Market volatility decimates Q1 profits for Markel
Markel Corporation’s profits collapsed in Q1 as equity market volatility saw the re/insurer suffer severe losses in its investment portfolio.
The re/insurer reported a comprehensive loss to shareholders of $1.4 billion for Q1 2020, compared to profit of $732.2 million for Q1 2019.
It blamed “the significant volatility in the equity markets arising from economic uncertainty associated with the COVID-19 pandemic,” for the dramatic turnaround. Markel made a net investment loss of $1.7 billion in Q1 2020, attributable to the change in fair value of its equity portfolio, compared with a net investment gain of $612.2 million in Q1 2019.
The re/insurer generated $1.3 billion of earned premiums in its underwriting operations, compared with $1.2 billion in 2019. Its combined ratio was 118 percent in Q1 2020, with a $325 million underwriting loss attributed to the COVID-19 pandemic adding 24 points to the combined ratio. In Q1 2019 its combined ratio was 95 percent.
Thomas Gayner and Richard Whitt, co-chief executive officers at Markel, said: “While the economic disruption of the pandemic has impacted our financial performance this quarter, we believe we are well positioned to weather the current challenges and continue our focus on the long-term.”
