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Markel 2nd Q 2009 Earnings Call Transcript


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To me, Markel is on the defensive mode. From what I read about them, they think that some competitors are underwriting business at very inapropriate rates. Consequently, they are shrinking their premiums significantly.


Also, from what I see on their balance sheet and some comments I've heard, I came to the conclusion that they want to have a full loaded gun when the tide will come and some others will be naked.



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I agree.  Markel is doing what's good for Markel, the transcript was refreshing. 


Not trying to being a troll, but I'd like some of the same people that commented on FFH for their Q1 "adverse" and "F/X" losses to understand Markel's Q2 had the same problems (two losses from litigation costed $25MM).


In addition, Markel premiums declined in the double digits (% wise), same as Crum. 


One thing I didn't understand was why they are paying down their revolver.  That $150MM could be used elsewhere, but I'll reserve my opinion until I know more. 


As a potential shareholder, who has always admired the team, I'm pretty happy about the reaction.  Although I don't work in the insurance industry anymore, I still have some contacts, and they are cutting premiums in the 30-40% range.  I understand why people make the CR comparisons to the Chubbs, Travelers, and others, but just because you have a CR in the 80-sub-90 range, doesn't mean your a good underwriter, especially in a soft market environment.  It just means you got very lucky, because reporting YOY -2 to -5% volume means that you are crediting the crap out of single accounts and writing a ton more.  This brings me to the infamous cliche, "I'll rather be lucky, than smart."  Not sure it applies to insurance. 


Better gauge of who is conservative is:

-Premium/Policy Account.

-YOY change in reserves.

-Screw the ROE, the ROA is harder to manipulate.



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