Markel profit falls by more than half in 2020 despite growth

Specialist insurer  Markel's profits more than halved in 2020 despite improving its performance in the final quarter due to the significant market volatility and challenging circumstances created by the global COVID-19 pandemic.

Markel saw its profits slide to $797.6 million in 2020, which was less than half of the $1.79 billion it reported in 2019. However, it posted a healthy net profit of $828.9 million in the fourth quarter, up from $511.1 million in the same period of 2019.

Gross written premiums for 2020 were $9.27 billion, up from $8.78 billion in 2019. For the reinsurance segment specifically gross written premiums inched up to $1.13 billion from $1.11 billion in 2019.

For Q4 2020 Markel reported gross written premiums of $2.3 billion, up from $2.01 billion in the same period the previous year. For the reinsurance business gross written premiums were up to $172.4 million, from $151 million in Q4 2019.

Markel’s consolidated combined ratio was 98 percent for 2020, up from 94 percent in 2019. For the reinsurance segment specifically, its combined ratio for 2020 was 103.7 percent, up from 104.4 percent last year.

The combined ratio for Q4 2020 was 89 percent, and 96 percent for the reinsurance business. This is compared to 93 percent the previous year, and 120 percent for reinsurance.

"Our insurance operations delivered an underwriting profit for 2020 in the face of significant losses attributable to the global pandemic and the unusually high number of natural catastrophes as we benefited from capturing meaningful rate increases and new business in targeted growth areas globally, while exercising strong expense discipline," said Thomas Gayner and Richard Whitt, co-chief executive officers of Markel.

"Markel Ventures also saw strong top and bottom line performance amid challenging economic conditions and we achieved solid investment returns despite volatile market conditions and historically low interest rates."

The co-CEOs noted that the business “enters 2021 well positioned to continue the momentum of our excellent fourth quarter. We will help our customers navigate continued near-term economic uncertainties and cautiously look forward to greater opportunities as economies around the world recover."

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