Good morning and welcome to the Markel Corporation First Quarter 2016 Conference Call. All participants will be in listen-only mode. 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 a reconciliation to GAAP of these measures in the Form 10-Q which can be found on our website at www.markelcorp.com in the Investor Information section. Please note this event is being recorded. I would now like to turn the conference over to Tom Gayner, Co-Chief Executive Officer. Please go ahead.

Thank you, Ellison. Good morning everyone and welcome to the 2016 first quarter conference call for the Markel Corporation. My name is Tom Gayner and I'm joined by my colleagues Anne Waleski, Mike Crowley and Richie Whitt. Anne will brief you on the financial results, Mike and Richie will discuss our insurance operations, and then I will return with comments on our investment results in Markel Ventures. As always, we thank you for your interest and support of Markel and we look forward to your questions. With that, Anne? Anne G. Waleski - Chief Financial Officer & Executive Vice President: Thank you, Tom, and good morning, everyone. Our first quarter results were very strong and are in many ways a continuation of the trends that we saw in 2015 with our investing, underwriting and Markel Ventures operations, all contributing to our success. I am also pleased to report that we have substantially completed the integration of two acquisitions that were closed late last year, reporting our first results during the quarter for both Markel CATCo and CapTech. Now, let's talk about our first quarter 2016 results. Total operating revenues grew 6% to just under $1.4 billion in 2016 from $1.3 billion in 2015. The increase is driven by a roughly 18% increase in revenue from Markel Ventures. This increase is primarily due to our acquisition of CapTech in the fourth quarter of 2015 and higher sales volume in our manufacturing operations. Moving into the underwriting results. Gross written premiums were $1.4 billion for the first quarter of 2016 compared to $1.3 billion in 2015, an increase of 11% driven primarily by an increase within our Reinsurance segment. The increase in the Reinsurance segment was due to new business and renewals of multi-year policies in our general liability and product line…

Thanks, Anne. Good morning. U.S. segment is off to a very solid start in 2016. As a reminder, this segment comprises all direct business written on our U.S. insurance companies and includes all of the underwriting results for our Wholesale and Specialty divisions as well as certain products written by our Global Insurance team. Gross written premiums for the U.S. segment were $648 million, an increase of $62 million, or 11% compared to prior year. This increase was primarily due to the timing of closing of our underwriting systems for the quarter. However, excluding the additional booking time in the quarter all divisions recorded modest growth. We continue to see growth in our Hagerty classic car program and our workers' comp product lines within our Specialty division, as well as our property and casualty lines in the Wholesale division. Within the Wholesale division, we saw growth from both our binding and brokerage distribution channels. Another encouraging factor for our Wholesale division was the fact that 11 of our 12 largest relationships grew in the quarter. The combined ratio for the first quarter of 2016 was 89% compared to 84% for the same period a year ago. The 5 point increase in the combined ratio is primarily driven by less favorable development of prior accident year loss reserves and a slightly higher expense ratio, both of which were partly offset by lower current accident year loss ratio. First quarter of 2016 had 6 points less favorable development on prior year accident year loss reserves compared to 2015. Last year's results included $19 million or 4 points of redundancy on prior accident years due to the reduction in the estimated volatility of our net loss reserves. Additionally, during 2016 we saw adverse development within our medical malpractice and specified medical product lines…

