Markel bullish on continued hardening, but predicts some client fatigue

Specialist insurer  Markel predicts further rate improvements in 2022 – but it also admits that increases in some lines could slow as the hardening trend enters a fifth year, potentially prompting it to become more selective with business.

"Conditions continue to be favorable and we expect to achieve rate increases in a great majority of our lines," Richard Whitt (pictured), Markel's co-CEO heading up the insurance side of the business, told the Q4 earnings call.

"It is still a great market; I think we are still able to push rate increases….but in some cases, after three and four years of rate increases, you’re not going to be able to maintain double digit increases," he stated.

Claims inflation, social inflation and low interest rates top Markel’s list of likely drivers that will ensure rates continue to improve.

As pricing trends in different lines split, Markel could get choosy. Whitt said the carrier will review line by line and "adjust our pricing strategies accordingly." Some cases may warrant a "potential scaling back of our appetite" while others could merit "full speed ahead."

Client fatigue after years of rate increase could eventually creep into renewal retention rates, Whitt admitted.

"There is some fatigue creeping in in terms of the insureds ... it would not be surprising to see renewal retention drop a bit," something Whitt would expect "later in the economic cycle".

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