The core values here are something we talk about, but I actually don’t think of them as core values as much as I think of them as actionable principles because this is what we do. And, you know, a lot of great companies that come to these conference and a lot of great companies that I look up to, and this is certainly one of them, and it’s the reason why am here, frankly.
We do focus on the first one, where underwriting profit comes first. There are no arbitrage deals, there are no cash flow underwriting deals; we write for underwriting profit. If we can’t get what we think is an acceptable profit margin, we pass. Simple and straightforward; it’s not magic. But it requires discipline and a strong tone at the top, and it’s consistently delivered across the organization. It’s worked for 39 years and counting; we’re proud of that.
Certainly, some of these others here are also important. We do specialize in complex risks. We have seasoned, very experienced, and very technical underwriting teams; very technical and accomplished claims teams, as well, which is really just as important, probably, and often ignored in some of these messaging and presentations. You don’t talk about claims too often. But this is a claims-paying business, it’s a risk-sharing business.
And, ultimately, you need people that know how to settle claims and also service the customer.
I have to tell you, at the risk of sounding like a [Homer] here, my favorite point here is the one that really drew me here, and that is we actually conduct our business with integrity, professional, and pride. And it sounds like — again, it’s just like storyboarding. But, at the end of it, you have to like what you do, you have to like the people you work with, and I am actually pretty blessed to be in a place that is a really solid financial background, is disciplined.
We have a Board of Directors that is very, very experienced and deep in expertise across the industry and, frankly, don’t put pressure on management for quarterly earnings targets. We don’t manage the Company that way. We manage the Company to build value. Simple and straightforward.
And it’s something that — I’m probably going to have to start paying the family of Ben Graham or at least Warren Buffett. But I always use some of the Ben Graham lines that Warren Buffett takes credit for, and my favorite line — I always tell Stan this and he laughs, but in the short term, stock market is a voting machine, but in the long term, it’s a weighing machine. And we are confident, as we continue on on the next 39-year journey of this Company, that we’re going to weigh a lot more than we do today.
Ciro DeFalco – The Navigators Group, Inc. (NAVG)- SVP and CFO at KBW Insurance Conference, SEPTEMBER 25, 2013