Markel Q4 2025 Markel Group Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Markel Group Inc Earnings Call
Speaker #1: Good morning and welcome to
Operator: Good morning, and welcome to the Markel Group Fourth Quarter and Year-End 2025 Conference Call. All participants will be in listen-only mode. 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. During the call today, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. They are based on current assumptions and opinions concerning a variety of known and unknown risks. Actual results may differ materially from those contained in or suggested by such forward-looking statements.
Speaker #1: Conference call. All Q4 and year-end 2025 participants will be in listen-only mode. Should you need assistance during the Markel Group fourth quarter conference call, signal a conference specialist by pressing the star key followed by zero.
Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on your touch-tone phone.
Speaker #1: To withdraw your question, please press star, then one again. During the call today, we may make forward-looking statements under the Securities Litigation Reform Act of 1995.
Speaker #1: 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 factors that could cause actual results to differ materially statements.
Operator: 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 from our 2025 results, as well as 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." We may also discuss certain non-GAAP financial measures during the call today. You may find the most directly comparable GAAP measures and reconciliation to GAAP for these measures in the press release for our 2025 results. The press release for our 2025 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, this event is being recorded. I would now like to turn the conference over to Tom Gayner, Chief Executive Officer.
Operator: 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 from our 2025 results, as well as 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." We may also discuss certain non-GAAP financial measures during the call today. You may find the most directly comparable GAAP measures and reconciliation to GAAP for these measures in the press release for our 2025 results.
Speaker #1: forward-looking statements is included in the press release from our 2025 results, as well as our most recent annual report on Form 10-K and quarterly report on under the captions "Safe Harbor" and "Cautionary Statement" and also discuss certain Additional information about call today.
Speaker #1: You may find the most directly comparable GAAP measures and 'Risk Factors.' We may provide reconciliation to GAAP for our 2025 results. The press release for our 2025 results, as well as our Form 10-K and Form 10-Q, can be found on our website in the Relations section.
Operator: The press release for our 2025 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, this event is being recorded. I would now like to turn the conference over to Tom Gayner, Chief Executive Officer.
Speaker #1: Please note this event is being recorded. I would now like to turn the conference over to Tom Gayner, Chief Executive Officer. Please go
Operator: Please go ahead.
Operator: Please go ahead.
Speaker #1: ahead. Thank you,
Tom Gayner: Thank you, Rebecca, and good morning and welcome. Thank you for joining us all on today's call. I'm delighted to be here with my colleagues, Brian Costanzo, our CFO, Simon Wilson, CFO of Markel Insurance, as well as Mike Heaton, our COO, who will be available for the Q&A session. At Markel Group, our purpose is to be a long-term home for exceptional leaders and businesses, and to relentlessly compound your capital at attractive rates of return over decades, all while staying true to our culture as we describe it in The Markel Style. 2025 was a year that reinforced the power of that model. Every reportable segment made a positive contribution, and the company advanced both quantitatively and qualitatively. Let me begin with Markel Insurance, where we took a series of decisive long-term actions this year.
Tom Gayner: Thank you, Rebecca, and good morning and welcome. Thank you for joining us all on today's call. I'm delighted to be here with my colleagues, Brian Costanzo, our CFO, Simon Wilson, CFO of Markel Insurance, as well as Mike Heaton, our COO, who will be available for the Q&A session. At Markel Group, our purpose is to be a long-term home for exceptional leaders and businesses, and to relentlessly compound your capital at attractive rates of return over decades, all while staying true to our culture as we describe it in The Markel Style. 2025 was a year that reinforced the power of that model. Every reportable segment made a positive contribution, and the company advanced both quantitatively and qualitatively. Let me begin with Markel Insurance, where we took a series of decisive long-term actions this year.
Speaker #2: Rebecca, and good morning and welcome. Thank you for joining us all on today's call. I'm delighted to be here with my colleagues, Brian Costanzo, our
Speaker #2: CFO of MARKEL Insurance, as well as Mike Keaton, our COO, who will be available www.mklgroup.com in the Investor for the Q&A session. And MARKEL Group, our purpose is to be a long-term home for exceptional leaders and businesses.
Speaker #2: And to relentlessly compound your capital, at attractive rates of return over to our culture as we describe it in the MARKEL style. 2025 was a year that model, every reportable segment reinforced the power of that made a positive contribution, and the qualitatively.
Speaker #2: of decisive long-term actions this Insurance, where we took a series year. These were not easy, but Let me begin with MARKEL thank the entire team for a year marked by tough decisions and genuine progress.
Tom Gayner: These were not easy, but they were necessary, and I want to thank the entire team for a year marked by tough decisions and genuine progress. In 2025, we exited underperforming businesses, most notably reinsurance, made key leadership changes, including appointing Simon Wilson as the new CEO of Markel Insurance, and we made structural improvements to simplify the business and reinforce accountability. The full impact of these changes will play out over years, as is the case with all long-term compounding. Last quarter, I described the results as a green shoot. This quarter, I'll adjust it to the plural. We are now seeing green shoots. In the fourth quarter, Markel Insurance generated a 92.9% combined ratio and contributed $399 million of adjusted operating income.
Tom Gayner: These were not easy, but they were necessary, and I want to thank the entire team for a year marked by tough decisions and genuine progress. In 2025, we exited underperforming businesses, most notably reinsurance, made key leadership changes, including appointing Simon Wilson as the new CEO of Markel Insurance, and we made structural improvements to simplify the business and reinforce accountability. The full impact of these changes will play out over years, as is the case with all long-term compounding. Last quarter, I described the results as a green shoot. This quarter, I'll adjust it to the plural. We are now seeing green shoots. In the fourth quarter, Markel Insurance generated a 92.9% combined ratio and contributed $399 million of adjusted operating income.
Speaker #2: 2025, we exited In underperforming businesses, most notably changes, including appointing Simon Wilson as the new CEO of MARKEL Insurance, and we made structural improvements to simplify the business and reinforce play out over years, as is the case with all long-term compounding.
Speaker #2: Last quarter, I described the results as a green shoot. This quarter, I'll adjust it to the plural: green shoots. In the fourth quarter, we are now seeing MARKEL Insurance generate a 92.9% combined ratio and $399 million of adjusted operating income.
Speaker #2: For the full ratio, and contributed year, the segment delivered $1.4 billion in adjusted operating income, up from $1.2 billion in the prior year. And 2025 marked the 21st consecutive year development.
Tom Gayner: For the full year, the segment delivered $1.4 billion in Adjusted Operating Income, up from $1.2 billion in the prior year. 2025 marked the 21st consecutive year of favorable reserve development, a testament to our conservative posture and financial integrity. Within Markel Insurance, the headline is simple: We're doing more of what works and less of what doesn't, with a focus on simplification, better execution, and improved return on equity. As Simon will discuss later, we believe the foundation is now set, but it's early days. Importantly, Markel Insurance is only one part of a broader, more diverse ecosystem of high-quality cash flows, which are central to the Markel Group story.
Tom Gayner: For the full year, the segment delivered $1.4 billion in Adjusted Operating Income, up from $1.2 billion in the prior year. 2025 marked the 21st consecutive year of favorable reserve development, a testament to our conservative posture and financial integrity. Within Markel Insurance, the headline is simple: We're doing more of what works and less of what doesn't, with a focus on simplification, better execution, and improved return on equity. As Simon will discuss later, we believe the foundation is now set, but it's early days. Importantly, Markel Insurance is only one part of a broader, more diverse ecosystem of high-quality cash flows, which are central to the Markel Group story.
Speaker #2: A favorable reserve— a testament to our conservative posture and financial integrity. Within Markel Insurance, we’re doing more of what works and less of what doesn’t, with a focus on simplification, better execution, and improved returns on equity.
Speaker #2: As Simon will discuss later, we believe the foundation is now set, but it's early days. Importantly, Markel Insurance is only one part of a broader and more high-quality cash flow, which is central to the Markel Group story.
Speaker #2: Our financial, industrial, and consumer and other segments also delivered positive results in 2025, each benefiting from the autonomy and accountability we give leaders to make the best long-term decisions for their businesses.
Tom Gayner: Our financial, industrial, and consumer and other segments also delivered positive results in 2025, each benefiting from the autonomy and accountability we give leaders to make the best long-term decisions for their businesses. The financial segment, which includes State National and Nephila, had a tremendous year, generating $327 million in adjusted operating income, up 25% from 2024. The industrial segment earned $343 million, slightly below last year's level. This was a strong result, given the softening in certain end markets, and it reflects the skills of the amazing leaders of those businesses and the room and space we give them to serve their customers with a long-term mindset. Consumer and other delivered $175 million of adjusted operating income, up from $145 million last year, with our acquisition of EPI driving most of the increase.
Tom Gayner: Our financial, industrial, and consumer and other segments also delivered positive results in 2025, each benefiting from the autonomy and accountability we give leaders to make the best long-term decisions for their businesses. The financial segment, which includes State National and Nephila, had a tremendous year, generating $327 million in adjusted operating income, up 25% from 2024. The industrial segment earned $343 million, slightly below last year's level. This was a strong result, given the softening in certain end markets, and it reflects the skills of the amazing leaders of those businesses and the room and space we give them to serve their customers with a long-term mindset. Consumer and other delivered $175 million of adjusted operating income, up from $145 million last year, with our acquisition of EPI driving most of the increase.
Speaker #2: The financial segment, which had a tremendous year generating $327 million in adjusted operating income, up 25% from 2024. The industrial segment earned $343 million, slightly below last year's level.
Speaker #2: This was a strong result given the softening in certain then markets, and it reflects the skills of the amazing leaders of those businesses and the way they serve their customers for the long-term, and the room and space we give them to mindset.
Speaker #2: Consumer and Other delivered $175 million of adjusted operating income, up from $145 million last year, with our acquisition of EPI driving most of the increase.
Speaker #2: Our public equity portfolio returned 10.5%, generating $156 million in dividend income and ending the year with a market value of $13 billion, with an unrealized gain of $8.9 billion.
Tom Gayner: Our public equity portfolio returned 10.5%, generating $156 million in dividend income and ending the year with a market value of $13 billion, with an unrealized gain of $8.9 billion. These equity holdings, diversified, high quality, and held with a long-term mindset, remain an important driver of compounding. All of our streams of Adjusted Operating Income convert well into cash, producing durable, resilient, and diverse inflows that give us the flexibility to allocate capital to its highest and best use wherever that may be across the group. To that end, cash flow from our operations grew to $2.8 billion in 2025, and we put that cash to work with discipline.
Tom Gayner: Our public equity portfolio returned 10.5%, generating $156 million in dividend income and ending the year with a market value of $13 billion, with an unrealized gain of $8.9 billion. These equity holdings, diversified, high quality, and held with a long-term mindset, remain an important driver of compounding. All of our streams of Adjusted Operating Income convert well into cash, producing durable, resilient, and diverse inflows that give us the flexibility to allocate capital to its highest and best use wherever that may be across the group. To that end, cash flow from our operations grew to $2.8 billion in 2025, and we put that cash to work with discipline.
Speaker #2: These equity holdings diversified high-quality and held with a long-term compounding. All of our mindset, remain an important driver of streams of adjusted operating income convert well into and diverse inflows that give us the flexibility to allocate cash, producing durable, resilient, capital to its highest and best use wherever that may be across the group.
Speaker #2: To that $2.8 billion in sense of that, we deployed 2025. work with discipline. And we put that cash to $207 million in new property and equipment.
Tom Gayner: To give you a sense of that, we deployed some of that cash to $1.4 billion in fixed maturity net purchases, $207 million in new property and equipment. We bought $143 million in net public equity securities and invested $170 million in bolt-on acquisitions and increases in our ownership stakes in our existing majority-owned businesses. We also redeemed $600 million in preferred shares and repurchased $430 million of our own common shares, all while weighing every dollar invested against its next best alternative. Even with all that investment and return of cash to shareholders, our cash balance increased by $411 million, and we paid down a little bit of our long-term debt.
Tom Gayner: To give you a sense of that, we deployed some of that cash to $1.4 billion in fixed maturity net purchases, $207 million in new property and equipment. We bought $143 million in net public equity securities and invested $170 million in bolt-on acquisitions and increases in our ownership stakes in our existing majority-owned businesses. We also redeemed $600 million in preferred shares and repurchased $430 million of our own common shares, all while weighing every dollar invested against its next best alternative. Even with all that investment and return of cash to shareholders, our cash balance increased by $411 million, and we paid down a little bit of our long-term debt.
Speaker #2: We bought $143 million in net public equity securities and invested $170 million in bolt-on acquisitions and increases in our ownership stakes in our existing majority-owned businesses.
Speaker #2: We also redeemed $600 million in preferred shares and repurchased $430 million of our own common shares all while weighing every dollar invested against its next best alternative.
Speaker #2: that investment and return of cash to shareholders, our cash balance increased by $411 million and we paid down a little bit of our Even with all combination, high-quality cash long-term debt.
Tom Gayner: That combination, high-quality cash inflows with a 360-degree set of opportunities to deploy it, continues to fuel what we often describe as a perpetual motion machine of shareholder value creation. In any given year, results can and will be volatile, but over five-year periods and beyond, the trend has been up and to the right. That's the power of long-term compounding.... It is a joy to serve you alongside such a great team. We are energized for the year to come, and we thank you for your ongoing engagement and support. With that, I'll turn it over to Brian.
