It’s not uncommon for one of the leaders of Markel Corp. to be greeted by an employee intent on giving him “what for” about something going on at the company as he exits his car in the morning.

Richie Whitt, the co-chief executive of the Richmond, Va.-based diversified insurance and non-insurance holding company, shared his regular employee parking lot encounters during a presentation at an insurance conference last Friday, explaining that he wouldn’t have it any other way.

“I think that’s fantastic. Our people thoroughly believe they have the right—and they do—to stand up when they think that something is not happening the way it should in [line with] ‘The Markel Style,'” he said.

Whitt explained that the right to speak up to executives and broad standards about the way things should be done are spelled out in a six-paragraph document titled “The Markel Style“—a blueprint of the firm’s culture.

“We are encouraged to look for a better way to do things…to challenge management,” reads one of roughly a dozen principles. Highlighting that stated goal, along with others that speak to everything from good humor to honesty and fairness, and from building shareholder value to maintaining spontaneity and flexibility, Whitt said that every strategic decision is measured against the style document.

“Culture is not what you do, it’s how you do it,” he said, noting that while some style statements, like “We believe in hard work and a zealous pursuit of excellence,” may sound like “motherhood and apple pie,” culture is the No. 1 competitive advantage of the $12.3 billion market cap company.

That culture remained intact even as Markel made its way into the Fortune 500 this year—at No. 476—more than 400 spots below 27th-ranked Wells Fargo, where a spectacular breakdown in culture has put the bank’s name in financial headlines.

Whitt offered some insight just a week after news broke that thousands of bank employees had created roughly two million fraudulent accounts for customers without their knowledge in order to meet internal sales targets—activities that have since led to regulatory fines and the dismissal of over 5,000 employees.

“People have questioned the culture,” Whitt noted at the KPMG Annual Insurance conference. “I think Wells Fargo has a very good corporate culture,” he said, noting that the learning he takes away from the bank’s issues relates to the problems of massive growth.

“What it points out to me is the difficulty in how hard you have to work to maintain a culture when you’re growing, particularly when you’re growing at a pace that Wells Fargo grew over the last 10 years.”

“These people, for whatever reason, did these things, and clearly they are against what their culture stands for. They’ve got to go back and do some work to clean that up,” Whitt said.

“It’s something we constantly worry about [at Markel]. We have grown very fast—nothing like a Wells Fargo, but we always think about how is this growth going to impact our ability to maintain that culture,” he said.

According to Whitt, “The Markel Style” statement is “a living, breathing document” that executives use each day as they make decisions. “As we make decisions around investments, around acquisitions, you name it, we’re asking ourselves how does this fit with our values. Is this aligned with the Markel Style?”

Among other things, the style document says: “We have the ability to make decisions or alter a course quickly. The Markel approach is one of spontaneity and flexibility. This requires a respect for authority but a disdain of bureaucracy.”

Referring to Wells Fargo, Whitt said, “I would be really disappointed if we had an issue similar to that because I think our people really do feel empowered to stand up if they feel like we’re not doing things in line with our culture.”

Markel’s Growth Story

Whitt made his remarks during the KPMG Annual Insurance conference where topics like “disruption,” “innovation,” “robotic process automation” and “autonomous vehicles” were high on the agenda. The one-time KPMG accountant said Markel executives are thinking about all these things too and are equally excited about technology and disruption that will change the industry for the better.

“Those fundamentals—the things that don’t change—will help you to tackle all these massive amounts of changes that are going on around us at an ever-increasing pace,” he said.

“Try not to panic,” he told the crowd, offering the homespun Warren Buffett-like wisdom that’s been common from leaders of a company that traces its roots back to a family business that started in 1930.

“There should be a sense of urgency around all these things that we’re dealing with today. But let’s not take our eye off the ball of some of the things that have gotten us to this point.”

Tracing the history of Markel to its current position, Whitt reviewed a series of striking growth numbers that culminated in a global company that today has 10,600 employees (3,600 in insurance companies; 7,000 in non-insurance companies) working in 62 offices in 20 countries—ranging from a more than 1,000-person office in Richmond, Va., to one- and two-person shops elsewhere.

Using the 1986 date of an initial public offering as a starting point, Whitt revealed that:

• Net income to shareholders has soared from $5 million in 1986 to $583 million in 2015.
• Book value, just $16 million back in 1986, has grown at a compound annual rate of 19 percent to $7.8 billion.
• Investments of $30 million in 1986 totaled $18 billion last year.
• The stock price of $8.33 when Markel went public in 1986 was $833.35 at Dec. 31, 2015.

Together, the global insurance operations write more than $4 billion in premium, with reinsurance adding another $800 million. The 2013 acquisition of Bermuda-based Alterra, now called Markel Global Reinsurance, was also part of the growth story, as was the acquisition last year of insurance-linked securities specialist CATCo, which manages some $3.6 billion of assets.

