Author Topic: MKL - Markel Corp  (Read 334055 times)

scorpioncapital

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Re: MKL - Markel Corp
« Reply #770 on: April 22, 2020, 10:58:07 AM »
sure but they should set up the program with the insurers instead of tanking the stocks thinking there may or may not be a 'bailout'.
Btw, some countries have just paid every business of some size, no matter what. But perhaps it won't work in a giant country like USA.


GregS

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Re: MKL - Markel Corp
« Reply #771 on: April 22, 2020, 01:02:40 PM »
It might be a stupid thing for the government to do, but that doesn't mean they won't do it. Especially in an election year.

If you dismiss this risk as highly unlikely and not worth haircutting, I'd reconsider.

If you do consider the risk, then the lower bound of IV estimates of many insurers goes much much lower.

Lawyers will be the big winners here.

A retroactive change to the contracts would be unconstitutional, full stop. Of course, that doesn't prevent the market from imposing a discount until it's resolved.

Poor drafting is a larger risk, and there will be judges that make stupid decisions, but insurance companies will win most of these suits or settle on favorable terms eventually.  Plaintiffs' lawyers are selling their clients hard on a hope and a prayer.  Clients getting played.

Spekulatius

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Re: MKL - Markel Corp
« Reply #772 on: April 22, 2020, 04:00:32 PM »
It might be a stupid thing for the government to do, but that doesn't mean they won't do it. Especially in an election year.

If you dismiss this risk as highly unlikely and not worth haircutting, I'd reconsider.

If you do consider the risk, then the lower bound of IV estimates of many insurers goes much much lower.

Lawyers will be the big winners here.

A retroactive change to the contracts would be unconstitutional, full stop. Of course, that doesn't prevent the market from imposing a discount until it's resolved.

Poor drafting is a larger risk, and there will be judges that make stupid decisions, but insurance companies will win most of these suits or settle on favorable terms eventually.  Plaintiffs' lawyers are selling their clients hard on a hope and a prayer.  Clients getting played.

I have heard the wording is pretty standardized and precludes pandemics. The wording was drafted by national insurers organization after the 2003 SARS episode. I willing to bet that this is just noise.
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scorpioncapital

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Re: MKL - Markel Corp
« Reply #773 on: April 23, 2020, 01:35:15 AM »
In any case the government would have to announce a deal with Insurers as a servicing program for pandemic fund disbursement. To make it happen as a disorganized let the insurer fail ,oh and then we will swoop in as the lender of last resort is ridiculously short sighted.


thepupil

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Re: MKL - Markel Corp
« Reply #775 on: April 28, 2020, 06:14:56 PM »
This is kind of odd; they seem to have just stuck their finger in the air and concluded things will get bad without having any material losses/claims yet.

 I understand the concept of reserving but I guess I donít quite understand the connection between covid and liability for medical institutions. Are they saying there will be a bunch of lawsuits?

No position, just following as a (inferior in my opinion) comp to Berkshire



Underwriting Operations
As efforts to respond to the pandemic continue to evolve, the Company expects that losses indirectly related to the COVID-19 pandemic and associated with a broader range of coverages are likely to emerge. As an example, the Company provides liability coverage for health and medical institutions and professions, as well as other professions, which have been strained or otherwise impacted by the pandemic, for which few claims have been reported thus far. Other product lines that may be impacted by losses derived from COVID-19 include the Company's trade credit business and workersí compensation product lines, among others, including the Company's reinsurance product lines. Few losses have been reported at this time. Losses attributed to these exposures that are indirectly related to COVID-19 will be recognized in the period incurred.
The widespread economic and social disruption caused by COVID-19 has created significant financial hardships for individuals and businesses worldwide. In response, the Company is currently halting cancellations and delinquency actions following requests from customers and brokers for customers who express a financial hardship due to COVID-19, as well as directives from certain government authorities. While these actions will impact the timing of premium collections, at this time, the Company does not believe there has been any material change in its exposure to credit losses.
The significant decline in economic activity is likely to have an unfavorable impact on the Company's premium volume, due to business closures, reduced recreational activity and lower gross receipts, revenues and payrolls of insureds, among other things. For those policies where the underlying loss exposures have been reduced as a result of decreased economic activity or shelter-in-place orders resulting from COVID-19, the Company may also be required to refund premiums to policyholders. These adverse impacts on premium volume could be material.
« Last Edit: April 28, 2020, 08:05:02 PM by thepupil »

Spekulatius

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Re: MKL - Markel Corp
« Reply #776 on: April 29, 2020, 04:28:49 AM »
^ Yes, COVID-19 will be big Catastrophe even for medical institutions and some companies. Think inadequate PPE, inadequate safety protocols for medical workers, cross infection of patients, problems with patient care due Overload etc. It will take a while to figure out, but I am sure lawyers are already looking for angles.

It’s not just medical either - when you look at the news from meat fabrication plants from Tyson with clear evidence of work related outbreak clusters, you know there are going to be lawsuits.
« Last Edit: April 29, 2020, 04:33:01 AM by Spekulatius »
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BroKon

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Re: MKL - Markel Corp
« Reply #777 on: April 29, 2020, 09:12:43 PM »
I was a little disappointed to see they increased cash, net sold some equity holdings, and suspended their buyback. I assume they are convinced conditions deteriorate at least on the liability side.
Markel always seemed a little expensive, so suspending their buyback when their valuation finally became fair is surprising.

bookie71

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Re: MKL - Markel Corp
« Reply #778 on: April 30, 2020, 09:00:13 AM »
Controlling their cash.  Old adage: "To win the race you must first finish the race."
Just being smart and cautious.
Always remember, Pigs get fat and hogs get slaughtered.

CorpRaider

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Re: MKL - Markel Corp
« Reply #779 on: April 30, 2020, 09:24:13 AM »
I was a little disappointed to see they increased cash, net sold some equity holdings, and suspended their buyback. I assume they are convinced conditions deteriorate at least on the liability side.
Markel always seemed a little expensive, so suspending their buyback when their valuation finally became fair is surprising.

Buying back stock at 2.0x book in amounts that track compensation dilution and then suspending them in the storm?  Doesn't walk exactly like a duck, does it?