Asmus Puhl Finance Blog

Sometimes continued success can be a little boring…

Markel Corp.(NYSE:MKL) reported excellent Q3 2021 results:

“Our third quarter and year-to-date results reflect the strength and balance of our three-engine operating model of insurance, investments and Markel Ventures,” said Thomas S. Gayner and Richard R. Whitt, Co-Chief Executive Officers.

Earned premiums grew 17% for the 3rd quarter, reflecting continued growth in gross premium volume from new business and more favorable rates.

The combined ratio for the 3rd quarter 2021 included $114.4 million, or seven points of net losses and loss adjustment expenses attributed to natural catastrophes.
The ratio improved to 93% from 97% quarter over quarter.

Looking at the “second engine“, net investment gains for the nine months ended September 30, 2021 reflected a substantial increase in the fair market value of our equity portfolio driven by favorable market value movements during 2021.

And the Markel Ventures businesses continue to grow and add value. They added Buckner HeavyLift Cranes to the group in the third quarter.

The all important metric of the insurance industry book value per common share outstanding came in at $ 988.99 up from $ 885.72 in the 3rd quarter 2020.

Markel remains a stable long term investment. A significant upturn of this company eventually will be seen when interest rates continue to rise which will improve the results of the fixed income segment of their investment portfolio.

Markel is valued at 1.3 price / book value which is not too expensive.
Markel is a buy for longterm investors!

Markel Corp. (NYSE: MKL) reported Q3 2020 results amidst a pandemic which left investors with a lot of doubts about insurers.

Markel’s stock lost about 20% since the beginning of this year. Other insurance stocks behaved the same way.

So let’s have a look at the numbers of Q3:

Earned premiums are up 7% to $ 1’394’428’000

Markel Ventures operating revenue is up strongly by 66% to $ 824’132’000

and comprehensive income more than doubled to $ 520’089’000

Book value per share outstanding climbed slightly to $819,71 from $802,59 at 31^st of december 2019.

CFO Jeremy Noble explained: “.fortunately, we saw positive contributions from each of our three engines during the third quarter.

Our insurance operations produced an underwriting profit despite elevated levels of natural catastrophe losses, as well as increases to reserves related to the pandemic, reflecting the strong underlying performance of our business.

Our Markel Ventures operations delivered meaningful profits, demonstrating their resilience despite economic uncertainty, and our investment portfolio also saw gains amid volatile market conditions.”

Co CEO Tom Gaynor pointed out that “losses occured by Markel’s clients stem not just from the things you see in the headlines regarding the pandemic, but also a spate of natural catastrophes such as more hurricanes than hurricane names, wildfires, a major derecho, and ongoing and recurring events and circumstances that we see regularly in our insurance operations”

Markel already in Q1 2020 increased reserves in a meaningful way. So investors could be cautiously optimistic that the worst is coming to an end. And Markel Ventures seems to be very resilient to the crisis.

Markel’s stock today is valued at a price/book ratio of only 1.1 which is rather cheap for this high quality company.

For patient investors with a long term horizon Markel today is a „buy“!