Greetings, and welcome to the Markel Corporation’s Third Quarter 2014 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. I would now like to turn the conference over to your host, Mr. Tom Gayner, President and Chief Investment Officer. Thank you, Tom. You may begin.

Good morning. Thank you and welcome. We’re glad that you’re with us and we look forward to discussing our results from the first nine months of 2014 as well as our thoughts on the business. Anne Waleski, our Chief Financial Officer will review the overall financial results and my co-Presidents, Mike Crowley and Richie Whitt will then cover our insurance operations. And then I’ll return to discuss our investments and Markel Ventures activities. Before we get started, I’ll remind you of the Safe Harbor Statement. As a reminder, comments made on today’s call may contain 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 our – or suggested by such forward-looking statements. Please refer to the full disclosure regarding the risks that my affect Markel which may be found in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. With that, let me turn things over to Anne.

Thank you, Tom, and good morning everyone. I’m pleased to report that the positive momentum that we experienced in the first half of 2014 has continued into the third quarter. Our financial results for the first nine months of the year are very solid. We produced underwriting profits in all three ongoing insurance segments and continue to align the legacy Alterra reserves with the Markel’s reserving philosophies. Markel Ventures completed the acquisition of Cottrell, Inc. during the period and continues to look for profitable growth opportunities. Our total operating revenues grew 25% to $3.8 billion in 2014 compared to $3 billion in the first nine months of 2013. The most significant drivers of this increase continues to be inclusion of nine months of underwriting revenues from legacy Alterra product offerings in 2014, higher revenues from the Hagerty business and higher investment income fees [ph] through our larger investment portfolio. Also contributing to the increase, other revenues were up 25% to $630 million from $505 million last year, primarily due to revenue growth within Markel Ventures. Moving into the underwriting results, gross written premiums were $3.8 billion in 2014 compared to $2.9 billion in 2013, an increase of 30%. Net written premiums were $3.1 billion in the first nine months of 2014, up 28% from the prior year. And earned premiums increased 26% to $2.9 billion. These increases were driven by the inclusion of nine months of premiums from the legacy Alterra products in 2014 compared to five months of legacy Alterra premium in 2013. Net retention was down slightly in 2014 at 82% compared to 83% in 2013. The slight decrease which is in line with our expectations is primarily due to higher use of reinsurance on certain insurance products previously underwritten by Alterra. Our consolidated combined ratio for the…

Thanks, Anne. Good morning. The U.S. insurance segment, as we pointed out before, comprises all direct business written on our U.S. insurance companies and includes all the underwriting results of our wholesale and specialty divisions as well as certain products written by our global insurance team. For the third quarter, gross written premium was up 3% over prior year. Year-to-date, gross written premiums have increased 13% over prior year. This increase was due in large part to the Alterra lines of business that are now included in this segment. Excluding these lines, premium volume is up 5%. Keep in mind that we have been exiting or re-underwriting some lines in our specialty and wholesale divisions and this has impacted growth. The combined ratio for the quarter was 95% for both 2014 and 2013. The combined ratio for the year was 97% as compared to 94% in 2013. As Anne pointed out, the higher insurance segment combined ratio was driven by less favorable development of prior losses due in part to adverse development in the architects and engineers line of business. Partially offsetting this impact was a lower year-over-year expense ratio. The improvement in the expense ratio was due to higher contribution of earned premiums from the legacy Alterra in 2014 than in 2013 and due to non-reoccurring transaction costs reported in 2013 associated with the Alterra acquisition. The rate environment in the U.S. segment remains competitive. However, we continue to achieve modest single-digit rate increases on small to medium sized risks across the various divisions within the segment. Large accounts remain under competitive pressure and prices for property and casualty lines on Fortune 1000 business remained soft. Operationally during the quarter, we combined our Atlanta and Richmond specialty program units under one management team and we expect this reorganization to…