Tom Gayner: That combination, high-quality cash inflows with a 360-degree set of opportunities to deploy it, continues to fuel what we often describe as a perpetual motion machine of shareholder value creation. In any given year, results can and will be volatile, but over five-year periods and beyond, the trend has been up and to the right. That's the power of long-term compounding.... It is a joy to serve you alongside such a great team. We are energized for the year to come, and we thank you for your ongoing engagement and support. With that, I'll turn it over to Brian.
Speaker #2: inflows, with a That $360-degree set of opportunities to deploy it, continues to fuel what we often describe as a perpetual motion machine of shareholder value creation.
Speaker #2: In any given year, results can and will be volatile. But over a five-year period and the right. That's the power of beyond, the trend has been up and to long-term compounding.
Speaker #2: It is a alongside such a great team. We are energized for the year to come, and we thank you for your ongoing engagement and support.
Speaker #2: With that, I'll turn it over to Brian.
Speaker #1: Thank you, Tom. Good morning, everyone. As a reminder, last quarter, we released significant enhancements to our financial disclosures, along with a reporting changes guide available on our IR site.
Brian Costanzo: Thank you, Tom. Good morning, everyone. As a reminder, last quarter, we released significant enhancements to our financial disclosures, along with a reporting changes guide available on our IR site. We made these changes to help investors better understand the company and its performance. To review, the major changes we made were: changing the presentation of investment gains and losses to be included outside of revenues, establishing new reportable segments of Markel Insurance, Industrial, Financial, and Consumer and Other, while collapsing our former investment segment results into these new segments, and reporting of new metrics, including adjusted operating income for all segments that excludes investment gains and amortization expense, and segment-level KPIs, such as organic growth and return on equity for insurance. With that, let's cover the results for the period, starting with our consolidated results.
Brian Costanzo: Thank you, Tom. Good morning, everyone. As a reminder, last quarter, we released significant enhancements to our financial disclosures, along with a reporting changes guide available on our IR site. We made these changes to help investors better understand the company and its performance. To review, the major changes we made were: changing the presentation of investment gains and losses to be included outside of revenues, establishing new reportable segments of Markel Insurance, Industrial, Financial, and Consumer and Other, while collapsing our former investment segment results into these new segments, and reporting of new metrics, including adjusted operating income for all segments that excludes investment gains and amortization expense, and segment-level KPIs, such as organic growth and return on equity for insurance. With that, let's cover the results for the period, starting with our consolidated results.
Speaker #1: We made these changes to help investors better understand the company and its performance. To review, the major changes we made were changing the presentation of investment gains and losses revenues, establishing new reportable segments of MARKEL Insurance, Industrial, Financial, and Consumer and Other, while collapsing our former Investment segment results into these new segments, and reporting of new metrics, including adjusted operating income for all segments that excludes investment gains, segment-level KPIs such as organic growth, and return on to be included outside of equity for Insurance.
Speaker #1: With that, let's cover the results for and amortization expense and the period starting with our consolidated results. MARKEL Group's consolidated operating revenues, which exclude net investment gains, were up 8% for the quarter and 5% for the year.
Brian Costanzo: Markel Group's consolidated operating revenues, which exclude net investment gains, were up 8% for the quarter and 5% for the year. Operating income for the quarter was $795 million, up from $595 million in the comparable period last year, and $3.2 billion for the year versus $3.7 billion in 2024. As a reminder, operating income includes net investment gains, which can be volatile from period to period. Net investment gains were $212 million in the quarter, compared with $117 million in the fourth quarter last year, and $1.1 billion for the year versus $1.8 billion in 2024.
Brian Costanzo: Markel Group's consolidated operating revenues, which exclude net investment gains, were up 8% for the quarter and 5% for the year. Operating income for the quarter was $795 million, up from $595 million in the comparable period last year, and $3.2 billion for the year versus $3.7 billion in 2024. As a reminder, operating income includes net investment gains, which can be volatile from period to period. Net investment gains were $212 million in the quarter, compared with $117 million in the fourth quarter last year, and $1.1 billion for the year versus $1.8 billion in 2024.
Speaker #1: Operating income for the quarter was $795 million, up from $595 million in the comparable period last $3.7 billion in 2024. As a reminder, operating income includes net investment gains, which can be volatile from period to period.
Speaker #1: Net investment gains were $212 $117 million in the million in the quarter, compared with fourth quarter last year, and $1.1 billion for the year, versus $1.8 billion in 2024.
Speaker #1: Adjusted operating income, which excludes net investment gains and amortization expense, totaled $626 million for the quarter, up 19% versus the same period last year.
Brian Costanzo: Adjusted operating income, which excludes net investment gains and amortization expense, totaled $626 million for the quarter, up 19% versus the same period last year. Adjusted operating income was $2.3 billion in 2025, compared to $2.1 billion in 2024, or up 10%. The increase in adjusted operating income was primarily driven by improvements in our insurance business and strong performance within our financial segment. Operating cash flow was $2.8 billion in 2025 versus $2.6 billion in 2024, and comprehensive income to shareholders totaled $606 million in the quarter and $2.6 billion for the year. Turning now to our operating segments, starting with Markel Insurance.
Brian Costanzo: Adjusted operating income, which excludes net investment gains and amortization expense, totaled $626 million for the quarter, up 19% versus the same period last year. Adjusted operating income was $2.3 billion in 2025, compared to $2.1 billion in 2024, or up 10%. The increase in adjusted operating income was primarily driven by improvements in our insurance business and strong performance within our financial segment. Operating cash flow was $2.8 billion in 2025 versus $2.6 billion in 2024, and comprehensive income to shareholders totaled $606 million in the quarter and $2.6 billion for the year. Turning now to our operating segments, starting with Markel Insurance.
Speaker #1: $2.3 billion in 2025, compared to $2.1 billion in 2024, or up 10%. The increase was primarily driven by improvements in our insurance business and strong performance within our financial segment.
Speaker #1: Operating cash flow was $2.8 billion in 2025, versus $2.6 billion in 2024, and comprehensive income to shareholders totaled $606 million in the quarter and $2.6 billion for the year, starting with Markel. Turning now to our operating segments, Insurance.
Speaker #1: The return on equity for Markel Insurance for 2025, trailing five-year period return on equity, was 13%. We view the five-year average return on equity as our primary KPI within our commitment to generating consistent insurance, measuring our profitability within both our underwriting and investment of capital.
Brian Costanzo: The return on equity for Markel Insurance for 2025 was 14%, and the trailing five-year period return on equity was 13%. We view the five-year average return on equity as our primary KPI within insurance, measuring our commitment to generating consistent profitability within both our underwriting and investment operations and remaining efficient with our use of capital. Markel Insurance underwriting gross written premiums increased 3% for the quarter and 4% for the full year, driven by personal lines in the US and growth across several product classes in our international division. At a divisional level within Markel Insurance, within our international division, gross written premium grew by 14% for the year, with the division growing in every market. Our international division continued its recent track record of fantastic results, posting an 83% combined ratio for the year.
Brian Costanzo: The return on equity for Markel Insurance for 2025 was 14%, and the trailing five-year period return on equity was 13%. We view the five-year average return on equity as our primary KPI within insurance, measuring our commitment to generating consistent profitability within both our underwriting and investment operations and remaining efficient with our use of capital. Markel Insurance underwriting gross written premiums increased 3% for the quarter and 4% for the full year, driven by personal lines in the US and growth across several product classes in our international division. At a divisional level within Markel Insurance, within our international division, gross written premium grew by 14% for the year, with the division growing in every market. Our international division continued its recent track record of fantastic results, posting an 83% combined ratio for the year.
Speaker #1: operations and remaining efficient with our use MARKEL Insurance underwriting gross written premiums increased 3% for the quarter and 4% for the full year, driven by personalized in the US and growth across several product classes in our international division.
Speaker #1: At a divisional level within Markel Insurance, within our international division, gross written premium grew by 14% for the year, with the division growing in every market.
Speaker #1: Our international division continued its recent track record of fantastic results, posting an 83% combined ratio for the year. Programs and solutions gross written premium grew by 8% for the year, driven by our personalized and delegated programs units.
Brian Costanzo: Programs and solutions gross written premium grew by 8% for the year, driven by our personal lines and delegated programs units. For our wholesale and specialty division, gross written premium declined 4% for the year. Excluding the impact from exiting our US Risk Managed Professional Liability book earlier this year, premium growth was flat across the division. In global reinsurance, which we exited in 2025, gross written premium declined 10% for the year. Overall, underwriting gross written premium volume, excluding the impact of exiting our global reinsurance and US Risk Managed Professional lines, grew by 7% for the year. One additional note on premium volume relative to our 2026 reporting. Our underwriting premium volume next year will be impacted by two significant items.
Brian Costanzo: Programs and solutions gross written premium grew by 8% for the year, driven by our personal lines and delegated programs units. For our wholesale and specialty division, gross written premium declined 4% for the year. Excluding the impact from exiting our US Risk Managed Professional Liability book earlier this year, premium growth was flat across the division. In global reinsurance, which we exited in 2025, gross written premium declined 10% for the year. Overall, underwriting gross written premium volume, excluding the impact of exiting our global reinsurance and US Risk Managed Professional lines, grew by 7% for the year. One additional note on premium volume relative to our 2026 reporting. Our underwriting premium volume next year will be impacted by two significant items.
Speaker #1: our wholesale and specialty division, 4% for the year, excluding the gross written premium declined For US risk-managed professional liability book, earlier this year, division.
Speaker #1: In global reinsurance, which we exited in 2025, gross written premium declined 10% for the year. Overall, underwriting gross written premium volume, excluding the impact of exiting our global reinsurance and U.S. risk-managed professional lines, grew by 7% for the year.
Speaker #1: One additional note on premium volume relative to our 2026 reporting. Our underwriting premium volume next year will be impacted by two factors. First, the exit of our $1 billion gross written premium global reinsurance business, and second, the transition, effective January 1, 2026, of our partnership with Hagerty to a pure fronting model.
Brian Costanzo: First, the exit of our $1 billion gross written premium global reinsurance business, and second, the transition, effective 1 January 2026, of our partnership with Hagerty to a pure fronting model. Hagerty premium will be included in our results going forward as fronted gross written premium versus underwriting gross written premium. This change was a natural next step in our long-term evolution of our partnership with Hagerty, continuing to retain greater amounts of underwriting risk. In 2025, Markel only retained 20% of the Hagerty gross written premium volume, so the impact on our net earned premium volume will be significantly less. Together, these two changes will decrease underwriting gross written premiums for 2026 by approximately $2 billion. But we expect these changes over the long term to benefit our combined ratio, adjusted operating income, and return on equity.
Brian Costanzo: First, the exit of our $1 billion gross written premium global reinsurance business, and second, the transition, effective 1 January 2026, of our partnership with Hagerty to a pure fronting model. Hagerty premium will be included in our results going forward as fronted gross written premium versus underwriting gross written premium. This change was a natural next step in our long-term evolution of our partnership with Hagerty, continuing to retain greater amounts of underwriting risk. In 2025, Markel only retained 20% of the Hagerty gross written premium volume, so the impact on our net earned premium volume will be significantly less. Together, these two changes will decrease underwriting gross written premiums for 2026 by approximately $2 billion. But we expect these changes over the long term to benefit our combined ratio, adjusted operating income, and return on equity.
Speaker #1: Haggerty Premium will be included in our results gross written premium. going forward as fronted gross was a natural next step in our long-term evolution of our partnership with Haggerty, continuing underwriting risk.
Speaker #1: In to retain greater amounts of 2025, MARKEL only retained 20% of the Haggerty gross written premium volume, so the impact on our net earned premium volume will be significantly changes will decrease underwriting gross less.
Speaker #1: written premiums for Together, these two 2026 by approximately $2 billion. But we expect these changes over the long term to benefit our combined ratio adjusted operating income and return on equity.
Speaker #1: Turning back This change to insurance profitability, adjusted operating income for MARKEL Insurance was 31% from last year. The combined ratio for the quarter was to 95.9% in the same quarter last year.
Brian Costanzo: Turning back to insurance profitability, adjusted operating income for Markel Insurance was $399 million for the quarter, up 31% from last year. The combined ratio for the quarter was 92.9%, compared to 95.9% in the same quarter last year. This 3-point improvement was driven by lower losses from our CPI product and within our US casualty lines, partially offset by higher attritional losses in our US personal umbrella product and large losses incurred in the Q4 within our US surety line. Our surety portfolio has been highly profitable for us since our acquisition of SureTec in 2017. For the year, Markel Insurance finished with $1.4 billion in adjusted operating income and a combined ratio of 94.6%, a 1-point improvement from last year.
Brian Costanzo: Turning back to insurance profitability, adjusted operating income for Markel Insurance was $399 million for the quarter, up 31% from last year. The combined ratio for the quarter was 92.9%, compared to 95.9% in the same quarter last year. This 3-point improvement was driven by lower losses from our CPI product and within our US casualty lines, partially offset by higher attritional losses in our US personal umbrella product and large losses incurred in the Q4 within our US surety line. Our surety portfolio has been highly profitable for us since our acquisition of SureTec in 2017. For the year, Markel Insurance finished with $1.4 billion in adjusted operating income and a combined ratio of 94.6%, a 1-point improvement from last year.
