Hurricane and wildfire claims drive Markel to $107.5m loss
Markel Group suffered a $107.5 million loss in the third quarter as Hurricane Idalia and the Hawaiian wildfires and net investment losses cut into growth in earned premiums, the company said.
Markel reported earned premiums of $2.12 billion, up eight per cent from $1.96 billion in the third quarter of 2022 while Markel Ventures saw operating revenues rise to $1.246 billion from $1,216 billion in 2022.
Net investment income rose to $192.2 million from $112.6 million in 2022, but this was offset by net investment losses on a fair value basis of $265.92 million compared to a loss of $281.48 million in 2022.
Markel’s combined ratio for the period was 99%, up from 93% in the third quarter of 2022.
“Underwriting results for the quarter and nine months ended September 30, 2023 included $46.2 million of net losses and loss adjustment expenses attributed to the Hawaiian wildfires and Hurricane Idalia, or two points and one point, respectively, on the quarter-to-date and year-to-date consolidated combined ratio,” the company said.
“Underwriting results for the quarter and nine months ended September 30, 2022 included $70 million of net losses and loss adjustment expenses attributed to Hurricane Ian, or four points and one point, respectively, on the quarter-to-date and year-to-date consolidated combined ratio.”
The company added: “The higher combined ratio for the quarter and nine months ended September 30, 2023 was primarily due to a higher attritional loss ratio and less favourable development on prior accident years loss reserves in 2023 compared to 2022, partially offset by lower catastrophe losses.”
Tom Gayner, chief executive officer, said: “Markel Ventures delivered exceptional margins and cash flows this quarter and our net investment income was up significantly.
"Additionally, our insurance engine generated strong cash flows for our investments engine while remaining intensely focused on navigating current insurance market dynamics and shaping our portfolio for long-term value creation.
“This quarter stands as yet another example that we can go a lot further and faster on our road to build one of the world's great companies with three engines instead of just one.”
For the nine months ended September 30, 2023, the company had net income of $1.1 billion compared to a loss of $2.08 billion in the same period in 2022.
That result was due to earned premiums of $6.12 billion, up from $5.55 billion in 2022.
Markel Ventures operating revenues were $3.73 billion, up from $3.53 billion while investment income was $521 million, up from $301 billion, while investment gains on a fair value basis were $591 million compared to a loss of $2.2 billion in 2022.
The company’s combined ratio for the first nine months of 2023 was 95% compared to 91% a year earlier.
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