(1)
U.S. Surplus Lines Segment Review Special Report
, A.M. Best
(August 27, 2015)
.
|
(2)
London Company Market Statistics Report
, International Underwriting Association
(October 2015)
.
|
(3)
Swiss Re Sigma
(
April 2015
).
|
(4)
Global Reinsurance Segment Review Special Report,
A.M. Best
(September 2, 2015)
.
|
(5)
Lloyd's Annual Report 2014
.
|
(6) Bermuda Insurance Market Report 2014,
Deloitte Limited
(2014).
|
•
|
General Liability
|
•
|
Professional Liability
|
•
|
Property
|
•
|
Personal Lines
|
•
|
Programs
|
•
|
Workers' Compensation
|
•
|
Other Product Lines
|
•
|
excess and umbrella products, which provide coverage over approved underlying insurance carriers on either an occurrence or claims-made basis;
|
•
|
products liability products, which provide coverage on either an occurrence or claims-made basis to manufacturers, distributors, importers and re-packagers of manufactured products;
|
•
|
environmental products, which include environmental consultants' professional liability, contractors' pollution liability and site-specific environmental impairment liability coverages; and
|
•
|
casualty facultative reinsurance written for individual casualty risks focusing on general liability, products liability, automobile liability and certain classes of miscellaneous professional liability and targeting classes which include low frequency, high severity general liability risks.
|
•
|
inland marine products, which provide a number of specialty coverages for risks such as motor truck cargo coverage for damage to third party cargo while in transit, warehouseman's legal liability coverage for damage to third party goods in storage, contractor's equipment coverage for first party property damage, and builder's risk coverage; and
|
•
|
railroad-related products, which provide first party coverages for short-line and regional railroads, scenic and tourist railroads, commuter and light rail trains and railroad equipment.
|
•
|
general agent programs that use managing general agents to offer single source admitted and non-admitted programs for a specific class or line of business;
|
•
|
first and third party coverages for medical transport, small fishing ventures, charters, utility boats and boat rentals; and
|
•
|
property and liability coverages for farms and animal boarding, breeding and training facilities.
|
•
|
ocean marine products, which provide general liability, professional liability, property and cargo coverages for marine artisan contractors, boat dealers and marina owners including hull physical damage, protection and indemnity and third party property coverages for ocean cargo; and
|
•
|
coverages for equine-related risks, such as horse mortality, theft, infertility, transit and specified perils.
|
•
|
Professional Liability
|
•
|
Marine and Energy
|
•
|
General Liability
|
•
|
Property
|
•
|
Other Product Lines
|
•
|
crime coverage primarily targeting financial institutions and providing protection for bankers' blanket bond, computer crime and commercial fidelity;
|
•
|
contingency coverage including event cancellation, non-appearance and prize indemnity;
|
•
|
accident and health coverage targeting affinity groups and schemes, high value and high risks accounts and sports groups;
|
•
|
coverage for equine-related risks such as horse mortality, theft, infertility, transit and specified perils;
|
•
|
specialty coverages include mortality risks for farms, zoos, animal theme parks and safari parks; and
|
•
|
short-term trade credit coverage for commercial risks, including insolvency and protracted default as well as political risks coverage in conjunction with commercial risks for currency inconvertibility, government action, import and export license cancellation, public buyer default and war.
|
•
|
Property
|
•
|
Casualty
|
•
|
Other
|
•
|
aviation, which includes commercial airline hull and liability coverage as well as general aviation for risks worldwide;
|
•
|
accident and health catastrophe coverage for personal accident, life, medical and workers' compensation;
|
•
|
structured and whole turnover credit, political risk, mortgage and contract and commercial surety reinsurance programs covering worldwide exposures;
|
•
|
onshore and offshore marine and energy risks on a worldwide basis, including hull, cargo and liability;
|
•
|
agriculture reinsurance for Multi-Peril Crop Insurance, hail and related exposures, covering risks located in the United States and Canada; and
|
•
|
public entity reinsurance products, which offer customized programs for government risk solutions, including counties, municipalities, schools, public housing authorities and special districts (e.g. water, sewer, parks) located in the United States. Types of coverage include general liability, environmental impairment liability, workers' compensation and errors and omissions.
