Archive for April, 2017

Markel had a decent first quarter 2017!

April 29th, 2017 Comments off

Markel Corp. (NYSE: MKL) the speciality insurer released Q1 2017 results.

Book value per common share outstanding at the end of the quarter was $620.30, representing 2.3% growth from $606.30 at the end of 2016 and up 5.2% from $589.86 at this time last year.

At first glance the combined ratio of 100% appeared to be a deterioration but it could be attributed enterily to the „Odgen rate“ as executive chairman Alan Kirshner explained:

“The combined ratio for the quarter ended March 31, 2017 included $85.0 million, or nine points on the combined ratio, of adverse development on prior years’ loss reserves resulting from the decrease in the Ogden rate, which is used to calculate lump sum awards in U.K. bodily injury cases.”

Markel’s investment operations had a good quarter: net investment income increased 9.9%, to $100.4 million, driven by a combination of dividends, higher short-term interest rates, and interest from Markel’s fixed income portfolio.

Unfortunately Markel Ventures’ net income to shareholders declined 0.5%, to $14 million but this can be attributed to the influence of the “cyclical related businesses which began to feel a bit of the topping out we expected to see in their normal cyclical pattern“ as CIO Thomas Gayner explained in the conference call.

Overall this was a decent quarterly result and Markel – as always – remains focused on building long-term shareholder value.

Markel’s stock ended Friday’s trade at $ 969.60 which means a price / book ratio of 1.6
Not cheap but not too expensive either to build up a long-term oriented position!

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