tag:blogger.com,1999:blog-5389144729834496735.post4125149168523118064..comments2024-03-17T05:15:55.634-04:00Comments on The Brooklyn Investor: Markel - Alterra MergerUnknownnoreply@blogger.comBlogger19125tag:blogger.com,1999:blog-5389144729834496735.post-59104875015031929642013-07-15T13:35:28.489-04:002013-07-15T13:35:28.489-04:00Hi,
I deleted that post. Please let me know if ...Hi, <br /><br />I deleted that post. Please let me know if it pops up again somewhere... I try to delete spam but don't get them all. <br /><br />Sorry for the inconvenience. kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-38493560612357828472013-07-15T12:54:55.308-04:002013-07-15T12:54:55.308-04:00Hi, I can not seem to work out who runs this blog,...Hi, I can not seem to work out who runs this blog, however someone has deiced to write about my company from jononphp6 which they linked to my website. If the owner could remove this asap that would be very much appreciated.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-21822976336586802012013-04-24T18:05:16.746-04:002013-04-24T18:05:16.746-04:00I love the blog by the ways its one of the best I&...I love the blog by the ways its one of the best I've ever read.hp androidhttp://www.handphoneandroid.orgnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-81655515923478449642013-01-24T15:18:32.925-05:002013-01-24T15:18:32.925-05:00Is anyone surprised that ALTE is now above 30 doll...Is anyone surprised that ALTE is now above 30 dollars a share as of 1/24/2013?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-75437721200370624382013-01-23T20:36:52.254-05:002013-01-23T20:36:52.254-05:00Its amazing how well tobbaco stocks have performed...Its amazing how well tobbaco stocks have performed over the years considering all the lawsuits thrown at them. This is a unbelievable success story in many ways.QUALITY STOCKS UNDER 5 DOLLARShttp://www.zipleaf.us/Companies/The-Manhattan-Calumet-Value-Stock-Hotlinenoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-79311205390055880362012-12-29T05:14:47.426-05:002012-12-29T05:14:47.426-05:00Make sure to keep in mind that the triangle on the...Make sure to keep in mind that the triangle on the balance sheet is presented in calendar year format, rather than accident year format! Because of that, you need to be careful when progressing past the first year in the triangle because it's cumulative. It includes all years prior to that year, as well, so it's not like you could just add up all of the redundancies and deficiencies or something.<br /><br />To get a better idea on how they've done in each year, you can convert the calendar year triangle in to an accident year triangle pretty simply, and that'll give you a better idea of how the company has done over time and trends in developments than the calendar year triangle will. :)))<br /><br />In regards to paid claims, you can get a rough estimate of the company's reserving pretty simply. Make sure to convert the triangle to accident year, and then check reserving with a simple chain ladder method. You can calculate the company's link ratios over time to get what the ultimate loss development factor is going to be. ^.^<br /><br />It's not like it'll be perfect or anything, but it's a cool way to check if reserving is even close to sensible! :D Here's a brief overview of how to do it yourself, if you want. Enjoy~~<br /><br />http://www.aicp.net/chapters/midwest/prop_casnotes0922804.pdfS.https://www.blogger.com/profile/03368937023116304198noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-41097820994465287612012-12-26T14:06:46.185-05:002012-12-26T14:06:46.185-05:00I get that, it could just be a bad year for the in...I get that, it could just be a bad year for the industry but just the level of remaining reserves seems extremely low given historical developments for those years ('03 and '04). I guess you have to trust that Markel has done their homework. I love the blog by the ways its one of the best I've ever read. hcvnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-1567832387977004102012-12-26T13:05:17.863-05:002012-12-26T13:05:17.863-05:00Hi,
I'm no expert on insurance companies, bu...Hi, <br /><br />I'm no expert on insurance companies, but I don't think the cumulative paid losses is an indication of under or overreservedness. For that, you can look at the other section, reserves re-estimated and see if their initial reserve estimates have proven to be conservative or not. Deficiency / redundancy tells you that. <br /><br />But you have to be careful with that too as oftentimes that may just reflect the insurance cycle; hard markets allow higher prices and higher reserves that may prove redundant over time. <br /><br />The best is to compare this deficiency/redundancy with similar insurance companies; that may give you an indication of how well the underwriting is and it might help filter out the cyclical factor. <br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-28551400906806791762012-12-26T01:28:32.005-05:002012-12-26T01:28:32.005-05:00Alterra's reserving seems low to me given rece...Alterra's reserving seems low to me given recent paid loss developments.<br /><br />Alterra has had pretty aggressive growth. <br /><br />The CEO had this to say in the 2011 Q4 conference call:<br /><br />"We've been a pretty steady releaser of reserves for 6 years in a row and we don't see that changing anytime soon."<br /><br />I just had a quick look but: <br /><br />Taking the 2003 line of business, paid losses have jumped by $63m last year and $210m the year before yet there is just $42m in reserves left.