Scott Heleniak: Okay. Great. And then just lastly can you share what the new money yield is? I know you mentioned you have higher yields now in money market and some of the fixed income. Can you just talk about what give the spread on what the new money is versus existing, and any kind of major shifts that are going on in the investment portfolio at all?
Tom Gayner: Yeah, this is Tom. The new money yields are basically what you can see on your Bloomberg or Yahoo! Finance if you want to go the bargain route. And we are buying treasuries and government securities and the high-high credit quality. So there’s really nothing new that happens for us that you don’t see on a day-by-day basis. I don’t have the numbers with me on what the rolling off on the quarter. But we do have a continuing increment of investment income coming on the books as the time goes by.
Scott Heleniak: Okay. But nothing really new happening on the fixed income side in terms of just good positioning repositioning it all there that’s pretty steady state?
Tom Gayner: I can assure you that I’ve been in Markel 34 years now and we really don’t do anything differently on the fixed income side ever.
Scott Heleniak: Thanks.
Tom Gayner: Thank you.
Operator: Your next question comes from Robert Farnam with Janney. Your line is open.
Robert Farnam: Hi, good morning. Unfortunately again another question for Jeremy on the insurance operations. Looking at that international professional liability favorable development, I’m just trying to get a feel for — it’s probably several questions. One did you do a review of that at year-end? And if so, kind of, what changed in the first quarter? But I’d also like to know if there’s much differentiation between the International book versus the U.S. book? I’m trying to talk — are the tales similar? Are there loss trends similar? Or is the litigation environment similar? Just trying to get a feel for what that book looks like relative to the U.S.?
Tom Gayner: Jeremy if you’d be so kind to respond?
Jeremy Noble: Yes of course. So, nothing out of usual a little ordinary with regards to our loss reserves in the first quarter. I mean we do a comprehensive loss reserve across our product portfolios in each of our businesses each quarter. We’re always looking at actual experience versus expected and seeing whether or not we should make any modifications. As we’ve sort of said over the years very consistently, we react to bad news very quickly and we take a very measured approach to the good news. What you’re seeing in those Professional Lines in the International is more of that latter bucket where we’ve sat cautious and trying to understand whether or not some of the inflation trends that we would have witnessed within the U.S. on Professional Lines might come through in the International portfolio and we’ve gotten more confident over time as actual experience has been better than what we anticipated or expected in our actuarial models.
And when that’s the case, we release reserves. So — and that was — it’s not that all of the favorable prior year takedowns by any stretch was just that line. That’s just example in a more meaningful year-over-year contributor. As far as the book differential, I spoke a little bit about this earlier, the biggest difference is our international portfolio is just that. It’s risks that are outside the U.S. And as far as are there different risk profiles between U.S. risks and International risk, I would leave it to you to draw your conclusions about legal environment, social inflation trends, litigation, financing, and what you would see in the rest of the world versus what we would experience in the U.S. Our view is that that looks a little bit different.
And economic inflation I think trends are a little bit different as well. The profile of the client, the insured, the products themselves, there’s also some differences there as well between what we do in the U.S. and there. But also it’s the case that EBITDA in the U.S. and Internationally, we have very broad product capabilities, coverage capabilities, and customer capabilities, ranging from small businesses all the way to very large Global 1000 risk managed accounts that we would do in U.S. and Bermuda. So — but there’s definitely sort of differences. Our international would weigh towards smaller and just that international non-U.S. risk.
Robert Farnam: Great. Thanks for all the color. That’s it.
Jeremy Noble: Of course
Operator: Your next question is a follow-up from Charlie Lederer with Citi. Your line is open.
Charlie Lederer: Hey thanks. So, Tom mentioned in the shareholder letter a couple of months ago about the improving earnings trajectory at Nephila as it gets above its high watermark Wondering if you can update us on the outlook there post 1Q? It doesn’t look like we saw the uplift in 1Q, should we think about that coming soon? Or are revenue accelerating there, any color?
Tom Gayner: Yes, I’m going to take the first pass at that and I would like Jeremy and Brian to chime in. Given the nature of Nephila’s business, generally speaking they’re going to do their work through the course of the year, and we’re not going to put up a lot of accruals for until after the year is closed, and you see what their share of profits are. So it will tend to be reported with a year lag because you got to get into the first quarter of the subsequent year till you recognize what happened in the year before. So during the first, second and third — excuse me, second third, fourth quarters of the year, you’re still just showing sort of what happened last year. Not so much what’s happening this year.
Jeremy Noble: Yeah, Tom, it’s Jeremy. I’ll just — I’ll add to that, Charlie, a couple of things. One, there is — probably most importantly, within our disclosures, I would just caution you or make the observation that the insurance-linked securities line alone doesn’t include all of the economics and contributions from Nephila because within the program services and other fronting line, where you can see there’s more revenues as well as a higher margin there. A portion of that is associated with the Nephila’s operations as well. That’s part of the overall earnings profile of that business. So in fact, the overall results would be better than just what you would see in the ILS line and would be profitable overall. The other thing that’s really important is there is certainly sort of seasonality.