Referring to the ILS market as a “a big area of innovation in the insurance industry,” Whitt told conference attendees, “We wanted to have a platform in that part of the market.”

Markel Ventures, which was added to the Markel story in 2005, adds another $1 billion in revenues, Whitt reported.

“Our primary businesses are insurance and reinsurance. That’s where we’ve grown up over the last eight decades.” But Markel Ventures, the investment arm through which Market makes permanent investments in businesses outside of the specialty insurance marketplace, has given the company a great deal of diversification, Whitt said.

“You probably know of another company that has that sort of formula,” Whitt said. “In a small way, we are trying to emulate what Berkshire Hathaway has done over many decades.”

Entrepreneurs and Disrupters

Markel traces its roots back to 1930, when Sam Markel turned an idea linked to the latest technological innovation of the time—the growing use of cars in the United States—into an insurance sales opportunity. After World War I, soldiers returning home bought cars, and to pay for them they turned them into cabs, referred to as Jitney buses, charging nickel fares for rides. (Jitney was slang for a nickel back then.)

“Sam Markel was an entrepreneur. He was a disrupter, as you would say today,” said Whitt, noting that the company’s founder, then a member of the city council of Norfolk, Va., saw a business prospect.

“He went to the city council and talked to them about requiring insurance for these guys. He got that set up and then decided, I’ll sell these guys insurance,” Whitt reported. “It was pretty brilliant.”

Markel subsequently grew from a wholesaler and managing general agent in the transportation insurance segment—a niche that was the focus for the first five decades of Markel’s existence—into a specialty insurance operation (Essex Insurance launched in 1980) and finally into an international operation (with the acquisition of Terra Nova in 2000). While taking the company public in 1986 supported much of the subsequent change and growth, Whitt said the family roots remain important.

“We want to be this interesting combination of a family and public company,” he said, noting that he and co-CEO Tom Gayner and other members of the management team are actually the first group of leaders that does not include a member of the Markel family. (Editor’s Note: Alan Kirschner, who is chairman of the board, is a Markel by marriage.)

“We’re at a really unique time in our history where we want to maintain our culture,…but for the first time since it began, there won’t be a Markel family member at the head of the organization today like there has been for the past 80-plus years.”

What’s next for Markel?

Whitt answered the question with regular references to the style. “We will keep our way—our culture, the principles that have helped us get here,” he said. “We think they still work in this fast-changing world. We will use them to help us adapt,” he said.

“We will innovate,” he added. “You’ve got to innovate, or you die. Maybe you have to innovate more quickly now, but it’s always been the case,” he said.

In fact, he noted a special urgency in the property/casualty insurance industry. “We’ve got anywhere from a 20 to a 50 expense ratio on some of our lines of business. Talk about something that’s ripe for disruption and innovation…Somebody seeing a product where 50 cents of each dollar doesn’t go to helping the client—it’s chewed up in expenses and moving the business around. That’s unacceptable, and somebody is going to figure out how to attack that,” he said, adding that this particular type of disruption is happening already.

Referencing excerpts from The Markel Style as he spoke, Whitt referred often to the need for finding balance in the family-turned-public company as he highlighted lessons from an 86-year journey.

“We try to keep it fairly informal at Markel,” he said, referring to the “disdain for bureaucracy” proclaimed in the style statement. But “we have to be careful not to fall into anarchy…Bureaucracy on its face is not a bad word. As you get larger, you have to have a certain amount of bureaucracy to keep the trains running.”

“But it’s all about balance…We have tried to balance having the right amount of bureaucracy and no more in our organization,” he said.

Similarly, Whitt highlighted another balance imperative as he discussed the final sentence of The Markel Style document: “There is excitement at Markel that comes from innovating, creating, striving for a better way, sharing success with others…winning.”

Whitt said: “We don’t view winning as ‘I win, that means someone else has to lose.’ It’s not binary,” he said. Markel leaders think about winning for five sets of stakeholders: shareholders, customers, partners (vendors and producers), employees and communities. “The art comes in how you balance the needs of those stakeholders,” he said, again providing some insight into the Wells Fargo situation.

“You could argue that Wells Fargo got out of balance and was favoring the shareholders a little bit over their customers. They’re going to have to rebalance. They’re going to have to regain and re-establish the balance between their constituencies.”

Making reference to broad conference themes about disruptive technology, Whitt called for balance once again.

“We very much believe in relationships—that people do business with people they like and trust…Technology is critical, [but] I hope I don’t live to see the day when technology replaces relationships. In a perfect world, the technology is there to enhance and enable the relationship. God forbid it replaces the relationship,” he said, offering a go-forward challenge for Markel and other insurers.