Markel Corporation earned premiums grew 17% in the second quarter of 2022, yet high investment losses have hurt the company’s performance.
The re/insurer earned premiums grew to $1.83bn compared to the $1.56bn reported in Q2 2021; according to the re/insurer, this improvement reflects continued growth in gross premium volume from new business, more favourable rates and expanded product offerings.
For this year’s second quarter, Markel reported net investment losses of $1.55bn, compared to the $674.75mn in income reported in Q2 2021.
Net investment losses in 2022 reflected a substantial decrease in the fair value of our equity portfolio resulting from significant declines in the public equity markets, said the re/insurer.
As a result of the steep investment loss, Markel reported a $1.28bn comprehensive loss to shareholders in Q2 2022, compared to the $849.65mn in income reported in the same period last year.
For the first six months of 2022, Markel has reported a loss of $1.8bn, compared with a gain of $1.2bn in H1 2021. This reflects investment losses for H1 2022 of more than $1.9bn, against a gain of $1.2bn in H1 2021.
Driven by the impact of less favourable development on prior accident years loss reserves, the company’s combined ratio for Q2 022 was 91%, compared to the 87% reported in the same period last year.
Markel noted that the combined ratio for the six months ended June 30, 2022 – which was 90% – included $35.0mn of net losses and loss adjustment expenses, as well as $12.3mn of additional reinsurance costs, attributed to the Russia-Ukraine conflict.
In the same period last year, Markel also reported a combined ratio of 90% which included $67.9mn of net losses and loss adjustment expenses from Winter Storm Uri.
The re/insurer noted that Markel Ventures growth reflected contributions from acquisitions in the second half of 2021 and the impact of increased demand and higher prices across many of our businesses.
Thomas S. Gayner and Richard R. Whitt, Co-Chief Executive Officers, said: “Results for the first half of 2022 reflect the benefits of our diversified, three-engine architecture of insurance, investments, and Markel Ventures.
“Within our insurance engine, new business opportunities, an attractive pricing environment and solid portfolio construction contributed to strong top line growth and, when combined with continued expense management efforts, resulted in a 90% combined ratio for the first six months of 2022.
“Our Markel Ventures engine provided additional thrust with another record-setting quarter for both revenues and EBITDA.”
They added: “Within our investments engine, our results were impacted by the sharp decline in the equity markets, as well as rising interest rates in the bond market, during the first half of 2022. Given our focus on long-term performance and investing discipline, we are confident in the durability of our portfolio and understand that periodic volatility is to be expected.
“Looking forward to the remainder of 2022, we are well-positioned to execute on our business objectives and remain focused on building long-term shareholder value.”
