Underwriting our business
In the Markel Corporation 2009 Annual Report, Markel International is praised as one of the company's 'crown jewels'. Recent performance explains why.
2009: a year of growth
Markel International's results for 2009 have underlined the growing contribution that Markel Corporation's international business
makes to the overall success of the Markel brand.
Continued strong underwriting and investment performance from Markel International supported a 27% increase in
the book value of Markel Corporation, while Markel International reported a combined ratio of 91%, compared with 104% in 2008, and an annualised investment return of more than 10% for 2009.
Markel Corporation reported an all-time high book value per common share of $282.55 as of 31 December 2009. Comprehensive income stood at $591 million for the year, in sharp contrast to a comprehensive loss of $403 million in 2008. The combined ratio was 95% compared with 99% for 2008.
Alan I. Kirshner, chairman and chief executive officer of Markel Corporation, commented: "While 2009 was certainly a volatile year for the financial markets and a challenging year for the economy and the insurance industry, our associates met these challenges and delivered solid underwriting profits and strong investment returns."
Stressing the need for cautious optimism, Kirshner added: "We don't expect significant improvement in the insurance market in 2010. However, we're excited about the opportunities we see to provide quality products and services to our customers and build value for our shareholders."
Certainly, Markel International's continued growth will play a key part in the future success of the Markel brand. Last year's developments, which include the acquisition of Elliott Special Risks and the launch of an equine and livestock division, reflect the company's ambition to widen its portfolio of
specialist insurance products and move into new markets.
Andy Davies, finance director at Markel International, explained the figures for 2009: "Our excellent underwriting results reflect minimal catastrophe losses in 2009 compared with 2008 and increased reserve redundancies on the 2003 to 2006 accident years. The investment portfolio of both Markel Corporation and Markel International generated annualised returns of 10% for 2009. The acquisition of Elliott Special Risks and recent key appointments at Markel International reinforce our commitment to profitable growth and the development of a global brand."
2010: first quarter results
Markel International reported gross written premiums of $208.2 million for the quarter ended 31 March 2010 compared with $185.0 million for the first quarter of 2009. The 13 percent increase was due to the effects of foreign currency exchange rate movements, which accounted for six percent of the increase, and additional writings at the majority of Markel International's UK operating divisions and overseas operations. The combined ratio for Markel International was 109 percent for the first quarter of 2010 compared with 97 percent for the same period of 2009. The increase in the combined ratio was primarily due to $17m (or 12
points) of underwriting loss related to the Chilean earthquakes. However, the loss was offset by another strong investment performance and as a consequence shareholders' equity increased by five percent during the first quarter of 2010.
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