MKL - Markel Corp

[Shane]

Of course he is going to come up with a litany of ways to justify why he deserves the payout.  As an outsider, I don't know how I would gain much from this without hearing Markel's response.

[LongTermView]

Of course he is going to come up with a litany of ways to justify why he deserves the payout.  As an outsider, I don't know how I would gain much from this without hearing Markel's response.

Agreed, I don't want to come to conclusions until I hear Markel's response.

[reader]

Markel Issues Statement on Markel CATCo
RICHMOND, Va., April 14, 2019 /PRNewswire/ -- Markel Corporation (NYSE: MKL) (the "Company") previously reported that the U.S. Department of Justice, U.S. Securities and Exchange Commission and Bermuda Monetary Authority (together, the "Governmental Authorities") are conducting inquiries into loss reserves recorded in late 2017 and early 2018 at Markel CATCo Investment Management Ltd. and its subsidiaries (together, "CATCo"). These inquiries are limited to CATCo and do not involve the Company or its other subsidiaries.
As the Company previously disclosed, it retained outside counsel to conduct an internal review of CATCo's loss reserving in late 2017 and early 2018. The internal review has recently been completed.  The internal review conducted by outside counsel found no evidence that CATCo personnel acted in bad faith in exercising business judgment in the setting of reserves and making related disclosures during late 2017 and early 2018.  The Company's outside counsel has met with the Governmental Authorities and reported the findings from the internal review.

The Governmental Authorities' inquiries are ongoing and the Company continues to fully cooperate with them.  The Company cannot currently predict the duration, scope or result of the Governmental Authorities' inquiries.

https://www.markelcorp.com/About-Markel/NewsRoom/Reuters2394437

[Cigarbutt]

Markel teams up with Tesla through a fronting arrangement.
https://www.reinsurancene.ws/tesla-insurance-product-to-be-fronted-by-markels-state-national/

[CorpRaider]

Would be very interested if someone asked about this at the brunch; i.e., did they do some DD about risks.  "Any concerns/due dilligence about the turnover in the c-suite or reputational harm by association?" 

I have to wonder if Saurabh hooked this up/highlighted potential for pipeline into how better data and analytics might disrupt the industry.  Pretty damned interesting.

[ValueMaven]

Does anyone have any interesting SOTP valuation approachs to valuing this?  It seems like the overhang from CatCo accounting issues is now gone?!  In retrospect -- this thing trading down to the mid-$900s was a bargin for the LT investor

[Astrea]

The video of the Markel Brunch 2019 is available here

https://www.youtube.com/watch?v=JewU4-cOl6g

[Cigarbutt]

It looks like the dust is settling on a personal level.
https://www.insurancejournal.com/news/national/2019/07/16/532453.htm
For the unusual reserves development, Markel found 'no bad faith' but still waiting for the government enquiry (inquiry?).

[reader]

https://www.artemis.bm/news/nephila-climate-takes-weather-risk-to-assist-scout-wind-farm-financing/#more-61504

"Nephila Climate, the weather, climate risk, and reinsurance focused unit of the largest ILS fund manager Nephila Capital, has participated in another wind farm financing transaction, taking the weather risk out of the equation for operators and investors in the renewables project."

[Cigarbutt]

https://www.artemis.bm/news/nephila-climate-takes-weather-risk-to-assist-scout-wind-farm-financing/#more-61504

"Nephila Climate, the weather, climate risk, and reinsurance focused unit of the largest ILS fund manager Nephila Capital, has participated in another wind farm financing transaction, taking the weather risk out of the equation for operators and investors in the renewables project."

Nephila appears to be a leader in that growing space and, through transaction fees and/or actual risk transfer participations, could make reasonable profits in exchange for the smoothing of operational results. This (contracts related to intermittent or variable sources of energy) is a growing market and 'new' issues are being defined that are really a redefinition of 'fuel' risks traditionally associated with PPAs. A way to classify the risks and potential profit opportunities for risk transfers of wind projects are 1-volume risk: actual volume of energy delivered is less than what was contracted for over a certain period of time, 2-shape risk: the actual energy quantity delivery, which is irregular and hard to predict, although sufficient in volume overall, does not 'fit' energy demand and 3-covariance risk: weather conditions may result in a situation where solar energy and wind energy both reach high levels resulting in lower energy prices in the interim.
This field of financial engineering is promising and, interestingly, Microsoft is becoming a leader in providing more global solutions such as Proxy Generation Swap transactions and may ask for specialized agents such as Nephila to act as an intermediate to the reinsurance (traditional or ILS) world for the Volume Firming Agreements aspect.
If interested in this fascinating and developing market:
https://s3.amazonaws.com/cdn.orrick.com/files/PFIPPAArticle.pdf
https://www.artemis.bm/news/nephila-helps-microsoft-hedge-renewable-weather-risk-in-three-deals/