Good morning, and welcome to the Markel Corporation First Quarter 2015 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] During the call today, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. They are based on current assumptions and opinions concerning a variety of known and unknown risks. Actual results may differ materially from those contained in or suggested by such forward-looking statements. Additional information about factors that could cause actual results to differ materially from those projected in the forward-looking statements is included under the captions "Risk Factors" and "Safe Harbor and Cautionary Statement" in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. We may also discuss certain non-GAAP financial measures in the call today. You may find reconciliation to GAAP of these measures in the press release, which can be found on our Web site at www.markelcorp.com in the Investor Information Section. Please note this event is being recorded. I would now like to turn the conference call over to Mr. Tom Gayner, President and Chief Investment Officer. Mr. Gayner, the floor is yours sir.

Thank you so much. Good morning and welcome to the 2015 first quarter conference call for the Markel Corporation. My name is Tom Gayner and I'm joined as usual by Anne Waleski, Mike Crowley and Richie Whitt. Anne will brief you on the financial results, Mike and Richie will follow with some comments on our insurance operations and then I’ll finish with invested results and an update on Markel Ventures. As always we thank you for your interest and support in Markel and we look forward to your questions. With that Anne?

Thank you, Tom and good morning everyone. I am happy to report that we are off to a fantastic start in 2015 with our investing, underwriting and Markel Ventures operations all contributing to our success. While this is an exciting beginning, it's important to remember that there is a lot of year left to go. Let's jump into our first quarter results; our total operating revenues grew 5%, to $1.3 billion in 2015 from $1.2 billion in 2014. The increase is driven by higher revenues from Markel Ventures. Other revenues which include revenue from Markel Ventures were up just under 40% to $260 million from $186 million last year, primarily due to our acquisition of Cottrell in July 2014. Moving into our underwriting results, gross written premiums were $1.3 billion for the first quarter of 2015, compared to $1.4 billion from 2014, a decrease of 8% driven by the climb within our reinsurance segment. During 2014, we see [trailing] auto reinsurance in the UK and we also decreased our non-standard U.S. other reinsurance business. Foreign currency exchange rates had an unfavorable impact on the year-over-year change in gross written premium. However even on constant rate of exchange gross premium volume decline 5%. As Mike and Richie will discuss in more detail later, market conditions remain very competitive, consistent with our historical practices we will not rate business when we believe prevailing market rates will not support our underwriting profit targets. Net written premiums for the first quarter of 2015 were approximately $1 billion, down 9% from the prior year for the same reasons I just discussed. Net retention was down slightly in 2015 and 83% compared to 84% in 2014. Earned premiums decreased 1% to $944 million for the first quarter of 2015. The decrease in 2015 was driven by…

Thanks Anne, good morning. As we’ve outlined before, the U.S. Insurance segment comprises all direct business written on our U.S. insurance companies and includes all of the underwriting results of our wholesale and specialty divisions, as well as certain products written by our Global Insurance team. For the first quarter gross written premium was up 2% over prior year. We've seen some growth in our wholesale casualty lines and our specialty workers comp line. This growth was been offset by lower premium volume from architects and engineers where we have exited certain classes and our wholesale property lines where we’re seeing the softening market conditions. The combined ratio for the quarter was 84% compared to 96% for the same period a year-ago. In the quarter we benefited from lower attritional losses in our binding and brokerage property lines and program business, as well as more favorable prior year takedowns due in part to the change in volatility which Anne just discussed. In our core product lines we also saw a favorable development of prior year losses in our professional liability and worker's compensation books. Additionally the expense ratio was better due to lower general expenses in quarter one compared to last year. Operationally [indiscernible] is fully engaged in his new position as President of Markel Global a large account business. We've recently returned from the RIMS Conference in New Orleans where our Senior Global Underwriters had the opportunity to engage with the number of clients, brokers and prospects, and we continue to believe that under better market conditions we have the talent and products to grow this business. Matt Parker assumed the position of President of Markel Specialty April 1st taking over from Greg Thomson who is focusing his efforts on finding new program opportunities for Markel. I am very…

Thanks Mike, and good morning everybody. Today I will focus my comments on the underwriting results of the first quarter of 2015 for both our international insurance and reinsurance segment. As Anne said 2015 is off to a fantastic start however we all need to keep in mind that one quarter does not make any year and we all know there is a long way to go and lot of hard work ahead of us. The international insurance segment which includes business written by our Markel International division as well as that written by our Global Insurance division had a great first quarter. Gross written premiums in the international insurance segment did decrease slightly by 2% to 289 million however the combined ratio was 73% compared to 91% in the prior year. The decrease in premium writings is primarily due to the impact of the strengthening U.S. dollar. Excluding currency impacts gross written premium volume actually increased 4% due to increased volume in our professional liability product lines partially offset by decreases in our marine and energy product lines. The lower segment combined ratio was driven by more favorable prior accident years we takedowns and lower current accident year loss ratio partially offset by higher expense ratio. The decrease in the current accident year loss ratio was primarily driven by the nine claims development and lower attritional loss ratios across the number of lines within our Markel International division. This segment included approximately 18 points of favorable of prior accident year's movement related to the change in estimated volatility on our loss reserves that Anne discussed earlier. We also experienced favorable prior year's development across our Global Insurance division which reported adverse development last year. The expense ratio for this segment increased slightly due to higher general expenses. On the…