Speaker #1: This three-point improvement was driven by lower losses from our CPI product and within our US casualty lines, partially offset by higher attritional losses in our US personal umbrella product and large losses incurred in the fourth quarter within our US surety line.
Speaker #1: Our surety portfolio has been highly profitable for us since our acquisition of Surtek in the year Markel Insurance finished with 2017. For $1.4 billion in adjusted operating income and a combined ratio of 94.6%, a one-point improvement from last year.
Speaker #1: We had six points of favorable prior year loss development for both the quarter and year-to-date periods, and our balance sheet position strong. Turning next to our investment portfolio, our net $258 million in the quarter and investment income was $970 million for the year, up 6% for the quarter and 5% year-to-date, due to higher interest rates and increased securities.
Brian Costanzo: We had six points of favorable prior year loss development for both the quarter and year-to-date periods, and our balance sheet position for reserves remains strong. Turning next to our investment portfolio, our net investment income was $258 million in the quarter and $970 million for the year, up 6% for the quarter, and 5% year-to-date, due to higher interest rates and increased holdings in fixed income securities. Our fixed income portfolio yield was 3.6% for Q4. We reinvested new money into securities at an average yield of 4% in the quarter, versus 3.1% on average across our net maturities. Within our public equity portfolio, during 2025, we made $143 million of net purchases of securities.
Brian Costanzo: We had six points of favorable prior year loss development for both the quarter and year-to-date periods, and our balance sheet position for reserves remains strong. Turning next to our investment portfolio, our net investment income was $258 million in the quarter and $970 million for the year, up 6% for the quarter, and 5% year-to-date, due to higher interest rates and increased holdings in fixed income securities. Our fixed income portfolio yield was 3.6% for Q4. We reinvested new money into securities at an average yield of 4% in the quarter, versus 3.1% on average across our net maturities. Within our public equity portfolio, during 2025, we made $143 million of net purchases of securities.
Speaker #1: Our fixed income portfolio yield was 3.6% for the fourth quarter. We reinvested new money into securities at an average yield of 4% in the quarter, versus 3.1% on average across Within our public equity our net maturities.
Speaker #1: We made $143 million of net purchases of securities. Our public equity portfolio returned 10.5% for the equity portfolio at the end of the year, bringing the value of our public equities to $13 billion, with a total unrealized gain of $8.9 billion.
Brian Costanzo: Our public equity portfolio returned 10.5% for the year, bringing the value of our public equity portfolio at the end of the year to $13 billion, with a total unrealized gain of $8.9 billion. Over the trailing five-year period, the equity portfolio's annual return was 12%, compared with 15% for the S&P 500. Our net equity purchases declined year-over-year, reflecting rising and less attractive valuations and better opportunities elsewhere for incremental investments. Moving to our industrial segment, revenues were $1 billion for the quarter and $3.9 billion for the full year, up 4% for both the quarter and for the year. Organic revenue growth was 2% for the year.
Brian Costanzo: Our public equity portfolio returned 10.5% for the year, bringing the value of our public equity portfolio at the end of the year to $13 billion, with a total unrealized gain of $8.9 billion. Over the trailing five-year period, the equity portfolio's annual return was 12%, compared with 15% for the S&P 500. Our net equity purchases declined year-over-year, reflecting rising and less attractive valuations and better opportunities elsewhere for incremental investments. Moving to our industrial segment, revenues were $1 billion for the quarter and $3.9 billion for the full year, up 4% for both the quarter and for the year. Organic revenue growth was 2% for the year.
Speaker #1: Over the trailing five-year period, the equity portfolio's annual return was S&P 500. Our net equity purchases declined year over year, reflecting rising and less attractive valuations and better opportunities elsewhere for incremental investment.
Speaker #1: Moving to our industrial segment, revenues were $1 billion for the quarter and up 4% for both the quarter and for the year. Organic revenue growth was 2% for the year.
Speaker #1: Revenue growth for the year Valor and organic growth was driven was impacted by our acquisition of business and our businesses that serve by our equipment leasing commercial and residential by lower revenues in our construction markets, partially offset transportation products businesses.
Brian Costanzo: Revenue growth for the year was impacted by our acquisition of Valor, and Organic Growth was driven by our equipment leasing business and our businesses that serve commercial and residential construction markets, partially offset by lower revenues in our transportation products businesses. Adjusted Operating Income was $80 million for the quarter, down 26% from $108 million in the same period last year. Adjusted Operating Income was $343 million for the year, or down 6% versus 2024. The decline in Adjusted Operating Income was driven by lower revenues in our transportation products businesses and tightening margins due to higher materials and labor costs within our other products businesses.
Brian Costanzo: Revenue growth for the year was impacted by our acquisition of Valor, and Organic Growth was driven by our equipment leasing business and our businesses that serve commercial and residential construction markets, partially offset by lower revenues in our transportation products businesses. Adjusted Operating Income was $80 million for the quarter, down 26% from $108 million in the same period last year. Adjusted Operating Income was $343 million for the year, or down 6% versus 2024. The decline in Adjusted Operating Income was driven by lower revenues in our transportation products businesses and tightening margins due to higher materials and labor costs within our other products businesses.
Speaker #1: Adjusted operating income was $80 million for the quarter, down 26% from $108 million in the same period last year. Adjusted operating income was year, or down 6% versus 2024.
Speaker #1: $343 million for the The decline in adjusted operating income was driven by lower revenues in our tightening margins due to higher materials and labor costs within our transportation products businesses and other products businesses.
Speaker #1: For our consumer $274 million in the quarter, and $1.4 billion for the full year, or year-to-date up 4% for both the quarter and periods.
Brian Costanzo: For our Consumer and Other segment, revenues were $274 million in the quarter, and $1.4 billion for the full year, or up 4% for both the quarter and year-to-date periods. Organic revenue growth was 1% for the year. Adjusted Operating Income was $23 million in the quarter, up 35% versus $17 million in the same quarter one year ago. Adjusted Operating Income was $175 million for 2025, or up 20% versus 2024, driven primarily by our acquisition of EPI and higher sales volume of ornamental plants.
Brian Costanzo: For our Consumer and Other segment, revenues were $274 million in the quarter, and $1.4 billion for the full year, or up 4% for both the quarter and year-to-date periods. Organic revenue growth was 1% for the year. Adjusted Operating Income was $23 million in the quarter, up 35% versus $17 million in the same quarter one year ago. Adjusted Operating Income was $175 million for 2025, or up 20% versus 2024, driven primarily by our acquisition of EPI and higher sales volume of ornamental plants.
Speaker #1: Organic revenue growth was 1% for the year. Adjusted operating income was $23 million in the quarter, up 35% versus $17 million. Adjusted operating income was $175 million for 2025, up 20% versus 2024, driven primarily by our acquisition of EPI and higher sales volume at plants.
Speaker #1: Next, within revenues were $224 million, up 41% for the quarter versus the same period one year ago, and $737 million for 2025, up 24% versus 2024.
Brian Costanzo: Next, within our financial segment, revenues were $224 million, or up 41% for the quarter versus the same period one year ago, and $737 million for 2025, up 24% versus 2024. Organic revenue growth was 17% for the year. The increase in revenues for the year was due primarily to increased performance fees at a higher management fee rate within ILS, along with higher premium volumes within our Program Services product. Year-to-date revenues were impacted by a $41 million gain on the sale of our remaining minority interest in Velocity earlier this year.
Brian Costanzo: Next, within our financial segment, revenues were $224 million, or up 41% for the quarter versus the same period one year ago, and $737 million for 2025, up 24% versus 2024. Organic revenue growth was 17% for the year. The increase in revenues for the year was due primarily to increased performance fees at a higher management fee rate within ILS, along with higher premium volumes within our Program Services product. Year-to-date revenues were impacted by a $41 million gain on the sale of our remaining minority interest in Velocity earlier this year.
Speaker #1: Organic revenue growth was 17% for the year. The increase in revenues for the year was due primarily to a higher management fee rate within ILS, along with higher premium volumes within our program services product.
Speaker #1: Year-to-date revenues were impacted by a increased performance fees at $41 million gain on the sale of our remaining minority interest in velocity earlier this year.
Brian Costanzo: The increases in revenue drove adjusted operating income up 58% to $107 million for the quarter versus the comparable period one year ago, and up 25% for 2025 to $327 million. The year-to-date adjusted operating income change was also impacted by $58 million of favorable loss development related to Markel CATCo, recognized in 2024. Finally, regarding capital allocation, for the year, we repurchased shares totaling $430 million, reducing our share count to 12.6 million shares from 12.8 million shares at the end of last year. We also redeemed our $600 million preferred stock issue earlier this year, making total capital return to shareholders over $1 billion. With that, I will pass it over to Simon to discuss Markel Insurance.
Brian Costanzo: The increases in revenue drove adjusted operating income up 58% to $107 million for the quarter versus the comparable period one year ago, and up 25% for 2025 to $327 million. The year-to-date adjusted operating income change was also impacted by $58 million of favorable loss development related to Markel CATCo, recognized in 2024. Finally, regarding capital allocation, for the year, we repurchased shares totaling $430 million, reducing our share count to 12.6 million shares from 12.8 million shares at the end of last year. We also redeemed our $600 million preferred stock issue earlier this year, making total capital return to shareholders over $1 billion. With that, I will pass it over to Simon to discuss Markel Insurance.
Speaker #1: The increases in revenue drove adjusted operating income up 58% to the quarter, versus the comparable period one year ago, and up 25% for 2025 to $327 million.
Speaker #1: The year-to-date adjusted operating income change was also impacted by $58 million of favorable loss development related to MARKEL CATCo, recognized in 2024. Finally, regarding capital allocation, for the year, we repurchased shares totaling $430 million, reducing our share count to 12.6 million shares from 12.8 million shares at the end of last year.
Speaker #1: We also redeemed our $600 million preferred stock, bringing total capital return to shareholders to over $1 billion. With that, I will pass it over to Simon to discuss MARKEL Insurance.
Speaker #2: Thank you, Brian, and good morning, everyone. I'm pleased to be with you and share some further insight on the progress at MARKEL Insurance. First off, some numbers.
Simon Wilson: Thank you, Brian, and good morning, everyone. I'm pleased to be with you and share some further insight on the progress at Markel Insurance. First off, some numbers. The quarter produced a Combined Ratio of 92.9%, 3 percentage points better than the same quarter in 2024. The prior-year reserve release of 6 points in the quarter was broad-based and reflected the stable position of our reserves. We achieved 3% growth in GWP and 7% growth in Net Earned Premium, despite our withdrawal from the global reinsurance business. Improving underwriting results were an important factor in achieving a 14% Return on Equity for Markel Insurance in 2025.... Our underwriting and reorganization actions over recent years are beginning to pay dividends.
Simon Wilson: Thank you, Brian, and good morning, everyone. I'm pleased to be with you and share some further insight on the progress at Markel Insurance. First off, some numbers. The quarter produced a Combined Ratio of 92.9%, 3 percentage points better than the same quarter in 2024. The prior-year reserve release of 6 points in the quarter was broad-based and reflected the stable position of our reserves. We achieved 3% growth in GWP and 7% growth in Net Earned Premium, despite our withdrawal from the global reinsurance business. Improving underwriting results were an important factor in achieving a 14% Return on Equity for Markel Insurance in 2025.... Our underwriting and reorganization actions over recent years are beginning to pay dividends.
Speaker #2: 92.9%, three percentage points better than 2024. The prior year reserve release of six points in the quarter was broad-based and reflected the stable position of our reserves compared to the same quarter.
Speaker #2: We achieved 3% growth in GWP, and 7% growth in net earned reinsurance business, improving underwriting results were an important factor in achieving a 14% return on equity for MARKEL premium.
Speaker #2: Insurance in 2025. Our underwriting and years are beginning to pay dividends. We are now far better able to focus on the key areas where we have a right to win.
Simon Wilson: We are now far better able to focus on the key areas where we have a right to win. The combined ratio of our three ongoing business divisions for Q4 2025, which excludes the impact from global reinsurance and CPI, was 91%. This figure would have been even stronger, but was impacted by heavier than expected losses in a large personal umbrella program and our surety business, where we were hit by 3 discrete losses in the period. Every decision that we made during 2025 was designed to simplify our business and create clarity around P&L ownership. Ultimately, these decisions will drive more consistency and better execution around the key financial metrics of combined ratio and return on equity over the long term.
Simon Wilson: We are now far better able to focus on the key areas where we have a right to win. The combined ratio of our three ongoing business divisions for Q4 2025, which excludes the impact from global reinsurance and CPI, was 91%. This figure would have been even stronger, but was impacted by heavier than expected losses in a large personal umbrella program and our surety business, where we were hit by 3 discrete losses in the period. Every decision that we made during 2025 was designed to simplify our business and create clarity around P&L ownership. Ultimately, these decisions will drive more consistency and better execution around the key financial metrics of combined ratio and return on equity over the long term.
