. Could you talk about how you think Markel is a better, stronger company, being more diversified than just insurance? If my observations are not correct, please correct me.

Tom: I've been in Markel 34 years now.

Thomas Sinnickson Gayner: And we really don't do anything differently on the fixed income side.

Thomas Sinnickson Gayner: However.

Thomas Sinnickson Gayner: Thanks.

Speaker Change: Thank you.

Thomas Sinnickson Gayner: Your next question comes from Robert Farnam with Jamie Your line is open.

Speaker Change: Yes, hi, there and good morning.

Thomas Sinnickson Gayner: Fortunately again another question for Jeremy on the insurance operations.

Thomas Sinnickson Gayner: Looking at the international professional liability favorable developments I'm, just trying to get a feel for it.

Thomas Sinnickson Gayner: It's probably several questions. One did you did you do a review of that at year end and if so kind of what changed in the first quarter, but I would also like to know if there's much differentiation between the international book versus the U S book I'm trying to talk to.

Thomas Sinnickson Gayner: <unk> similar are the other loss trend similar as litigation environment, similar just trying to get a feel for what the what that book looks like relative to the U S.

Thomas Sinnickson Gayner: Jeremy if you'd be so kind as to respond yes of course so.

Speaker Change: Nothing nothing.

Thomas Sinnickson Gayner: The usual ordinary with regards to our loss reserves in the first quarter I mean, we do a comprehensive loss reserve across our product portfolios in each of our businesses each quarter. We're always looking at actual experience versus expected and seeing whether or not we should make any modifications as we've sort of said.

Thomas Sinnickson Gayner: Over the years very consistently we react to bad news very quickly and we take a very measured approach to the good news what youre seeing in those professional lines in the international is more of that latter bucket, where we sat and cautious and cautious in trying to understand whether or not some of the inflation.

Thomas Sinnickson Gayner: Trends that we would have witnessed within the U S on professional lines might come through in the international portfolio and we have gotten more confident over time as actual experience has been better than what we anticipated or expected in our actuarial models and when that's the case, we release reserves, so and that was it's not that all of the.

Thomas Sinnickson Gayner: The favorable prior year takedowns by any stretch was just that line. That's just an example in a more meaningful year over year contributor as far as the book differential I spoke a little bit about this earlier. The biggest difference is our international portfolio is just that its risks that are outside the U S and as far as are there different risk profiles.

Thomas Sinnickson Gayner: Between U S risks and international risks.

Thomas Sinnickson Gayner: I would leave it to you to draw your conclusions about legal environment, social inflation trends litigation financing and what you would see in the rest of the world versus what we would experience in the U S. Our view is that that looks a little bit different.

Thomas Sinnickson Gayner: And economic inflation, I think trends are little bit different as well the profile of the client the insured the products themselves. There's also some differences there as well between what we do in the U S and there, but but also it's the case it even in the U S and internationally, we are very broad.

Thomas Sinnickson Gayner: Product capabilities coverage capabilities and customer capabilities, ranging from small businesses all the way to very large global 1000 risk managed accounts that we would do in the U S and Bermuda so.

Thomas Sinnickson Gayner: Theres definitely sort of differences.

Thomas Sinnickson Gayner: Our international and weight towards smaller and just that international U S risk.

Thomas Sinnickson Gayner: Great. Thanks for all the color Thats of course.

Thomas Sinnickson Gayner: Yes.

Thomas Sinnickson Gayner: Your next question is a follow up from Charlie <unk> with Citi. Your line is open.

Speaker Change: Okay. Thanks.

Thomas Sinnickson Gayner: So Tom mentioned in the shareholder letter a couple of months ago about that.

Thomas Sinnickson Gayner: Improving earnings trajectory at Nephila.

Thomas Sinnickson Gayner: As it gets above its high watermark.

Thomas Sinnickson Gayner: I'm wondering if you can update us on the outlook there post one Q. It doesn't look like we saw that the uplift in <unk> should we think about that coming soon or our revenue accelerating there any color.