Thank you, Richie. I'm going to try and set a record of revenue this morning in my investment and Markel Ventures comments. My colleagues in the room are placing bets as we speak. In short we're earning positive productive returns on our investments in Markel Ventures operations. And I'm optimistic that we can continue to do so even in the faith of the tectonic force of low interest rates. More importantly our short duration fixed income portfolio, our percentage of equity capital invested in equities have range of possibilities that we can pursue in Markel Ventures and in our ongoing profitable insurance operations with the cash flows that they produce, gives us a great flexibility and many options as conditions and circumstances change. I'm highly confident that we will see change and most of us will be surprised by the nature and speed of whatever comes our way. I also think it's fair to say that we are in better position than many to take advantage of dynamic markets rather than just suffer [blows]. As to the current numbers so far in 2015, we're continuing to see the trends that have been in place for the last several years. We've earned reasonable returns from our equity investing activities with a return of 2.3% in the first quarter. In our fixed income operations, we earned 1.6% in the ongoing low interest rate environment and we kept our duration at just over four years. The total portfolio have earned 1.7% in local currency terms, but only half the percent after currency effects from the higher U.S. dollars. That currency drive and investment results is largely offset by the fact that we remain largely hedged in foreign currencies for our insurance reserves. As such the dollar value of insurance liabilities diminishes by a…

Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question we have comes from John Fox of Fenimore Asset Management. Please go ahead.

I have two questions; first one is on the reserve releases which over the last two quarters [with an over] 300 million and I imagine you could have started that process instead of fourth quarter last year, the second quarter of last year or maybe the second quarter of this year and I understand there's always a margin of safety and reserves, but other than the expense transaction, what’s been the catalyst or the reason why you feel comfortable taking the strategy reserve releases that you have taken in the last two quarters, did something change, did you just say you got to your margin and safety level or is there some other catalyst? And then I have another question. Thank you.

I don’t think anything has changed, I think the overall the experience that we have seen in the loss reserves has been positive, I do think we have a tendency to wait until the second half of the year to look real hard if we have historically any or different things, but I don’t think anything in the process or our approach has change at all recently or over the long-term, nor do I think it will. I think we have seen the Alterra portfolio experience maybe better than we expected on day one. But we are still being cautious in that space. So I understand the reserve take downs have been significant, but I don’t think there is anything different happening here.

John, Richie, I’ll just add to that I talked about volatility and as an example in our global insurance division, last year we had prior year development, this year we had prior year redundancies and that sort of gets back to you that business it's excess limit large limit business and it's just simply more volatile. So that was just a complete turnaround year-to-year and one of the drivers.

And Richie my second question is on reinsurance, should we expect to see the magnitude of decline in gross written that we saw this quarter, which I applaud if you're not getting the adequate rate. So should we think about that line being down 20% year-over-year or something of that nature?

It's a little hard to say, I mean we’re going to have to see how the rest of the year goes John. We made too pretty fundamental decisions in the last number of months in terms of exiting UK motor and significantly reducing U.S. non-standard simply because we couldn’t make, we don’t think we can make money in either of them, the way we needed to. We’re going to look at every contract that comes up on its own merits, those were obviously two pretty big items and we’ll just have to see how the rest of the year goes.

[Operator Instructions] Next we have Mark Dwelle of RBC Capital Markets.

A couple of questions; last one the UK motor book that you had exited at the end of last year is that a quarter share book or an excess book which is the same, is it something that’s going to affect all of the forward quarters of this year or is it something that’s kind of one and done?

It's mostly market, it's mostly renewed January 1, there are some renewals throughout year, but update renewal date on that business is January 1. It is except loss business, it is not a quota share business.

The second question relates to the tax rate and I think you kind of described how it works, is it right or at least reasonable to assume 19% is going to be the run rate for this year unless something changes otherwise, I know you true it up later in the year, but as a starting point is that where we should begin thinking?

That’s what our expectation is and we’ll true it up each quarter, but you're right.

And then finally on the asbestos retrocession transaction, what portion of overall asbestos reserves were transferred? And I guess if it's not a 100%, why not 100%?

Well it was about 35%.

Mark as Anne said, 35%. The reason for the third is this would be all of the asbestos and environmental reserves that resided in our UK insurance company Markel International Insurance Company. And what it really does is it cleans up and removes all of that asbestos and environmental and in fact all 1992 and prior exposures from that balance sheet. And it's just an opportunity to -- we’ve been working for 15 years to sort of clean up the legacy that we purchased with Terra Nova and this is the culmination if you will of those efforts and the guys up there did an absolutely fantastic job cleaning that up.

But you didn’t really -- this was just opportunistic with respect to that book, did you consider getting rid of the U.S. portion as well or that just wasn’t really what was on the table?

That wasn’t what was on the table at the time, I mean we’ve been running that book, that legacy position down for long time over there and it was an opportunity to complete it if you will. In the U.S -- I mean we certainly, I mean obviously we look at it all the time to decide whether you're better off running it off for letting someone else run it off, but, we’re perfectly comfortable keeping the rust off it.

Well at this time, we’re showing no further questions. We’ll go ahead and conclude today’s question-and-answer session. I would now like to turn the conference back over to Mr. Tom Gayner, President and Chief Investment Officer for any closing remarks. Sir?

Thank you very much for joining us and we look forward to catching up next quarter. Take care.

And we thank you sir and to the rest of the management team for your time also today. Again the conference call has concluded. At this time, you may disconnect your lines. Thank you and have a great day everyone.