Speaker #2: The combined ratio of our three ongoing business divisions for Q4 Despite our withdrawal from the global CPI, was 91%. This figure would have been even stronger if it was 2025, which excludes the impacted by heavier-than-expected losses in three discrete losses in the reorganization actions over recent period.
Speaker #2: Every decision that we—a large personal umbrella program—and made during 2025 was designed to simplify our business and create clarity around P&L ownership.
Speaker #2: Ultimately, these decisions will drive more consistency and better execution around the key financial metrics of combined ratio and return on equity over the long term.
Simon Wilson: The 2026 business planning process completed in the quarter was a key test of the new structure and gives me confidence that the overall organization will benefit from the changes we made in 2025. 5 key indicators that underpin this confidence are: number 1, a revamped portfolio mix with a refreshed focus on bottom-line results and a wide range of profitable growth opportunities. Number 2, ambitious and measured investment plans for our high-performing businesses with clear growth opportunities, such as environmental, energy, healthcare, financial institutions, personal lines, and workers' comp in the US, and our key regional businesses in the London market, European Union, Asia Pacific, Canada, and the UK. Number 3, P&L owners are challenging expenses harder than I've seen in a long time. It's been interesting to watch the way behavior changes when costs are clearly attributable to a business unit.
Simon Wilson: The 2026 business planning process completed in the quarter was a key test of the new structure and gives me confidence that the overall organization will benefit from the changes we made in 2025. 5 key indicators that underpin this confidence are: number 1, a revamped portfolio mix with a refreshed focus on bottom-line results and a wide range of profitable growth opportunities. Number 2, ambitious and measured investment plans for our high-performing businesses with clear growth opportunities, such as environmental, energy, healthcare, financial institutions, personal lines, and workers' comp in the US, and our key regional businesses in the London market, European Union, Asia Pacific, Canada, and the UK.
Speaker #2: 2026 business planning process completed in the quarter was a key test of the The new structure and gives me confidence that the overall organization will benefit from the changes we made in 2025.
Speaker #2: Five key indicators that underpin this confidence are: number one, a revamped portfolio mix with a refreshed focus on bottom-line results and a wide range of profitable growth opportunities.
Speaker #2: Number two, ambitious and measured investment plans for our high-performing businesses—energy, healthcare, financial—with clear growth opportunities, such institutions, personal lines, and workers' comp in the US, and our key regional as environmental, and the UK.
Speaker #2: businesses in the London market, European Union, Asia Pacific, Canada, Number three, P&L owners are challenging expenses harder than I've seen in the long time.
Simon Wilson: Number 3, P&L owners are challenging expenses harder than I've seen in a long time. It's been interesting to watch the way behavior changes when costs are clearly attributable to a business unit.
Speaker #2: Behavior changes when costs are clearly attributable to a business unit. It's been interesting to watch the way that's unfolded. I fully expect and encourage this behavior to continue.
Simon Wilson: I fully expect and encourage this behavior to continue. The planned doubling of investment of our technology stack this year versus last is the fourth area. These decisions are now driven by the business rather than the corporate center. For example, there is a complete system overhaul in the high-performing personal lines business, the continued transformation of our data and core operating systems across the international division, and a commitment to increasing decision-making speed and response times in our core US wholesale and specialty division. AI will be a central component of all these investments. We are fully aware that speed is a critical success factor in our business, and we are focused on improving it. And finally, number 5, a renewed sense of ownership across our leadership group. A founder's mentality is returning to the fray. Our business model is designed to be driven by many, not few.
Simon Wilson: I fully expect and encourage this behavior to continue. The planned doubling of investment of our technology stack this year versus last is the fourth area. These decisions are now driven by the business rather than the corporate center. For example, there is a complete system overhaul in the high-performing personal lines business, the continued transformation of our data and core operating systems across the international division, and a commitment to increasing decision-making speed and response times in our core US wholesale and specialty division.
Speaker #2: The planned doubling of stack this year versus last is the investment of our technology fourth area. These decisions are now corporate center. For example, we have a complete system overhaul in the high-performing personal lines business.
Speaker #2: The continued transformation of our data and core operating systems across the International division, and a commitment to increasing decision-making speed and response in the Specialty division.
Speaker #2: AI will be a central component of all these times in our core US wholesale and We are fully aware that speed is a critical success driven by the business rather than the factor in our business, and we are focused on improving it.
Simon Wilson: AI will be a central component of all these investments. We are fully aware that speed is a critical success factor in our business, and we are focused on improving it. And finally, number 5, a renewed sense of ownership across our leadership group. A founder's mentality is returning to the fray. Our business model is designed to be driven by many, not few.
Speaker #2: And finally, number five, a renewed sense of ownership across our leadership group. A founder's mentality is returning to the fray. Our business model is designed to be driven by many, not few.
Speaker #2: We have set clear expectations for every area of our business for 2026. Our job is now to execute. Further, the overall improvement in operations is built upon the continued strength of our balance sheet.
Simon Wilson: We have set clear expectations for every area of our business for 2026. Our job is now to execute. Further, the overall improvement in operations is built upon the continued strength of our balance sheet. The overall reserve release for 2025 was 6 points, or $484 million. We're able to make these releases while increasing our margin of safety and overall strength of the balance sheet. We have a continued commitment to setting reserves that are more likely redundant than deficient. A strong margin of safety will be important in the coming years. There is no doubt that market conditions in many areas of the specialty insurance industry have softened. Profitability has been high, competition has increased, and prices are under pressure in several key lines of business.
Simon Wilson: We have set clear expectations for every area of our business for 2026. Our job is now to execute. Further, the overall improvement in operations is built upon the continued strength of our balance sheet. The overall reserve release for 2025 was 6 points, or $484 million. We're able to make these releases while increasing our margin of safety and overall strength of the balance sheet. We have a continued commitment to setting reserves that are more likely redundant than deficient. A strong margin of safety will be important in the coming years. There is no doubt that market conditions in many areas of the specialty insurance industry have softened. Profitability has been high, competition has increased, and prices are under pressure in several key lines of business.
Speaker #2: The 2025 was six points, or overall reserve release for $484 million. We're able to make these releases while increasing our margin of safety and overall strength likely redundant than continued commitment to setting reserves that are more deficient.
Speaker #2: Our strong margin of safety will be important in the coming years. many areas of the specialty insurance industry have softened. Profitability has been There is no doubt that market conditions in high, competition has increased, and prices are under pressure in several key lines of business.
Simon Wilson: However, competition drives progress, and our customers and brokers continue to value clear appetite, market-leading expertise, high-quality service, and speed of decision-making. Our job is to continue building a business that meets these needs, all while staying true to the Markel style. Businesses and teams that focus on their customers remain well organized and have a strong sense of purpose are those best positioned to succeed in any market conditions. As the comedian Billy Connolly once quipped, "There is no such thing as bad weather, only the wrong clothes." I'm pleased with our new wardrobe and look forward to sharing the results with you on the 2026 catwalk. With that, I pass it back to Tom.
Simon Wilson: However, competition drives progress, and our customers and brokers continue to value clear appetite, market-leading expertise, high-quality service, and speed of decision-making. Our job is to continue building a business that meets these needs, all while staying true to the Markel style. Businesses and teams that focus on their customers remain well organized and have a strong sense of purpose are those best positioned to succeed in any market conditions. As the comedian Billy Connolly once quipped, "There is no such thing as bad weather, only the wrong clothes." I'm pleased with our new wardrobe and look forward to sharing the results with you on the 2026 catwalk. With that, I pass it back to Tom.
Speaker #2: And our customers and brokers continue to value clear appetite. However, competition drives progress, market-leading expertise, high-quality service, and speed of decision-making. Our job is to continue building a business that meets these needs, all while staying true to the Markel style.
Speaker #2: Businesses and teams that focus on their customers, remain well-organized, and have a strong sense of purpose are those best positioned to succeed in any market conditions.
Speaker #2: Comedian Billy Connolly once quipped, "There is no such thing as bad weather. Only the wrong clothes." I'm pleased with our new wardrobe and look forward to sharing the results with you on the 2026 catwalk.
Speaker #2: With that, I pass it back to
Speaker #1: Thank you, Simon. Rebecca, we would love to open the floor for questions.
Tom Gayner: Thank you, Simon. Rebecca, we'd love to open the floor for questions. Thank you.
Tom Gayner: Thank you, Simon. Rebecca, we'd love to open the floor for questions. Thank you.
Speaker #1: Thank you. Tom.
Operator: We will now begin the question-and-answer session. 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 this time, we will pause momentarily to assemble our roster. The first question comes from Andrew Kligerman with TD Cowen. Please go ahead.
Operator: We will now begin the question-and-answer session. 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 this time, we will pause momentarily to assemble our roster. The first question comes from Andrew Kligerman with TD Cowen. Please go ahead.
Speaker #3: answer session. one on your touch-tone phone, if To ask a question, We will now begin the question and you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker #3: To withdraw your question, please press star, then one again. time, we will pause momentarily to assemble our At this roster. The first question comes from Andrew Klingerman with TD Cowell.
Speaker #3: Please go
Speaker #4: Good morning, everyone. I'd like to start off in the property casualty segment. I think back in early January, when you hosted an investor meeting, Simon, you touched on wanting to kind of level out at a 93 combined ratio.
Andrew Kligerman: Good morning, everyone. I'd like to start off in the property casualty segment. I think back in early January when you hosted an investor meeting, Simon, you, you touched on wanting to kind of level out at a 93 Combined Ratio. And I guess the fortunate part is that you're more focused on casualty. So I wanna get a sense, do you feel like the way pricing is in casualty, coupled with some intense loss cost trends, can you... And you did come in at 92.9, so right on the number in the quarter. Do you feel like you can sustain the trends, the 93? And then underlying that, looking at program and solutions, you came in at 101.9.
Andrew Kligerman: Good morning, everyone. I'd like to start off in the property casualty segment. I think back in early January when you hosted an investor meeting, Simon, you, you touched on wanting to kind of level out at a 93 Combined Ratio. And I guess the fortunate part is that you're more focused on casualty. So I wanna get a sense, do you feel like the way pricing is in casualty, coupled with some intense loss cost trends, can you... And you did come in at 92.9, so right on the number in the quarter. Do you feel like you can sustain the trends, the 93? And then underlying that, looking at program and solutions, you came in at 101.9.
Speaker #4: And I guess the fortunate part is that you're more focused on casualty. So I want to get a sense: do you feel like, the way pricing is—you did come in with some intense loss cost trends—came at 92.9, so right on the number in the quarter. Do you feel like you can sustain the trends?
Speaker #4: The 93. And then, underlying that, looking at program and solutions, you came in at 101.9. I'd like to, in casualty coupled with, know what drove...
Andrew Kligerman: I'd like to know what drove that and what you might do to kind of get that lower. Then on the flip side, international was fabulous at 80.5, and I'm wondering what's driving such a terrific Combined Ratio and whether trends are gonna push that up. One question-
Andrew Kligerman: I'd like to know what drove that and what you might do to kind of get that lower. Then on the flip side, international was fabulous at 80.5, and I'm wondering what's driving such a terrific Combined Ratio and whether trends are gonna push that up. One question-
Speaker #1: Of that, and due to kind of that lower. And yet you might side. International was fabulous. And was wondering—a terrific combined. I'm fabulous at 80.5.
Speaker #1: wondering what's such a . Combined And I'm whether At 80.5 . terrific are going to push that up long question .
Simon Wilson: ... Well, well, that's pretty much everything there. I think we're going to cover it.
Simon Wilson: ... Well, well, that's pretty much everything there. I think we're going to cover it.
Andrew Kligerman: I know. That was an open question. Sorry.
Andrew Kligerman: I know. That was an open question. Sorry.
Simon Wilson: No, that's fine. And I thank you for the interest in those numbers as well. I have said, and we've said for a long time now that, you know, to hit our return on equity, kind of like aspirations, a low 90s Combined Ratio is important to us. So that's absolutely my ambition and, you know, the focus of our organization to get down to that kind of a number consistently. That's the plan. Part of your question is saying, "Look, you guys pretty casualty centric organization. How do you get to a 93 with that backdrop?" I'd probably challenge that, actually. I don't think we are that heavily casualty oriented. We've got a very diverse book of specialty products.
Simon Wilson: No, that's fine. And I thank you for the interest in those numbers as well. I have said, and we've said for a long time now that, you know, to hit our return on equity, kind of like aspirations, a low 90s Combined Ratio is important to us. So that's absolutely my ambition and, you know, the focus of our organization to get down to that kind of a number consistently. That's the plan. Part of your question is saying, "Look, you guys pretty casualty centric organization. How do you get to a 93 with that backdrop?" I'd probably challenge that, actually. I don't think we are that heavily casualty oriented. We've got a very diverse book of specialty products.
Speaker #2: Pretty much—well, that's everything there. I think we're—I...
Speaker #2: going to interest the . numbers In those I as well . have said for a time now that , you to hit . return on equity , kind our , a 90s combined ratio important is low that's So to us .
Speaker #1: know . that
Speaker #1: question . Sorry Yeah .