Thanks Mike. Good morning, everyone. Today, I'll focus my comments on underwriting results for the first quarter for both International Insurance and the Reinsurance segments. Both segments are off to a very strong start and produced outstanding underwriting results for the first quarter. First, I'll start with the International Insurance segment which includes business written by our Markel International division as well as certain products written by our Global Insurance division. Gross written premiums were relatively flat to prior year at $291 million for the first quarter of 2016. As has been said a number of times already, market conditions continue to be difficult especially in London and in our global property products. I'll speak a little more about these headwinds later in my comments. The first quarter combined ratio was 95% compared to 73% for the same period a year ago. The increase in the segment combined ratio for the quarter was primarily driven by less favorable prior accident year takedowns in 2016. Prior accident year losses were unfavorable by 23 points for the quarter driven by lower redundancies most notably in our marine and energy lines. The segment also saw a benefit in the first quarter of 2015 related to the decrease in the estimated volatility of our net loss reserves. That contributed $17 million or 8 points, as Anne previously referred to that. The expense ratio increased 3 points compared to the first quarter of 2015 due to a 2 point increase in variable expenses related to an increase in earned premiums during the quarter on our marine and energy lines. Those lines carry a higher commission rate. Finally, these unfavorable movements were partially offset by a 5 point increase in our current accident year loss ratio. This was primarily driven by lower attritional losses on our…

Thank you, Richie. I'm happy to report to you that we're off to a good start in 2016. As we've talked about before, Markel benefits from a comprehensive approach to building the values of this company for our clients and customers and our associates; in doing so, we build financial value for our shareholders. We describe the values of this company in the Markel style and we talked about our belief in hard work and pursuit of excellence while keeping a sense of humor. We also consistently reiterate our creed of honesty and fairness in all of our dealings. There is no more important message that I can give you this morning than to tell you that we follow that formula to repeat (21:06) during the first quarter of 2016. We do so constantly (21:11). All of the numbers and the results flow from that description and pledge as to how we conduct overselves. The pace of change in business continues to accelerate and I can assure you that we are working harder than ever in the several new and appropriate initiatives to power Markel forward. Financial results from any one quarter or any one year are inherently volatile. Things like weather, financial market volatility and competitive behavior are beyond our control and can highly influence short-term results. That said, it's always more fun to report good results than bad ones, and the first quarter was filled with good results. Comprehensively, there are three main engines at Markel that build financial value, our insurance operations, our investment activities, and Markel Ventures. Fortunately and pleasantly, all three engines powered positive results as we start this year. Anne gave you the overall numbers and Mike and Richie described our insurance operations. On the investment side of the house, we earned 3.6% on…

And our first question will come from Jeff Schmitt of William Blair. Please go ahead. Jeff Schmitt - William Blair & Co. LLC: Hi. Good morning, everyone.

Good morning. Jeff Schmitt - William Blair & Co. LLC: Looking at Markel Ventures, the EBITDA margin moved up over 14%, looks to be about 14.5%, net profit margin at 5%. These look like the highest numbers at least that's the (27:26) available historical information. What's driving that? Is the Cottrell deal driving that or is there something else there?

It's Tom. The EBITDA margins are the more meaningful thing to look at as opposed to net income. Net income is heavily influenced by purchase accounting and the younger in the business to do part of Markel, the more purchase accounting will (27:53) that number. So EBITDA is what we look at, that's the key performance indicator and I would encourage you to focus on that. That number probably will range from some mild double-digit number to something in the teens. It's dependent on the mix of businesses that we own and the acquisitions that we do – that we would do, and what sort of cyclical performance we would see from time to time in the businesses that do have more cyclicality to it. So it's a good quarter. But these are the sort of margins that we would expect and be pretty happy about when conditions are reasonably good as they are right now. Jeff Schmitt - William Blair & Co. LLC: So do you view these levels as more of a run rate going forward? I mean, they are above-historical levels.

I would think or appropriate to think of it as a run rate over long periods of time, but there will be a lot of volatility any (28:49) quarter-by-quarter, just the nature of the business. Jeff Schmitt - William Blair & Co. LLC: Yeah.

Just like insurance business. And net-net-net we don't judge ourselves or think about quarters too much. We think about rolling five-year periods and things like that. And over a rolling five-year period, yeah, low-to-mid teens EBITDA margins (29:06). Jeff Schmitt - William Blair & Co. LLC: Okay, okay. Thank you.

Our next question will come from John Fox of Fenimore. Please go ahead.

Okay. Thank you. Hello, everyone.

Good morning, John.

