Markel Group (MKL) Q3 2021 earnings summary

Executive summary

• Three-engine model of insurance, investments and Markel Ventures supported Q3 and 9M results; Q3 insurance combined ratio was 93% despite significant catastrophe losses.

• Management expected to finish 2021 strong, citing continued premium growth, recent underwriting changes and contributions from all three operating engines.

Financial highlights

• Earned premiums rose 17% in Q3 and 15% in 9M YoY, supported by new business and more favorable rates.

• Markel Ventures operating revenues were $908.2M in Q3 and $2.69B in 9M 2021, versus $824.1M and $2.01B in the prior-year periods.

• 9M net investment gains were $1.176B, reflecting higher fair value of the equity portfolio; 9M 2020 recorded a $230.9M net investment loss amid pandemic-related market volatility.

• Diluted EPS was $15.09 in Q3 and $114.20 in 9M 2021, versus $31.03 and $(3.76) in 2020.

Outlook and guidance

• Management said it was well-positioned to finish 2021 strong, with insurance, investments and Markel Ventures expected to support performance.

• Long-term performance is assessed over five-year periods; book value per share CAGR was 10% and share-price CAGR was 5% for the five years ended September 30, 2021.