Speaker #2: fine . No that's cover it . And thank
Speaker #2: absolutely my ambition . And you focus of and we know , the organization to that kind get down to number that's that's the plan .
Speaker #2: And consistently , part of your saying , look , question is guys pretty you casualty centric aspirations 93 with that get to a organization .
Speaker #2: backdrop ? probably I'd challenge that . are Actually . I don't of a heavily . We've got oriented . diverse Casualty book of specialty products .
Simon Wilson: Yes, we've got US Casualty, but, you know, our London Market business, for example, lots of marine, energy, a lot of professional lines all around the world. So I, I don't know what the exact percentages of our casualty, the casualty contribution to our book, but it will be less than 50% for sure. And, and, you know, so, again, very well balanced across the portfolio. Therefore, I think it's the power of that diversification, and I was kicking the tires in lots of these specialty business areas, that gives us the confidence that we can, you know, get towards achieving that ambitious Combined Ratio target over time. So if you're asking me, do I think we can approach those targets?
Simon Wilson: Yes, we've got US Casualty, but, you know, our London Market business, for example, lots of marine, energy, a lot of professional lines all around the world. So I, I don't know what the exact percentages of our casualty, the casualty contribution to our book, but it will be less than 50% for sure. And, and, you know, so, again, very well balanced across the portfolio. Therefore, I think it's the power of that diversification, and I was kicking the tires in lots of these specialty business areas, that gives us the confidence that we can, you know, get towards achieving that ambitious Combined Ratio target over time. So if you're asking me, do I think we can approach those targets?
Speaker #2: Yes , we've got us casualty . But you know , our London market business , for lots of marine . example , a lot of professional lines Energy , around the world .
Speaker #2: So I don't know the exact percentages of our casualty , the contribution casualty to our book , but it will be less than 50% for sure .
Speaker #2: And , you know , sort of again , very well balanced across the Therefore , I think it's the power of that diversification and us kicking the tires and lots of portfolio .
Speaker #2: business , business areas . That gives us confidence that we get can , you know , the combined target ratio over time . you're asking So if me , do I think we can you know , targets ?
Simon Wilson: Well, you know, everything that we're doing and putting in place is designed to achieve those, but we'll see how that pans out. But it's the diversification of the portfolio and those different drivers, and a couple of those that you just called out, that will end up with a result overall. So, focused on it, feel good about it at the moment. Specifically on programs and solutions, you raised that in the quarter, it took a pop. And I did mention in my comments, I think Brian did in his, there are two factors that influence that, and a quarter is a pretty short period of time, so you get the occasional blip. The two areas were in our what we call our programs business, that's delegated underwriting, where we do a Personal Umbrella account.
Simon Wilson: Well, you know, everything that we're doing and putting in place is designed to achieve those, but we'll see how that pans out. But it's the diversification of the portfolio and those different drivers, and a couple of those that you just called out, that will end up with a result overall. So, focused on it, feel good about it at the moment. Specifically on programs and solutions, you raised that in the quarter, it took a pop. And I did mention in my comments, I think Brian did in his, there are two factors that influence that, and a quarter is a pretty short period of time, so you get the occasional blip. The two areas were in our what we call our programs business, that's delegated underwriting, where we do a Personal Umbrella account.
Speaker #2: everything that we're doing and Well , place designed is to achieve those . we'll see how But that putting in pans out . diversification of portfolio and those the different drivers .
Speaker #2: A couple of those that called, you've just out the result overall. So, focused good about moment, specifically on programs and solutions.
Speaker #2: I raised that in the IT. I feel on you, quarter. It took a pop, and I did mention in comments—I think Brian did in his.
Speaker #2: my There were two factors that that , influenced quarter's a pretty short period and a of time . So you get the occasional blip .
Simon Wilson: And we saw the claims trends beginning to spike in that area. And what we tend to do at Markel, and certainly my philosophy, is to get ahead of those loss trends and put our reserves up early. So the Combined Ratio and the loss ratio within that for the Personal Umbrella program is really driven by us putting up a big solid reserve against that program, so that we've got the money in the bank effectively to pay the claims that, you know, may or may not come through. But that's our best guess at the moment, and very much focused on that redundant rather than deficient position on our balance sheet. So that's the first area in Programs and Solutions that created that result that came overall.
Simon Wilson: And we saw the claims trends beginning to spike in that area. And what we tend to do at Markel, and certainly my philosophy, is to get ahead of those loss trends and put our reserves up early. So the Combined Ratio and the loss ratio within that for the Personal Umbrella program is really driven by us putting up a big solid reserve against that program, so that we've got the money in the bank effectively to pay the claims that, you know, may or may not come through. But that's our best guess at the moment, and very much focused on that redundant rather than deficient position on our balance sheet. So that's the first area in Programs and Solutions that created that result that came overall.
Speaker #2: two areas our were in call our what we The delegated underwriting , where we do a programs umbrella personal account . And we saw the trends beginning to spike in that area .
Speaker #2: claims what we And what we tend to do Markel , and at my philosophy is to get those loss and put ahead of certainly up early .
Speaker #2: So the so the combined loss ratio ratio and the that for umbrella program is trends really the personal by us driven putting up a , solid reserve that program so that we've against got the money in effectively to pay that , claims you know , the may or may come through , but best not guess at the moment .
Speaker #2: And redundant very much that focused on rather than deficient position on our own sheet. So area in solutions that created that, that's the first that result came over.
Simon Wilson: The second area was actually in our surety business, which, I'll be honest with you, I think we were a little bit surprised, not least because the surety business has been an absolute mainstay of profitability for a decade now, since we bought a company called SureTec, back in the mid-2010s. Often in business like the ones that we do, you get the occasional large loss. At SureTec, we actually suffered 3 large losses in the quarter, and we've obviously reserved, paid claims against those. That happens. I will take the trade on surety every day of the week, though. You know, we had 3 large losses this year, but it's on the back of 10 years of very significant profitability.
Simon Wilson: The second area was actually in our surety business, which, I'll be honest with you, I think we were a little bit surprised, not least because the surety business has been an absolute mainstay of profitability for a decade now, since we bought a company called SureTec, back in the mid-2010s. Often in business like the ones that we do, you get the occasional large loss. At SureTec, we actually suffered 3 large losses in the quarter, and we've obviously reserved, paid claims against those. That happens. I will take the trade on surety every day of the week, though. You know, we had 3 large losses this year, but it's on the back of 10 years of very significant profitability.
Speaker #2: The actually an our surety second area was big which I'll be honest , I think we business , bit a little surprised , because the surety business has been an absolute mainstay profitability of for a decade now since we bought a company called Shore Tech back in mid , the in the 2000 and mid not least time often in business , .
Speaker #2: like the ones the do , we get large occasional in short , actually suffered three large we in the quarter . And we've losses obviously .
Speaker #2: reserved claims those against that that pay happens . I And will take the trade on surety every day of the week This know , we had three large losses this year , but it's were we on the back of ten years of very though .
Simon Wilson: And as we look forward into 2026, having reviewed that entire book of business, we feel really good about that, you know, the standard result that comes out of that business, absolutely meeting our Combined Ratio and Return on Equity target. So I would consider, and I genuinely think this, the Programs and Solutions business, suffer from two very specific areas. The rest of that area, personal lines business, our Bermuda business, and our workers' comp business, all perform really well. So on average, I think they just did really nicely. International, you know, I do have fairly good insight into that. They've been producing extremely good results for a number of years now. And what happened there was in the late ...
Simon Wilson: And as we look forward into 2026, having reviewed that entire book of business, we feel really good about that, you know, the standard result that comes out of that business, absolutely meeting our Combined Ratio and Return on Equity target. So I would consider, and I genuinely think this, the Programs and Solutions business, suffer from two very specific areas. The rest of that area, personal lines business, our Bermuda business, and our workers' comp business, all perform really well. So on average, I think they just did really nicely. International, you know, I do have fairly good insight into that. They've been producing extremely good results for a number of years now. And what happened there was in the late ...
Speaker #2: significant You profitability . And as we look into forward 2026 , having reviewed that entire book of business , we feel really good about that .
Speaker #2: standard You know , comes out of result that that business . Absolutely . Meeting our combined and return So ratio targets . equity would consider genuinely think programs and suffer from two very areas .
Speaker #2: The specific area, the rest of personal lines, and our business business, workers comp business, all perform really well. And so does our Bermuda business.
Speaker #2: on average , I really nicely . International . You know , I do have fairly good insight that . into They've been producing extremely a results for good number of years now , and did what think they probably was 2017 , 18 , we took a big hard look at the late , our portfolio and areas of didn't think were going to be profitable we over the long business , which didn't feel we had the right to areas So win .
Simon Wilson: Probably 2017, 2018, we took a big, hard look at the portfolio and took out areas of business, which we didn't think were gonna be profitable over the long term, areas where we didn't feel we had the right to win. So when we cut back and, you know, this is 5, 6 years ago, those areas, we then started to grow in areas where we did have the right to win and our regional businesses as well. So what we're seeing now is the result of decisions that were made 5 and 6 years ago, and then investment on that new business model over quite a long period of time. So key growth areas last year were in Asia Pacific, which was up over 30%, our European Union business, which is up 20%, London Market business, which is up 13.
Simon Wilson: Probably 2017, 2018, we took a big, hard look at the portfolio and took out areas of business, which we didn't think were gonna be profitable over the long term, areas where we didn't feel we had the right to win. So when we cut back and, you know, this is 5, 6 years ago, those areas, we then started to grow in areas where we did have the right to win and our regional businesses as well. So what we're seeing now is the result of decisions that were made 5 and 6 years ago, and then investment on that new business model over quite a long period of time.
Speaker #2: when we cut back in , you know , five , this is ago , those areas we then six years regional businesses as grow in now well .
Speaker #2: of decisions that result were made years ago , and then five that new business and six over quite So period of time . So key growth areas last year were Pacific , which was up over 30% .
Simon Wilson: So key growth areas last year were in Asia Pacific, which was up over 30%, our European Union business, which is up 20%, London Market business, which is up 13.
Simon Wilson: They are all areas that we've been strategically investing in for a long period of time, and the result is one of quite good market conditions over the past few years, but absolute focused investment in areas where we think we can win. And that's what we're trying to do in all the other areas of the business now that we've got this really focused business model across the whole of Markel Insurance. So, I can't say that we're gonna achieve low 80s combined across the whole thing for the next decade. That's not, you know, that's not what I'm gonna say here. But we'll take the international results now, and I think what we've seen there, and the techniques that were driven to achieve those results, is exactly what we're deploying across the rest of the business.
Simon Wilson: They are all areas that we've been strategically investing in for a long period of time, and the result is one of quite good market conditions over the past few years, but absolute focused investment in areas where we think we can win. And that's what we're trying to do in all the other areas of the business now that we've got this really focused business model across the whole of Markel Insurance. So, I can't say that we're gonna achieve low 80s combined across the whole thing for the next decade. That's not, you know, that's not what I'm gonna say here. But we'll take the international results now, and I think what we've seen there, and the techniques that were driven to achieve those results, is exactly what we're deploying across the rest of the business.
Speaker #2: which business , up a long London market is business , Higher which is up 13 . are all areas . European investing in for a long strategically period in Asia And the time .
Speaker #2: result is the next to say here . But we'll take the what I'm going international results now . And I think what we've seen techniques that were achieve there in the those results , is exactly what we're deploying across of the the rest business .
Speaker #2: one of quite good market conditions over the past few years . But of absolute focused areas where we think we investment in win .
Speaker #2: can And trying to do in all areas of the Now that business . we've got this the other really focused business model across the whole of So I can't say that we're going to that's what we're across the 80s combined whole thing for decade .
Simon Wilson: That's what gives me confidence in the thing as a whole. I look forward genuinely to what we can do in 2026.
Simon Wilson: That's what gives me confidence in the thing as a whole. I look forward genuinely to what we can do in 2026.
Speaker #2: And that's what gives me confidence in the thing as a whole . And I look genuinely to what we can do forward in 2026 .
Andrew Kligerman: That was, that was super helpful.
Andrew Kligerman: That was, that was super helpful.
Simon Wilson: If I may, Andrew, just to finish up, to translate Simon's English accent to the American idiom, we will do the best we can, and that's not so bad.
Simon Wilson: If I may, Andrew, just to finish up, to translate Simon's English accent to the American idiom, we will do the best we can, and that's not so bad.
Speaker #1: super Hollywood helpful .
Speaker #3: If I may , just to finish up to translate Simon's accent to English the we idiom , American will do the best can .
Andrew Kligerman: No, it's not. Thank you for that super, super helpful response. Maybe, maybe shifting over to industrial and consumer. And by the way, thank you for the new reporting structure. It's very helpful. The industrial organic revenue was up 2.5%. I think you just mentioned equipment leasing was good, and it was offset by transportation. Wondering if you could share a little color on how that's likely to trend going forward. And then in the consumer, you had organic growth of about 1%. I think you mentioned ornamental plants was a positive, but how do you think that's gonna trend going forward as well?