Thanks, Mike, and good morning everyone. Following on from comments by Anne and Mike, I’d sum up the first nine months of the year in Markel’s underwriting operations as solid or business as usual. I think this is a really important statement when we consider that we are establishing consistent with our historical practices a loss reserve margin and safety on legacy Alterra business. Turning specifically to the results of the international insurance and reinsurance segments, the international insurance segment which includes business written by our Markel International division as well as that written by our Global Insurance division has performed well so far this year. During the nine months of 2014, gross written premiums in the international insurance segment increased 13% to $653 million. The combined ratio was 95% compared to 92% in the prior year. The increase in premium writings is primarily due to the Global Insurance division which was created after the acquisition of Alterra and contributed nine months of business in 2014 compared to only five months of business in 2013. The higher segment combined ratio was driven by a higher current accident year loss ratio partially offset by a favorable expense ratio. The improvement in expense ratio was due to transaction costs of the Alterra merger back in 2013 and higher earned premiums from the Global Insurance division which carry a lower expense ratio. Now I’ll turn to the reinsured segments which includes reinsurance programs written by our Global Reinsurance division as well as that written by our Markel International division. Gross written premiums for this segment were $999 million for the first nine months of 2014 and that was up from $443 million a year ago. The increase in premium writes is primarily due to including nine months of writing from products previously written…

Thank you, Richie. My comments this morning will be brief since our news is good and straightforward. I’m happy to answer any questions or cover any details when we get to the Q&A. On the investment side of the house, we are 7.3% on our equity investments and 4.5% on our fixed income portfolio during the first nine months which produced a gross total return of 5.2%. In the equity portfolio, we continue to methodically add to our holdings steadily throughout the year. Between purchases of roughly $300 million so far as well as appreciation [ph] of the portfolio, we’ve now got roughly 52% of our shareholders’ capital invested in equities compared to 48% at yearend 2013. We continue to have an unusual combination of investment ideas that we’re confident about, positive cash flows from our insurance and ventures businesses and some sense of overall caution and weariness about the investment market overall. The net effect of these cross-currents is that we continue to steadily dollar-cost average our way and into building positions. We think that approach prudently protects our balance sheet and leaves us with the ability to being able to invest more money in equities as the opportunities present themselves. Expect us to continue our steady, consistent approach in building the equity portfolio. In our fixed income operations, we earned a total return of 4.5% as low interest rates that prevailed at the end of 2013 were under an even lower than both segs [ph] by the time we got to the end of September. That meant we got some capital appreciation in the portfolio in addition to recurring interest income. We remain cautious as we have been for multiple years about the balance between risks and rewards in bonds. Long term rates just don’t have that much…

Thank you. (Operator instructions) Our first question comes from the line of Vincent D’Agostino from KBW. You may state your question. Vincent D’Agostino – KBW: Hi, good morning, everyone.

Good morning.

Morning. Vincent D’Agostino – KBW: I’ll start off, so last quarter you guys had talked about the reinsurance environment kind of theoretically being at bottom and everybody was being disappointed. I’m just wondering if at this point there’s any change in kind of that assessment or if it’s one of these things where we have to really wait for one-one [ph] to play out before we can get a true test of if that’s kind of – if we’re going to be at bottom and potentially rebound or go lower.

This is Richie, Vincent. I think it’s a little early to say. Like you say, I think we’ve got to see what happens with the one-one renewal. But a lot of people are talking about it being at the bottom. I wouldn’t look for a bounce at this point. I think there’s too much capital out there for there to be any sort of bounce. If I had to guess, you might just see a little more reduction but I just can’t imagine the kinds of reductions we’ve seen in the last two years. And certainly, if people were looking for those kinds of reduction at one-one, we’ll probably be coming off with some business. So it feels like we’re getting close to a bottom but I’d like to see those one-one renewals before I commit to that. Vincent D’Agostino – KBW: Okay, good deal. And then just to switch over two questions on the Markel Ventures side. And, Tom, sorry if I missed this. I know you said you look forward to kind of giving us the full year numbers but with Cottrell and Eagle, just where roughly with those two businesses should put us on an annualized EBITDA and net income basis?

Annualized EBITDA – I mean, annualized run rate of the revenues should be a round number of $1 billion, plus or minus. There’s cyclicality to that and just looking into 2015. And we would expect double-digit EBITDA earnings from that mixed collection of business. Vincent D’Agostino – KBW: Okay, cool. Thank you. And then just –

And [indiscernible] a lot of zeros involved there. Vincent D’Agostino – KBW: Good deal. Just a theoretical question between the split and in terms of when you’re speaking with investors between Markel Ventures and [indiscernible], do you feel that you get more credit for the ventures income stream versus the public equities since on the ventures you don’t have to do the whole equity – look for earnings buyback?

Yes. Vincent D’Agostino – KBW: All right. Take care, guys. Thank you.

