Markel Returns to Q1 Net Income Profit on Investment Gains

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Markel Corp. reported first quarter 2023 net income of $537.8 million compared to a loss of about $48.8 million a year ago.

Net investment gains during the first three months were about $372.6 million compared to a loss of $358.4 million during the same time last year.

First quarter net income attributable to shareholders was $488.7 million compared to a loss of $51.7 million for Q1 2022.

“The first quarter of 2023 saw all three engines – insurance, investments and Markel Ventures – meaningfully contribute to our strong operating results,” said Thomas S. Gayner, chief executive officer.

The Q1 combined ratio for the insurance and reinsurance segments was 94, up 5.2 points from the year prior. Underwriting income fell 40% to about $119 million. Net written premiums increased 2% to about $2.22 billion.

Separating the insurance segment, Q1 underwriting profit decreased 49% to $96.5 million and net written premiums increased 6% to $1.7 billion. The combined ratio for insurance was 94.4, up 7.1 points from Q1 2022.

According to comments in Markel’s quarterly SEC filing, it continues to focus on rate adequacy, “particularly within certain classes within our casualty and professional liability product lines, and will not write business that does not meet our underwriting profit targets.”

Markel’s Q1 loss ratio in the insurance segment was impacted by attritional losses in professional liability and general liability product lines.

“We have been increasing our attritional loss ratios on these lines since the latter half of 2022 due to the impacts of recent claims trend, including impacts from economic and social inflation. We also increased our attritional loss ratios within our professional liability product lines in the first quarter of 2023 related to exposures arising from recent bank failures,” Markel said.

Markel reported less favorable reserve development in Q1 2023 compared to Q1 2022 – $62.6 million compared to $98.6 million. The insurer said it remains “cautious in our approach to reducing prior year loss reserves on our longer tail general liability and professional liability lines in the prevailing economic environment.”

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