Andrew Kligerman: No, it's not. Thank you for that super, super helpful response. Maybe, maybe shifting over to industrial and consumer. And by the way, thank you for the new reporting structure. It's very helpful. The industrial organic revenue was up 2.5%. I think you just mentioned equipment leasing was good, and it was offset by transportation. Wondering if you could share a little color on how that's likely to trend going forward. And then in the consumer, you had organic growth of about 1%. I think you mentioned ornamental plants was a positive, but how do you think that's gonna trend going forward as well?
Speaker #3: And that's bad not so .
Speaker #1: No , it's for that . Super , super helpful response . Maybe , maybe shifting over to Andrew , industrial consumer the way .
Speaker #1: And by for the , the and reporting structure . the new very helpful It's . The organic revenue was up two and a half , I think you mentioned just equipment was leasing good it was offset not .
Speaker #1: and transportation . Wondering if you share a little could color on on how that's likely to trend industrial And then in the consumer , you had organic growth about 1% .
Speaker #1: and transportation . Wondering if you share a little could color on on how that's likely to trend industrial And then in the consumer , you had organic growth of think you ornamental plants was a positive , but how do you think going to trend going well ?
Tom Gayner: Yeah, Andrew, it's Tom. We are delighted with the collection of businesses that we own. We've got first-class people running them. They're producing good returns on capital. We run those with a focus on good returns on capital over long periods of time. Each and any one of those businesses in any quarter has volatility, normal cyclicality, and seasonality. So frankly, the answer to your question is, we don't think about it that much. As long as those businesses are being well-run and doing what they should do, well, then the outside forces are what they are. But we've toted up the numbers of them for a long period of time, as you can more clearly see in the way we're presenting the financial disclosures and data these days, we are happy.
Tom Gayner: Yeah, Andrew, it's Tom. We are delighted with the collection of businesses that we own. We've got first-class people running them. They're producing good returns on capital. We run those with a focus on good returns on capital over long periods of time. Each and any one of those businesses in any quarter has volatility, normal cyclicality, and seasonality. So frankly, the answer to your question is, we don't think about it that much. As long as those businesses are being well-run and doing what they should do, well, then the outside forces are what they are. But we've toted up the numbers of them for a long period of time, as you can more clearly see in the way we're presenting the financial disclosures and data these days, we are happy.
Speaker #3: Andrew . It's Tom .
Speaker #3: We are with the delighted collection of businesses that we own. We've got first-class people, they're running them, producing good returns on capital.
Speaker #3: those with a focus on good returns on periods of We run . Each and every businesses , in any one of those quarter has , has volatility forward as normal cyclicality and and seasonality .
Speaker #3: those with a focus on good returns on periods of
Speaker #3: We don't think about it that much. Those are being, well, businesses. The question is capital over long, and they should do well. Then the outside are what the forces are.
Speaker #3: But when coded up the mentioned numbers of the of them for period of time , as you can clearly see in the way we're presenting more disclosures and data these days .
Tom Gayner: We were, we were happy six months ago. We're happy right now. We would anticipate continuing to be happy with the way those businesses are performing.
Tom Gayner: We were, we were happy six months ago. We're happy right now. We would anticipate continuing to be happy with the way those businesses are performing.
Speaker #3: We financial happy . We are we've were happy six months ago . We're happy right now . We would continuing to be happy with anticipate the way those businesses are performing .
Andrew Kligerman: Got it. Thank you.
Andrew Kligerman: Got it. Thank you.
Tom Gayner: Thank you.
Tom Gayner: Thank you.
Operator: Again, if you have a question, please press star, then one. Your next question comes from the line of Andrew Andersen with Jefferies.
Operator: Again, if you have a question, please press star, then one. Your next question comes from the line of Andrew Andersen with Jefferies.
Speaker #1: Thank you. Got it.
Speaker #3: Thank you .
Speaker #4: Again, if you have a question, please *star. Press question one. Your next question comes from Andrew Anderson with Jefferies.
Andrew Andersen: Hey, good morning. Maybe just on the insurance segment, how are you kind of viewing the insurance pricing environment into 2026? Are you still seeing rate increases in certain areas? And maybe how does that differ between US wholesale and the international segment?
Andrew Andersen: Hey, good morning. Maybe just on the insurance segment, how are you kind of viewing the insurance pricing environment into 2026? Are you still seeing rate increases in certain areas? And maybe how does that differ between US wholesale and the international segment?
Speaker #5: Hey
Speaker #5: morning . Maybe just on the good insurance .
Speaker #5: kind segment . the insurance pricing environment into line of 26 ? Are you still in seeing certain areas and does that differ maybe how between us wholesale and the international segment ?
Simon Wilson: Thanks, Andrew. Thanks for the question. There's a general trend, I think I mentioned that, sort of, there's a number of lines that you are seeing softening rating conditions in, at the moment. In particular, I would say US property would be top of the list on that. We've seen very significant profitability, definitely in our book, but that's across the industry. And with that profitability, often in the insurance market cycle, you see heavy competition. So we are seeing very significant competition in that US property market.
Simon Wilson: Thanks, Andrew. Thanks for the question. There's a general trend, I think I mentioned that, sort of, there's a number of lines that you are seeing softening rating conditions in, at the moment. In particular, I would say US property would be top of the list on that. We've seen very significant profitability, definitely in our book, but that's across the industry. And with that profitability, often in the insurance market cycle, you see heavy competition. So we are seeing very significant competition in that US property market.
Speaker #2: Andrew . Thanks for Thanks , the question . It in general trend . I think I that mentioned there's a number of lines that you are softening rating conditions at the in moment .
Speaker #2: In particular , I would US say there's a property would be top of the list on that . We've seen very significant profitability definitely in our book , that's across the industry .
Speaker #2: with And profitability , often the insurance market you see heavy competition . So we seeing are very significant competition in a competition in that US property , you know , market .
Simon Wilson: And you know, it depends what the account is, but you know, you're looking at probably at least 10% reductions in many of that, in that property book, and probably up nearer towards 20, I think, in general terms, and we've seen that reported by several other players as well. It is a bit more nuanced than that. It's not just to say, like, every property risk is down, you know, double-digit percentages. What we're really seeing in property is the structured and layered risks that come in. There's a change in the structure that's going about. So the primary layer is actually writing larger lines, you know, so the initial insurer.
Simon Wilson: And you know, it depends what the account is, but you know, you're looking at probably at least 10% reductions in many of that, in that property book, and probably up nearer towards 20, I think, in general terms, and we've seen that reported by several other players as well. It is a bit more nuanced than that. It's not just to say, like, every property risk is down, you know, double-digit percentages. What we're really seeing in property is the structured and layered risks that come in. There's a change in the structure that's going about. So the primary layer is actually writing larger lines, you know, so the initial insurer.
Speaker #2: it depends what the And account is . But you looking at know , you're probably at least reductions in many of 10% that property book .
Speaker #2: probably up And 20 I think in general terms . And we've seen that reported several other that in well . a bit more nuanced not just to say , like It is property risk than that .
Speaker #2: probably up And 20 I think in general terms . And we've seen that reported several other that in well . a bit more nuanced not just to say , like It is property risk is by you know , double digit percentages , what we're property is really seeing structured and It's risks that come in .
Speaker #2: probably up And 20 I think in general terms . And we've seen that reported several other that in well . a bit more nuanced not just to say , like It is property risk is by you know , double digit percentages , what we're property is really seeing structured and in lot of competition around them .
Simon Wilson: And some of the layers on top of that, the excess layers, are being challenged, either by being removed completely or you're seeing an awful lot of competition going around them. So if you're playing in the second or third excess layer, you're probably seeing more intense price reductions there than maybe you are on the primary side. So the property is generally soft, but you're also seeing that nuanced bit where, depending on where you play in the program. A lot of people, though, in property are talking maybe not just about rate reductions, but rate adequacy.
Simon Wilson: And some of the layers on top of that, the excess layers, are being challenged, either by being removed completely or you're seeing an awful lot of competition going around them. So if you're playing in the second or third excess layer, you're probably seeing more intense price reductions there than maybe you are on the primary side. So the property is generally soft, but you're also seeing that nuanced bit where, depending on where you play in the program. A lot of people, though, in property are talking maybe not just about rate reductions, but rate adequacy.
Speaker #2: So if you're playing third excess layer , you're second or probably seeing more going intense price reductions . There maybe you are on the on than primary side .
Speaker #2: So the property is the on the generally soft , but you're also seeing bit where that nuanced depending on where you play in the program , a people that are lot of in property are talking .
Simon Wilson: And I think that's really important because there are a lot of sharp rises in the property market when we saw catastrophes kind of 3 and 4 years ago, impacting the cat market and then the non-cat market and property as well. So I think the general sentiment in the industry is that prices are just about remaining adequate at the moment, but you really have to be thoughtful about what your risk appetite is and where your, you know, sort of your walk away price might be. So we're keeping a close eye on that area. Conversely, the casualty market continues to get rate increases, specifically in auto risks, habitational risks, and construction risks. We're seeing that significant rate increases ongoing.
Simon Wilson: And I think that's really important because there are a lot of sharp rises in the property market when we saw catastrophes kind of 3 and 4 years ago, impacting the cat market and then the non-cat market and property as well. So I think the general sentiment in the industry is that prices are just about remaining adequate at the moment, but you really have to be thoughtful about what your risk appetite is and where your, you know, sort of your walk away price might be. So we're keeping a close eye on that area. Conversely, the casualty market continues to get rate increases, specifically in auto risks, habitational risks, and construction risks. We're seeing that significant rate increases ongoing.
Speaker #2: not rate just about reductions , but rate that's really important adequacy . And I think because there are a of sharp rises in the property market .
Speaker #2: not rate just about reductions , but rate that's really important adequacy . And I think because there are a of sharp rises in the property market Maybe lot saw When we catastrophes kind of three and four years ago impacting the cap market , and then cap the non market and property as and then well .
Speaker #2: So I think general the industry is that the prices are just about remaining adequate at the But you moment . be thoughtful about what your risk appetite where is and sentiment in you know , sort of your walk away price we're .
Speaker #2: might be keeping a close eye on that So area . And conversely , the casualty market continues to get rate increases in auto risks .
Simon Wilson: And that's important because the claims trends that we're seeing in those areas continue to be fairly strong as well. So the skill in casualty is not just writing everything just because rates are going up, but really being thoughtful about the areas of the casualty market in which we're going to play, because the litigation environment in the United States is all very significant as well. Moving to international briefly, I suggest that there is softness there. So as a wholesale market in London, you see quite a lot of business that have been going to London becoming, you know, sort of structured and, and certain brokers are bringing that in and looking for price reductions when they go into London. So certainly in marine lines, energy lines, property areas, we're seeing that price competition in London as well.
Simon Wilson: And that's important because the claims trends that we're seeing in those areas continue to be fairly strong as well. So the skill in casualty is not just writing everything just because rates are going up, but really being thoughtful about the areas of the casualty market in which we're going to play, because the litigation environment in the United States is all very significant as well. Moving to international briefly, I suggest that there is softness there. So as a wholesale market in London, you see quite a lot of business that have been going to London becoming, you know, sort of structured and, and certain brokers are bringing that in and looking for price reductions when they go into London. So certainly in marine lines, energy lines, property areas, we're seeing that price competition in London as well.
Speaker #2: Habitational risks , construction risks . We're seeing that significant rate increases , ongoing . And that's important because the claims trends that we're seeing in those continue to be fairly strong , specifically as skill in casualty is not well .
Speaker #2: Habitational risks , construction risks . We're seeing that significant rate increases , ongoing . And that's important because the claims trends that we're seeing in those continue to be fairly strong , specifically as skill in casualty is not the just So writing everything just because rates are up , going but really being market about the areas of the going to play in which we're , because the litigation United environment in the States is all very as significant well .
Speaker #2: Moving to international briefly , I would suggest that there is there . So softness wholesale market in London . You see of business that are London going to know , sort there's a of structured in brokers are bringing that looking in and for price reductions when they go into So London .
Speaker #2: certainly in , energy Lines lines Marine areas , , property seeing we're certain price competition in London as well . I think the professional lines area has begun to after a couple of years of softening .
Simon Wilson: I think the professional lines area actually has begun to stabilize after a couple of years of softening. I think that's stabilizing. And again, being really focused on rate adequacy in that area is what we're focused on, and sticking to the bits of the professional lines where we really think we add value, to the broker and to the ultimate customer, and where we've got expertise. That served us well, and that's one of the reasons why our combined ratios have been so good in London, is because we've chosen our risk pretty well. Outside of London, in our regional offices, and this is a really important point for people to note, we tend to focus on the small end of the risk market.
Simon Wilson: I think the professional lines area actually has begun to stabilize after a couple of years of softening. I think that's stabilizing. And again, being really focused on rate adequacy in that area is what we're focused on, and sticking to the bits of the professional lines where we really think we add value, to the broker and to the ultimate customer, and where we've got expertise. That served us well, and that's one of the reasons why our combined ratios have been so good in London, is because we've chosen our risk pretty well. Outside of London, in our regional offices, and this is a really important point for people to note, we tend to focus on the small end of the risk market.
Speaker #2: I think that's stabilize stabilizing . And again , being really focused on rate adequacy in that area is what we're that what we're focused on .
Speaker #2: Sticking to the, and the professional lines where we, bits of--really think we add to the value, to the broker and to the ultimate customer.
