Greetings ladies and gentlemen and welcome to the Markel Corporation Third Quarter 2008 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Steve Markel, Vice Chairman for Markel Corporation. Thank you. Mr. Markel, you may now begin.

Fine, thank you. I'll add my welcome to the Markel third quarter earnings call. During our call today we may make forward-looking statements. Additional information about factors that could cause actual results to differ materially from those projected in the forward-looking statements is described under the caption Risk Factors and Safe Harbor and Cautionary Statements in our most recent Annual Report on Form 10-K and quarterly report on Form 10-Q. Our quarterly report on Form 10-Q, which is filed on our website at www.markelcorp.com also provides a reconciliation to GAAP of certain non-GAAP financial measures, which we may discuss in today's call. A program today will follow in the same format as previous calls. I'll make a few introductory comments, after which Rich Whitt, who is our Chief Financial Officer to review the numbers, Paul Springman President will follow with some operational and comments at the marketplace. Tom Gayner, our Chief Investment Officer will share some commentary on our investment activity. And then finally I'll moderate the question and answer session. 2008 is proving to be a very challenging year on many fronts. At September 30th, we were reporting our book values per share as declined 11% from year-end to $235.72 per share. Our speakers' today will get into these results and some gap. However, I'd like to start with a few comments about three important events during the quarter. First, our underwriting results were adversely impacted by hurricane's Gustav and Ike. We ensure wind exposed property in several of our operating businesses and manage our hurricane exposures both at our product line level and in total. The very nature of the insurance business is that we assume some volatility in our results. The vast majority of our business units, incurred losses from these hurricanes that were well within both…

Thanks Steve and good morning everybody. I'm going to stick with the format that I have used in past quarters and I will start by discussing our underwriting operation I'll follow with that with the discussion of our investment portfolio. And then I'll bring the two together with a discussion of our total results for the nine months. And again I will focus primarily on year-to-date results obviously in question... Q&A we can get into any questions you have about quarter or year-to-date results. Many of the trends we'll be discussing are sort of competitive from our first and second quarter calls. The two biggest issues obviously affecting our nine months results as we've said are the competitive insurance market. And the unstable financial markets and their impact on our investment portfolio. In addition as Steve mentioned, we had a $115 million of losses from hurricanes Gustav and Ike in the third quarter of 2008. So getting into it let's talk about underwriting first. Due to the increased competition through the first nine months in virtual of all our markets, gross premium volumes decreased 6% to about $1.7 billion for the first nine months of the year. About one third of the decrease was due to exiting certain programs previously written as Markel Re, the remainder was primarily the result of the increased competition. Net written premiums were down about 4% to $1.5 billion and premium retentions were actually up slightly to 88% from 87% 2007. I can tell you that every reinsurance treaty that comes up for renewal, we look at and look for opportunities to increase our net retentions of the business that we ride. Earned premiums were down 5% to $1.5 billion for the first nine months, compared to 2007. Our combined ratio was 104% for the…

Thanks Ritchie and good morning to all of you. You've just heard Steve and Ritchie report on our numbers from the third quarter of this year, and for the first nine months of 2008. And in a few minutes, Tom Gayner will take us through our investment results. Today, I have an abbreviated report from our operational side. But do want to update you on three or four important items. First, our combined operating ratio of a 124% for the quarter, and a 104% on a year-to-date basis, obviously represent unacceptable results. It underscores the importance of increased pricing, a process of which was actually started prior to the beginning of the third quarter, in a few of our select lines. Over the last 30 to 45 days, we have met with each of our product line leaders, and have reviewed our results and pricing targets for everyone of our products, and have implemented rate increases virtually across the board. We firmly believe that the combination of the adverse operating results being reported by the industry, as well as the turmoil in the financial markets, dictate that market pricing must rise in every sector of the business. We have moved our pricing targets up significantly, on our wind exposed business, as well as our overall property product lines. We set individual pricing targets on all of our 75 plus specialty products, with an overall 20% return in mind. Given that uncertainty in the financial markets today, higher prices on all these products are a must for the future. So, where does that leave us in regards to the rest of the market? Given the fact that most careers price their business 30 to 60 days in advance, most of our competitors businesses reflect moderate price erosion in the 5% to…

