Markel’s third-quarter earnings fall on investments, but insurance ‘strongly profitable’

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Following a third quarter of higher earned premiums compared to the same period in 2021, Markel Corp. leaders reflect on recent earnings and how current events shape their approach to the future I checked.

“You can compare Markel to a pizza,” co-CEO Tom Gayner said during the organization’s third-quarter conference call. “The overall pizza size is getting bigger and we’re taking fewer slices. It seems like each slice is getting more value.”

Markel posted third-quarter net income attributable to common stockholders of approximately $65.4 million, down 65% from the year-ago quarter. Earned premiums were up 20% in the third quarter, but Markel posted a net investment loss of $281.5 million during the quarter.

Gayner said Markel’s insurance business was “strongly profitable and growing at the same time.” The company also reported that reserves performed well in the face of external factors such as Hurricane Ian and rising inflation. The reinsurance business also posted solid profitability in the face of these challenging factors.

Markel said third-quarter underwriting results included a $70 million net loss from Hurricane Ian and a loss adjustment charge. Ian contributed his four points to his combined ratio of 93 in the third quarter. This is the same result as Q3 2021.

Richie Witt, co-CEO, said strong quarterly operating results in the insurance business benefited from lower underwriting volatility, including adjustments to the company’s property and casualty underwriting strategy and appetite over the past several years. said he received it.

“Over the past few years, the impact of the catastrophe has been [Ian’s] A smaller size would have had a more negative impact on underwriting results,” Witt said. “Top-line growth continues to be strong across our product lines, with our underwriting business delivering 19% growth in both the quarter and year-to-date.”

In the reinsurance segment, gross premiums written and premiums earned within the segment increased 5% in the first nine months of the year. Premium growth was driven by higher General Liability and Professional Liability premiums due to both new business and renewal growth. This was due in part to the impact of favorable premium adjustments on the Company’s general liability and credit guarantee policies as well as more favorable rates.

“This growth was partially offset by lower premiums on property and workers’ compensation lines due to non-renewal,” Witt explained. “Our property lines will continue to execute as part of our catastrophe strategy by transitioning our reinsurance property lines to Nephila., And the decision to stop offering the retro property business in our underwriting business. ”

This transition of reinsurance property lines and termination of retroactive reinsurance lines reduced volatility and significantly benefited Markel Reinsurance segment underwriting results.

Mr. Witt noted that interest rates are gradually easing on most routes. Exceptions continue to be cat-exposed properties such as aviation, terrorism, war, and political violence, and have been affected by the Ukrainian War and other large-scale events, including Hurricane His Ian.

“Despite concerns related to uncertain financial markets and a potential economic slowdown, we continue to see strong submissions, new business opportunities and gross premium writing,” Witt said. “Inflation in all its forms remains a key focus for us and the industry.”

Inflation costs were factored into pricing and loss reserves for 2022. A more cautious approach was taken in the third quarter, impacting both prior accident year reserve releases and current accident year loss picks, Markel said.

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