Markel makes first quarter profit compared to $2m loss last year, Chile earthquake hits underwriting
Markel moved back into the black, reporting a $134.5m net income in the first quarter compared to a $2m loss in the same period last year.
The 2010 first quarter results reflect improved investment returns, partially offset by declining underwriting performance.
Combined ratio for the first quarter of 2010 was 101% compared to 95% for the first quarter of 2009.
The combined ratio for the first quarter of 2010 included approximately $17 million, or 4 points, of underwriting loss on the Chilean earthquakes that occurred in February of this year.
Chairman and chief executive Alan Kirshner said: “Our results continue to benefit from the rebound of the financial markets with our invested assets approaching $8 billion. On the underwriting side, we produced a small loss as a result of the Chilean earthquakes. We continue to look for opportunities in the insurance marketplace to profitably grow our business and build value for our shareholders.”
Markel International reported gross written premiums of $208.2 million for the quarter ended March 31, 2010 compared to $185.0 million for the first quarter of 2009.
The increase of 13% was due to the effects of foreign currency exchange rate movements which accounted for 6% 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% for the quarter ended March 31, 2010 compared to 97% 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.
Finance director Andy Davies said: “We are pleased with the development of the business in the first quarter of the year which reflected real volume gains across the UK and overseas operations.
“A combined ratio of 109% reflects the significant losses that impacted the insurance industry in the first quarter of 2010 and, in Markel International’s case, largely reflected underwriting losses related to the Chilean earthquakes.
“These were well within our risk appetite for a market loss of this size and represent approximately 3 points of Markel International’s full year premium and less than 3% of Markel International’s capital. The underwriting loss was offset by another strong investment performance and as a consequence shareholder’s equity increased by 5% during the first quarter of 2010.”