Markel Corp. (NYSE:MKL) Q2 2017 Earnings Conference Call - Final Transcript

Thank you, Mr. Gayner. And your first question will come from Mark Hughes of SunTrust. Please go ahead.

Thank you. Good morning. Could you talk about the growth at State National which you expect? How do you see the overall market expansion here, and then what do you think you'll be able to add to the combination relative to that overall growth rate?

Mark, this is Richie. Obviously, if you've studied State National's recent result, they've had tremendous growth in both of their markets, both the Program Services and Lender Services. And then I would say as I kind of pointed out in my comments, I think the changes that are occurring in the insurance market, in terms of Insurtech, in terms of third-party or alternative capital, as some people call it, their sort of secular trends looked very good for the business model that they've created. In terms of future growth, I mean given that they've been growing so fast, it would be dangerous to project that kind of growth to continue, but we think they are set up both with the model that they have created and the secular trends that we see in the insurance business to have good-- very good growth as they go forward.

In addition, I think just becoming part of Markel, a bigger company with the relationships, their capital, all the resources that we can bring to bear, I think that does nothing but help State National continue to build out their model. So cannot be more excited, but we haven't sat down in our models and put a specific number on it, but we do expect significant growth.

The US business, your gross written premium was up nicely. You said market conditions are still competitive, largely unchanged compared to the recent trend, but was there something you'd like better this quarter? Was it marginally more attractive in 2Q compared to last quarter?

Again, I'll take that one. I wouldn't say the market was different at all in the second quarter. We have well over 100 products at Markel and they don't all move in the same direction at the same time. First quarter, we talked about that extra week of processing last year versus this year. I think we had some catch-up as a result just getting through the second quarter, I think some of that smoothed out in the terms of the writings.

And also, as I said, not all programs or products move in the same direction. While it's very competitive, we've got some products that are growing nicely and have good prospects and we talked about some of those, the classic car program, workers' comp, a number of others. So we continue to grow in those areas where we might be shrinking in some other areas due to some competitive pressures.

And final question. Any inflation you're seeing in workers' comp losses? Are trends there still pretty benign?

I think we continue to look for those, but nothing outside of