AM Best Assigns Indicative Issue Credit Ratings to Markel Corporation’s New Shelf Registration

Rhea-AI Summary

AM Best assigned Long-Term Issue Credit Ratings of 'bbb+' for senior unsecured issues, 'bbb' for subordinated issues, and 'bbb-' for preferred stock to Markel's new shelf registration. The outlook for these ratings is stable, while previous ratings have been withdrawn. Financial leverage stood at 23.7% at the end of 2020, with earnings coverage declining to an average of 2.9 times due to natural catastrophes and pandemic-related losses. However, Markel's coverage ratio is expected to remain within guidance.

Positive

• Long-Term Issue Credit Ratings assigned indicate stable outlook.
• Financial leverage at 23.7% aligns with company targets.

Negative

• Earnings coverage ratio declined to 2.9 times in 2020.
• Net operating earnings significantly impacted by natural catastrophes and pandemic-related claims.

AM Best has assigned indicative Long-Term Issue Credit Ratings of “bbb+” to senior unsecured issues, “bbb” to subordinated issues and “bbb-” to preferred stock to the recently filed shelf registration of Markel Corporation (Markel) (Glen Allen, VA) [NYSE: MKL]. The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the ratings on the previous shelf registration. The existing ratings of Markel and its insurance subsidiaries are unchanged.

Financial leverage, as calculated by AM Best, was at 23.7% at year-end 2020, within Markel’s targets. Earnings before interest, preferred dividends and taxes interest coverage has been strong, averaging 3.9 times over the past three years, albeit declining to 2.9 times in 2020. AM Best expects Markel’s coverage ratio to remain within guidance. The company’s 2020 net operating earnings results were affected meaningfully by net claim losses associated with natural catastrophes and by pandemic-related event cancellation and business interruption and other claim losses sustained by its international and US insurance and reinsurance operations.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210331005589/en/

FAQ

What are the recent credit ratings assigned to Markel (MKL)?

AM Best assigned Long-Term Issue Credit Ratings of 'bbb+' for senior unsecured, 'bbb' for subordinated, and 'bbb-' for preferred stock to Markel.

What is the outlook for Markel's credit ratings?

The outlook for the assigned credit ratings is stable.

How did natural catastrophes affect Markel's earnings?

Natural catastrophes and pandemic-related event losses led to significant impacts on Markel's net operating earnings in 2020.

What was Markel's financial leverage at the end of 2020?

Markel's financial leverage was reported at 23.7% at year-end 2020.

What happened to Markel's previous shelf registration ratings?

The previous shelf registration ratings have been withdrawn by AM Best.