<br /><br />Taking the 2004 line of business, paid losses have jumped by $101m last year and $287m the year before yet there is just $69m in reserves left.<br /><br />Am I misreading the P&C triangle?<br />hcvnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-33835614961957985162012-12-23T15:04:10.203-05:002012-12-23T15:04:10.203-05:00Hi, I do like GLRE. They had a problem with under...Hi, I do like GLRE. They had a problem with underwriting and Einhorn's performance hasn't been amazing lately, but in general I like it. He is not running a multistrategy portfolio like Max Re; Einhorn is running pretty much the whole investment portfolio which I really like (I was never a fan of multistrategy structures). <br /><br />kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-85977821313298588782012-12-23T11:34:48.572-05:002012-12-23T11:34:48.572-05:00Any read throughs to GLRE here? I'm thinking i...Any read throughs to GLRE here? I'm thinking it has to be positive, thoughts? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-15346482858027043012012-12-22T21:29:04.990-05:002012-12-22T21:29:04.990-05:00I suppose you can use options here. I haven't...I suppose you can use options here. I haven't looked at anything, though. <br /><br />One thing that may be interesting is to see what happened to the implied volatility in the ALTE options. Vols should be much lower now than before since instead of an ALTE option representing 100% of an insurance company, it would represent 65% insurance company and 35% cash or some such; the volatility of ALTE's stock price would be driven by the portion that will be paid in MKL shares upon closing of the deal. $10/share cash would have zero volatility. <br /><br />So there might be a volatility arb there (ALTE options against MKL options, if they even exist; I haven't looked). If vol is unchanged in ALTE post deal, you short ALTE vola and go long MKL vola. <br /><br />There are different ways to do that. But I don't do those sorts of trades so... <br /><br />(actually, ALTE vols can stay high if there is a chance that this deal doesn't get done, so it's not as simple as I describe above...)kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-79971114176919573842012-12-22T21:25:16.171-05:002012-12-22T21:25:16.171-05:00Hi,
Interest rates have been going down pretty m...Hi, <br /><br />Interest rates have been going down pretty much steadily since the early 80s, so I don't think there is much data that would be helpful (in the old days, they didn't mark things to market like they do now). <br /><br />But yes, if interest rates start to rise, insurance companies will have losses on their portfolios. But since many of them have shortened duration due to lower rates (and lower opportunity cost for doing so as long rates come down), it shouldn't be that bad. <br /><br />The argument usually is that a rising rate environment will happen in a stronger economic recovery and in that case, a hardening insurance market and increasing volume would help offset the headwind of lower bond prices. kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-56498087954583410482012-12-22T20:59:56.470-05:002012-12-22T20:59:56.470-05:00Great post , what about using optionsGreat post , what about using optionsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-84754748035576995502012-12-21T21:55:47.911-05:002012-12-21T21:55:47.911-05:00KK,
> Also, rising rates will cause bond pric...KK,<br /><br />> Also, rising rates will cause bond prices to decline putting pressure on bond prices. Some feel that owning insurance companies is owning bubbled up bonds on leverage (well, it is). <br /><br />Does that mean, in general, BV of insurance/re-insurance companies tends to go down during time of high inflation? Also, do they have to mark to market longer term bonds held for maturity, and recognize the gains/losses? Tonynoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-10680888804706984962012-12-21T15:12:02.425-05:002012-12-21T15:12:02.425-05:00Great stuff.
kk, I had a question. If you get a c...Great stuff.<br /><br />kk, I had a question. If you get a chance, shoot me an email.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-60865807066494846532012-12-21T10:10:16.100-05:002012-12-21T10:10:16.100-05:00Thanks for the excellent analysis. I've gone ...Thanks for the excellent analysis. I've gone through a similar calculation regarding the ALTE/MKL arbitrage but only penciled in one dividend payment rather than two. That doesn't change the equation very much, however. I've purchased both MKL and ALTE in the days since the merger announcement. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-60143637158945869152012-12-21T08:31:35.159-05:002012-12-21T08:31:35.159-05:00Hi, I don't know anything specific to this dea...Hi, I don't know anything specific to this deal, but I imagine the $10 portion would count simply as a sale of the stock so you pay capital gains tax on it just as if you sold ALTE stock in an all cash deal, or for that matter if you sold it in the market. On the stock portion of the deal you owe no taxes (even though you would just transfer any gain you had on ALTE to the new MKL position). kkhttps://www.blogger.com/profile/06299974418283948333noreply@blogger.comtag:blogger.com,1999:blog-5389144729834496735.post-60487987401781083612012-12-21T07:29:52.196-05:002012-12-21T07:29:52.196-05:00Hi,
Do you have any information about the taxatio...Hi, <br />Do you have any information about the taxation of the $10 cash payment? There is some mention in the presentation that this will be a "taxable event" for Alterra shareholders. <br />Thanks<br />RichardAnonymousnoreply@blogger.com