Parsad

AM Best Upgrades Credit Ratings of Members of Stonetrust Insurance Group CONTACTS: Chris Draghi Associate Director +1 908 439 2200, ext. 5043 [email protected] Richard Attanasio Senior Director +1 908 439 2200, ext. 5432 [email protected] Christopher Sharkey Manager, Public Relations +1 908 439 2200, ext. 5159 [email protected] Jeff Mango Managing Director, Strategy & Communications +1 908 439 2200, ext. 5204 [email protected] FOR IMMEDIATE RELEASE OLDWICK - JUNE 08, 2022 01:55 PM (EDT) AM Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a-” (Excellent) from “bbb+” (Good) of Stonetrust Commercial Insurance Company and its reinsured subsidiary, Stonetrust Premier Casualty Insurance Company. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. The companies are domiciled in Omaha, NE, and are known collectively as Stonetrust Insurance Group. The ratings reflect Stonetrust Insurance Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The rating upgrades reflect sustained improvement in the group’s overall balance sheet strength. The group has maintained the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), adhering to internal targets set by management. Furthermore, the surplus position has been enriched consistently by income derived from underwriting activities. Loss reserve development has been consistently favorable since management implemented more-robust guidelines regarding the carried position, as well as further emphasis put on its comprehensive claims closure strategy, which has materially reduced the number of open claims from older accident years. Partially offsetting these favorable attributes are elevated positions in more-volatile asset classes, marked by a common stock leverage that compares unfavorably with the composite average. However, management is expected to maintain close controls over the portfolio to mitigate potential volatility and actively monitor risk appetites and tolerances. The group’s adequate operating performance has benefited from profitability initiatives geared toward refining the classes of business written, as well as a commitment to safety and loss prevention strategies. The group’s limited profile reflects its product and geographic concentration as a monoline workers’ compensation writer primarily in a few key states. Nonetheless, the group continues to expand geographically in an effort to improve diversification. The group maintains an appropriate ERM program to mitigate risk exposure, which is overseen by an ERM steering committee. This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

Ok, so you pick Paul Pelosi and rightfully so, since he is an ass and his wife is a hypocrite. But you could have also chosen to point out Trump's tax follies...equally disgusting. And before you say it, I'm happy to throw Hunter Biden into this shithole too. But let's stop the partisan politics hidden as economic rationale. If you are going to pick on the elite and their privilege, pick on both sides. Cheers!

Are you slowing things down, or trying to lift people up? Greg, if you are ever in a car crash, or God forbid suffer some devastating setback, I hope the person that offers their hand to help you or your family doesn't think the same sort of thing that went through your head..."utterly useless and helpless"! I've been through a lot of things in my life...just like most people...and for all intents and purposes, I could be viewed as a moderate success, but there have been a couple of periods where I could have been as down and out as the dregs of society you unintentionally maligned. There but for the grace of God go I...humanity isn't a left or right thing. Cheers!

I never thought inflation was transitory, as we've been watching manufacturers and retailers dealing with some production inflation for the last couple of years...the shrinkage in product size for the same price since early 2019. But the amount of cash flowing into bank accounts has created inflationary pressure in many more areas than just production costs...distribution, labor, commodities, microchips, etc. And I've expected a correction around 30-35%...we had already hit 31% on the Nasdaq and 20-21% on the Dow and S&P500. I find it hard to see a larger correction than that with the way consumers and the economy are powering on. You look at the recent earnings reports from many retailers, travel-related companies, restaurants...consumers are spending and in a big way. They're just moving to different areas of industry to spend some of their dollars that have opened up after the pandemic. It's going to be interesting to see how they can do it, but rising rates should have a reasonable effect on current inflationary pressure. I think we'll get a better idea after the 3rd quarter how these 0.5% rate hikes are affecting spending and the economy. But I just don't see a prolonged recession happening yet...too much money still on the sidelines in checking accounts and corporate balance sheets! Look at Macy's recent report...terrific sales, increased revenue and earnings, cash on the books, lower costs due to efficiencies put in place during the pandemic and they've paid down over a third of the debt accumulated during the slowdown. Look at the comments by Jamie Dimon and Brian Moynihan...both see a robust economy with consumers spending, and debt still under control. Much of the nutso valuations have corrected anywhere from 40-90% (AMZN - PTON) primarily in the areas that had excessive expectations. Speculative assets have equally collapsed and hit the floor...crypto, meme stocks, SPAC's, Cathie Wood's ass! Most of the areas that weren't excessive are probably trading in the 7-12 times P/E range on normalized earnings now...retailers, restaurants, banks, manufacturers, industrial, distribution, etc. While the overall market at the bottom recently was around 18 times P/E. Is there more pain to come...probably some. But this is nothing like 2008/2009 or the pandemic...not sure it's even that similar to 1999. History doesn't repeat, but it may rhyme! So yes, another correction, but not necessarily like the others...except that it always ends! Cheers!

