Markel reports 2022 second quarter and six-months results

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Markel Corporation (NYSE: MKL) reported its financial results for Q2 2022, showing a 17% increase in earned premiums compared to the same quarter last year, reaching $1.83 billion. However, net investment losses totaled $(1.55 billion), reflecting declines in equity markets. The comprehensive loss to shareholders was $(1.28 billion). The combined ratio for the quarter rose to 91%, influenced by higher loss reserves and reinsurance costs due to the Russia-Ukraine conflict. Over a five-year period, book value per share grew 7%.

Positive

• Earned premiums increased 17%, totaling $1.83 billion for Q2 2022.
• Markel Ventures' operating revenues rose due to acquisitions and increased demand.
• Combined ratio improved to 90% for the first six months of 2022.

Negative

• Net investment losses of $(1.55 billion) impacted overall results.
• Comprehensive loss to shareholders was $(1.28 billion) due to unrealized losses.

RICHMOND, Va., Aug. 2, 2022 /PRNewswire/ -- Markel Corporation (NYSE:MKL) today reported its financial results for the second quarter of 2022. The Company also announced today it has filed its Form 10-Q for the quarter ended June 30, 2022 with the Securities and Exchange Commission.

The following tables present summary financial data for the quarters and six months ended June 30, 2022 and 2021.

	Quarter Ended June 30,				Six Months Ended June 30,
(dollars in thousands, except per share amounts)	2022		2021		2022		2021
Earned premiums	$      1,833,104		$         1,568,037		$      3,592,874		$         3,065,732
Markel Ventures operating revenues	$      1,361,398		$         1,075,506		$      2,311,790		$         1,782,108
Net investment gains (losses)	$     (1,554,643)		$            674,753		$     (1,913,042)		$         1,201,624
Comprehensive income (loss) to shareholders	$     (1,281,449)		$            849,654		$     (1,810,476)		$         1,208,651
Diluted net income (loss) per common share	$            (69.19)		$                57.02		$            (75.68)		$                99.03
Combined ratio	91 %		87 %		90 %		90 %
(in thousands, except per share amounts)	June 30, 2022		December 31, 2021
Book value per common share	$           898.53		$           1,036.20
Common shares outstanding	13,538		13,632

Highlights of results from the quarter and six months include:

• Earned premiums grew 17% for both the quarter and six months ended June 30, 2022, reflecting continued growth in gross premium volume from new business, more favorable rates and expanded product offerings.
• The higher combined ratio for the quarter ended June 30, 2022 compared to the same period of 2021 was driven by the impact of less favorable development on prior accident years loss reserves.
• The combined ratio for the six months ended June 30, 2022 included $35.0 million, or one point, of net losses and loss adjustment expenses, as well as $12.3 million of additional reinsurance costs, attributed to the Russia-Ukraine conflict. The combined ratio for the six months ended June 30, 2021 included $67.9 million, or two points, of net losses and loss adjustment expenses from Winter Storm Uri.
• 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.
• Growth in operating revenues from our Markel Ventures operations reflected contributions from our acquisitions in the second half of 2021 and the impact of increased demand and higher prices across many of our businesses.
• Comprehensive loss to shareholders in 2022, for both the quarter and six months, was a result of unrealized losses on our fixed maturity and equity portfolios.

"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," said Thomas S. Gayner and Richard R. Whitt, Co-Chief Executive Officers. "Our Markel Ventures engine provided additional thrust with another record-setting quarter for both revenues and EBITDA."

"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," Gayner and Whitt remarked. "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."

We believe our financial performance is most meaningfully measured over longer periods of time, which tends to mitigate the effects of short-term volatility and also aligns with the longer-term perspective we apply to operating our businesses. We generally use five-year periods to measure our performance. Over the five-year period ended June 30, 2022, the compound annual growth in book value per common share was 7%. Over the five-year period ended June 30, 2022, our share price increased at a compound annual rate of 6%.

A copy of our Form 10-Q is available on our website at www.markel.com or on the SEC website at www.sec.gov. Readers are urged to review the Form 10-Q for a more complete discussion of our financial performance. Our quarterly conference call, which will involve discussion of our financial results and business developments and may include forward-looking information, will be held Wednesday, August 3, 2022, beginning at 9:30 a.m. (Eastern Time). Investors, analysts and the general public may listen to the call free over the Internet through our website at www.markel.com in the "For investors" section. Any person needing additional information can contact Markel's Investor Relations Department at IR@markel.com. A replay of the call also will be available on our website from approximately one hour after the conclusion of the call until Monday, August 15, 2022.

About Markel Corporation
Markel Corporation is a diverse financial holding company serving a variety of niche markets. The Company's principal business markets and underwrites specialty insurance products. In each of the Company's businesses, it seeks to provide quality products and excellent customer service so that it can be a market leader. The financial goals of the Company are to earn consistent underwriting and operating profits and superior investment returns to build shareholder value. Visit Markel Corporation on the web at www.markel.com.

 

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SOURCE Markel Corporation

FAQ

What were Markel Corporation's Q2 2022 financial results?

Markel reported a 17% increase in earned premiums, net investment losses of $(1.55 billion), and a comprehensive loss of $(1.28 billion) for Q2 2022.

How does Markel's combined ratio for Q2 2022 compare to last year?

The combined ratio for Q2 2022 was 91%, up from 87% in the same period last year.

What factors contributed to Markel's net investment losses in 2022?

Net investment losses were driven by significant declines in equity markets and rising interest rates.

What growth did Markel Ventures experience in the second quarter of 2022?

Markel Ventures saw operating revenue growth due to acquisitions and increased market demand.