Thomas Sinnickson Gayner: I'm going to take the first pass at that sounds like Jeremy and Brian to two to chime in given the nature of the films business generally speaking theyre going to do their work through the course of the year and we're not going to put up a lot of accruals for it until after the year is closed and you see what their share of profits or so.

Thomas Sinnickson Gayner: It'll tend to be reported.

Thomas Sinnickson Gayner: The year lag because you got to get into the first quarter of the subsequent year till you recognize what happened in the in the in the year before so during the first second and third excuse me second third fourth quarters of the year you are still just showing sort of what happened last year not so much what's happening this year.

Speaker Change: Yes, sure, yes, I'll, just I'll add to that Charlie.

Speaker Change: Couple of things.

Thomas Sinnickson Gayner: One there is probably most importantly.

Thomas Sinnickson Gayner: Within our disclosures.

Thomas Sinnickson Gayner: I would just.

Thomas Sinnickson Gayner: Caution you earned or make the observation that the insurance linked securities line alone doesn't include all of the economics and contributions from the filler because within the program services and other fronting line, where you can see there's more revenues as well as a higher margin there a portion of that.

Thomas Sinnickson Gayner: That is associated with <unk> operations as well that's part of the overall earnings profile of that of that business. So.

Thomas Sinnickson Gayner: In fact that the overall results would be better than just what you would see in the ILS line and it will be profitable overall.

Thomas Sinnickson Gayner: The other thing Thats really important is there is certainly sort of seasonality. So in the first quarter is a low earnings period within the funds because we're less on risk that increases in the second quarter. The third quarter is the highest earnings and that is largely correlated with wind season.

Thomas Sinnickson Gayner: And exposure within the portfolio and then the last point.

Thomas Sinnickson Gayner: Can you build off Tom's comment is that idea of performance management fees or just that you had they come in as fees. Once we've performed by and large that is going to be measured in the most meaningful way to the extent that it earned an available kind of at the stroke of midnight at the end of the year. So we don't make any.

Thomas Sinnickson Gayner: Provisions were accruals or assumptions around that until we were to get to the end of the year.

Thomas Sinnickson Gayner: We'll be back I guess in three quarters time, and we'll tell you how that how that win.

Thomas Sinnickson Gayner: Got it that's very helpful. So thats, a <unk> or a <unk> dynamic with performance that would be that would be most significantly of fourth quarter, our full year <unk>.

Thomas Sinnickson Gayner: NAMIC.

Thomas Sinnickson Gayner: Absolutely the case for all investors across all funds, but by and large.

Thomas Sinnickson Gayner: What it would be.

Thomas Sinnickson Gayner: The economic value being created by those businesses doesn't get well-reflected in book value, so they do make money, they are worth something, and we think the operating income line that we give you over multiple years and with the multi-year horizon is sort of a separate component of the overall value. Now, that's sort of an accounting presentation and trying to pencil out what it's worth.

Speaker Change: Okay, and if I could just ask one more.

Thomas Sinnickson Gayner: <unk> started the call I think by complementing the management team for turning the insurance business around and the results are much improved.

Thomas Sinnickson Gayner: To the meta point of the Markel Group being a resilient and robust company, I like the idea of three distinct streams of income that are flowing into the coffers. And in any given period, one of those engines might not be firing, two of those engines might not be firing, but usually, at least one is. And the first quarter was a case where all three were, so it makes things more robust, more resilient, more able to absorb volatility in any one line of business.

Thomas Sinnickson Gayner: And in fact, I think one of our major competitive advantages is that throughout the entire Markel organization, when we're faced with a business decision, it's often pretty clear that there are things which might cost you something in the short term, but are better for the long term. Now, if you're under pressure to pay a short-term bill or to meet a short-term quarterly estimate, the temptation to take the short-term decision exists. We try everything we can possibly do to not have that temptation.

Thomas Sinnickson Gayner: Just curious given some of the headlines we've seen with certain teams.

Thomas Sinnickson Gayner: Maybe defecting or just some of the changes in.

Thomas Sinnickson Gayner: In the last six plus months do you feel like you have the pieces in place now to accelerate growth as you lap some of the topline headwinds.

