Maxwell Fritzsche

Maxwell Fritzsche of Truist Securities asked about the workers' compensation line's contribution to favorable development, any emerging signs of medical inflation pressure, and whether the Q2 current accident year loss ratio represents a good run rate for the second half of the year.

Answer

CFO Brian Costanzo confirmed gradual prior-year reserve takedowns in the workers' comp line, noting medical inflation is a key watch area. Markel Insurance CEO Simon Wilson added that the new organizational structure allows for closer monitoring of rates and inflation. CEO Tom Gayner emphasized that this closer monitoring enables quicker corrective actions. Costanzo also affirmed that the Q2 current accident year loss ratio is a good run rate for the remainder of the year, as the benefits of prior underwriting actions are now earning through.

Maxwell Fritzsche of Truist Securities asked about the durability of the high refinance activity in Canada and sought details on the competitive and loss environments within the home warranty segment.

Answer

CFO Matthew Wajner stated that the strong refinance business in Canada is expected to persist for the remainder of the year. CEO Mark Seaton addressed the home warranty segment, attributing the strong performance and lower loss ratio to favorable weather, fewer contracts in force, and the benefit of prior price increases outpacing current cost inflation. He noted that while claim frequency is down, some cost inflation is anticipated in the second half of the year.

Maxwell Fritzsche of Truist Securities asked about the durability of the strong refinance activity in Canada and sought details on the competitive and loss environment within the home warranty business, particularly the drivers of lower claim frequency.

Answer

CFO Matthew Wajner stated that the strong refinance business in Canada, a key driver of 'Information and other' revenue, is expected to continue for the remainder of the year. CEO Mark Seaton addressed the home warranty segment, attributing the lower claim frequency to favorable weather conditions and a decrease in total contracts in force. He also noted that the segment benefited from price increases implemented a year ago in anticipation of inflation, which has not yet fully materialized on the cost side but is expected to in the second half of the year.

Maxwell Fritzsche of Truist Securities asked about the durability of the strong refinance activity in Canada and requested details on the competitive and loss environments within the home warranty segment.

Answer

CFO Matthew Wajner stated that the strong refinance business in Canada, a primary driver of growth in the Information and Other segment, is expected to remain robust for the rest of the year. CEO Mark Seaton addressed the home warranty business, attributing its strong performance to a lower loss ratio of 41%. This was driven by favorable weather, fewer contracts in force leading to lower claim frequency, and the benefit of prior price increases. He noted that while inflation on claims has been delayed, it is expected to materialize in the second half of the year.