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average
Five-Year
Annual
Return
|
|
Weighted
Average
Ten-Year
Annual
Return
|
||||||||||||
|
Years Ended December 31,
|
|
|
||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
|
||||||||||||||
Equities
|
(2.5
|
)%
|
|
18.6
|
%
|
|
33.3
|
%
|
|
19.6
|
%
|
|
3.8
|
%
|
|
13.7
|
%
|
|
11.2
|
%
|
|||||
Fixed maturities
(1)
|
1.6
|
%
|
|
6.5
|
%
|
|
0.0
|
%
|
|
5.1
|
%
|
|
7.6
|
%
|
|
3.8
|
%
|
|
4.3
|
%
|
|||||
Total portfolio, before foreign currency effect
|
0.5
|
%
|
|
8.9
|
%
|
|
6.9
|
%
|
|
8.6
|
%
|
|
6.7
|
%
|
|
5.9
|
%
|
|
5.7
|
%
|
|||||
Total portfolio
|
(0.7
|
)%
|
|
7.4
|
%
|
|
6.8
|
%
|
|
9.0
|
%
|
|
6.5
|
%
|
|
5.2
|
%
|
|
5.3
|
%
|
|||||
Invested assets, end of year (in millions)
|
$
|
18,181
|
|
|
$
|
18,638
|
|
|
$
|
17,612
|
|
|
$
|
9,333
|
|
|
$
|
8,728
|
|
|
|
|
|
(1)
|
Includes short-term investments, cash and cash equivalents and restricted cash and cash equivalents.
|
•
|
For our Markel Ventures manufacturing operations, laws and regulations in the areas of safety, health, employment and environmental pollution controls, as well as U.S. and international trade and anti-corruption laws and regulations; and
|
•
|
For our Markel Ventures non-manufacturing operations, laws and regulations in the areas of data privacy and security, health care, government contracting and employment.
|
•
|
trends in claim frequency and severity,
|
•
|
changes in operations,
|
•
|
emerging economic and social trends,
|
•
|
trends in insurance rates,
|
•
|
inflation or deflation,
|
•
|
changes in the regulatory and litigation environments, and
|
•
|
uncertainties relating to asbestos and environmental exposures.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Results of Operations
|
|
|
|
|
|
||||||
Earned premiums
|
$
|
3,824
|
|
|
$
|
3,841
|
|
|
$
|
3,232
|
|
Net investment income
|
353
|
|
|
363
|
|
|
317
|
|
|||
Total operating revenues
|
5,370
|
|
|
5,134
|
|
|
4,323
|
|
|||
Net income (loss) to shareholders
|
583
|
|
|
321
|
|
|
281
|
|
|||
Comprehensive income (loss) to shareholders
|
233
|
|
|
936
|
|
|
459
|
|
|||
Diluted net income (loss) per share
|
$
|
41.74
|
|
|
$
|
22.27
|
|
|
$
|
22.48
|
|
Financial Position
|
|
|
|
|
|
||||||
Total investments, cash and cash equivalents and restricted cash and cash equivalents (invested assets)
|
$
|
18,181
|
|
|
$
|
18,638
|
|
|
$
|
17,612
|
|
Total assets
|
24,941
|
|
|
25,200
|
|
|
23,956
|
|
|||
Unpaid losses and loss adjustment expenses
|
10,252
|
|
|
10,404
|
|
|
10,262
|
|
|||
Senior long-term debt and other debt
|
2,241
|
|
|
2,254
|
|
|
2,256
|
|
|||
Shareholders' equity
|
7,834
|
|
|
7,595
|
|
|
6,674
|
|
|||
Common shares outstanding (at year end, in thousands)
|
13,959
|
|
|
13,962
|
|
|
13,986
|
|
|||
OPERATING PERFORMANCE MEASURES
(1, 2)
|
|
|
|
|
|
||||||
Operating Data
|
|
|
|
|
|
||||||
Book value per common share outstanding
|
$
|
561.23
|
|
|
$
|
543.96
|
|
|
$
|
477.16
|
|
Growth (decline) in book value per share
|
3
|
%
|
|
14
|
%
|
|
18
|
%
|
|||
5-Year CAGR in book value per share
(3)
|
11
|
%
|
|
14
|
%
|
|
17
|
%
|
|||
Closing stock price
|
$
|
883.35
|
|
|
$
|
682.84
|
|
|
$
|
580.35
|
|
Ratio Analysis
|
|
|
|
|
|
||||||
U.S. GAAP combined ratio
(4)
|
89
|
%
|
|
95
|
%
|
|
97
|
%
|
|||
Investment yield
(5)
|
2
|
%
|
|
2
|
%
|
|
3
|
%
|
|||
Taxable equivalent total investment return
(6)
|
(1
|
)%
|
|
7
|
%
|
|
7
|
%
|
|||
Investment leverage
(7)
|
2.3
|
|
|
2.5
|
|
|
2.6
|
|
|||
Debt to capital
|
22
|
%
|
|
23
|
%
|
|
25
|
%
|
(1)
|
Reflects the acquisition of Alterra Capital Holdings Limited effective May 1, 2013, which included the issuance of equity totaling $2.3 billion.
