October 27, 2017 by Canadian Underwriter
Markel Corporation has reported a combined ratio of 134% for the third quarter of 2017 ending Sept. 30 compared to 98% in the same quarter last year.
For the first nine months of the year, the combined ratio was 108%, compared to 93% in 9M 2016, Glen Allen, Va.-based Markel said in its third quarter and nine-month financial results, released on Wednesday.
“The increase in the consolidated combined ratio for the quarter ended September 30, 2017 was attributable to the impact of the 2017 Catastrophes, partially offset by a decrease in the expense ratio driving by the favourable impact from higher earned premiums across all of our insurance segments in 2017 compared to the same period of 2016,” noted Markel’s Management’s Discussion and Analysis of Financial Condition and Results of Operations, referring to Hurricanes Harvey, Irma and Maria, and the earthquakes in Mexico. “Additionally, prior year redundancies increased for the third quarter of 2017 compared to 2016, primarily in our U.S. Insurance segment. For the nine months ended September 30, 2017, the increase in the consolidated combined ratio was attributable to the impact of the 2017 Catastrophes, partially offset by a decrease in the expense ratio and prior accident year loss ratio driven by the favorable impact of higher earned premium in 2017 compared to 2016.”
The combined ratio for the quarter and nine-month period included US$503 million of underwriting losses, net of reinstatement premiums, from the hurricanes and earthquakes in Mexico, Markel said in statement (On Oct. 12, Markel estimated that same figure for losses from the hurricanes and earthquakes).
“Our underwriting results were impacted by high levels of catastrophes, but with our strong balance sheet, we are well-positioned to respond to the claims of our insureds,” said Alan I. Kirshner, Markel’s executive chairman, in the statement. “We continue to see positive growth across several product lines within our insurance operations, while maintaining our focus on underwriting discipline.”
Markel added in the statement that the combined ratio for 9M 2017 also included US$85 million, or three points on the combined ratio, of previously reported adverse development on prior years’ loss reserves resulting from the decrease in the Ogden rate, which is used to calculate lump sum awards in United Kingdom bodily injury cases.
Comprehensive loss to shareholders was US$19.9 million for the third quarter of 2017 compared to comprehensive income of US$89.2 million for the same period of 2016. Comprehensive income to shareholders was US$545.7 million for the nine months ended Sept. 30 compared to US$696.1 million for the same period of 2016.
In total, consolidated gross premium volume was US$1.3 billion for the third quarter, up from US$1.1 billion in Q3 2016, while consolidated net written premiums (NWP) were US$1.1 billion in the most recent quarter, up from US$929 million in the same quarter last year. For the nine-month period ending Sept. 30, consolidated gross premium volume was US$4.1 billion (9M 2016: US$3.8 billion), while consolidated NWP were US$3.5 billion (9M 2016: US$3.2 billion).