Markel Corporation has reported an increase in comprehensive income for the third-quarter of 2020 to $520 million, while the company’s combined ratio deteriorated by three percentage points, year-on-year, to 97%.
Comprehensive income jumped by around 108% in Q3 2020 from the same period last year. However, for the first nine months of the year, Markel has announced comprehensive income of $259 million, which represents a significant decline from the $1.6 billion recorded for the same period in 2019.
Markel notes that comprehensive income for Q3 and 9M 2020 reflects the contribution of net income and loss, respectively, as well as increases in net unrealised gains on its fixed maturity portfolio.
In Q3 2020, Markel has revealed a net investment gain of $539 million, which marks a solid improvement from the $32 million investment gain posted for Q3 2019.
However, for the nine month period, Markel actually fell to an investment loss of around $230.9 million, which represents a steep dip from the investment gain of more than $1 billion announced for 9M 2019. The re/insurer attributes this decline to the significant volatility in equity markets due in part to uncertainty being caused by the ongoing COVID-19 pandemic.
Overall, the combined ratio weakened from 94% in Q3 2019 to 97% in Q3 2020, so remained in profitable territory despite the impacts of catastrophe events and the pandemic.
For Q3, the combined ratio included $48.9 million of underwriting losses related to COVID-19 and $101 million of underwriting losses from Hurricanes Laura, Sally, and Isaias, alongside the derecho in Iowa and wildfires in the western US.
The impact of the coronavirus and other catastrophe events during the nine month period were more significant, as Markel’s combined ratio for the period deteriorated from 95% in 2019 to an unprofitable 101% in 2020.
The combined ratio for 9M 2020 included $373.9 million of underwriting losses attributable to COVID-19, and $101 million of underwriting losses from the 2020 cats.
Thomas S. Gayner and Richard R. Whitt, Co-Chief Executive Officers (CEOs), commented on the results: “We delivered solid operating results for the quarter by maintaining our focus on managing and executing on factors within our control. Our insurance operations produced an underwriting profit, despite catastrophe losses and increases to reserves related to the COVID-19 pandemic, reflecting the strong underlying performance of our business. Our Markel Ventures operations delivered significant profit, demonstrating the valuable products and services we provide, and our investment portfolio also saw gains amid volatile market condition.
“We thank our employees, trading partners and customers, all of whom have performed remarkably well given the challenges and uncertainties of the pandemic.”
Within Markel Ventures, operating revenues increased to $824 million for Q3 2020 and to more than $2 billion for 9M 2020, compared with $496 million and $1.6 billion in 2019, respectively.
Earned premiums also increased for both periods year-on-year, reaching roughly $1.4 billion for Q3 2020 and $4.1 billion for the first nine months of the year.
