Markel Corporation: Everything you need to know
Corporate headquarters: 4521 Highwoods Parkway, Glen Allen, VA 23060, USA
Founded: 1930
Employees: 18,900
No. of businesses in the Markel Ventures family: 16
No. of offices: 80
No. of countries: 18
Gross premium volume: US$8.5 billion (2021)
Net written premiums: US$7.1 billion (2021)
Earned premiums: US$6.5 billion (2021)
Underwriting profit: US$628 million (2021)
Key people (insurance): Richard R. Whitt III I(co-CEO), Robert C. Cox (president and CEO, insurance operations), Matt Freeman (president, State National), Greg Hagood (co-CEO, Nephila Holdings and director, Nephila Capital), Frank Majors (co-CEO and president, Nephila Holdings and director, Nephila Capital), Jed Rhoads, president & CUO, Global Re), Nick Conca (chief claims officer), Sue Davies (chief human resource officer), Ron Herrig (chief actuarial officer), Bradley J. Kiscaden (president and chief administrative officer, insurance operations), Carla Owens (chief digital officer), Robin Russo (EVP, CUO), Bryan Sanders (president, Markel Specialty), Jim Spangler (chief communications officer), Patti Titus (chief privacy and information security officer), Simon Wilson (president, Markel International)
The Markel Corporation is a holding company for insurance, reinsurance, and investment operations around the world. It’s made up of 16 businesses with operations through 80 offices in 18 different countries. Its core business is specialty insurance, sold via Markel Assurance, Markel Specialty, and Markel International.
Founded in 1930 by Sam Markel, and headquartered in Richmond, Virginia (USA), Markel Corporation is structured in the following way:
Insurance: Markel Assurance; Markel International; Markel Specialty
Reinsurance: Markel Global Reinsurance
Fund management: Nephila; Lodgepine
Fronting: State National
Markel Ventures
Investment portfolio
Insurance/reinsurance operations
In 2021, 85% of the company’s gross premium distribution was in insurance (including all direct business and facultative placements written across the company), valued at around US$7.2 billion. The remaining 15% of gross written premium – totalling US$1.2 billion - was in reinsurance (including all treaty reinsurance written across the company).
“Our underwriting operations delivered a 90% combined ratio, which reflected the impact of recent underwriting actions we’ve taken to enhance our profitability while growing gross premium volume to US$8.5 billion,” said Thomas S. Gayner and Richard R. Whitt, co-chief executive officers.
Markel’s expertise
In general, Markel’s underwriters tend to focus on specialty risks. The firm has listed a number of areas that it specialises in: agriculture; casualty; commercial property; construction; cyber liability; D&O, E&O, energy and environmental; general and excess liability; ocean and inland marine; personal lines; professional liability; small businesses; trade credit; and workers’ compensation.
Going public
Markel Corporation spent 56 years as a private company before going public on December 12, 1986. In its final year as a private corporation, Markel’s total operating revenues were US$33.3million. Fast-forward 35 years to 2021 and its total operating revenues hit US$12.8 billion. Invested assets also grew from US$31 million to US$28.3 billion in the same period, and total assets grew from US$57 million to US$48.4 billion.
M&A activity
Markel Corporation has made some significant acquisitions in recent years. In November 2018, the firm completed its acquisition of Nephila, an investment manager specialising in insurance-linked securities (ILS) and weather-related risks. The acquisition made Markel the second-largest fund manager in the ILS sector. At the time of closing, Markel co-CEO Richie Whitt commented: “The addition of Nephila to Markel’s insurance, reinsurance, insurtech, fronting, and existing insurance-linked securities capabilities will enhance and strengthen the breadth and depth of Markel’s offerings to policyholders, producers, and investors.”
In 2017, Markel purchased State National Companies for about US$919 million. The Texas-based firm was the largest and longest-standing pure-play insurance fronting business in the US. State National’s program services business provides licensed admitted paper to specialty companies and capital providers.
Whitt commented on the deal: “Strategically, State National will help us to leverage our insurtech and digital distribution initiatives, diversify our underwriting and fee-based portfolios and revenue streams, and add to Markel’s third-party capital capabilities. Combining Markel’s financial strength with State National’s unique business model and proven record of success, we are confident that all stakeholders will be well-served moving forward.”
Markel at a glance - 2021
- Earned premiums rose 16%, reflecting continued growth in gross premium volume from new business and more favorable rates
- Lower combined ratio compared to 2020 was primarily due to significant losses attributed to COVID-19 and a lower attritional loss ratio partly because of the benefit of a favorable pricing environment
- Net investment gains reflected a substantial increase in the fair value of its equity portfolio driven by favorable market value movements during the year
- Operating revenues, operating income, and EBITDA from our Markel Ventures operations continued to expand through both acquisitions and organic growth
- Comprehensive income to shareholders reflected the contribution of net income, partially offset by decreases in net unrealized gains on our fixed maturity portfolio
“Our 2021 results show what we can achieve when all three of our operating engines – insurance, investments and Markel Ventures – power us forward,” Gayner and Whitt said. “Each contributed in meaningful ways to a record-setting 2021 across many financial metrics, including operating revenues and operating income, among others… We added two tremendous companies, Buckner and Metromont, to our Markel Ventures family of companies during a year in which revenues and EBITDA far surpassed previous record levels. Our investment portfolio provided strong returns on the back of the terrific performance of our equity portfolio.”
