Markel to offload MGAs, eyes growth in ILS unit Nephila

Markel will double down its focus on ILS issuance and asset management at its Nephila unit and is pursuing the sale of associated MGAs to clear a path for unfettered issuance growth, officials claimed Wednesday.

“We think the opportunity in the cat arena is significant,” co-CEO Richard Whitt (pictured) told the Q1 earnings call.

To get to that focus, Markel is selling off some profit-generating businesses that have fed premium into the machine, raising analyst doubts about the wisdom of the sale.

“Getting super focused on our core business is probably the driver,” Whitt said to distil the justification for the move.

Markel finalised the sell-down of its stake in managing general agent Velocity in February for a handsome gain and proceeded to strike preliminary terms for the pending sale of MGA Volante. That deal is slated to close in Q3, 2022.

Markel booked a $107 million gain on the $181 million sale of the Velocity stake and believes it can secure a $155 million price tag on the Volante unit.

“Great businesses, great people .... but there is a lot of time in managing those businesses,” Whitt said of the call for greater focus.

The sale of the Velocity stake, finalised in February, was already palpable in the group's Q1 top-line. Total revenues on entities managed by Nephila were down nearly 22% year on year in the first quarter.

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