Thomas Sinnickson Gayner: Or do you think you need to or.

Thomas Sinnickson Gayner: Or should we expect you to kind of keep adding.

Thomas Sinnickson Gayner: I think we have a wonderful team on the field, it's a dynamic business people come and people go but we have a <unk>.

Thomas Sinnickson Gayner: Wonderful roster of long term committed veterans, who have signed up to be part of the Markel style in the Markel group and I feel very good about our people again, we're not focused on topline growth, we're focused on profitability and creating value for the <unk> group shareholders overtime. So we might judge yourself bye.

Thomas Sinnickson Gayner: We want to do things that are in the right long-term interest of the Markel Group, our shareholders, our customers, our associates. And we've just taken away a lot of the noise, and I think it's a beautiful piece of architecture that underpins what we've been trying to do for a long time. And it's nice to get to a quarter like this where you see all three engines firing, and it's clear

John Derwin Fox: Right, right, thank you. I just have a suggestion for the presentation. I think Brian referenced a five-year, you know, cumulative investment gain or something. Maybe you could put the five-year cumulatives on your releases, because one quarter of investment gain, which was nice to make a billion dollars last quarter, but some of that's already gone in the month of April in stocks and bonds. So thinking about that and showing it out of five years and what the cumulatives are might help communicate that. So that's a suggestion. All right. Good stuff.

Operator: All right. Good stuff. Thank you.

Scott Gregory Heleniak: Your next question comes from Scott Heleniak with RBC Capital Markets. Your line is open.

Operator: Yeah, good morning. You mentioned the rate increases picking up, and casually, just wondering, are you seeing that across the board? Is there any line where it kind of sticks out and it's, it's, it's perked up a lot more relative to the past few quarters? And then just the second part is any sense on where just generally a lost cost trend is, is it in casually? I know it's tough to do by, you know, given your product set, but anything you can share on either one of those?

Jeremy Andrew Noble: Jeremy, if you'd be so kind, could you address that? Yep, sure. Sure, Scott. And good morning. I would say that, you know, the biggest pockets of our overall casualty portfolio, the ones that we're working on most focused on, and the ones that probably are my comments around rate, are really going to be in the primary casualty and access, and umbrella space within the U.S. That would contrast with, and also our larger risk-managed excess casualty offerings both in the U.S. and in Bermuda. I would contrast that a little bit with, let's say, what's happening in the pricing environment for, say, our binding lines or, you know, other sort of casualty offerings, be it in the healthcare space.

Jeremy Andrew Noble: space where the rates wouldn't be quite as strong as what I commented on, but across the portfolio, that's the case. As far as loss trends go, I said high single digits to low double digits for rates, and I would tell you loss cost trends are a few points below that.

Scott Gregory Heleniak: Slightly different metrics and then then you would look at where it can be easily quantified, but I love our team that's on the field.

Jeremy Andrew Noble: Okay, that's definitely helpful. And then just switching to reinsurance, I know you've been kind of remixing that business for a while and doing non-renewals, just kind of getting that book to where you want it to be. Do you feel like it's pretty close to that point, and maybe you could see some growth later in 2024 and 2025? Just anything you can share there on just the reinsurance side?

Jeremy Andrew Noble: Sure, Scott. So, overall, you're exactly right. We've been working really hard. We have been remixing the portfolio, taking a lot of action over the last several years. I'm pretty pleased with our position within reinsurance. And I think the market conditions are pretty favorable at the moment in the current trading environment overall. We have walked away from renewals where the pricing wasn't at the levels we wanted to support.

Jeremy Andrew Noble: So I know that the team is acting with discipline. And we're certainly being prepared to, you know, push for more exacting around pricing in terms of conditions and structures. We need to continue to see a favorable trading environment within reinsurance, and so our overall focus is absolutely on bottom-line financial performance and underwriting profitability. But that being said, we certainly have a broad portfolio within the casualty professional specialty space, and we're writing that on a global basis.

