Markel had an impressive year 2010!
After listening to the FY 2010 conference call of Markel Corporation (NYSE:MKL) one simply remains impressed by their discipline and their committment to build strong value to shareholders as few others!
Markel today rests on 3 pillars to realize shareholder value:
1. The first is obviously the insurance section.
The insurance market overall has been competitive and soft in 2010 and they anticipate that it will remain so in 2011!
Gross written premiums have been just under $2 billion.
The combined ratio stood at 97% which is very good after realized losses from the Chilean Earthquake and from Deep Water Horizon.
Markel never sacrifies profitablity for growth! Don’t forget that!
2. Investment section
This section just had a fantastic year!
They gained 8.1% in local currencies or 7.9% after conversion into US$, even as they sacrify return by buying bonds of shorter maturities in order to protect them against rising interest rates.
But the best is the Equity component of their investment portfolio:
Up 20% compared to a 15.1% rise of the S&P 500 index!
Over the last 5 years they had a return of 6.2% and over the last 10 years a return of 7.6% clearly outperforming the S&P500 index!
3. Their third pillar is Markel Ventures,
which invests in private high quality companies.
This is still a rather small part of Markel Corporation with its $185 mil revenue in 2010, but watch out!
They profit from a high reputation and confidence just in the way Berkshire Hathaway always did and they have the same investment criteria!
For more details about the FY 2010 results please listen to the conference call.
Markel’s book value/share is at an all time high of $326.36. The stock trades at a price/book value of 1.3
…..still doesn’t seem very expensive for a company many value investors consider the „next Berkshire Hathaway”!
Cheers!