Tough market conditions make further growth in its reinsurance segment unlikely this year, Richard Whitt III, co-chief executive officer of Markel Corporation, said in a conference call next week covering the company’s second quarter results.
This is despite the company enjoying solid growth so far no the back of new business in its mortgage product line and large quota share reinsurance treaties.
But Whitt said he was cautious on the prospects for further growth this year. “While we're pretty pleased with the results for six months and optimistic for the remainder of 2016, we continue to see extremely difficult market conditions and would not expect significant growth during the rest of the year,” he said.
He added: “Market conditions remain particularly challenging in London and in the large accounts segments. Competition also remained strong in the reinsurance market. However, as I think I stated last quarter, the rates have declined and slowed and even in a few cases we've seen some stabilization.”
For the second quarter gross written premiums in the reinsurance segment, which includes treaty reinsurance programs written by its global reinsurance division as well as those written by Markel International, were up $11 million or 4 percent compared to 2015. On a year-to-date basis writings were up $86 million or 14 percent compared to last year, he said.
He said within the second quarter growth was primarily driven by new business in its mortgage product line. For the year to date, growth was driven by a few large quota share reinsurance treaties within its property and general liability products as well as the timing and impact of multi-year deals year-over-year, he said.
“Given the nature of large quota share treaties, quarterly gross written premiums can and will be volatile. In addition, when multi-year treaties are written, the current quarter gross written premiums benefit from a one-time increase,” Whitt said.
Markel Corporation, Bermuda, Insurance, Reinsurance, Property, General liability, Results, Richard Whitt III