No. of Recommendations: 8
Omaha Markel Brunch 2025
You can watch it here- recently released:
https://www.youtube.com/watch?v=ogUpVQQyoI4Here are few of my Non-comprehensive notes:
Record- 2500 attendees in large Marriott meeting hall.
Increased Security, no bags allowed, metal detectors & lots of security present.
Lots of Optimism/ Folksy intro remarks.
$23.86B market cap $1876 on 5/2/25.
Omaha Markel Brunch started in 1991, started with 6 people, attracting similar shareholder to BRK.
Full Board approved review as rec’d by Jana:
https://www.cnbc.com/2024/12/14/jana-calls-on-mark...Tom Gayner- CEO
Michael Heaton- COO
Andrew Crowley- head of Markel Ventures
Brian Costanzo-CFO
Simon Wilson- New CEO of MKL Insurance. He headed Int’l division, he is from UK, was promoted to turn around suboptimal insurance division, esp. in the U.S.
Simon is very Charismatic, Entertaining, confident and thinks more Autonomy/ control should be given to the Local Markel team members and empower them.
Markel wants to show Conviction but also have Flexibility.
Last 2 years buybacks amounted to >$1B.
MKL ranked #4 in Ins. industry
$92B Ins. revenue.
$12B in public equities ($8B unrealized gains).
Ventures has 21 different businesses.
MKL has suboptimal 8.6% 5-year CAGR in stock price
15% CAGR in price since 1986.
18% Intrinsic Value 5-year CAGR.
3 year Avg. Op income-$1.7B
Admitted MKL’s Core ins. business has Not reached its potential- new leader & new focus with Simon Wilson. Underperformed over last 3-4 years.
Int’l Ins. division has been doing really well (under Wilson) but US has not performed as well.
MKL Goal: “Relentlessly & reliably compound your capital for decades.”
They see current market price may be at a 30% discount vs. it’s I.V.
They repurchased >$1B over last 2 years.
Comp. bonus is related to 5-year rolling averages.
CEO Tom Gayner- confirmed that a majority of his net worth is in MKL
Ventures has grown Op. income from $80Minitially to $520M from an $1.3B capital base, and it has produced a lot of cash to help fund the increased buybacks.
(Several informative slides were used by the executive team.
I had to leave during the Q&A.
The meeting should be available on their website soon as well as it was last year.
Their annual Reunion is in Richmond May 20-21.)
I thought their executives were focused, energized, pleasant, had a polished team presentation. Many of us were particularly impressed with Simon Wilson’s insurance record and promotion to head insurance, his leadership skills, energy, projection of confidence, “coolness”, humor and honestly, we thought he sounded like Bond, James Bond!😁 His insurance goals are lofty. Let’s hope he can elevate and grow and elevate the U.S. division to where it should be.
Per CNBC:
“Jana called on Markel to improve its insurance operations and explore a separation or sale of its private investments business. The firm also noted that the entire company presents an attractive acquisition target for larger insurers.”
It is unusual, expensive and honestly, the need for a comprehensive Board approved review is unsettling as an owner. However, if there is significant progress in clarity and execution with greater focus/ efficiency, revenue/ income growth and growth in Both IV And share price, then owners should be well pleased. Overall, I do feel better after the brunch meeting than prior. We elect to Hold the long-term position at present, but I still prefer Berkshire (and PGR) at present. Please watch the meeting when it is released online and form your own opinion.
