Wary Markel remains cautious on line size and level

Against a backdrop of what remain very soft market conditions, Markel is being very cautious on line size and level, Andrew Barnard, managing director, head of international property-catastrophe and retro reinsurance for Markel’s Global Reinsurance Division, told Baden-Baden Today.

He said that the fact that Markel does not rely on reinsurance for income—its reinsurance unit represents only around a third of its premium income—means that it is under less pressure to grow. He would rather walk away from business than be caught out, he said.

“We don’t want any unexpected losses or nasty surprises,” he said. “The industry is teetering on the verge of unprofitability and it is a nice position to be in whereby we do not need to worry about growth.

“As such, we are very careful on the line sizes we write and cautious on the layers of business we take. In some markets, the retention levels are now very low.”

Barnard notes that this is especially true in markets regarded as offering much-needed diversification on catastrophe risks such as Canada and Australia, which are also less well modelled. While the business indeed offers good diversification and a favourable rate online, this is partly because the attachment points are so low.

“We are very cautious on business like that,” he said.

He added that in Europe in particular, he is more interested in simply protecting the business Markel already has, which it has often “nurtured” for a long time.