They've adopted BTC solely for the purpose of bypassing fiat based currency. If you are a country that nationalizes foreign corporations, you want to relieve yourself of being dependent on fiat currencies when you eventually get sanctioned. I'm sure Russia wishes they had adopted BTC more readily in the present circumstances. But, most of the world will want to be able to transact through stable fiat currencies. Many of those looking to BTC will find more durable, stable variants later on as cryptocurrencies develop. Can you make a calculated bet on BTC right now without the possibility of losing significant capital long-term? Remember, rule #1...don't lose money! Cheers!

He was in two of my favorite movies of all time...Goodfellas and Field of Dreams. Both him and Kevin Costner were on such a run of great movies at that time.

Hi SD, I know all that. But it is almost inevitable that governments will crack down on crypto in current form, purely to deter the underground economy that has grown enormously and money laundering. Governments are always late to the party, but they eventually get to the party and ruin it once they realize that too many people are having fun. At some point, fiat currencies backed by tax revenues or gold, will create their own digital currencies using blockchain. More stable, easily convertible, trackable for tax purposes and a deterrent to the current base of crypto. Cheers!

This is all great, but when you go to spend your bitcoin next week at Overstock.com, and it's at $15K, how are you ahead of the game? And then Overstock.com sells you a Rolex this week for one BTC, but then next week they are adding to their inventory and BTC is now at $15K...suddenly they are paying twice as much for the same Rolexes they were selling last week! Luna is a perfect example of why this won't work. It was backed by BTC, and then we saw what happened. If they had pegged it to fiat currencies or gold, it would be around still. Again, I'm not against blockchain based crypto...I've been following it longer than 99% of people...but all I'm saying is that the stuff we have today is shit! It's AOL, not Google. Properly designed crypto will be extremely disruptive, stable and functional as a replacement for fiat currency. Cheers!

Not as terrible as analogy as you might think: https://www.tradewindsnews.com/opinion/-insane-market-as-prices-for-secondhand-container-ships-jump-by-a-third/2-1-1159454 Ships, planes, cars, trucks, etc depreciate in accounting terms and lifespan, but that doesn't mean their utility value decreases. Thus the massive price increase in second-hand containerships during the hard market. So depreciation reduces the asset value in terms of GAAP/IFRS, but the cash flows being generated by those depreciated assets has not changed. For example, again using McDonalds, who write down depreciation on PPE every year in their restaurants, but you can still make the same hamburgers on that equipment and charge customers the same for them. Whether you like it or not, ships are assets. Atlas is financing them through long-term leases, and they will do the same at APR. It's what Sokol did at MAE, it's how Netjets works, as well as BNSF...Atlas is no different. Cheers!

The contingency is to ship it in from other countries. Why on earth would you blame the government (either Republican or Democrat), for a company that was using substandard facilities to make baby formula? And do you think that officials just shut manufacturing facilities down without weighing consequences? Not that I'm defending this situation or others...but not every official is an idiot...nor is there much a government can do in the short-term, if years of underinvestment creates a shortage during a crisis. Cheers!

Why? Personally, I wouldn't buy either, but why BTC over gold? Cheers!

Overstock.com! $450M cash sitting on the books. Will do about $2.5B in revenues with a 3-4% net profit margin. $1.05B valuation. Hardly any debt. Means a P/E of about 7-10 times. Medici Ventures (blockchain portfolio) is given zero value...free call option. Could be worth anywhere from $750M to $4-5B depending on how they grow and are monetized. tZero alone could grow to a $50B business over the next 10-15 years! Pelion Ventures is now managing the Medici assets as the Medici Fund...an LP in which Overstock.com is the sole LP. Cheers!

The part they excluded was when Richard slaps Chris Rock across the face for making fun of Oracene at Wimbledon! The Queen was not pleased. Cheers!

For Yellowstone fans, Tyler Sheridan is doing another prequel series called "1932" with Helen Mirren and Harrison Ford as another generation of the Dutton clan. Will cover prohibition, droughts and the Great Depression. This one may end up even better than Yellowstone itself! Cheers! https://deadline.com/2022/05/yellowstone-prequel-1932-helen-mirren-harrison-ford-1235026210/

All inflation is supply/demand related...whether it is due to lack of infrastructure, scarcity or transport coordination. So, yes they should have been moving rates up a while ago, as it wasn't short-term transitory, but more of a longer-term nature. Things should improve by early/mid next year, but they have to curb demand to meet supply right now. There isn't a whole lot that congress can do that will alleviate that over 12 months...oil production takes 6-8 months to start up, let alone get production going significantly...refineries take nearly as long...you can't run ports more than 24 hours a day...and with a hot economy, demand for oil isn't going to decrease. So it all trickles up (rather than trickle down economics) and every one in the chain passes costs on to the final point...the consumer! So, rates should have been going up since the middle of last year, but probably in 25 basis point increments...not the herky-jerky reactive behavior of the Fed. Cheers!