Jeremy Andrew Noble: We're seeing pockets of growth. I think Marine and Energy is a good example right now in 23 and in 24, where we're opportunistically growing. So we're, and we're exploring, you know, other product areas or clients that we can support. So we're certainly not at all opposed to growth. But we're also not chasing growth right now; we want to act with a great deal of discipline. And we want to really see that total performance underwriting profitability come through.

Jeremy Andrew Noble: There is really a discrepancy, a sort of contrast, between having to address those older accident years, which we talked about where we've seen some reserve development over the last couple of years in reinsurance, and that current portfolio that you point to that we're feeling pretty good about.

Jeremy Andrew Noble: Okay, great. And then just lastly, can you share what the new money yield is? I know you mentioned that you have higher yields now in the money market and some of the fixed income. Can you just talk about what the new money is versus the existing money and any kind of major shifts that are going on in the investment portfolio at all?

Speaker Change: Thank you.

Jeremy Andrew Noble: This concludes our question and answer session I would like to turn the conference back over to Tom Gayner for any closing remarks.

Thomas Sinnickson Gayner: Yeah, this is Tom. The new money yields are basically what you can see on your Bloomberg or Yahoo Finance if you want to go the bargain route. And, you know, we are buying treasuries and government securities with high, high credit qualities. So there's really nothing new that happens for us that you don't see on a day-by-day basis. I don't have the numbers with me on what the rolling off for the quarter is, but we do have a continuing increment of investment income coming on the books as time goes by.

Thomas Sinnickson Gayner: Okay, but nothing really new is happening on the fixed income side in terms of just repositioning it all there. That's a pretty steady state. I can assure you that I've been in Markel 30...

Operator: I can assure you that I've been at Markel 34 years now, and we really don't do anything differently on the fixed income side, ever. Thanks. Thank you. Your next question comes from Robert Farnham. Your line is open. Yeah, hi there, and good morning. Unfortunately, yet another question for Jeremy on the insurance operation.

Operator: Your next question comes from Robert Farnham with Jamie. Your line is open.

Jeremy Andrew Noble: Jeremy, if you'd be so kind as to respond, yes, of course.

Thomas Sinnickson Gayner: Thank you so much, and again I just reiterate the invitation for you all to join us on May 22nd at the Robbins Center at the University of Richmond at 2 o'clock in the afternoon. It's a wonderful time. We expect more than 2,000 people there, so it's an event that you don't want to miss, and I hope to see so many of you there. Bye-bye.

Jeremy Andrew Noble: Yep, of course. So nothing out of the ordinary or ordinary with regard to our loss reserves in the first quarter. I mean, we do a comprehensive loss reserve across our product portfolios in each of our businesses each quarter. We're always looking at actual experience versus expected and seeing whether or not we should make any modifications. As we've sort of said over the years, very consistently, we react to bad news very quickly.

Operator: The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: Thank you so much and again I'd just reiterate the invitation for you all to join US on May 22nd at the rapid center at the University Richmond at two o'clock in the afternoon.

Jeremy Andrew Noble: And we take a very measured approach to the good news. What you're seeing in those professional lines in the international market is more that latter bucket, where we've sat in cautiously and tried to understand whether or not some of the inflation trends that we would have witnessed within the US on professional lines might come through in the international portfolio. And we've gotten more confident over time as actual experience has been better than what we anticipated or expected in our actuarial models. And when that's the case, we release reserves. So, and that was, it's not that all of the favorable prior takedowns were, by any stretch of the imagination, just that line.

Jeremy Andrew Noble: That's just an example and a more meaningful year-over-year contributor. As far as the book differential is concerned, I spoke a little bit about this earlier. The biggest difference is that our international portfolio is just that. It's risks that are outside the US. And as far as there are different risk profiles between US risks and international risks, I would leave it to you to draw your conclusions about the legal environment, social inflation trends, litigation financing, and what you would see in the rest of the world versus what we would experience in the US.

