Rates will be ‘flat at best’ says Markel

Markel International is predicting a tough 2010 as competition intensifies between capital-rich insurers.

Finance director Andy Davies said: “We believe the market is going to continue to be tough for 2010. One because we didn’t have catastrophes, and two, because people are going to have some good results, there is going to be a lot of capital around and people are going to be keen for business. I expect rates for 2010, from where we are today, to be flat at best.”

Davies was speaking following a set of improved underwriting results for 2009. Markel reported a combined ratio of 91% compared with 104% in 2008.

Gross written premium fell from $693m (£441.86m) to $641m but remained in line with 2008 on a constant exchange rate basis.

Davies praised Markel UK, saying: “They’ve had very strong underwriting results in a pretty tough market. They’ve been our most profitable unit over the last six years.”

Markel International returned around 10% on investments. Davies said: “That was a pretty solid investment performance; most people will be around the 5%-7% mark. The real driver for that was that we didn’t change our strategy at all during the year.”