Markel Group Inc.

Good morning and welcome to the Markell Group second quarter 2026 conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchstone phone. To withdraw your question, please press star then one again. During the call today, we 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 in the press release for our first quarter 2026 results, as well as our most recent annual report on Form 10-K and quarterly report on Form 10-Q, including under the captions safe harbor and cautionary statements and risk factors. We may also discuss certain non-GAAP financial measures during the call today. You may find the most directly comparable GAAP measures and a reconciliation to GAAP for these measures in the press release for our first quarter 2026 results or in our most recent Form 10Q. The press release for our first quarter 2026 results as well as our Form 10K and Form 10Q can be found on our website at www.mklgroup.com in the Investor Relations section. Please note, this event is being recorded. I would now like to turn the conference over to Tom Gayner, Chief Executive Officer.

Thank you, Matt, and good morning, and welcome to our second quarter conference call. We welcome this opportunity to update you on our current and long-term performance and to answer your questions. As we've long stated, at Martell, we operate with the dual time horizon of forever and right now. I believe that the movie Field of Dreams got it right. The central premise of the film stated, if you build it, They will come. We think that is true and we continue to work on building the system designed to relentlessly compound your capital. We are building the value of Markel and doing so in a way that rewards you, our shareholders, along with our customers and associates. That's the forever scorecard. The right now performance indicates how the journey continues to progress step by step. The case of the right now We look at adjusted operating income, which doesn't include many adjustments. It's simply gap operating income excluding the short-term swings in public equity markets and amortization expenses. Equities often swing wildly quarter to quarter. Any short-term metric that includes those swings is noisy and doesn't do a very good job of describing our progress. Over five-year periods So over this timeframe, we focus on operating income, which includes our equity returns. The adjusted operating income of our business, plus growth in our public equity portfolio, drives intrinsic value. Over time, we believe our stock price should track that intrinsic value. But first, the right now. In the second quarter of this year, our reorganized and refocused insurance business continued to improve profitability Thank you for joining us. Finally, in our financial business, we acknowledged last quarter that within our state and national business, we experienced a collateral shortfall relative to our total exposure to a particular capacity provider currently in bankruptcy. This quarter, after extensive actuarial work, including the engagement of an outside third party, we recognized a reserve of $205 million. I believe this event was driven more by the unique and unfortunate confluence of events including the nature of the business written, the jurisdictions involved, and the pace at which losses develop. This particular business involved began in 2012 and we ceased writing on these programs in 2021. This marks the first substantial credit loss in state nationals over a 40-year history. Per our practice, we've made what we believe is a conservative estimate of our ultimate liability consistent with our overall reserving philosophy. As is always the case at Markel, we do our best to recognize and report bad news quickly and let good news develop over time. Today's action is in keeping with that philosophy. Turning to the forever, we focus on a five-year time horizon to measure and compensate the senior management team. We think that five-year timeframe matches up with a meaningful measurement of economic progress For the last five years ending in June 2026, average annual operating income was $2.5 billion compared to $1.2 billion in the previous five-year period for a compound annual growth rate of 15%. We've been repurchasing our stock at an increasing rate and have reduced the total outstanding shares from $13.7 million to $12.4 million, a reduction of just under 10% over the last five years. On a per-share basis, Average operating income per share was $188.94 for the last five years, ending in June 2026, compared to $88.99 for the previous five-year period, for a compound annual growth rate of 16%. The average shareholder's equity used to produce these results grew by only 9% over the same period. That's significant earnings growth delivered in a capital-efficient way. When things go bump in the night, and they do, we can absorb it. When opportunities aligned with our values arise, we can pursue them. Our businesses continue to generate cash, which fuels the ongoing capital allocation activities. Over the last few years, the single largest use of capital has been the repurchasing of our own chairs. During the second quarter, We have now repurchased more than $2 billion since the beginning of 2022. We continue to believe that, at current prices and relative to the current set of alternatives, Markel shares represent the highest and best use of capital, and we're acting accordingly. I would also point out that we funded these repurchases through earnings. We are not leveraging up or borrowing money. As these repurchases continue to take place at a discount to our estimate of intrinsic value, that should continue to increase the value of each share of Markel. Brian will now share some financial highlights and details from the first half of 2026, and then Simon will provide an update about our insurance operations.