My question specifically I think is for Richie. There were a lot of good surprises in the results, but I was surprised by the amount of reinsurance – gross written reinsurance premiums. Certainly, it's well known that reinsurance premiums have been heading down particularly on the property side for a few years, and you mentioned retaining more of the property business. So could you just talk about the growth in reinsurance premiums, why you're writing more property at this point, as rates have been declining, and what you think kind of the risks are the in the property book at this point? Thank you.

Sure.

Yeah. Thanks John. Like I tried to say in my comments, I think the headline number of 20% is probably a little more flattering than it really is. We had a couple large quota share deals that, the timing just happen to be, that we got them in the first quarter and so they – they sort of pumped up the first quarter volume. A couple of those situations, one in particular, we've been working on for three years and we finally were able to put the deal together and that fell into the first quarter. So there is a decent amount of timing there. In addition, we had quite a few – had become more and more popular just kind of with where the market is of multi-year deals. And we had a number of two-year deals that we booked in the first quarter. And what basically happens is, in terms of gross written premium, that all gets put into the quarter in which you write the deal. So first quarter has been flattered by those deals, first quarter next year will be lower as a result of not having that premium in the first quarter next year. So we definitely had a good first quarter in terms of writings, but at the same time we also stepped away from a number of programs or reduced on programs where we were comfortable with where the pricing had been (31:31) gotten to. So I would expect as the year progresses, you won't see that kind of growth for the rest of the year. I would see us trending more down towards, basically what we wrote last year, I think, would be a good guess based on what I see today.

Okay, great. And how do you think about when you come into the year, the amount of property cat reinsurance you're willing to write. I mean, of course, there is a concept of PMOs of course and – but how do you guys think about it in terms of kind of, quote-unquote, what you're willing to lose if there is a large event or two or just how do you approach the property cat business risk?

Sure. Well, we set on various metrics of corporate appetite, how much we're willing to lose in a certain size event, how much of our shareholders' equity we're willing to expose, and we monitor those metrics very carefully. And I can tell you, just given the state of the property market and what – as you mentioned what's been happened in the last few years, we are well below with our appetite with the – in a more – in a better pricing environment. So we're well within those metrics today. Property, we basically – I don't think we've written much – probably about flat to last year in total in the first – or what we think we'll write this year. There were some timing differences in terms of the first quarter bookings. So we're, as I said, well below our theoretical maximum appetite in a better market, and I don't really see us pushing the gas pedal to speak as we go through this year.

Okay. Thank you.

Our next question will come from Mark Dwelle of RBC Capital Markets. Please go ahead.

Yeah. Good morning. I have kind of three questions, I guess. The first one relates to the U.S. business. You commented about timing difference there in terms of keeping the underwriting book on (34:00). Can I just clarify on that? Does that essentially borrow premiums out of what would have been the second quarter and book them into the first quarter such that the two together would end up being more of a flat run rate? Is that a fair way to think about?

Yeah, it is right, Mark. It's Mike. But even – but we had an extra week of bookings. But even excluding that extra week, the revisions (34:27) were up slightly.

Okay. So there was a little bit of growth in the quarter, but I mean the difference between a little bit and 11% or whatever the total was, is really almost entirely that extra week?

Yeah.

Okay.

Yeah. I think that's a good assessment. We had – I'd like to say modest single-digit growth excluding that.

Okay. All right. The second question, I guess this is in the other revenues and expenses table in the queue. You break out the investment management segment, which, I guess, I assume is probably the CATCo unit. And that unit showed a small loss for the quarter. Was there a certain amount of acquisition or integration related expenses or, I guess, I wouldn't assume that making a loss is your normal state of play in that unit?

