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Markel’s H1 income rises to $1.2bn as CR strengthens to 90%

4th August 2021 - Author: Luke Gallin

Markel Corporation has reported comprehensive income of approximately $849.7 million for the second quarter of 2021 and a lower combined ratio of 87%, which reflects a lower current accident year loss ratio.

MarkelYear-on-year, Markel’s Q2 2021 income did fall from the $1.1 billion announced in Q2 2020. Although, net income for the first six months of 2021 reached $1.2 billion, which is a huge improvement on the $260 million loss reported in H1 2020.

In Q2, earned premiums increased to $1.57 billion compared with $1.36 billion a year earlier, while H1 2021 earned premiums exceeded $3 billion, compared with $2.7 billion for the prior year period.

Markel attributes the growth in earned premiums in both periods to continued growth in gross premium volume from new business and more favourable rates.

On the asset side of the balance sheet, Markel has reported net investment gains of $674.7 million, compared with $911 million a year earlier. For H1 2021, Markel has reported net investment gains of $1.2 billion, compared with a loss of $770 million a year earlier.

Overall, the company has reported a combined ratio of 87% and 90% for the second quarter and first half of 2021, respectively. This compares with a combined ratio of 88% and 103% for the same periods in 2020, respectively.

The H1 2021 combined ratio of 90% included $67.9 million, or two points, of losses and loss adjustment expenses from Winter Storm Uri in the U.S. In comparison, the H1 2020 combined ratio included $325 million, or 12 points, of losses and loss adjustment expenses related to the COVID-19 pandemic.

Finally, operating revenues at Markel Ventures also improved year-on-year, reaching $1.075 billion in Q2 and $1.78 billion in H1 2021.

Thomas S. Gayner and Richard R. Whitt, Co-Chief Executive Officers (CEOs), commented: “Our results for the second quarter of 2021 reflect outstanding performance across our three engines. We continued to achieve double-digit premium growth in our underwriting operations through both organic growth in new business and more favorable rates, and we delivered an 87% combined ratio for the quarter demonstrating our strong underwriting discipline and expense management amidst this favorable rate environment.

“Markel Ventures revenues surpassed $1 billion for the quarter, which translated to an equally impressive contribution to our bottom line. Within our investment portfolio, significant gains on our equity portfolio demonstrate the quality of the portfolio as well as the value of our long-term focus, particularly in a volatile market.

“As we pass the halfway mark of 2021, we remain excited about our position in the markets we serve and look forward to building upon our first-half performance with the continued hard work and dedication of our employees and the support of our trading partners.”

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