RICHMOND, Va., Aug. 2, 2023
/PRNewswire/ -- Markel Group Inc. (NYSE:MKL) today reported its
financial results for the second quarter of 2023. The Company also
announced today it filed its Form 10-Q for the quarter ended
June 30, 2023 with the Securities and Exchange Commission.
"Insurance, Investments, and Markel Ventures all contributed to
solid operating results in the second quarter," said Tom Gayner, Chief Executive Officer. "Markel
Ventures recorded strong margins and cash flows, our insurance
business increased gross written premiums while maintaining our
long-term discipline of profitable underwriting and conservative
reserving, and investment income grew significantly amid higher
interest rates. I am grateful to the more than 20,000 people in our
family of companies who work every day to drive results like these
as we continue our journey to build one of the world's great
companies."
The following tables present summary financial data for the
quarters and six months ended June 30,
2023 and 2022. Generally accepted accounting principles
(GAAP) require that we include unrealized gains and losses on
equity securities in net income. Given the magnitude of our equity
portfolio, we believe that this approach creates volatility in
revenues and net income that can obscure the operating performance
of our businesses and does not align with our long-term investment
philosophy. As of June 30, 2023, the
fair value of our equity portfolio included cumulative unrealized
gains of $5.4 billion.
|
Quarter Ended June
30,
|
|
Six Months Ended June
30,
|
(dollars in
thousands, except per share amounts)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Earned
premiums
|
$ 2,031,143
|
|
$
1,833,104
|
|
$
3,998,847
|
|
$
3,592,874
|
Markel Ventures
operating revenues
|
$ 1,386,579
|
|
$
1,361,398
|
|
$
2,491,259
|
|
$
2,311,790
|
Net investment
income
|
$
169,693
|
|
$
96,795
|
|
$
329,028
|
|
$
189,099
|
Net investment gains
(losses)
|
$
484,527
|
|
$
(1,554,643)
|
|
$
857,090
|
|
$
(1,913,042)
|
Comprehensive income
(loss) to shareholders
|
$
564,549
|
|
$
(1,217,688)
|
|
$
1,210,914
|
|
$
(1,729,602)
|
Diluted net income
(loss) per common share
|
$
50.09
|
|
$
(69.15)
|
|
$
87.34
|
|
$
(75.56)
|
Combined
ratio
|
93 %
|
|
91 %
|
|
93 %
|
|
90 %
|
Highlights of results from the quarter and six months:
- Earned premiums grew 11% for both the quarter and six months
ended June 30, 2023, reflecting
growth in gross premium volume from new business and more favorable
rates.
- The higher combined ratio for the quarter and six months ended
June 30, 2023 was primarily due to a
higher attritional loss ratio in 2023 compared to 2022.
- Markel Ventures operating income for the quarter and six months
ended June 30, 2023 grew 40% and 42%,
respectively, driven by higher operating margins at our products
businesses.
- Net investment income for the quarter and six months ended
June 30, 2023 increased 75% and 74%,
respectively, as a result of higher interest rates during the first
half of 2023 compared to the first half of 2022.
- Net investment gains in 2023 reflect an increase in the fair
value of our equity portfolio resulting from favorable market value
movements.
- Comprehensive income to shareholders for the quarter and six
months ended June 30, 2023 reflects
strong contributions from all three operating engines.
We believe our financial performance is most meaningfully
measured over longer periods of time, which tends to mitigate the
effects of short-term volatility and also aligns with the long-term
perspective we apply to operating our businesses. We generally use
five-year periods to measure our performance. Over the five-year
period ended June 30, 2023, our share price increased at a
compound annual rate of 5%. While this measure, considered
independently of other factors, falls below our internal targets,
we remain confident in the strong operating performance of our
businesses.
The compound annual growth in book value per common share over
the five-year period ended June 30, 2023 was 8%. We give
consideration to the following information when assessing this
measure:
- Amortization expense - As we grow through acquisitions, our
intangible assets grow. GAAP requires that we amortize a portion of
these acquired intangible assets, which is a non-cash charge to net
income. Amortization of acquired intangible assets for the
five-year period ended June 30, 2023
totaled $793.6 million.
- Unrealized gains and losses on fixed maturity securities - We
invest in high credit quality, investment grade securities, with
durations that are matched to the expected timing of claims-related
payments. As such unrealized gains and losses from our bond
portfolio are generally expected to reverse as the securities
mature. The fair value of our bond portfolio included cumulative
pre-tax unrealized losses of $907.9
million as of June 30, 2023
compared to cumulative pre-tax unrealized gains of $108.5 million as of June
30, 2018.
- Value of our businesses - Book value does not include changes
in the fair value of our acquired businesses or equity method
investments, other than decreases arising from an impairment.
Acquired businesses include our Markel Ventures, insurance-linked
securities (ILS) and program services businesses.
* * * * * * * *
A copy of our Form 10-Q is available on our website at
mklgroup.com or on the SEC website at www.sec.gov. Readers are
urged to review the Form 10-Q for a more complete discussion of our
financial performance. Our quarterly conference call, which will
involve discussion of our financial results and business
developments and may include forward-looking information, will be
held Thursday, August 3, 2023,
beginning at 9:30 a.m. (Eastern
Time). Investors, analysts and the general public may listen
to the call via live webcast at ir.mklgroup.com. The call may be
accessed telephonically by dialing (888) 660-9916 in the U.S., or
(646) 960-0452 internationally, and providing Conference ID:
4614568. A replay of the call will be available on our website
approximately one hour after the conclusion of the call. Any person
needing additional information can contact Markel Group's Investor
Relations Department at IR@markel.com.
About Markel Group
Markel Group Inc. is a diverse family of companies that includes
everything from insurance to bakery equipment, building supplies,
houseplants, and more. The leadership teams of these businesses
operate with a high degree of independence, while at the same time
living the values that we call the Markel Style. Our specialty
insurance business sits at the core of our company. Through decades
of sound underwriting, the insurance team has provided the capital
base from which we built a system of businesses and investments
that collectively increase Markel Group's durability and
adaptability. It's a system that provides diverse income streams,
access to a wide range of investment opportunities, and the ability
to efficiently move capital to the best ideas across the company.
Most importantly though, this system enables each of our businesses
to advance our shared goal of helping our customers, associates,
and shareholders win over the long term. Visit mklgroup.com to
learn more.
Cautionary Statement
Certain of the statements in this release may be considered
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995, as amended. Statements that are not
historical facts, including statements about our beliefs, plans or
expectations, are forward-looking statements. These statements are
based on our current plans, estimates and expectations. There are
risks and uncertainties that could cause actual results to differ
materially from those expressed in or suggested by such statements.
Factors that may cause actual results to differ are often presented
with the forward-looking statements themselves. Additional factors
that could cause actual results to differ from those predicted are
set forth in our Annual Report on Form 10-K for the year ended
December 31, 2022, including under "Business Overview," "Risk
Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Safe Harbor and Cautionary
Statement," and "Quantitative and Qualitative Disclosures About
Market Risk," and in our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2023, including under "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," "Safe Harbor and Cautionary Statement," and
"Quantitative and Qualitative Disclosures About Market Risk". We
assume no obligation to update this release (including any
forward-looking statements) as a result of new information,
developments, or otherwise. This release speaks only as of the date
issued.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/markel-group-reports-2023-second-quarter-and-six-months-results-301892056.html
SOURCE Markel Group