Markel’s 2023 annual outcomes revealed

Markel returned to revenue in 2023 after a loss making 2022.

The insurer reported complete revenue of $2.3 billion for the 12 months (2022: $1.2 billion loss). Earned premiums rose 9% year-on-year, at $8.3 billion for 2023 in comparison with $7.6 billion for 2022.

“We loved glorious returns in 2023 from Markel Ventures, our funding operations, and plenty of parts of our insurance coverage enterprise,” stated Thomas S. Gayner, Markel CEO. “While we stay centered on some areas of enchancment for our insurance coverage operations, our three-engine system continues to drive worthwhile progress.

“Strong working money flows from every of our insurance coverage, investments, and Markel Ventures engines can now be reinvested to proceed rising shareholder worth.”

Markel insurance coverage outcomes for 2023

Markel’s section noticed working income of $7.3 billion (2022: $6.5 billion). Reinsurance working income was down 5%, at $1 billion (2022: $1.1 billion).

Markel’s program companies, insurance-linked securities (ILS) and different insurance coverage section noticed working income slide 43%, at $280 million in 2023 (2022: $494 million).

Gross premium quantity for the 12 months was $10.3 billion (2022: $9.8 billion). The improve was pushed by “more favorable” charges and new enterprise progress, significantly inside private traces and property, Markel stated in its outcomes report.

What had been Markel’s 2023 annual outcomes?

^{Source: Markel}

Markel sees underwriting revenue slide, notes Idalia, wildfire affect

Markel noticed its underwriting revenue slide 79% for the 12 months, at $132.8 million (2022: $626.6 million). The mixed ratio was 98.4%, a deterioration on 91.7% in 2022.

The insurer noticed $40.1 million of internet losses and loss adjustment bills (LAE) from the Hawaiian wildfires and Hurricane Idalia. Its 2022 underwriting outcomes had included $81.9 million of internet losses and LAE from Hurricane Ian and the Russia-Ukraine battle.

“Excluding these losses, the increase in our consolidated combined ratio in 2023 compared to 2022 was primarily driven by a higher attritional loss ratio across both our underwriting segments,” the insurer said within the annual report.

Markel took $65 million Vesttoo hit

Markel moreover flagged losses on mental property collateral safety insurance coverage written inside its skilled legal responsibility product line because of “higher than anticipated levels of claims and loss experience”.

Included on this, the insurer booked $65 million of credit score losses in reference to Vesttoo affiliate fraudulent letters of credit score as reinsurance collateral on two insurance policies, which Markel stated it believes “represents our full exposure to credit losses on the related reinsurance recoverables.”

“We are actively pursuing remedies to make recoveries on the reinsurance recoverables impacted by the fraudulent letters of credit and do not have any other ceded reinsurance contracts with Vesttoo Ltd. or its affiliates,” Markel stated within the report.

Markel flags casualty development reserve rethink

In the fourth quarter of 2023, Markel undertook a reserve research on “selected” common legal responsibility {and professional} legal responsibility merchandise traces, leading to will increase to its prior accident 12 months loss reserves.

The insurer flagged its casualty development enterprise, which it stated has “grown meaningfully” lately.

“Within our excess and umbrella general liability and risk-managed errors and omissions professional liability books, we determined that there was a greater than expected propensity for limits below our attachment point to erode, pushing more claims into our layers,” the insurer stated. “Further, reporting of those claims has lagged historic loss improvement patterns because of the impact of court docket closures and claims backlogs arising from the COVID-19 pandemic, along with aggressive ways by the plaintiffs’ bar and delayed claims reporting tendencies.

“Although we have achieved significant rate increases since 2019 on many of these lines in response to heightened loss trends, the findings of our study led us to increase our loss development factors and therefore our estimate of the ultimate loss ratios on our primary casualty contractors’ liability, excess and umbrella general liability and risk-managed errors and omissions professional liability product lines.”

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