Thanks Paul. Good morning and thank you. As Ritchie noted in his opening remarks, total returns for the portfolio were a negative 5.1%, for the first nine months of 2008. Equities declined 12%and fixed income declined 1.7%. Additionally changes in foreign exchange subtracted 1.1% which brought the total portfolio return to a negative 5.1%. To begin to place those results in some context our equity return of negative 12% compares with a negative 18.9 from the SMP 500. Our long-term record of solid equity return remains intact. Over the last 15 plus years of data that we keep at our finger tips, our equity investment have provided excess returns both to the SMP 500 index as well as its functional equivalent index in the bond world the at least it has been up until now layman aggregate. I would also add the foreign exchange gains and losses should balance out economically from Markel's shareholders. As we hold the foreign exchange denominated bond to match against our foreign exchange denominated liability embedded in the insurance reserves. The investments gains and losses are reported explicitly. The roughly corresponding and offsetting gains and losses of matching insurance liabilities are recorded as part of the reserve heading process and sure is a part of the underwriting. One accounting item that I will point out is that we've recorded another than temporary decline in our investment portfolios of roughly $95 million during the third quarter. More than half of this amount comes from the lower market price of our holdings and equities such as GE, International Game Technology, Marryat and other companies where we can to be optimistic about their long-term prospect despite their recent price decline. Do not own complicated or exotic securities. They're transparent and easily priced. While we may not like the…

Thank you, Tom, and Ritchie and Paul. While the quarter in 2008 have been a challenge, we are very confident of our ability to earn consistent underwriting profits, and superior returns on investments, to build shareholder value. With that, I'd like to open the floor to your questions. Question And Answer

Thank you. Ladies and gentlemen we'll now be conducting the question-and-answer session. [Operator Instructions]. Our first question is coming from John Fox with Fenimore Asset Management. Please state your question.

Hi, good morning everyone. So I have number of questions. First, if we given monitoring was going on the life insurance business, which you may, or may not have, a lot issues there with investment losses, and product guarantees, and that type of things which I know you don't have. But you certainly have a investment portfolio, and the rating agencies seem to be changing the bar. And I am just curious... how do you guys think about if we sustain further investment losses in this point, where your capital position would be like? How would that allow you to take advantages of I guess, the hardening market into '09? And how do you handicap to rating agencies might change the bar? So if you can just kind of comment on that area?

Yes John, I'll take a shot at it. And when I think the economic and the dynamic between our light businesses and TNC businesses are very different, and I think a large part of the life problems are on the assets side. And again, we don't invest I don't think in any life companies and we certainly don't operate and it like businesses. So we've a few steps removed from that. But our fixed income is definite portfolio was never structured to be a 5% or 6% guaranteed yield in our life contract or annuity or variable annuity, and so we didn't try to structure exotic assets to match them. I think also this is a global outside of my area expertise but I think historically, like companies does not been maybe as disciplined in marking those assets to appropriate valuation of accounts we would like and because of sort of level two and level three type assets that are in those portfolios, they are probably much greater stressed in time to determine what is an appropriate right valuation and whether or not is an impairment whether it's temporary or some otherwise. In terms of Markel capital position is, I don't think it ever have been any stronger as we pointed out diffusion liquidity today, our premium volume has been flat for three or four years. And if the rest of market does not increasing prices our risk will down in somewhere in the next quarter or two as we increase prices regardless of what others do, we continue to operate with underwriting profitability and have a very, very strong balance sheet. So I don't sense that we have any particular financial stresses whatsoever.

Yes, I guess my question was really about the rating agencies and whether are they changing how they're measure you and if there's further investment losses in the system and I agree my color very strong have you getting any noise in the rating agencies or anything of that nature?

I'll be honest with this, John I don't talk to them at all. So I'll let somebody else.

Okay. That's good.

John this is Ritchie.

We don't have to talk to rating agencies.

Yes, the things I guess, I can say is obviously evolved if things keep dropping, if you drop another 30% or 40% from here, in terms of the whole system. But realistically we have very strong capital position and speak that we have a lot of liquidity as a holding company and on a consolidated basis. We were recently upgraded this year by SMP annuity to bring this to a BBB last level our team is departing. So we're BBB flat now from all three of the rating agencies. So, clearly we and everybody else will be having a lots of discussions with the rating agencies because there they have a heightened sense of awareness at this point because of what's going on in the market.

Sure.

In terms of them being particularly concerned about Markel absolutely not and if the markets were to go down a bit more, we have the capital to deal with that, for system collapses nobody hasn't see it where with all the deal with that.

Right, I understand that obviously. And then for Steve, I was interested in your opening comment about, if I interpret this correct, possibly writing at a 100 for the year. I'm looking at year-to-date underwriting loss with obviously with the hurricanes and stuffs et cetera. So, could you just expand on that a little bit? It would obviously require a pretty good combined ratio here at the end of the year?