No, that wouldn't be the goal. I can assure you Mark. You're right, that is a portion of it. And I think this first year will be a learning experience for everybody that kind of get used to have the pattern of earnings on CATCo. But there's a couple of things going on. There is a seasonality to the earning of the management fees at CATCo, and first quarter and fourth quarter are the lowest, second quarter and third quarter are the highest kind of corresponding with – the wind risk is in the portfolio. So relatively low management fees compared to what we'll see in the next two quarters at CATCo, that's part of it. You mentioned and that you are correct, there are some acquisition costs – related costs going through this year, state bonuses, incentives, planned bonuses, those will be recurring for the rest of the year. And then, probably the biggest thing is, we're only recognizing in revenue the management fees as we go through the year. If we get through the year and have a solid year in the fourth quarter at the stroke of midnight on December 31, we will go ahead and recognize performance fees as well. There is some leeway in terms of accounting. We chose the preferred method, which was wait until you're absolutely certain that's earned. So our fourth quarter has the potential to be where most of the revenue is booked into CATCo.

Okay. That's helpful. Probably that's something I can easily model in advance, but at least that understands how the flow of the numbers is going to go?

We heard the ball dropping in Times Square. It means a lot to us this year.

All right. Thanks. The last question I had – and I think you touched on it in terms of the tax rate, the tax rate in the quarter was sort of in the in between space between sort of where it used to be and where it was last year. Could you just go through again how – what benefit, if any, was from the foreign tax paid in the quarter? Anne G. Waleski - Chief Financial Officer & Executive Vice President: Well – so last year we had benefit from the foreign tax credits of about, I think, 8%. So this year you're right, we're sort of at the level we are – we're a little bit lower than we had been historically, but moving back into that space, 24%. And I think it would be our expectation that we would be in the mid-to-high 20%s this year.

Okay. So the thing – the factor that was making it a little bit lower this quarter was a little more one-time in nature than being part of just kind of the ongoing assessment? Anne G. Waleski - Chief Financial Officer & Executive Vice President: No, no, no, no. That would have been the impact to last year's number. So the comparison would be the 24% this quarter versus the 19% last quarter – last year's first quarter. And last year's first quarter would have benefited from those tax credits that we took advantage of.

Okay. I probably asked the question poorly. If you're going to get to a mid-to-high 20%s for the full-year, the balance of the year will need to be relatively higher than the first quarter. Is that a fair way to think of it? Anne G. Waleski - Chief Financial Officer & Executive Vice President: No, I don't think so. I mean, I think the 24% is our expected tax rate for the year. It's a little bit lower than we would have historically had. And that is being driven by a decrease in earnings that we expect to be taxed at a 35% rate.

Okay. All right. Thanks for that. Those were all my questions. Thank you.

Our next question is a follow-up from John Fox of Fenimore. Please go ahead.

Yeah. So good (39:28) people can only take so much cat reinsurance, sorry I went back in the queue. Could you talk about CATCo? And you mentioned they're up to $3 billion in AUM. And can you talk about, if there's a wind event, the risk – one the risk to Markel, I assume there is some management fee, and then you mentioned you have $200 million invested in the funds. So in a wind event what are the risks of the CATCo investment? Thank you.

Sure. Thanks John. You're right. Really I think the way to think about CATCo and what it means to Markel is: one revenue stream is as an investment manager, fund manager; the other net revenue stream would be to the extent we invest in the CATCo funds. And as I mentioned and as you'll see in the Q, this year we have invested $200 million into the CATCo funds. So those would be the two revenue streams. That's what we'll be recording in our financials as we go throughout the year. And also in terms of the investment manager, there's really two pieces to it. There is the management fee which we'll book quarterly, and then there is the performance fee if performance is good, and that would be booked in the last quarter of the year. In terms of the $200 million investment we've made in CATCo, the potential is – there need to be multiple events, but the potential is we could lose the entire $200 million. And that is the same for virtually any other investor in CATCo. There is a slight complication to that. We have multiple funds. And in some of the funds we actually do go out and hedge some of the risks for the investors in those funds, so their results could be slightly different as a result of that. But in a multi-event – large event scenario, Markel could lose the entire investment. That is highly unlikely. In a one event, sort of large event loss we can lose as much as approximately $50 million of the $200 million. CATCo's product is – not to get into great detail, but CATCo's product is little different than most other cat products out there as opposed to a single shot retro sort of product. It is a multi-pillar product and you can have up to four losses against the product and the entire limit does not erode unless you have up to those four losses. So to give you a little bit of background on it, and if you need more information on it, happy to talk to you offline, John.