Speaker #2: And actually that where we've expertise that's one of the reasons why And served us our combined ratios have been so good in is because London our risk well London , in our outside of regional offices , and this is a really point for important people to to note .
Simon Wilson: The very small end of the risk market, and this is maybe 2,000- or 3,000-dollar policies quite often, certainly in the European Union, the UK regions, and some of our Asia book. In that area, the price competition is less aggressive. So yes, you might see a bit of softening, but it's very much single-digit in there, and often we're charging minimum premiums, so the rate adequacy can be, can be really positive in that area. So less affected outside of our London lines than in London, just because the intensity of competition for that small risk segment is just lower. It's harder to get at, and it's stickier. So our strategy within international is to grow our non-London portion relative to London, so that we've got more of this kind of smaller, stickier business, which is less exposed to intense price competition going forward.
Simon Wilson: The very small end of the risk market, and this is maybe 2,000- or 3,000-dollar policies quite often, certainly in the European Union, the UK regions, and some of our Asia book. In that area, the price competition is less aggressive. So yes, you might see a bit of softening, but it's very much single-digit in there, and often we're charging minimum premiums, so the rate adequacy can be, can be really positive in that area. So less affected outside of our London lines than in London, just because the intensity of competition for that small risk segment is just lower.
Speaker #2: tend to focus on the small end of the risk market and the very small end of the market . And risk this is maybe two , $3,000 often , certainly in policies .
Speaker #2: European Union , the UK Quite some of our regions and Asia . in But that area , the price less competition is aggressive .
Speaker #2: yes , you might So see a bit of softening , but it's very single much digit in there . And often we're charging minimum premiums .
Speaker #2: rate So the can be really be can positive in adequacy that area . less affected outside of our lines London than in London .
Simon Wilson: It's harder to get at, and it's stickier. So our strategy within international is to grow our non-London portion relative to London, so that we've got more of this kind of smaller, stickier business, which is less exposed to intense price competition going forward.
Speaker #2: because the Just intensity of competition for small risk segment that is just lower . It's harder to at . And stickier . it's So get within international is to grow non-london our portion relative to London , so got more of this kind of smaller , exposed to business , which intense price stickier competition going forward .
Simon Wilson: I think that balance will help us, you know, with that overall diversified portfolio over time. So it's a mixed bag in terms of what's happening in the rating environment. To very quickly summarize, property is competitive. Casualty, actually, we're seeing firming and hardening, but it's not an easy market to underwrite your way through. London is competitive. Non-London international actually is stacking up, continues to stack up pretty well. So hopefully, that gives you a bit of a flavor of what's going on in our world. It's an interesting time, and I like our odds with the underwriters that we've got on the ground to navigate it.
Simon Wilson: I think that balance will help us, you know, with that overall diversified portfolio over time. So it's a mixed bag in terms of what's happening in the rating environment. To very quickly summarize, property is competitive. Casualty, actually, we're seeing firming and hardening, but it's not an easy market to underwrite your way through. London is competitive. Non-London international actually is stacking up, continues to stack up pretty well. So hopefully, that gives you a bit of a flavor of what's going on in our world. It's an interesting time, and I like our odds with the underwriters that we've got on the ground to navigate it.
Speaker #2: that I think And balance will help us , you know , with that overall diversified portfolio time . over it's a So mixed terms what's happening in the is less environment .
Speaker #2: And quickly rating , property is competitive casualty . Actually , we're seeing firming and hardening . But it's not an easy to very market to underwrite your way through .
Speaker #2: London is Non-london international actually is stacking up , continues to stack up pretty well , so hopefully that bag in of what's going on in our .
Andrew Andersen: Very comprehensive. Thank you for that. Maybe we could just kind of shift to AI and the expense ratio. You know, where is it being deployed within insurance? Maybe what are some returns or examples you've seen so far and some focus areas into 2026 and 2027 for deployment?
Andrew Andersen: Very comprehensive. Thank you for that. Maybe we could just kind of shift to AI and the expense ratio. You know, where is it being deployed within insurance? Maybe what are some returns or examples you've seen so far and some focus areas into 2026 and 2027 for deployment?
Speaker #2: an It's world time competitive . I our like odds with the underwriters that we've got on the ground to to navigate . .
Speaker #5: Thank you for comprehensive . that . And
Speaker #5: maybe we could just Very kind of shift to it and the expense ratio . What kind of is it where being deployed insurance maybe .
Tom Gayner: I'll ask Brian to take the first stab at that and-
Tom Gayner: I'll ask Brian to take the first stab at that and-
Speaker #5: What are some returns or far so you've seen examples in and some focus areas into 26 and deployment ? 27 for
Brian Costanzo: Sure. Yeah, I mean, I think, you know, with the new model that we have and the operating model and the org structure, I mean, now it's really in the hands of the individual business leaders. We're trying to put tools in their toolbox, make them aware of what's out there. We've had some really nice wins in lines where you have large documents and needs to digest big amounts of data. So think of things like Transaction Liability, Financial Institutions, where you can get data rooms filled with all kinds of things that humans have to pore through.
Brian Costanzo: Sure. Yeah, I mean, I think, you know, with the new model that we have and the operating model and the org structure, I mean, now it's really in the hands of the individual business leaders. We're trying to put tools in their toolbox, make them aware of what's out there. We've had some really nice wins in lines where you have large documents and needs to digest big amounts of data. So think of things like Transaction Liability, Financial Institutions, where you can get data rooms filled with all kinds of things that humans have to pore through.
Speaker #3: Brian to take the first half of that ask . and
Speaker #3: Brian to take the first half of that ask . and
Speaker #6: I mean , I think , you Sure . Yeah . with the new know , I'll have and the the and the we operating model structure , I now it's mean , really in hands of the the individual business leaders .
Speaker #6: We're trying tools to put in their toolbox , make them aware out there . of what's We've had some really wins in nice lines where you large documents and have digest big needs amounts So think of things like of data .
Speaker #6: Transaction liability, financial institutions — where you can have data rooms filled with all kinds of information that humans have to pour through. The AI can synthesize that down very quickly, pull together the data, and allow you to move to the investment side.
Brian Costanzo: The AI can synthesize that down very quickly, pull together the data, and allow you to lower the investment of the human side, and that allows you to look at accounts that, from a size and premium standpoint, you wouldn't have been able to access just because of the human element and the expense ratio of going after those. Now, you've broadened what you can go after from an appetite standpoint. So that, that's certainly one example. I think the other place we've seen a lot of AI use is in data ingestion. So when we have delegated underwriting arrangements, when we have bordereau business coming in, when we need to get data into our systems and use that to make decisions, using the AI to transport, bring it in, and, and that avoids a lot of the human element of what I call data wrangling and data compiling.
Brian Costanzo: The AI can synthesize that down very quickly, pull together the data, and allow you to lower the investment of the human side, and that allows you to look at accounts that, from a size and premium standpoint, you wouldn't have been able to access just because of the human element and the expense ratio of going after those. Now, you've broadened what you can go after from an appetite standpoint. So that, that's certainly one example. I think the other place we've seen a lot of AI use is in data ingestion.
Speaker #6: And that allows you to look at lower the accounts from a, uh, size and premium standpoint, you wouldn't have been able to because of access—just the human element and the expense ratio of going after those.
Speaker #6: Now , you've broadened what you can go after from an appetite standpoint . So certainly that's one place we've the other seen a I think lot of AI is in use ingestion .
Brian Costanzo: So when we have delegated underwriting arrangements, when we have bordereau business coming in, when we need to get data into our systems and use that to make decisions, using the AI to transport, bring it in, and, and that avoids a lot of the human element of what I call data wrangling and data compiling.
Speaker #6: data So have delegated when we have arrangements , when border coming in , when we need business to get into our systems and use that decisions using the data AI to transport , in bring it .
Brian Costanzo: That's expensive; it's non-value add. It shifts those resources now to where the data's there, you can now spend the time doing the analysis, finding the trends, finding where you win, and, and enhancing the book overall.
Brian Costanzo: That's expensive; it's non-value add. It shifts those resources now to where the data's there, you can now spend the time doing the analysis, finding the trends, finding where you win, and, and enhancing the book overall.
Speaker #6: That avoids a lot of the human element of what I call data wrangling and data compiling. That's expensive. It's non-value add. It shifts those resources.
Speaker #6: where Now to the data's there . You can spend the now time doing the analysis , finding the finding where you win , and enhancing the book to overall .
Simon Wilson: Can I just add to Brian, and you picked up some really important spots. I will say this: I am, Andrew, I'm utterly obsessed with operations. I'm pretty geeky around this stuff. I'll admit that much. Efficient and high-quality operations that lead to speed of response are absolutely at the center of my mind now. I'm really excited about where we are on this AI position. Like, we have some really exciting projects ongoing at the moment. Brian alluded to a couple of them there. But what 2025 did to clear the organizational structure, so we can really focus on specific program, or specific, areas of the business, allows us to deploy AI in a much, much more effective way than a simple broad brush effect that we did previously.
Simon Wilson: Can I just add to Brian, and you picked up some really important spots. I will say this: I am, Andrew, I'm utterly obsessed with operations. I'm pretty geeky around this stuff. I'll admit that much. Efficient and high-quality operations that lead to speed of response are absolutely at the center of my mind now. I'm really excited about where we are on this AI position. Like, we have some really exciting projects ongoing at the moment. Brian alluded to a couple of them there. But what 2025 did to clear the organizational structure, so we can really focus on specific program, or specific, areas of the business, allows us to deploy AI in a much, much more effective way than a simple broad brush effect that we did previously.
Speaker #2: Can I just add to Brian and you picked really up some important spots ? I will say this . I'm Andrew , I'm utterly obsessed with operations .
Speaker #2: I'm sort of pretty geeky around this stuff . I'll much . And efficient high and operations that lead to speed response are absolutely center of Now really excited , I'm my mind .
Speaker #2: admit that the about where we are this AI on we really have some exciting projects ongoing at moment . Brian the to a couple of them .
Speaker #2: There , position . Like what alluded but clear the organizational structures that can really focus on specific program or specific areas of the business , allows us to deploy AI in a much , more effective way than a simple , broad brush effect that we did much previously .
Simon Wilson: So I don't think we're doing some really exciting things. I think we'll begin to impact our productivity and efficiency at the moment, but I'm going to start turning the handle on AI and just, you know, operations in particular, during this quarter and next to get our focus in and around that. And I think that will begin to have a much more material impact as we go through the next sort of 6 to 12 months. So we've made a nice start, but the strategic level of what we need to do here is just beginning.
Simon Wilson: So I don't think we're doing some really exciting things. I think we'll begin to impact our productivity and efficiency at the moment, but I'm going to start turning the handle on AI and just, you know, operations in particular, during this quarter and next to get our focus in and around that. And I think that will begin to have a much more material impact as we go through the next sort of 6 to 12 months. So we've made a nice start, but the strategic level of what we need to do here is just beginning.
Speaker #2: I don't So think we've we've we're doing some really exciting things . I think we'll begin to impact our productivity and efficiency at the moment , but I'm going to start turning the on on AI and just , you know handle , operations in during this quarter and next particular to get our focus in and around that .
Speaker #2: And I think that will begin to have a much more material impact as through the we go next 6 to 12 months . So we've made a nice start .
Brian Costanzo: Maybe I'll add, you know, more. Let's talk more generally on expense ratio. If you look at the portfolio, the areas in which we're growing and have been very profitable in some of the segments in international, our European business, our Asian business, in the US, our personal lines business, those are all great businesses, low Combined Ratios. They have higher expense ratios to operate. They have almost an inverted expense ratio, loss ratio profile to other areas of the business. Areas where we've been very challenged, our global reinsurance business, our Risk Managed Professional Liability product that we've exited, those are some of the lowest expense ratio businesses that we had in our portfolio. So we are ultra-focused on Combined Ratio, Return on Equity.
Brian Costanzo: Maybe I'll add, you know, more. Let's talk more generally on expense ratio. If you look at the portfolio, the areas in which we're growing and have been very profitable in some of the segments in international, our European business, our Asian business, in the US, our personal lines business, those are all great businesses, low Combined Ratios. They have higher expense ratios to operate. They have almost an inverted expense ratio, loss ratio profile to other areas of the business. Areas where we've been very challenged, our global reinsurance business, our Risk Managed Professional Liability product that we've exited, those are some of the lowest expense ratio businesses that we had in our portfolio. So we are ultra-focused on Combined Ratio, Return on Equity.
Speaker #2: But the strategic level of what we need to do here is just beginning . .
Speaker #6: maybe I'll And add more . Let's talk more generally on expense ratio . If you look at the the areas in which portfolio , we're growing and have been very profitable some of segments in the international or European in , our Asian business business in US , our personal lines , the business , those are all great businesses , low combined ratios .
Speaker #6: They have higher ratios to operate . expense They have almost an inverted expense ratio , loss ratio profile to areas of the business areas where other we've been very challenged .
Speaker #6: global Our business , our risk managed professional liability product reinsurance that we've exited , those are some of the lowest expense ratio businesses that we had in our So we portfolio .
