Archive for October, 2017

Markel’s Q3 2017 results marked by catastrophe losses

October 30th, 2017 Comments off

Markel Corp. (NYSE: MKL) released Q3 2017 results last week.

Markel reported book value per common share outstanding of $ 641.20 up 6% from $ 606.30 at December 31, 2016.

The insurance segment incurred huge losses because of the hurricanes and the Mexico City earthquake.

Therefore the combined ratio came in at 134% for the third quarter of 2017 compared to 98% for the third quarter of 2016.

This was largely expected by the market as Markel announced the loss estimate of $mil 503 already in advance of the earnings release.

But income and performance of their investment portfolio and of Markel Ventures more than compensated for the payments to policy holders. As CIO and Co-CEO Tomas Gayner pointed out on the conference call: “… there are positive returns from two of our three engines that total well over $1 billion of pre-tax ins, compared to the $0.5 billion of pre-tax outs.”

Markel’s strong balance sheet and conservative loss reserve policy once again demonstrated their importance in difficult times which in the insurance business can occur at any moment!

Markel’s stock today trades at a price / book ratio of 1.7, rather expensive compared to the valuation over the last years.

For new investment perhaps wait for a lower entry point!


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