Okay. Just curious the $200 million is where on the balance sheet? Anne G. Waleski - Chief Financial Officer & Executive Vice President: In the investment portfolio.

In equity investments or? Anne G. Waleski - Chief Financial Officer & Executive Vice President: I think $175 million of it John is in equity and the other is in equity method that was (42:39) in other.

That's close enough. And $44 million early extinguishment of debt, is that pre-tax? Anne G. Waleski - Chief Financial Officer & Executive Vice President: It is. Yes, it's pre-tax and it will come through in the second quarter.

Right. Thank you.

Our next question is from Mark Hughes of SunTrust. Please go ahead.

Hi. This is actually Kevin Alloway on for Mark Hughes. Just a question about current year – for current accident year loss, it seem kind of lower generally across the board, is that a sustainable level or is this more of a one-time phenomenon. Anne G. Waleski - Chief Financial Officer & Executive Vice President: I think it is a trend we started to see in the fourth quarter a little bit. So we think it is attritional losses as well as lower loss ratios across product lines. So we believe it's sustainable, but we will look at it every quarter.

Okay. Thank you.

Our next question will come from Rob Hauff of Wells Fargo Securities. Please go ahead.

Yes. Good morning. Had a quick question on the large quota share that you mentioned. I'm curious was that with a new or existing customer to Markel?

That was a new customer. It was a customer we have been quoting for probably three years now and we're finally able to breakthrough and have success. And that's sort of the nature of that business. There is a long lead time sometimes on putting those deals together, and when they come they can be pretty substantial. That was roughly a $20 million deal in the first quarter.

Okay, great. Thank you very much. And then I don't want to focus too much on this, but just, if you could give us a little bit of color on the adverse development in the medical lines. Was that concentrated in certain accident years. Is there any – was it concentrated in certain customer types, that it emerged (44:45) from? Any color you can give us on that would be helpful.

Yeah, sure. I think there are some specific areas we saw and then I think also there is some general trend there. The specific areas we saw were some areas like correctional medicine, we saw some uptick in losses in that area, and that's an area we've written a decent amount of premium in, in the past. The other thing I would just say is just the general state of healthcare. There has been a trend from solo practitioners into larger practices, into practices being brought into hospitals. And I don't think we've got our hands totally around it at this point, but we do believe that is leading to higher trend in terms of the medical lines. So we are looking at it very carefully. We've taken a lot of corrective actions and we think we're on top of it.

Great. And then, last question. Just wondering if you could just update us on your thoughts on the M&A landscape, whether it'd be valuations, the pipeline you guys are being shown or whether or not you're seeing better opportunities in the underwriting business versus the ventures business. Thanks.

In general prices are high across the board. (46:08) looking at insurance deals or ventures deals, we do see a flow. Fortunately, we're well known enough to be aware of a lot of transactions and we are anxious to add to the Markel family but not at these prices.

Great. Thank you very much.

The one thing I will add to that is and Tom is absolutely right, prices do seem to be high across the board and expectations seem to be high across the board. Probably the other side of that coin at lease in insurance is organic growth is going to be very, very difficult to come by. And so if you are setting out growth targets for yourself, acquisition is the other way to do it. So at some point people will come to a meeting of the minds on that and we might see some deals. But right now I think just given what the future looks like, people expect a little too much for their companies.

Makes sense. Thank you.

Having no further questions, this will conclude our question-and-answer session. I would like to turn the conference back over to Tom Gayner for any closing remarks.

Thank you very much. Glad you joined us. We look forward to standing with you next quarter. Take care.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.