|
(2)
|
Operating Performance Measures provide a basis for management to evaluate our performance. The method we use to compute these measures may differ from the methods used by other companies. See further discussion of management's evaluation of these measures in Management's Discussion & Analysis of Financial Condition and Results of Operations.
|
(3)
|
CAGR—compound annual growth rate.
|
(4)
|
The U.S. GAAP combined ratio measures the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
|
(5)
|
Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.
|
(6)
|
See "Investing Results" in Management's Discussion & Analysis of Financial Condition and Results of Operations for detail regarding the calculation of taxable equivalent total investment return.
|
(7)
|
Investment leverage represents total invested assets divided by shareholders' equity.
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
5-Year CAGR
(3)
|
|
10-Year CAGR
(3)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
2,147
|
|
|
$
|
1,979
|
|
|
$
|
1,731
|
|
|
$
|
1,816
|
|
|
$
|
2,022
|
|
|
$
|
2,117
|
|
|
$
|
2,184
|
|
|
17
|
%
|
|
7
|
%
|
282
|
|
|
264
|
|
|
273
|
|
|
260
|
|
|
282
|
|
|
305
|
|
|
269
|
|
|
5
|
%
|
|
4
|
%
|
|||||||
3,000
|
|
|
2,630
|
|
|
2,225
|
|
|
2,069
|
|
|
1,977
|
|
|
2,551
|
|
|
2,576
|
|
|
19
|
%
|
|
9
|
%
|
|||||||
253
|
|
|
142
|
|
|
267
|
|
|
202
|
|
|
(59
|
)
|
|
406
|
|
|
393
|
|
|
—
|
|
|
—
|
|
|||||||
504
|
|
|
252
|
|
|
431
|
|
|
591
|
|
|
(403
|
)
|
|
337
|
|
|
551
|
|
|
—
|
|
|
—
|
|
|||||||
$
|
25.89
|
|
|
$
|
14.60
|
|
|
$
|
27.27
|
|
|
$
|
20.52
|
|
|
$
|
(5.95
|
)
|
|
$
|
40.64
|
|
|
$
|
39.40
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
9,333
|
|
|
$
|
8,728
|
|
|
$
|
8,224
|
|
|
$
|
7,849
|
|
|
$
|
6,893
|
|
|
$
|
7,775
|
|
|
$
|
7,524
|
|
|
17
|
%
|
|
11
|
%
|
12,557
|
|
|
11,532
|
|
|
10,826
|
|
|
10,242
|
|
|
9,512
|
|
|
10,164
|
|
|
10,117
|
|
|
18
|
%
|
|
10
|
%
|
|||||||
5,371
|
|
|
5,399
|
|
|
5,398
|
|
|
5,427
|
|
|
5,492
|
|
|
5,526
|
|
|
5,584
|
|
|
14
|
%
|
|
6
|
%
|
|||||||
1,493
|
|
|
1,294
|
|
|
1,016
|
|
|
964
|
|
|
694
|
|
|
691
|
|
|
866
|
|
|
—
|
|
|
—
|
|
|||||||
3,889
|
|
|
3,388
|
|
|
3,172
|
|
|
2,774
|
|
|
2,181
|
|
|
2,641
|
|
|
2,296
|
|
|
20
|
%
|
|
16
|
%
|
|||||||
9,629
|
|
|
9,621
|
|
|
9,718
|
|
|
9,819
|
|
|
9,814
|
|
|
9,957
|
|
|
9,994
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
403.85
|
|
|
$
|
352.10
|
|
|
$
|
326.36
|
|
|
$
|
282.55
|
|
|
$
|
222.20
|
|
|
$
|
265.26
|
|
|
$
|
229.78
|
|
|
11
|
%
|
|
12
|
%
|
15
|
%
|
|
8
|
%
|
|
16
|
%
|
|
27
|
%
|
|
(16
|
)%
|
|
15
|
%
|
|
32
|
%
|
|
—
|
|
|
—
|
|
|||||||
9
|
%
|
|
9
|
%
|
|
13
|
%
|
|
11
