Subject: MKL Omaha Brunch notes
For those interested:

2024 Markel Brunch Meeting:

Tom Gayner is the sole CEO now.
Praised by name many MKL people.
Was very folksy and pleasant.
IPO was in 1986
BRK was their model of course. Paid tribute to WEB, CTM & culture.
1992 1st Omaha Brunch-6 people attended, $9/ share. (Roger Lowenstein attended the initial mtg)
2000 people registered for the brunch today.
Jeremy Noble- Pres. Insurance division, CPA by training.
Andrew Crowley-Pres. of Ventures.
Prices of wholly owned businesses have been too high but are starting to look more appealing recently potentially.
“Partners” & Golden Rule philosophy.
Chris & Shelby Davis, Larry Cunningham (on Board) present today.
MKL Loss reserves have been honest and have been conservative with margin of safety for decades.
Mgt took a lot of time recently to take a close look at data tied to loss reserves & they feel better going forward after a tough 2023.
Cap allo options- existing businesses, new companies, public equities, buybacks.
They accelerated buybacks in ‘23 & 1Q ‘24 & Gayner himself has recently bought more stock.
They felt a disconnect between market price and IV over last year or 2- share count was 14M, now it is 13M (7% share repurchase)
Ventures-Costa Farms- Ornamental gardening, 51M sq ft, bought Battlefield as add on, 98M plants shipped this year.
“Stir what you’ve got” sometimes response when mgrs get a “no” response to ask for more capital.
Climate change-premium & risk for only 1 year, then renews at higher rate. Challenging, but will have more influence on risk & premiums in time.
$100M in premiums in Asia now-small but growing.
They take in about $10B in current overall premiums.
Thoughtful wrt amount of debt, variable & depends on which group.
Doubts they will invest in China, at least at this stage, rule of law, less expertise.
Profitability is the priority over top line growth.
Combined ratio- (98 in 2023, up from 92 in 2022) but improving in recent quarters. Gayner owned that they have made some mistakes in recent years, but some meaningful changes have been made.
MKL is pro diversity, development of young talent, support college students investing programs at UVA & Delawares State.
Over the last year- Transitions with new architect plan beyond Insurance business model + Transition of leadership in several key positions.
? wrt BRK sold MKL. Gayner has not sold any MKL stock but has purchased more personal stock above what he receives.
Continues warm relationships with WEB and BRK mgt. He was surprised and disappointed but BRK “has its own reasons” for exiting equity positions.
Question was raised- MKL spent $180K on compensation consultants- provided data in the decisions they made for our exec. team compensation and not used to simply promote self interest & compensation.
We try to adjust take EDITDA and interpret and translate it ultimately to Cash.
Be flexible to adjust to “fish where the fish are” and be lifelong learners.
1st stock MKL bought was in 1990 was BRK with unrealized gain over $1B.
The whole MKL portfolio’s unrealized gain is over $7B.
Over 60% of their total public equity value are in their top 20 holdings.
Compensation is spread out over 3-5 years, make it long-term focused, ROC based.
Using AI in bits and pieces but it will grow as we better understand it.
Prioritize the long term over short term results.
Talked about a dinner with Charlie.
They Do write Cyber insurance but it’s not a big ticket, MKL writes way smaller limits & a big spread. They also have a service to provide advice and service to limit client company’s risk/exposure.
They had some exposure to Baltimore bridge collapse & bus. interruption from that event & if you see any natural disaster, there is a good chance they have at least some exposure.
Stock price up 18% over last 12 months.