Yes, I think I mean there are couple that Ritchie pointed out some of those. They are usual events or additional charges in the third quarter.

Right.

In addition to the hurricane, there was... I think we did our as practiced [ph] in environmental review which added a few buck than we had, a little bit of bad news in one of those product lines that we discontinued a year or two ago. So I think with the normal quarter added to those kinds of events, it's not unrealistic that we could end the year at 99%. We also, I think we're reasonably conservative on our hurricane estimates. There is no certainty of how that will evolve in the next couple of months, there is still a lot of work to be done through set some of the damages. But early indications are that we may have a small bit of redundancy there as well. And so I think we're it's very realistic. But I shouldn't realistic, it's very possible that we'll end the year at something less than a hundred. And the contract I'll sign put it in. was that in terms of the signing Markel's ability to absorb it faster bit. Our standard has been that we want to have every year less than a 100% of that ratio. And have the 92 that Gustav and Ike are such that we pushed into the limit. And we may have gone over that limit modestly. But I don't think so yet, or I'm not certain yet.

Okay.

Although I wish intended to sort of gaze the size of our ability and willingness to absorb a hurricane loss, obviously in return for thinking that we were quite enough premiums in the year. But they're not at loss to just start getting in that activity and on each product line we do evaluate and measure that.

Okay. Thank you.

Our next question is coming from Beth Malone with KeyBanc Capital Markets. Please state your question.

Hi, thank you. Good morning. You talked about pricing, putting us in pricing increases, and being pretty disciplined throughout your market. Is the market itself in general there is some very undisciplined competitors still out there in the marketplace that may not follow that pricing trend. So should we... what do you anticipate for the top-line, if you raised rates missed it half the underwriting, but are we going to see it meaningful shrinking of the business as the consequence.

Yes. From that result I want you to understand and certainly all of our associates understand. If we need to increase prices on a particular downside was 15% we should do so because it's the right think to do with that respect to what any of our competitors do. In the last quarter I cover volume result of five points I think. It would not at we one do in fact I would prefer is than all 10 points if the margin would had improve. And I will be trilled for that if we get our price increases to awarded and of course those people did achieve that goal, with that regard to the volume. Now my believe is that in good time the marketplace will also get more prices and we'll see our volume increase, I also believe that our share of the market with some of the problems going on in the industry really increase. But it's and what we can control is the underwriting discipline on each and every account and we can do our very, very best job to get out in front of our agents and our clients in still Markel and provide a quality services and quality product that we offer our clients in this there is no reason why this business shouldn't be able to grow very, very significantly. But the first step is to do the right job underwriting and the right job of charging the right price, the rest we'll talk also.

Okay. Could you comment on what you thinks going on, with a native competitor with AIG where do you think there's going to continue to be a major factor in the marketplace or do you see in not few just in future than their competitor capability if they manage.

I think the safest and smartest thing to do is not to throw any oil or gasoline on that fire. It's burning pretty good all by itself, we don't any help from there.

Okay, fair enough. And for Tom could you mentioned that you were going to look at changing carrier strategies potentially given market conditions? Is there an overall seeing that you are going to focus on or is there going to be change in the kind of investments you make in the market or the kind of company you invest with?

No on the equity side I really don't anticipate any change at all. The comments that I made is that on the fixed income side, I think we learned some lessons I could recall my comments exactly about the net necessity and transparency and clarity in financial statements and some of the additional things you think about when you're doing credit analysis work in the corporate volume area. So that's really the area that's under the microscope.

Okay. And just, I know you provide a lot of detail in your 10-Q on the credit to cost front. But as you've always transpired to have very clear and simple investments that are easy to understand. Is the credit default go up fall into that category?

Yes, I'll take the responsibility for that. At the fall of last year, when the storms started coming, credits spreads and pricing, went out a bunch. Now clearly, they've since gone out a lot more than what we had ever anticipated or thought or had seen before. We thought in the fall of last year that we were being paid appropriately, for the risk that we were taking. The credit fall swaps in Markel, consisted of credits that we had already had in our portfolio. We had already done credit analysis work. Everybody here involved in credit analysis looked at each of those credits, and we netted the list of names, and we essentially made the decision that we thought those institutions were not going to go bankrupt. Clearly, there is a long list of institutions that do not exist today, that existed a year ago and that explains a 100% of losses in the credit default swab, we didn't see it. We lost unfortunately, we did one. And then we stopped, and we have not done another. I would also add in the discussion of the pricing, some hands in insurance over used to rate online, for a $50 million total notional exposure, we were paid $30 million of cash, right upfront. So, that's 60% rate online. And given our comfort with the underlying names in the portfolio, we thought that was a good risk reward decision. It has proven to be incorrect, we declined a less and we're moving on.