|
%
|
|
10
|
%
|
|
18
|
%
|
|
16
|
%
|
|
—
|
|
|
—
|
|
|||||||
$
|
433.42
|
|
|
$
|
414.67
|
|
|
$
|
378.13
|
|
|
$
|
340.00
|
|
|
$
|
299.00
|
|
|
$
|
491.10
|
|
|
$
|
480.10
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
97
|
%
|
|
102
|
%
|
|
97
|
%
|
|
95
|
%
|
|
99
|
%
|
|
88
|
%
|
|
87
|
%
|
|
—
|
|
|
—
|
|
|||||||
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
—
|
|
|
—
|
|
|||||||
9
|
%
|
|
7
|
%
|
|
8
|
%
|
|
13
|
%
|
|
(10
|
)%
|
|
5
|
%
|
|
11
|
%
|
|
—
|
|
|
—
|
|
|||||||
2.4
|
|
|
2.6
|
|
|
2.6
|
|
|
2.8
|
|
|
3.2
|
|
|
2.9
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|||||||
28
|
%
|
|
28
|
%
|
|
24
|
%
|
|
26
|
%
|
|
24
|
%
|
|
21
|
%
|
|
27
|
%
|
|
—
|
|
|
—
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(dollars in thousands)
|
||||||
ASSETS
|
|
|
|
||||
Investments, available-for-sale, at estimated fair value:
|
|
|
|
||||
Fixed maturities (amortized cost of $9,038,158 in 2015 and $9,929,137 in 2014)
|
$
|
9,394,468
|
|
|
$
|
10,422,882
|
|
Equity securities (cost of $2,208,834 in 2015 and $1,951,658 in 2014)
|
4,074,475
|
|
|
4,137,576
|
|
||
Short-term investments (estimated fair value approximates cost)
|
1,642,261
|
|
|
1,594,849
|
|
||
Total Investments
|
15,111,204
|
|
|
16,155,307
|
|
||
Cash and cash equivalents
|
2,630,009
|
|
|
1,960,169
|
|
||
Restricted cash and cash equivalents
|
440,132
|
|
|
522,225
|
|
||
Receivables
|
1,113,703
|
|
|
1,135,217
|
|
||
Reinsurance recoverable on unpaid losses
|
2,016,665
|
|
|
1,868,669
|
|
||
Reinsurance recoverable on paid losses
|
50,123
|
|
|
102,206
|
|
||
Deferred policy acquisition costs
|
352,756
|
|
|
353,410
|
|
||
Prepaid reinsurance premiums
|
322,362
|
|
|
365,458
|
|
||
Goodwill
|
1,167,844
|
|
|
1,049,115
|
|
||
Intangible assets
|
792,372
|
|
|
702,747
|
|
||
Other assets
|
944,101
|
|
|
985,834
|
|
||
Total Assets
|
$
|
24,941,271
|
|
|
$
|
25,200,357
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Unpaid losses and loss adjustment expenses
|
$
|
10,251,953
|
|
|
$
|
10,404,152
|
|
Life and annuity benefits
|
1,123,275
|
|
|
1,305,818
|
|
||
Unearned premiums
|
2,166,105
|
|
|
2,245,690
|
|
||
Payables to insurance and reinsurance companies
|
224,921
|
|
|
276,122
|
|
||
Senior long-term debt and other debt (estimated fair value of $2,403,000 in 2015 and $2,493,000 in 2014)
|
2,241,427
|
|
|
2,253,594
|
|
||
Other liabilities
|
1,030,023
|
|
|
1,051,931
|
|
||
Total Liabilities
|
17,037,704
|
|
|
17,537,307
|
|
||
Redeemable noncontrolling interests
|
62,958
|
|
|
61,048
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Common stock
|
3,342,357
|
|
|
3,308,395
|
|
||
Retained earnings
|