Brian Costanzo: We certainly want to take advantage of efficiencies, AI or whatever they might be from an operations standpoint, but number one is that Combined Ratio focus that we have.
Brian Costanzo: We certainly want to take advantage of efficiencies, AI or whatever they might be from an operations standpoint, but number one is that Combined Ratio focus that we have.
Speaker #6: are ultra focused on combined ratio return equity . on We want to certainly advantage of take efficiencies or whatever they might be from an operations standpoint .
Andrew Andersen: Thank you.
Andrew Andersen: Thank you.
Speaker #6: But number that combined one is ratio focus that we have .
Operator: Your next question comes from the line of Mark Hughes with Truist.
Operator: Your next question comes from the line of Mark Hughes with Truist.
Speaker #5: Thank you .
Mark Hughes: Yeah, thank you very much. Good morning.
Mark Hughes: Yeah, thank you very much. Good morning.
Speaker #4: Your next question the line comes from of Hughes with Truist .
Tom Gayner: Good morning.
Tom Gayner: Good morning.
Brian Costanzo: Good morning.
Brian Costanzo: Good morning.
Mark Hughes: In the financial segment, earnings very strong this quarter. Talked about the better fees, I think assets under management. How much of that was a product of just a light cat season this year? And how much of that should we think ought to carry forward into 2026?
Mark Hughes: In the financial segment, earnings very strong this quarter. Talked about the better fees, I think assets under management. How much of that was a product of just a light cat season this year? And how much of that should we think ought to carry forward into 2026?
Speaker #7: Yeah . very much . Good morning .
Speaker #3: morning . Good Good
Speaker #3: morning . In
Speaker #7: the in the financial earnings very strong quarter this about the talked better segment I think assets under management . How much of that was a product the just light cat season year this .
Tom Gayner: ... Yeah, I'll start, and I'll turn it to Brian. Yes, clearly, the light cat environment helps.
Tom Gayner: ... Yeah, I'll start, and I'll turn it to Brian. Yes, clearly, the light cat environment helps.
Speaker #7: And how much of that should we think ought to carry forward into 2026.
Speaker #3: Yeah , I'll start turn it to and I'll Brian . Clearly the light cat environment helps .
Brian Costanzo: Yeah, I mean, so what I'll say is the light cat environment at Nephila; they did earn some performance fees in the fourth quarter, based on that kind of. We've talked about this before. Those kind of all accrue in the fourth quarter. So you wait the full year, you see how the ultimate kind of cat season plays out, and then in the fourth quarter, those crystallize. And with a very low cat season, we saw the benefit coming from that. The other thing going on there is the State National business has just been on a consistent track record, year-over-year growth, growth in the premium base, growth in the fee income that they're generating. That's high-margin business when it comes in, so a lot of that growth drops right to the bottom line.
Brian Costanzo: Yeah, I mean, so what I'll say is the light cat environment at Nephila; they did earn some performance fees in the fourth quarter, based on that kind of. We've talked about this before. Those kind of all accrue in the fourth quarter. So you wait the full year, you see how the ultimate kind of cat season plays out, and then in the fourth quarter, those crystallize. And with a very low cat season, we saw the benefit coming from that. The other thing going on there is the State National business has just been on a consistent track record, year-over-year growth, growth in the premium base, growth in the fee income that they're generating. That's high-margin business when it comes in, so a lot of that growth drops right to the bottom line.
Speaker #6: Yeah . I mean , so what I'll say the light cat environment at Nephila , they did earn some performance in the fees fourth quarter based on that , that kind of they we've talked about this before .
Speaker #6: Those of all kind So you wait the matriculate in the full fourth quarter . year . You see how the cat season out .
Speaker #6: ultimate plays quarter , kind of then the fourth And those crystallize . And with cat low a very season , we saw the benefit coming that .
Speaker #6: The other thing going on there is the state is just business national been consistent track record a year over growth . Growth in the from fee they're income that That's high margin comes in .
Mark Hughes: On State National, have you seen any push in your book for more risk retention on your part or... I'll leave it at that.
Mark Hughes: On State National, have you seen any push in your book for more risk retention on your part or... I'll leave it at that.
Speaker #6: when it So a lot of that business right to the drops bottom line .
Speaker #7: On state National , have you seen any push in your book for more risk retention on your part or I'll that .
Tom Gayner: Yeah, it's Tom again. Yes, that's a feature of the market. State National has been a leader. They do well, and leaders attract competition.
Tom Gayner: Yeah, it's Tom again. Yes, that's a feature of the market. State National has been a leader. They do well, and leaders attract competition.
Speaker #7: leave it at Very good . And then Tom the AI trade , when you look at your portfolio a lot of discussion of equity software or companies companies that at tech from risk AI .
Speaker #3: It's
Speaker #3: again . Yes . That's a that's a market state been a do leader . well They and feature of the leaders attract competition .
Mark Hughes: Very good. And then, Tom, the AI trade, when you look at your equity portfolio, a lot of discussion of software companies or tech companies that may be at risk from AI and, obviously, opportunity, but then, it's quite a volatile area. So how are you looking at that from your equity portfolio standpoint?
Mark Hughes: Very good. And then, Tom, the AI trade, when you look at your equity portfolio, a lot of discussion of software companies or tech companies that may be at risk from AI and, obviously, opportunity, but then, it's quite a volatile area. So how are you looking at that from your equity portfolio standpoint?
Speaker #7: And obviously opportunity . But then quite a it's volatile area . So how are you looking from your that at standpoint ? portfolio
Tom Gayner: Well, I appreciate the question. One of my great friends and mentors and teachers and longtime Markel shareholder, who passed recently, a guy named Shad Rowe, down in Texas, and I learned so much from him over the years. And one of the things he used to say was that, "In the investment business, at any given point in time, you look either smarter or dumber than you really are." And 2025 was a year, I would say, we looked dumber than we probably really are. If you look at our long-term record, very proud of it, very pleased with the discipline and the way we do things. But clearly, the AI headlines that you read had a lot to do with investment returns and probably a bit less with what happened at Markel.
Tom Gayner: Well, I appreciate the question. One of my great friends and mentors and teachers and longtime Markel shareholder, who passed recently, a guy named Shad Rowe, down in Texas, and I learned so much from him over the years. And one of the things he used to say was that, "In the investment business, at any given point in time, you look either smarter or dumber than you really are." And 2025 was a year, I would say, we looked dumber than we probably really are. If you look at our long-term record, very proud of it, very pleased with the discipline and the way we do things. But clearly, the AI headlines that you read had a lot to do with investment returns and probably a bit less with what happened at Markel.
Speaker #3: Well , I question . the appreciate One of my
Speaker #3: and great and friends and teachers long time equity shareholder who passed recently , a guy named Shad down in Texas Markel . And I learned so much from him over row the And one of the things he say was used to that in the investment business , at any years .
Speaker #3: time , you look the in smarter or dumber than you are really And 2025 was a . looked year . I would probably really dumber and we If you are .
Speaker #3: say we term record , look at our of very proud very pleased with the discipline we do But things . clearly the it , had a you read lot to AI do investment with returns and probably a bit less what at Markel as we turned the corner with into 2026 , the that's out let's there , let's hold our see how that fire and how swirl that But out .
Tom Gayner: As we turn the quarter into 2026, the swirl that's out there, let's hold our fire and see how that works out. But clearly, the disciplines and the tools and the principles we've used to manage and select equity investments over the years, on any given day, will look better or worse than they truly are, but I stand by what we do.
Tom Gayner: As we turn the quarter into 2026, the swirl that's out there, let's hold our fire and see how that works out. But clearly, the disciplines and the tools and the principles we've used to manage and select equity investments over the years, on any given day, will look better or worse than they truly are, but I stand by what we do.
Speaker #3: clearly , the works disciplines the and principles we've the used to manage and select equity tools and investments over the years any given day , will look better than they truly or worse what we are .
Mark Hughes: Very good. And if I could squeeze in one more on the Personal Umbrella, you put up strong reserves. What underwriting actions have you taken, price increases, stricter terms and conditions? Just curious.
Mark Hughes: Very good. And if I could squeeze in one more on the Personal Umbrella, you put up strong reserves. What underwriting actions have you taken, price increases, stricter terms and conditions? Just curious.
Speaker #3: But I stand by .
Speaker #7: Very good . squeeze in one more on the could personal umbrella , . you put up a reserves . What actions have you underwriting taken ?
Speaker #7: If I
Simon Wilson: Yeah, yeah, good question. So we've done 2 major things I would suggest just for this call. The first is to increase rate quite significantly. Now, it's an admitted product, so you have to do that state by state. You have to apply for it. So I think we're up to, I mean, a dozen states now that have signed off on that. So we have a material increase in the pricing that we're able to charge in those states now. But we've also taken another key underwriting action, which is to stop underwriting people with second homes in Florida. That was a cause of a lot of these losses, and increased the attachment point from... It used to be $250,000 where we attached.
Simon Wilson: Yeah, yeah, good question. So we've done 2 major things I would suggest just for this call. The first is to increase rate quite significantly. Now, it's an admitted product, so you have to do that state by state. You have to apply for it. So I think we're up to, I mean, a dozen states now that have signed off on that. So we have a material increase in the pricing that we're able to charge in those states now. But we've also taken another key underwriting action, which is to stop underwriting people with second homes in Florida. That was a cause of a lot of these losses, and increased the attachment point from... It used to be $250,000 where we attached.
Speaker #7: increases Price , stricter terms and conditions to secure ?
Speaker #2: Good question . So Yeah . we've done two major suggest just for this things I would first is to increase rate quite The significantly .
Speaker #2: Now it's an have to do that state by state . You have to apply product . So I think we're up to I mean a So you that now off on have signed that .
Speaker #2: have a So we material increase in the pricing that we're able states . in to . But we've also taken another key underwriting action , to stop underwriting people cause of a with second homes in Florida .
Speaker #2: That was a losses . And the attachment that was a point from it used to be $250,000 , where we attached in where we've been these states the rate We've also increased the attachment point to half a million .
Simon Wilson: In these states where we've been able to get the rate increase, we've also increased the attachment point to $500,000, and we think that will take away a significant chunk of the losses that we've been being hit with, mainly from auto losses, actually, in those various states. So, we've acted decisively, quickly, and we are keeping a very, very close eye on how those claims trends go from here on in. But we do have, as I say, we put the reserve up this quarter to give ourselves breathing space and cushion to watch that play out. And ultimately, if these underwriting actions don't work, then we'll have to think about maybe withdrawing from that particular area of business. We're not there yet, but we'll see.
Simon Wilson: In these states where we've been able to get the rate increase, we've also increased the attachment point to $500,000, and we think that will take away a significant chunk of the losses that we've been being hit with, mainly from auto losses, actually, in those various states. So, we've acted decisively, quickly, and we are keeping a very, very close eye on how those claims trends go from here on in. But we do have, as I say, we put the reserve up this quarter to give ourselves breathing space and cushion to watch that play out. And ultimately, if these underwriting actions don't work, then we'll have to think about maybe withdrawing from that particular area of business. We're not there yet, but we'll see.
Speaker #2: we think take And away a chunk significant of the losses that we've been with being hit , mainly from auto losses , actually , in those various states .
Speaker #2: So we've acted decisively , quickly , and very , keeping a on how we are those very claims trends go close eye on in .
Speaker #2: we do from here But have the we put reserve up this quarter to give ourselves space and breathing cushion to watch play out if these and underwriting actions don't work , then we'll have to think about maybe withdrawing from particular area that ultimately , of business .
Simon Wilson: But, but a very, very big focus in the last couple of months from Alex Martin, Jeff Lamb, and their teams.
Simon Wilson: But, but a very, very big focus in the last couple of months from Alex Martin, Jeff Lamb, and their teams.
Speaker #2: yet , but we'll see . But a very , big very focus in the last couple of months Alex from that Martin , Jeff Lamb and their teams .
Mark Hughes: Thank you.
Mark Hughes: Thank you.
Operator: This concludes our question and answer session. I would like to turn the call back over to Tom Gayner for any closing remarks.
Operator: This concludes our question and answer session. I would like to turn the call back over to Tom Gayner for any closing remarks.
Speaker #7: Thank you .
Speaker #4: concludes This our question and answer session . I would like to turn the call over back Tom to For closing any remarks .
Tom Gayner: Thank you very much for joining us. We appreciate your support and your interest, and we're delighted to be able to report the results of the rational focus and the rational actions that we are indeed committed to, and starting to see the green shoots from those, from those activities. We look forward to connecting back with you next quarter. Be well.
Tom Gayner: Thank you very much for joining us. We appreciate your support and your interest, and we're delighted to be able to report the results of the rational focus and the rational actions that we are indeed committed to, and starting to see the green shoots from those, from those activities. We look forward to connecting back with you next quarter. Be well.
Speaker #3: Thank you very joining much for
Speaker #3: We appreciate your support and your interest, and are delighted to be able to report to you. Rational focus is a gainer, and the results of rational actions show that we are indeed committed and starting to see the green shoots from those actions. We look forward to connecting back with you next quarter.
Operator: The conference call has now concluded. Thank you all for attending today's presentation. You may now disconnect.
Operator: The conference call has now concluded. Thank you all for attending today's presentation. You may now disconnect.
