Markel Corporation has reported that its net profits fell in the first quarter of 2016 and its combined ratio also increased.
The company said that these adverse results were driven by less favourable development of prior years’ loss reserves and a higher expense ratio.
The company made a net profit of $160 million in the quarter compared with $191 million in the same period a year earlier.
Its combined ratio was 88 percent for the first quarter of 2016, up on the 83 percent it reported over the same period of 2015. Markel said that this increase was driven by less favourable development of prior years’ loss reserves and a higher expense ratio, partially offset by a lower current accident year loss ratio compared to the first quarter of 2015.
Its comprehensive income for the first quarter of 2016 was much healthier. It increased to $397.0 million compared with $281.8 million in the same period of 2015.
It also enjoyed some growth in the quarter. Its total operating revenues increased slightly to $1.37 billion from $1.3 billion while its earned premiums increased to $957 million compared with $943 the year before.
Executive chairman Alan Kirshner said: “2016 is off to a strong start with solid contributions from our underwriting, investing and Markel Ventures operations. Our growth in book value per share for the quarter reflects significant returns from our investment portfolio and our long-term focus on underwriting discipline. We are well-positioned to continue to build shareholder value and to take advantage of profitable growth opportunities as they arise.”
Commenting on the performance of London-based subsidiary Markel International, William Stovin, its president, said: “Conditions in the London market, particularly in energy, are difficult and against that background we are pleased with our start to the year. We have continued to generate underwriting profits, and are seeing level, or slightly better, volumes across the majority of our classes.
“In April we simplified the organisation of our wholesale London market business. We reduced the number of divisions from seven to three, with the objective of making it easier for brokers to do business with us across a range of business lines and to maximise our flexibility to deal with our clients’ needs.”
Markel Corporation, First Quarter 2016 Results, Insurance, Reinsurance, Alan Kirshner, Markel International, William Stovin, Bermuda, North America, London