Thank you.

Our next question comes from the line of Mark Dwelle of RBC Capital Markets. Please state your question. Mark Dwelle – RBC Capital Markets: Yes, good morning. Just a few sort of numbers questions because as you said, it was a pretty straightforward quarter. In the discontinued line segment, there was $6.8 million of adverse development, was that just a true-up of the asbestos study from the second quarter or was it something different?

No, that’s actually some development that we saw on the discontinued businesses from the Alterra acquisition that occurred during the quarter. Mark Dwelle – RBC Capital Markets: Okay. The figure for the remaining amortization of the premium in the investment portfolio, is that number somewhere in the 10-Q? I haven’t found it if it is.

It’s not. But given the – and I don’t have the number with me, Mark. But given the amount of the portfolio that we have turned over that the number that’s left has gotten smaller. But I don’t have the specific number with me and it’s not in the Q. Mark Dwelle – RBC Capital Markets: Okay. And then finally, was there any meaningful amount of catastrophe loss across any of the businesses? I know Richie you mentioned in the reinsurance there was not. Just asking on the other units.

Nothing to speak of.

No, we always have a bit of an attritional amount of catastrophes built into our assumption. And I would say it was even probably a light attritional quarter from that standpoint. Mark Dwelle – RBC Capital Markets: Okay. Those are all my questions. Thank you.

Thank you.

Our next question comes from the line of Jay Cohen of Bank of America Merrill Lynch. Please state your question. Jay Cohen – Bank of America Merrill Lynch: Yes, thank you. In the reinsurance segment, the expense ratio in the third quarter dropped I guess about four points from the first half. In the Q, you suggest there was an increase in experience-related funds or something. I forget exactly the phrase. But I’m wondering how much of an impact that had on the expense ratio in the quarter in the reinsurance segment.

Yes, I would say the impact to the quarter was probably not significant. Jay Cohen – Bank of America Merrill Lynch: So do you see the third quarter number as a reasonable run rate going forward, because it’s about 30 versus – it was 34 in the first half.

Yes. No, I do not think that it is a reasonable run rate. I think you can take the earlier quarters and use those. This would be a non-recurring one-time adjustment that we make and then we’ll trend it going forward. But I think you can use the earlier quarters’ indication. Jay Cohen – Bank of America Merrill Lynch: That’s helpful. And I guess for the overall company when you think about the expense ratio, given the market conditions internationally and in reinsurance, should we expect any improvement at all in the expense ratio going forward or should we just kind of assume it stays reasonably flat?

Well, this is Richie, Jay. Obviously we continue to work to reduce the expense ratio. But it’s fair to say we don’t expect to have a whole lot of help in that effort from growth next year. And as for growing the top line, if the markets stay like this, that’s going to be difficult. So we’re going to have to do it the old-fashioned way which is spending less. So admittedly, it’s going to be difficult. But if we have like 37 –

Thirty-seven.

– a little over 37 this quarter, I think that’s probably fair for next year and we’re going to work hard to see if we can reduce it. Jay Cohen – Bank of America Merrill Lynch: That’s great. If I could squeeze one more in. Markel Ventures, Tom as you had mentioned, the improvement was pretty noticeable versus the first half. And specifically in the manufacturing segment where the net income or GAAP income went from $4.5 million in the first quarter up to $21 million this quarter, so pretty impressive. Does seasonality play a role there and should we think about the third quarter again as a reasonable run rate going forward?

Seasonality plays a small role but I would say it’s much more economically cyclical than what I would describe as seasonal. And frankly, the first quarter was low. We were in the midst of integrating some acquisitions and there’s always a little bit of indigestion in process that’s connected with that. And as we’ve gone through the year, those issues are starting to resolve themselves and then we’re getting to a more normal basis. I really would steer you towards EBITDA because given amortization, purchase accounting and that sort of stuff, the true cash that’s being produced by the business is best represented by the EBITDA and that’s what we hold the managers accountable for because they can’t control tax rate, they’re very lightly levered, we’re not borrowing a bunch of money. So that really does describe the cash flows of the business. Jay Cohen – Bank of America Merrill Lynch: Fair enough. Thanks, Tom.

Okay.

(Operator instructions) Management, at this time there seems to be no more further questions. Would you like to make any closing remarks?

Thank you very much and we look forward to chatting with you next quarter. Take care.

This concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time.