Are you crazy?! Try the See's truffles...if they are too rich, then buy the chocolate covered nuts. But don't throw them away! Cheers!

I had moved to a ton of cash every time...late 1999...early 2008...late 2021. Didn't expect the pandemic and got hit on that one...although I was still 15-20% cash at that time, and borrowed for the first time in my life to buy equities! Cheers!

$5B in equities plus investments in BB, ATCO, etc...compared to $45B in cash and short-term bonds. They have significant potential for future investment gains, increased dividend income, alongside steady insurance income. While investors have plenty of choices, they don't get 3.5-1 leverage like they would through Fairfax. Fairfax only needs a 5% return on their investment portfolio annually to get a 15-17% ROE, while the average investor has to get 15-17% return on their investment ideas annually. Cheers!

There is an article in "Tradewinds" from the end of March that discusses how analysts are having a difficult time understanding Atlas...so you don't have to take my word for it. https://www.tradewindsnews.com/tag/atlas_corp Not only is Atlas a lessor, it is a finance company as well...one that owns the underlying assets being financed by leasing cash flows. Such companies, when well managed, have easily been valued at 10-12 times earnings. GE Finance in it's heyday was valued at 20-25 times earnings, and it wasn't particularly well managed, nor did it own the underlying assets except as collateral. McDonalds is considered a restaurant business, but it's as much a real estate business. Most people never understood that about McDonalds. Cash flows paid for real estate...long-term cash flows. Atlas is doing the same. Extending leasing contracts to an average duration of 11.5 years presently, and then paying for hard assets using those cash flows. If that isn't inflation-linked, then I don't know what is! Markets are bipolar. They will vote based on quarterly results...value investors have the luxury of, one, not being bipolar, and two, investing in businesses at the right price for the long-term. Atlas will probably add a couple of businesses over time, but whether they do or not, will not take away from the quality business they have built so far in roughly four years since Sokol joined and FFH invested. Four years! I'm more than excited to see what they can do in another decade! Cheers!

Fairfax has almost 90% of its portfolio in cash or bonds maturing in less than 3 years. Berkshire has over 50% of its assets in equities. If the market turns up from here, then Berkshire will do better. If the market has further to fall, which is likely based on further expected rate increases, then Fairfax will be far better positioned. So it's a coin toss, but the odds are in FFH's favor right now. Most insurers are going to get the crap kicked out of them from bond losses due to rate increases. Fairfax is best positioned to deal with that, as well as put money to work as rates rise and markets fall. We also already know that Fairfax does well when other insurers are getting beaten from catastrophe losses, as premium pricing only gets better after such events, and Fairfax reserves better than 90% of insurers. Cheers!

Name one company better positioned than Fairfax for this environment? Maybe Google...a ton of cash, little debt and steady, recurring cash flow? That's about it. Not even Berkshire is positioned as well for a stagflationary environment and market downturn. Cheers!

Markel is almost certainly a two-Ted's position and not a Buffett position. Alleghany was all Buffett. Cheers!

Godiva chocolate can sit for months in third-party retail stores. They usually go on a half price sale after every Christmas...chocolate that has been sitting there since October! Don't even get me started on Lindt! So quality control isn't the same as See's. Now Godiva stores are different...the chocolate doesn't sit, just like See's stores. Although, some of the boxed chocolates at Godiva's stores comes prepackaged. Most of the chocolate at See's (not lollipops, toffee, etc) that you see in prepackaged boxes are prepared at the stores as chocolate arrives. Just because a burger may taste fine sitting for three hours under a heat lamp, doesn't mean it's fresh! So when you buy See's at store locations, it's made recently. Cheers!

I spoke to Chuck Huggins about this many years ago...he was a very nice man! Wondered why they didn't do that, as well as expand to Canada on the West Coast. He said it was about quality and freshness control. Apparently, the window of making chocolate to delivery at locations is 3 days maximum. Huggins didn't want the distribution taking any longer than that. Also said that competition was quite tough in Canada with some very well known local brands...Purdy's, Laura Secord, Roger's Chocolates, etc. That's also the reason why they've grown organically for the most part out of regions where they were already known...other than a handful of licensed stores and kiosks outside of their core region. The manufacturing sites are within three days delivery to the locations in their region. This maintains quality control and margins are better on the retail side. Cheers!

ATCO is not a shipping company. It's a leasing company. Investors and analysts don't fully realize that yet. 6 times earnings is low. 10-12 times earnings is more reasonable. In 2024 it should be at $20-22 a share. It fell closer to half of intrinsic value, so I bought. Cheers!