Markel released better than expected Q3 2020 results!
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 31st 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“!