- Total Net Investments: $30.3 billion as of September 30, 2024, up 68% from $18 billion on September 30, 2019.
- Underwriting and Insurance Operating Income: $458 million for the first nine months of 2024, up 84% from $249 million in the same period of 2019.
- Markel Ventures Operating Income: $388 million for the first nine months of 2024, up 117% from $179 million in the same period of 2019.
- Recurring Dividend and Interest Income: $677 million for the first nine months of 2024, up 99% from $339 million in the same period of 2019.
- Share Price: $1,570 as of September 30, 2024, up 33% from $1,180 on September 30, 2019.
- Outstanding Shares: Decreased by 6.7% from 13.815 million shares to 12.887 million shares as of September 30, 2024.
- Total Revenues: Increased 15% to $12.8 billion for the first nine months of 2024.
- Total Operating Income: $3.1 billion for the first nine months of 2024.
- Net Income to Common Shareholders: $2.2 billion for the first nine months of 2024, compared to $1.2 billion in the same period of 2023.
- Comprehensive Income to Shareholders: $2.5 billion for the first nine months of 2024, compared to $1.1 billion in the same period of 2023.
- Net Cash from Operating Activities: $2.1 billion for the first nine months of 2024, compared to $2 billion in the same period last year.
- Share Repurchases: $389 million of common stock repurchased in the first nine months of 2024, compared to $270 million in the same period last year.
- Gross Written Premiums: Grew by 4% to $8.2 billion for the first nine months of 2024.
- Combined Ratio: 95% for the first nine months of both 2024 and 2023.
- Net Investment Income: $677 million for the first nine months of 2024, compared to $520 million in the same period last year.
- Net Investment Gains: $1.7 billion for the first nine months of 2024, compared to $591 million in the same period of 2023.
- Markel Ventures Revenues: Increased 3% in the first nine months of 2024.
Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Markel Group Inc (MKL, Financial) reported a significant increase in total net investments, growing by 68% over five years to $30.3 billion.
- Underwriting and insurance operating income rose by 84% over the past five years, indicating strong performance in their core business.
- Markel Ventures operations saw a 117% increase in operating income over five years, showcasing growth in their diversified business segments.
- Recurring dividend and interest income nearly doubled, increasing by 99% over five years, reflecting effective investment strategies.
- The company has actively repurchased shares, reducing the share count by approximately 6.7% over five years, which can enhance shareholder value.
Negative Points
- The combined ratio for the insurance segment remained at 95%, indicating room for improvement in underwriting profitability.
- The Markel Ventures segment experienced a decrease in operating income by 1% due to pressures in construction services and transportation-related businesses.
- The insurance segment faced challenges with a 3-point loss related to Hurricane Helene and 2 points of losses on the intellectual property collateral protection portfolio.
- The reinsurance segment results fell short of goals, with adverse impacts from the public entity product line and specific loss activities.
- The expense ratio in the insurance segment increased, driven by investments in talent and systems, as well as inflationary pressures.
Q & A Highlights
Q: With the corrective underwriting actions on US general liability and professional liability that began in the fourth quarter of last year, how many quarters of a drag do you think there is left on growth here?
A: Jeremy Noble, President - Insurance Operations: We started recognizing loss reserve development in '22 and '23, and began taking more impactful corrective underwriting actions in the first quarter of this year. We expect normalization as we enter 2025. The pricing environment varies between casualty and professional liability, with professional liability potentially facing continued pressure.
Q: Could you frame the upside potential for segment income for Nephila in '25, given the noise and losses within ILS over the last few years?
A: Jeremy Noble, President - Insurance Operations: We see increased earnings coming through the platform this year compared to last. The elevated climate signal and hedging strategies have impacted revenue and earnings, but we expect a constructive environment for Nephila in '25.
Q: How has Nephila's performance been, and is there potential for material upside in performance fees?
A: Thomas Gayner, CEO: The funds are performing well despite elevated activity, highlighting the quality of portfolio construction. There is potential for modest performance fees, but they will be less than in a clean year due to hedging strategies and the elevated climate signal.
Q: Regarding reinsurance, does it feel like you've righted the ship and could get back to more normalized levels next year?
A: Thomas Gayner, CEO: Our reinsurance results have fallen short of goals, but we've taken action, such as exiting the public entity product line. We expect more embedded profitability in recent underwriting years, which should moderate over time.
Q: Could you comment on the current year loss ratio benefiting from higher ceded loss recovery assumptions on glass?
A: Jeremy Noble, President - Insurance Operations: We refined estimates around reinsurance recoverable to align with gross reserving, impacting quarterly results. This is more of a one-time adjustment rather than a recurring event.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
