Markel Corporation has reported an improvement in its combined ratio to 89% for the first quarter of 2022, as earned premiums increased to almost $1.8 billion in the period.
The re/insurer’s combined ratio strengthened by five percentage points from the 94% reported in Q1 2021, driven by a lower current accident year loss ratio and lower catastrophe and attritional losses in Q1 2022 when compared with the prior year.
This year, the combined ratio included $35 million of net losses and loss adjustment expenses, and $12.3 million of additional reinsurance costs attributed to the war in Ukraine. In Q1 2020, the combined ratio included $64.3 million of net losses and loss adjustment expenses related to Winter Storm Uri.
The 17% year-on-year rise in earned premiums reflects continued growth in gross premium volume from new business and more favourable rates, says Markel.
The Markel Ventures unit also performed well in the quarter, recording operating revenues of $950.4 million in Q1 2022, compared with $706.6 million in Q1 2021.
But while underwriting improved and earned premiums rose, Markel has reported net investment losses of more than $358 million in Q1 2022, compared with a gain of over $526 million in Q1 2021. Markel attributes the investment losses to a decrease in the fair value of its equity portfolio driven by unfavourable market value movements.
As a result of unrealised losses on its fixed maturity and equity portfolios, Markel has announced a comprehensive loss to shareholders of just over $529 million in Q1 2022, compared with income of $359 million a year earlier.
Thomas S. Gayner and Richard R. Whitt, Co-Chief Executive Officers, commented: “Our first quarter results reflect continued progress against our underwriting initiatives as we grew our premium base through a combination of rate increases and new business opportunities and delivered an 89% combined ratio. These results further demonstrate the effects of our ongoing focus on underwriting and expense discipline.
“Our Markel Ventures businesses grew revenues by an impressive 35% through a combination of strong organic growth and contributions from our 2021 acquisitions. Our investing results reflected the impact of rising interest rates on our fixed maturity portfolio and unfavorable market value movements on our equity portfolio during the quarter. We maintain our focus on the long-term performance of our investment portfolio, which has been quite strong.
“We are excited about our start to the year and look forward to taking advantage of opportunities across our businesses throughout 2022.”