Okay. Thank you.

Our next question is coming from Jay Cohen with Merrill Lynch. Please state your question.

Yes, thank you. Regarding the price increases, first of all I was kind of encouraged to hear your early definitive statements. What we've been from others is where pricing should be moving up. But I haven't heard anyone say it is simply in the directly as you that we are raising prices. And that's what I hope to hear from others, I'm encouraged to hear you guys talking about it. Not surprised given your history. Had you started that process yet, and if so, what has been the reaction of your distribution partners, when you go to them with the price increase, have they been accepting to hear about price decrease what you say?

I'll let Paul deal with that. The first answer is yes, we've started it already. And yes, we don't want there to be any ambiguity, in what we intend to do. And that's true not only for communicating to you and other shareholders. But also internally.

I'm happy to comment on that Jay, there were a couple of product lines even before the beginning of the third quarter that we started move pricing up, our international holders just being one example and our domestic architects and engineers business being sequent for different reasons and some opportunistic and some just because the targets needed to moved up. But post of the two storms and post a lot of the noise around the financial turmoil we've set down with each of our 23 or 24 product line leaders and really reviewed where are from a result standpoint over the last several years. What we've done in terms of pricing in particular over the last 36 months, putting all in mind that each of our products over period of time need to return that 20% to the cooperation and we have systematically put in place price increase targets for virtually everyone of our product lines across the Board and that 65 to 75 of these specialty products. As I commented in my remarks where does this leave us in regards to the competition quiet frankly and we're probably out of step with most of the rest of the market taking a wait and see position but candidly this is one parade we don't mind being out in front. We think somebody has to be the pricing leader, someone has to say that the prices have to go up and we do have the discipline to walk away from business when we can get our price terms and conditions. Early indication would be that in a lot of products where we maybe targeting a 5% or 10% or 15% increase, previously the market place was doing a 5%, 10%, or 20% decrease and now maybe the marketplace has come up to at least flat. And we believe before you start be able to significantly sell increases you've got at least stop the decreases. So we're encouraged that the rest of the market is at least beginning to level of in pricing. And I firmly believe that from the first of the year and end of the first quarter you're going to see some increases and vast majority of alliance and significant, significant increases in some other products. Another elements our pricing models is that we do use an internal capital allocation category each products has underwriting targets for their lost ratio or combine ratio. And one of the elements tat go into the model is interest rate assumptions because while the underwriter don't directly participate in our investing returns the model don't take consideration are both the various products generally. And clearly our interest rate forecast for those internal debt to application models is lower than it was a year ago. And that's also an important element that drive prices up.

Great. And I appreciate those comments. I also hope your competition is listening to this call as well. The second question, if you look at your combined ratio, you take out the favorable development, and you take out the catastrophe effect, it looks like for the quarter it's about a 106 combined ratio. And you take out the development for the past two quarters, you are running more 101. And so... and I know mentioned with several product lines, you had mystery behind this cap. But looks like about a 5 point increase. First of all, is that you guys seeing at the same way, and then secondly what's behind that increase consecutively?

Jay, I am not and without maybe we can call to talk after the call. But one thing I am not sure, if you're picking up or not, is investors charge, which is about $25 million. So I don't know if that's giving the way you are doing your math, I don't know if that's ending up in your current exiting year or coming out.

I think, I'm taking it out. I'm just taking good 19 of net, net 19 of favorable development that I am just taking out.

Yes. That sounds a little high to me. But we can look at it after the call. And one thing I can't say is we're obviously continuing to establish margin on safety on the current estimate year as we always have in the past. And so clearly, that continues to be there. We have had tick up in the expense ratios. So that will pick the some of it, that's about a 1% increase. We did have couple of lines of business, that didn't behave quite the way we would like in the fourth... in the third quarter. We had some prop areas, of property other than catastrophe, just sort of normal property losses that were figure then we would like to see. And so that might be driving it a little bit. But I think we are still comfortable that we're pricing the business, to make an underwriting profit. Obviously, we have to establish the margin to save beyond top of that, and we've had some other things going on in the quarter as well. But I think your point is very valid Jay. And the margins have shrunk with the decline prices over time, while in the aggregate we might be equivalent over with our run rate is it, 99 or 101. The more important thing is that our run rate needs to get down into the low 90s, not the high 90s. We need to earn the kinds of margins adjusted our capital and insurance industry. That does not exist today. We need to increase prices significantly, to generate the kind of returns we're entitled to earn. Capital is king today, and we got to earn good returns on it. And the first thing that need that is it has to go up.

