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Markel reports jump in profit on investment gains

Markel reports jump in profit on investment gains

Markel Corp. reported a profit of $497.3 million for the second quarter of 2019, up 78.7% compared with the same period last year as net investment gains trebled, the insurer reported Wednesday.

Net investment income grew 6.1% to $111.8 million as net investment gains reached $425.7 million for the 2019 second quarter on increased value of market securities, according to the Richmond, Virginia-based insurer’s results statement.

Net written premium totaled $1.31 billion for the quarter, up 10.6% compared with the same period in 2018.

Premium growth was driven primarily by strong organic growth across several product lines, including general liability and professional liability, said Richard R. Whitt, co-CEO, speaking on a conference call with analysts Wednesday.

Markel’s second-quarter combined ratio deteriorated to 96% from 90% in the year-ago period, while the six-month combine ratio slipped to 97.0% from 94.0%, Mr. Whitt said, largely due to less favorable developments on prior accident year loss reserves.

Insurance rates continue to rise “in an incremental fashion and we continue to see month-over-month price improvements in most lines of business,” including low to middle single-digit price increases in professional liability and casualty, Mr. Whitt said.

Markel recently announced the formation of a new Bermuda-based insurance-linked securities unit, following the closure of its beleaguered Markel CatCo unit. 

Mr. Whitt said the new unit has a new management team and different strategy and portfolio to Markel CatCo. The new unit will be up and running this year, he said.

“We strongly believe the insurance-linked securities market is here to stay,” and will continue to grow, Mr. Whitt said.

For the first half of 2019 net income jumped 400% to $1.07 billion, again driven by the investment gains, which swung to a gain of $1.04 billion from a loss in the year ago period. Net written premium totaled $2.78 billion, up 10.6% from the year ago period.