Jeremy Noble, President of Insurance Operations at Markel, has said that his company will look to “opportunistically” take advantage of favourable conditions in the reinsurance space this year, but will not be pursuing “growth for the sake of growth.”
Noble’s comments came as part of a Q4 earnings call this week, during which executives discussed Markel’s performance last year and outlined their plans for reinsurance business over the coming year.
Markel reported a comprehensive loss of $1.31 billion for 2022 as unrealized losses in the company’s investment portfolio continued to weigh heavily on results.
However, underwriting profit remained stable for the year at $626.6 million on a combined ratio of 92%, including a return to profitability for the reinsurance segment, which reported underwriting profit of $83.9 million.
“Our reinsurance team has done a fantastic job of re-underwriting our book and reducing volatility over the last few years,” Noble said during the earnings call, noting a particular emphasis on long-term profitability within core casualty, professional, and specialty product lines.
“We’re starting to see more of a better priced business earn through the results,” he added “Gross written premiums within the reinsurance segment were only down 1% for the year, demonstrating our ability to remix the portfolio away from property, which we serve through Nephila, and growing our preferred lines.”
Markel discontinued writing property retrocessional reinsurance in 2022 and property reinsurance in 2021, which resulted in a $123.3 million reduction in gross premium volume in 2022 compared to 2021.
“Ultimately, we’re not focused on growth for the sake of growth within our reinsurance operation, but rather our energy is aimed at being a profitable, durable reinsurer that is relevant to the clients we support,” Noble explained.
On Markel’s outwards reinsurance, executives said that the January renewals had been challenging but within expectations, meaning there were no surprises and no delays to placements or gaps in programs.
“We’re well positioned to pass costs along and don’t anticipate any meaningful changes to our margins or underlying underwriting strategies,” Noble said. “In summary, I feel good about how we are positioned heading into 2023.”
And looking ahead, management maintained that Markel had the “ability to grow” and “the capital to deploy” depending on terms and conditions and the extent of price firming in casualty, professional and specialty lines.
“We will see improvements with regards to coverage, attachment and pricing in our portfolios moving through this year,” Noble concluded. “We will opportunistically take advantage where it makes sense in that space.”