3,137,285
|
|
|
2,581,866
|
|
||
Accumulated other comprehensive income
|
1,354,508
|
|
|
1,704,557
|
|
||
Total Shareholders' Equity
|
7,834,150
|
|
|
7,594,818
|
|
||
Noncontrolling interests
|
6,459
|
|
|
7,184
|
|
||
Total Equity
|
7,840,609
|
|
|
7,602,002
|
|
||
Total Liabilities and Equity
|
$
|
24,941,271
|
|
|
$
|
25,200,357
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(dollars in thousands, except per share data)
|
||||||||||
OPERATING REVENUES
|
|
|
|
|
|
||||||
Earned premiums
|
$
|
3,823,532
|
|
|
$
|
3,840,912
|
|
|
$
|
3,231,616
|
|
Net investment income
|
353,213
|
|
|
363,230
|
|
|
317,373
|
|
|||
Net realized investment gains:
|
|
|
|
|
|
||||||
Other-than-temporary impairment losses
|
(44,481
|
)
|
|
(4,784
|
)
|
|
(4,706
|
)
|
|||
Net realized investment gains, excluding other-than-temporary impairment losses
|
150,961
|
|
|
50,784
|
|
|
67,858
|
|
|||
Net realized investment gains
|
106,480
|
|
|
46,000
|
|
|
63,152
|
|
|||
Other revenues
|
1,086,758
|
|
|
883,525
|
|
|
710,942
|
|
|||
Total Operating Revenues
|
5,369,983
|
|
|
5,133,667
|
|
|
4,323,083
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
||||||
Losses and loss adjustment expenses
|
1,938,745
|
|
|
2,202,467
|
|
|
1,816,273
|
|
|||
Underwriting, acquisition and insurance expenses
|
1,455,080
|
|
|
1,460,882
|
|
|
1,312,312
|
|
|||
Amortization of intangible assets
|
68,947
|
|
|
57,627
|
|
|
55,223
|
|
|||
Other expenses
|
1,046,805
|
|
|
854,871
|
|
|
663,528
|
|
|||
Total Operating Expenses
|
4,509,577
|
|
|
4,575,847
|
|
|
3,847,336
|
|
|||
Operating Income
|
860,406
|
|
|
557,820
|
|
|
475,747
|
|
|||
Interest expense
|
118,301
|
|
|
117,442
|
|
|
114,004
|
|
|||
Income Before Income Taxes
|
742,105
|
|
|
440,378
|
|
|
361,743
|
|
|||
Income tax expense
|
152,963
|
|
|
116,690
|
|
|
77,898
|
|
|||
Net Income
|
$
|
589,142
|
|
|
$
|
323,688
|
|
|
$
|
283,845
|
|
Net income attributable to noncontrolling interests
|
6,370
|
|
|
2,506
|
|
|
2,824
|
|
|||
Net Income to Shareholders
|
$
|
582,772
|
|
|
$
|
321,182
|
|
|
$
|
281,021
|
|
|
|
|
|
|
|
||||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Change in net unrealized gains on investments, net of taxes:
|
|
|
|
|
|
||||||
Net holding gains (losses) arising during the period
|
$
|
(240,170
|
)
|
|
$
|
687,735
|
|
|
$
|
225,545
|
|
Change in unrealized other-than-temporary impairment losses on fixed maturities arising during the period
|
160
|
|
|
173
|
|
|
(141
|
)
|
|||
Reclassification adjustments for net gains included in net income
|
(80,482
|
)
|
|
(26,161
|
)
|
|
(40,830
|
)
|
|||
Change in net unrealized gains on investments, net of taxes
|
(320,492
