Thanks for posting the letter.

A couple of things trouble me about it. Tom Gayner has tried to emulate Warren Buffett in writing this annual letter for many years now. Like Mr. Buffett, he is an able writer and communicator. Unlike Mr. Buffett, he is prone to self-congratulation and self-generated jargon.

Mr. Buffett offered his five groves valuation method a couple of times, but he does not ceaselessly repeat it. Mr. Gayner became enamored of referring to Markel's three main operations -- insurance, investments and ventures -- as "engines," and uses that word 28 times in the latest letter. Perhaps I'm nitpicking, but to my mind calling a division or operation an engine takes a neutral description and makes it inherently dynamic and positive. It's self-promotional in a way I can imagine the late Charlie Munger making fun of.

Mr. Gayner doesn't get to the most concerning issues of Markel's 2023 performance until the bottom of page 4, after enumerating pretty much every positive he can think of. Unless I missed it, he never mentions the 106.9% combined ratio in Q4, up from 99% in Q3 and 90.8% in Q2. That's a disturbing trend. Referring only to the 98% full-year number masks this trend.

He does a decent job delving into some of the disappointing specifics, including noting a change in management teams for one product, but he never addresses the underlying question that personnel change suggests, which is management competence within the insurance operation.

Unlike Berkshire Hathaway, where no one ever seems to retire, Markel has seen significant management turnover in recent years. (They just announced a new COO today!) Richie Whitt ran the insurance operation for many successful years. In the summer of 2022, the company announced Mr. Whitt would retire by March 2023 and would work on the transition to Jeremy Noble, then the CFO, in the intervening time.

In a year that has been almost universally characterized as very strong for insurers, including Berkshire, Fairfax, Progressive, Chubb, etc., Markel's sub-par performance is concerning. Mr. Gayner offers several excuses/explanations, but he does not address the effect of Mr. Whitt's departure. I'm guessing this is due to his policy of always praising the Markel team in public, but for all his exposition, Mr. Gayner's background is not on the insurance side. So where is the expertise to outperform in that arena?

One theme Mr. Whitt returned to time and again at Markel's Omaha brunches was that the company was not addicted to growing premiums written. When they were not able to write policies profitably, they would not write them, even if it meant surrendering business. Has Mr. Gayner's evident frustration with the share price encouraged revenue growth at the expense of this conservatism?

It is true, as Mr. Gayner has repeatedly pointed out, that the share price has lagged book value growth in recent years, implying it will catch up at some point and is therefore a good investment today. That might be true, but the company keeps stubbing its toe in ways that prevent Mr. Market from hopping aboard. To listen to Mr. Gayner, each failure has been idiosyncratic and fixable, but at some point these toe stubs become a pattern.

I believe Mr. Gayner when he says they are determined to fix the latest problems, but I also have a sneaking suspicion that Mr. Whitt's retirement affected the insurance operation in ways that Mr. Gayner has not publicly acknowledged.

I am far from an insurance expert and would be interested in other takes.