Markel takes ever greater distance to professional liability
Professional liability is a strong outlier on a market otherwise delivering up sufficient rate, improving terms and a reasonable business pipeline, the chief of insurance operations at Markel, Jeremy Noble (pictured), told his company’s second quarter earnings call.
Revenues could suffer as Markel turns its back on business below the bar, he hinted.
“The current market cycle is nuanced, with each product line having a bit of its own story,” Noble said. “Broadly speaking, rates are holding up fairly well, keeping up with or in some cases slightly ahead of our view of [loss cost] trend.”
The negative outlier in the story: elements of professional liability, where Markel sees reason to walk away from business in both its primary and reinsurance lines of business. Public D&O insurance is showing pricing that Noble finds “somewhat inexplicable”.
Difficulties in transactional liability get mention for the cap placed on the reinsurance side, but have a clear fundamental cause: deal volumes have collapsed on the market, he notes.
The positive outlier to that story: property, where Noble likes “meaningful acceleration” to date in 2023.
In sharp contrast, Noble likes property, inland marine, binding, personal lines and select marine and energy bits from the London Market, he said.
Markel will freely walk away from inadequately priced business, despite a palpable weight for professional lines in the group’s overall book, Noble vowed.
“We are focused on maintaining rate adequacy across our entire portfolio,” Noble said. “We are walking away from accounts that do not meet our profitability targets.”
That discipline “may have the effect of slowing our top line growth” vis-à-vis recent years, Noble said.
Noble counters with an argument that a generally diversified book with pockets facing strong demand will offset. Submission and new business levels “generally remain strong outside of professional lines.”
“We are seeing great opportunities to grow,” Noble told analysts of “a number of product classes where we feel it is very attractive.”
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