Very rational. Thanks for the comment.

Your next question is coming from Meyer Shields with Stifel Nicolaus. Please state your question.

Thanks. Good morning. Let me start with much of comments I can. I think this on few comments and your comments it's not that your not quite ready to punch into equity and, waiting for?

Meyer, what I really like is this both tells in the short-term lineup and the two barrels in SMP the investment ideas and opportunities that are out there and I do think that they are out there. And point number two is the permanent insurance market, because the net dynamic that it happened in Markel over the years and that I think is on the horizon, when the insurance business is taken profitable and hard and has a lot of money coming in for that to happen at the same time when equity prices are very attracted, we would be deploying a lot of money indirectly. Meantime if you say capital is changed, preserving liquidity, preserving the quarter's balance sheet that we've had as our mentality really for the last year and half of though has been very important because the of the real familiar to finish first be most first finish. And we've got the balance sheet in place and we need to protect that first and foremost that we can take advantage of both in short and the investment markets.

Okay. That's helpful. And I think, I guess one of the characteristics of our insurance market is that businesses sort of marginally specialty like moves from the standard carriers to the specialty carriers, is that should we except that happen if we see rate declines next year or is it sort of different enough hard market that you anticipate in the tax components available or likely?

Well from my experience Meyer I would say that every hard market, soft market cycle has different characteristics and we have seen over the last 24 to 36 months a lot of grey area business except the Excess and Surplus Lines marketplace and find this way back to the standard market and that's just part of the normal as it flow in the cyclical nature of the business. What we're beginning to see already right now just over the last 60 days is that when you had carriers previously putting down $25 and $50 million lines on large Excess and Umbrella placements or large property or cover something's like that and the brokers and their clients are starting to say perhaps move maybe... I'll have five carriers each putting down $10 million rather than two carriers putting down $25 million alliance. And when you get back to layering such as that in another itself, the market pricing will push, will push the average cost north. So we're encouraged by that. We haven't really seen any change other than a blip on the radar screen in the middle of September, in terms of our new business offerings. Our new business submission count has been off significantly all year, but usually that just means more people shopping not necessarily more people buying.

I think Meyer, it is fair to say that the bar that we write the profit $5,000 are still being flat tracked as restaurants in the standard market. And so, we've not seen those comeback yet. But, you can make an underwriting profit writing bars of a $1000 in the standard markets. So, it's a matter of time.

Okay. No that helped. And I guess the last one, I think historically I think your preference has been to acquire companies that are sort bruised. Are more than nothing on your growth yet?

There are plenty of bruises out there. And I think we get our fair share look at most of them. I don't think there's any transactions that are ready for announcement today, and I wouldn't want to imply or to judge that something is going to happen at any special point to time. That's sort of a very opportunistic kind of circumstance. My guess would be that the impact of what we've seen in the financial markets, and the impact of what's going on in the underwriting markets, that we will see some significant opportunities in the profit cash over the next several financial quarters.

As the operator said at the beginning of the call, we're in a listen-only mode.

Got it. Thank you very much.

Our next question is coming from Chuck Acer with Acer Capital Management [ph]. Please state your question.

Hi, thanks. Three, four quick questions, thinking about this tarp [ph] around as its moving past banks and financial institutions, and maybe the life insurance. Have you all considered what would be... what would likely be your position if they wanted to shove money into you or others in your space, and putting you either advantage to disadvantage relative to other players, or is it just a crazy idea?

Well Chuck, it's sort of an interesting, because investment in a local bank or Markel Corporation, is in fact a bank holding company. And as a bank holding company, under the definition I think I have seen it, we are on list of thought eligible. I guess in industries or several preferred stock. At this point in time, I don't it would add much value to our balance sheet. So, it's not something that Markel Corp is currently pursuing and --

But, you haven't been exposed to the issue of if you're going to take this?

No, right now, there is no intent to take a brief. We are on behalf of or in conjunction with the community bank we own, are involved with the discussions that whether or not they should after them.

Okay.

That decision has not been made yet.

Great, quickly you answered a question about AIG. Somebody had mentioned that maybe not on this call, but did mention that they were being particularly fierce competitor in today's market, in order to preserve brand and franchise. Do you see that as a consequence of the turmoil there, and how it affects your ability to achieve price increases and so on, in places that you'd like to be.