Jeremy Andrew Noble: Our view is that that looks a little bit different. In terms of economic inflation, I think trends are a little bit different as well. The profile of the client, the insured, the products themselves, there are also some differences there as well between what we do in the US and there. But also, it's the case that even in the US and internationally. We have very broad product capabilities, coverage capabilities, and customer capabilities ranging from, you know, small businesses all the way to very large, you know, global 1000 risk managed accounts that we would do in the US and Bermuda. So there are definitely some differences. Our international would wait towards smaller and just that international, non US Thanks for all the color. That's it.

Operator: Your next question is a follow-up from Charlie Lederer with Citi. Your line is open.

Charles William Lederer: Hey, thanks. Tom mentioned in the shareholder letter a couple of months ago about the improving earnings trajectory at Nafila as it gets above its high watermark. I'm wondering if you can update us on the outlook there post 1Q. It doesn't look like we saw the uplift in 1Q. Should we think about that coming soon or revenue accelerating there, any color? Yeah, I mean,

Thomas Sinnickson Gayner: Yeah, I'm going to take the first pass at that. I would like Jeremy and Brian to chime in.

Jeremy Andrew Noble: Given the nature of Nafila's business, generally speaking, they're going to do their work through the course of the year, and we're not going to put up a lot of accruals for them until after the year is closed and you see what their share of profits is. So it'll tend to be reported with a year lag because you've got to get into the first quarter of the subsequent year until you realize what happened in the year before. So during the first, second, and third, excuse me, second, third, fourth quarters of the year, you're still just showing sort of what happened last year, not so much what's happening this year.

Thomas Sinnickson Gayner: Yeah, Thomas, Jeremy, I'll just, I'll add to that, Charlie, that, you know, a couple things. One, there is, probably most importantly, within our disclosures, I would just caution you or make the observation that the insurance link securities line alone doesn't include all of the economics and contributions from FILA because within the program services and other fronting lines, where you can see there's more revenues as well as a higher margin there, a portion of that is associated with FILA's operations as well. That's part of the overall earnings profile of that business. In fact, the overall results would be better than just what you would see in the ILS line and would be profitable overall.

Jeremy Andrew Noble: The other thing that's really important is there is certainly some sort of seasonality. So, for example, the first quarter is a low earnings period within the funds because we're less at risk. That increases in the second quarter; the third quarter is the highest earnings, and that is largely correlated with wind season and exposure within the portfolios. And then the last point to build off Tom's comment is that the idea of performance management fees is just that.

Jeremy Andrew Noble: They come in as fees once we've performed. By and large, that is going to be measured in the most meaningful way to the extent that it's earned and available, kind of at the stroke of midnight at the end of the year. So we don't make any provisions or accruals or assumptions around that until we are to get to the end of the year. We'll be back, I guess, in three quarters time, and we'll tell you how that happens.

Jeremy Andrew Noble: It's a wonderful time, we would expect more than 2000 people. There. So it's an event that you don't want to Miss and I hope to see so many of you there. Thank you all for calling bye bye.

Jeremy Andrew Noble: God, that's very helpful. So that's a 4Q or a 4Q dynamic with performance? That would be, most significantly, a fourth quarter, a full year dynamic. And that's not absolutely the case for all investors across all funds.

Charles William Lederer: But by and large, that's what it is. Okay, if I could just ask one more. So Tom started the call, I think, by complimenting the management team for turning the insurance business around, and the results are much improved. Just curious, given some of the headlines we've seen with certain teams, maybe defecting, or just some of the changes within the last six plus months, do you feel like you have the pieces in place now to accelerate growth as you lap some of the top line headwinds? Or do you think you need to, you know, or should we expect you to kind of keep adding? I think we have a wonderful team on the field.

Thomas Sinnickson Gayner: I think we have a wonderful team on the field. It's a dynamic business. People come and people go, but we have a wonderful roster of long-term, committed veterans who have signed up to be part of the Markel style, the Markel Group, and I feel very good about our people. Again, we're not focused on top-line growth. We're focused on profitability and, you know, creating value for the Markel Group shareholders over time. So we might judge ourselves by a slightly different metric than you would look at or that can be easily quantified, but I love our team that's on the field.

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

Thomas Sinnickson Gayner: This conference call has now concluded. Thank you for attending today's presentation you may now disconnect.

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