Thank you, Tom, and good morning, everyone. First, Markel Group's consolidated results for the second quarter of 2026. Operating revenues, which exclude net investment gains, were $4 billion for the quarter and $7.6 billion for the first six months. Both periods were flat to comparable periods a year ago. Operating income, which includes net investment gains, Thank you for joining us. for the first six months of 2026, adjusted operating income was $934 million versus $1.1 billion a year ago. The prior two quarters served as a good illustration of why we use longer-term views of operating income performance. As net investment gains were $1.2 billion for the quarter, More than reversing the investment losses from the first quarter. For the first six months of 2026, net investment gains totaled $440 million versus $431 million a year ago. Net income to common shareholders was $1.2 billion or $93 per diluted share for the quarter versus $631 million or $50 per diluted share a year ago. For the first six months of 2026, Net income to common shareholders was $957 million or $74 per diluted share versus $753 million or $62 per diluted share a year ago. Moving now to our Markel Insurance business. Underwriting gross written premiums were $2.4 billion for the quarter versus $2.8 billion in the second quarter of 2025. For the first six months of 2026, Underwriting gross written premiums were $4.6 billion versus $5.6 billion a year ago. In both periods, growth was 10% when excluding the impact of exiting our global reinsurance division and the transition of our Hagerty program to a fronting model. Net earned premiums were down 3% for both the quarter and the first six months of this year. The combined ratio was 93% for the quarter compared to 97% in the second quarter of 2025. The improvement was driven by more favorable prior year reserve development and a slightly lower expense ratio partially offset by 41 million or two points of current year catastrophe losses related to the Middle East conflict. For the first six months of 2026, the combined ratio was 93% versus 96% a year ago and included 76 million or two points of Middle East conflict losses while the prior year period included 61 million or one and a half points of losses from the California wildfires. Adjusted operating income was 376 million for the quarter versus 270 million in the second quarter of 2025. For the first six months of 2026, adjusted operating income was 746 million versus $552 million a year ago. In both periods, the increases were driven by improved underwriting profits and higher net investment income. Total operating income, which includes net investment gains within our insurance operations for the first half of this year, was $1.2 billion, putting us on pace to achieve double-digit return on equity for the full year. Looking now at the ongoing divisions within our insurance operations. Within our international division, gross written premiums were $890 million, up 31% versus the second quarter of 2025, with growth across the division, led by marine and energy, general liability, and professional liability lines. The combined ratio was 82% compared to 78% a year ago, with the current quarter including six points of losses from the Middle East conflict. For our U.S. wholesale and specialty division, Gross written premiums were $799 million, down 4% versus the second quarter of 2025, driven by intentional contraction in binding contractors and casualty lines and a softening property rate environment, partially offset by growth in professional liability lines. The combined ratio improved to 97% from 102% a year ago, reflecting lower loss and expense ratios from our continued underwriting actions. Within our Programs and Solutions Division, underwriting gross written premiums were $717 million, down 27% from the second quarter of 2025. This reduction was driven by the shift of our Hagerty program to a pure fronting model. Excluding that impact, gross written premiums grew by 6%, led by our delegated programs and personal lines businesses. The combined ratio was 94%, up from 91% a year ago, with the increase reflecting a higher current accident-year loss ratio in our personal umbrella line and within certain delegated programs. Turning now to our consolidated investment portfolio. Net investment income totaled $256 million for the quarter, up 11% from the second quarter of 2025, reflecting a higher average book yield and an increase in the average balances within our fixed maturity portfolio. For the first six months of 2026, net investment income was $512 million, up 10% from a year ago. The fair value of our public equity holdings increased to $13.5 billion at quarter end, up from $12.3 billion at the end of the first quarter, which represents a 10% increase. For the first six months, the portfolio increased by 4%. Our cumulative pre-tax unrealized gain on our equity holdings at the end of the period was $9.3 billion. Moving now to our industrial segment. Revenue was $1 billion for the quarter, a 2% increase versus the second quarter of 2025, driven by the contribution from a bolt-on acquisition in December of 2025. Organic revenue was flat, as higher sales volume of our pre-tax concrete products and fire safety services were offset by lower sales volume on our car hauling equipment due to a continued down cycle in demand for that industry. For the first six months of 2026, revenue was $1.9 billion, up 4% from a year ago, with organic revenue growth of 2%. Adjusted operating income was $75 million for the quarter versus $105 million in the second quarter of 2025, primarily reflecting tighter margins along with softer demand within our car hauling equipment business. For the first six months of 2026, adjusted operating income was $125 million versus $162 million in the prior year. Moving to our financial segment, revenue was $171 million for the quarter versus $173 million in the second quarter of 2025. For the first six months of 2026, Revenue was $333 million versus $351 million a year ago with the six-month period last year including non-recurring gains of $41 million from our investment in Velocity and the sale of its MGA operations. The financial segment recorded an adjusted operating loss of $149 million for the quarter versus income of $78 million a year ago. For the first six months of 2026, The segment recorded an adjusted operating loss of $113 million versus income of $158 million a year ago. Both periods were impacted by the $205 million bad debt charge within our State National Programs Unit in the second quarter of this year. Moving now to the consumer and other segments. Revenue was $552 million for the quarter. Thank you for joining us. Thank you for joining us. We direct capital to wherever we see the best long-term return. Some notes from this quarter. Within public equities, Net purchases were nominal, totaling $21 million. Acquisitions totaled $24 million of small downstream deals within our existing companies. We also paid $74 million to increase our ownership stake in our existing businesses. Regarding share repurchases, we repurchased $237 million in shares during the quarter and $371 million year-to-date. Reducing our share count at the end of the second quarter to 12.4 million shares. With that, I will turn the call over to Simon.