Well, I think the comment I made before is, we probably have quite not appropriate got through [ph], oil and gas on that file. But I don't think we are going to loose many Markel renewals. But we have a good relationship with the client over a long period of time, through a company like AIG being particularly competitive. What I am hearing in the marketplace is they're extreme aggressiveness it really relates to hanging on to there renewals.

Right, Okay.

And the vast majority of their business, is in product lines where they're putting out $500 million or $50 million or $25 million, and when those are not things that we particularly have a strong interest in.

Okay.

When they get down into the smaller account area. We would love to compete with them. And my guess is that they're spending all their energy on their big accounts. And so, I don't... I'm... with really 15% more and the clients is looking at it the long-term, I am not particularly worried about competition with them.

Great. Couple of questions and your equity holdings today as a percent of shareholders equity is what?

We're at about 60%.

And so that's about the lowest we've been in how long Tom?

Lowest it ever got was right after the Markel International acquisition at 50%, 51%. And this would be the second lowest in the modern era.

I suppose with your sense of humor, its okay to pass on the will rogers [ph] notion about your investment, got your changes in investment philosophy [ph].

Yes, that does not change. We're more interested in the return of our money than the return on our money.

Well, I was thinking about, the one about buy stocks, if they go up and if they don't go up--

Let's talk of it offline. There is no reason to share that information if you'd like [indiscernible].

Then just real quickly, the last question was about deals in the marketplace. And it seems to me that as it relates to what we call your gearing ratio, or your quarter one, are now less than three to one structure. You can get it back to the four to one target area, only through two things either through deals or strong pricing environment? And, if you're in fact, if we lucky enough that we're headed into a stronger pricing environment, I suppose that to some degree of means, do deals, or at least the aggressions the size at which you might be tempted. Is that accurate, or is that fuzzy thinking?

No, that's very, very accurate. And we clearly, we prefer to generate the growth internally. But we're still open for looking at opportunities. And particularly, in today's environment, having teams of people, and that's a very productive way, I think the Markel doors are wide open, to smart folks, with good ideas, they can bring business ideas underwriting, profit ideas in Markel. And so, we'll get placed, the people wanted to build their career. We're looking for hiring good people.

Thanks so much.

[Operator Instructions]. Our next question is a follow-up from John Fox with Fenimore Asset Management please state your question.

Hi, I had a question for Tom. Tom if you could just describe kind tone of the fixed income market, obviously October was horrible it's may through the quarter and into little bit early here in November. Do you see things getting thing the same if you could just seeing in fixed income.

Well, I can't give the answer to your question. That's pretty ugly out there.

Do you see any improvement or have all the same.

What I would say is that rate of decline we seem to have stop and just to improve the nature where nobody would... after NC&B product the bank done to long time ago, NC&B for no catch from nobody, and the markets were deep closing up like that for a while. We are starting to see a little bit of fall and the ability to transact and that would be the first step towards returning towards normality.

Okay. Thank you.

Our next question is coming from Mayer Shields with Stifel Nicolaus. Please state your question.

Thanks a follow-up for Paul, if I can. If does you see rental offices at all basically local Texas business?

At this point it is Meyer we have roughly five dozen wholesale producer relationships in Texas and our concentration, the first 90 days will be on those broker partner relationships that we were already in place. As we get closer to the end of year, we will expand to the surrounding states like Louisiana, Oklahoma and then ultimately the Mid South office we'll have roughly 10 to 12 states, they will be responsible for. In the meantime, we'll continue to prospect for new relationships and try to work on better penetration through the existing once.

Okay. That is all, there is no risk going of with cannibalizing other product line?

That is not all new business. They have inherited roughly $75 million to $85 million of existing business with existing Markel relationships that has being transferred under their watch to plain and in addition to that they're charged with responsibilities are producing them.

Okay. Thank you for the clarification.

Our deal the Markel organization that we are talking that is to create regional offices that provide all Markel products, all Markel wholesale products through those regional office distribution systems. So, Texas regional office will provide all Markel products to all the wholesale relationships in that region ultimately, currently as we've practiced we'll be expanding as well.

Okay. That's great. Thank you.

Ladies and gentlemen we appreciate your long-term support of shareholders with Markel. We wish you a very good day and if you have any further questions or comments don't hesitate to give us a call.

Ladies and gentlemen this does conclude today teleconference. You may disconnect your lines at this time. And we thank you for your participation. .