Markel shares rise as combined ratio falls
Markel shares rose more than 4 percent yesterday after the company reported a sharply reduced combined ratio and increased premiums.
The combined ratio or the third quarter of 2019 fell to 94 percent, down from 99 percent for the third quarter of 2018. Gross written premiums for the quarter rose to $2.26 billion, from $2.04 billion. Within reinsurance, premiums fell to $226 million from $234 million.
Net income fell to $205.6 million for the period, down from $409.4 million.
Catastrophes have hurt the company less in 2019 than they did last year. For the first nine months of 2019, underwriting results included $42.6 million of underwriting loss from Hurricane Dorian and Typhoon Faxai (2019 Catastrophes). Thie compares ot the same period a year earlier, when underwriting results included $75.7 million of underwriting loss from Hurricane Florence and Typhoon Jebi (2018 Catastrophes).
Thomas S. Gayner and Richard R. Whitt, co-chief executives, said: "Our operating results for the quarter continue to reflect profitable top line growth across the company. We produced a meaningful underwriting profit, despite catastrophes losses during the period, and we're seeing excellent results from our Markel Ventures operations. Our investment portfolio continues to make meaningful contributions to both net income and comprehensive income, driven by favorable market conditions."
Whitt told a conference call for analysts that it was “way too early to have any sense” of losses for the California wildfires. He added: “The one thing I can tell you is, we adapt. And so post the 2017 fires, we made changes to our underwriting approach to reduce our exposure for '18. Post the '18 fires, we made adjustments to reduce our exposures again.
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