Markel Corp. (NYSE: MKL), the so called „Mini Berkshire” released its Q1 2012 results.
The transcript of the Conference Call you’ll find here on Seeking Alpha.
Markel in 2012 is „off to a good start” as CFO Anne Waleski puts it!
Total operating revenues grew 18% to $733 million in 2012, up from $622 million in 2011. The increase is due to a 15% increase in revenues from insurance operations and a 43% increase in revenues from Markel Ventures, their non-insurance operations.
The combined ratio was 100% for 2012, compared to 112% in 2011, a significant improvement even if influenced positively by an GAAP accounting standard change.
The interesting news is certainly that the condition of the insurance market is finally improving. Markel ‘s premium volume is up and there is less aggressive pricing by other insurers.
Markel’s book value/share increased 6% to $ 373.
On the investment side Markel is „balance sheet oriented” as President Thomas Gayner points out: „We continue to believe that interest rates are unnaturally low and given that belief we continue to choose to protect the balance sheet by maintaining our bond portfolio at a lower duration than what we would naturally like.”
On the equity side, they earned a total return of 11.5% for the quarter and they continue to steadily increase their equity investment commitment which now stands at 59% of shareholders equity, up from 54% at year-end 2011.
Markel’s stock normally trades at 1.5 – 2 times book value/share as company executives pointed out at their traditional investor’s brunch just before the Berkshire Hathaway Annual Meeting in Omaha, Nebraska.
Today at $ 442 it trades at only 1.2 book value/share and the insurance market is finally improving! Think twice about this discount!