|
)
|
|
661,747
|
|
|
184,574
|
|
|||
Change in foreign currency translation adjustments, net of taxes
|
(29,278
|
)
|
|
(32,241
|
)
|
|
(10,143
|
)
|
|||
Change in net actuarial pension loss, net of taxes
|
(352
|
)
|
|
(14,750
|
)
|
|
4,065
|
|
|||
Total Other Comprehensive Income (Loss)
|
(350,122
|
)
|
|
614,756
|
|
|
178,496
|
|
|||
Comprehensive Income
|
$
|
239,020
|
|
|
$
|
938,444
|
|
|
$
|
462,341
|
|
Comprehensive income attributable to noncontrolling interests
|
6,297
|
|
|
2,510
|
|
|
2,852
|
|
|||
Comprehensive Income to Shareholders
|
$
|
232,723
|
|
|
$
|
935,934
|
|
|
$
|
459,489
|
|
|
|
|
|
|
|
||||||
NET INCOME PER SHARE
|
|
|
|
|
|
||||||
Basic
|
$
|
41.99
|
|
|
$
|
22.38
|
|
|
$
|
22.57
|
|
Diluted
|
$
|
41.74
|
|
|
$
|
22.27
|
|
|
$
|
22.48
|
|
(in thousands)
|
Common
Shares
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
Shareholders'
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|
Redeemable Noncontrolling Interests
|
|||||||||||||||
December 31, 2012
|
9,629
|
|
|
$
|
908,980
|
|
|
$
|
2,068,340
|
|
|
$
|
911,337
|
|
|
$
|
3,888,657
|
|
|
$
|
360
|
|
|
$
|
3,889,017
|
|
|
$
|
86,225
|
|
Net income (loss)
|
|
|
|
|
281,021
|
|
|
—
|
|
|
281,021
|
|
|
(958
|
)
|
|
280,063
|
|
|
3,782
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
—
|
|
|
178,468
|
|
|
178,468
|
|
|
—
|
|
|
178,468
|
|
|
28
|
|
|||||||||
Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
459,489
|
|
|
(958
|
)
|
|
458,531
|
|
|
3,810
|
|
|||||||||||
Issuance of common stock
|
71
|
|
|
24,518
|
|
|
—
|
|
|
—
|
|
|
24,518
|
|
|
—
|
|
|
24,518
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(109
|
)
|
|
—
|
|
|
(57,388
|
)
|
|
—
|
|
|
(57,388
|
)
|
|
—
|
|
|
(57,388
|
)
|
|
—
|
|
|||||||
Restricted stock awards expensed
|
(3
|
)
|
|
25,239
|
|
|
—
|
|
|
—
|
|
|
25,239
|
|
|
—
|
|
|
25,239
|
|
|
—
|
|
|||||||
Acquisition of Alterra
|
4,398
|
|
|
2,330,199
|
|
|
—
|
|
|
—
|
|
|
2,330,199
|
|
|
—
|
|
|
2,330,199
|
|
|
—
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
1,963
|
|
|
—
|
|
|
1,963
|
|
|
—
|
|
|
1,963
|
|
|
(1,963
|
)
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
(136
|
)
|
|
—
|
|
|
—
|
|
|
(136
|
)
|
|
—
|
|
|
(136
|
)
|
|
(11,716
|
)
|
|||||||
Other
|
—
|
|
|
63
|
|
|
973
|
|
|
—
|
|
|
1,036
|
|
|
5,031
|
|
|
6,067
|
|
|
(4,173
|
)
|
|||||||
December 31, 2013
|
13,986
|
|
|
3,288,863
|
|
|
2,294,909
|
|
|
1,089,805
|
|
|
6,673,577
|
|
|
4,433
|
|
|
6,678,010
|
|
|
72,183
|
|
|||||||
Net income (loss)
|
|
|
|
|
321,182
|
|
|
—
|
|
|
321,182
|
|
|
(1,981
|
)
|
|
319,201
|
|
|
4,487
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
—
|
|
|
614,752
|
|
|
614,752
|
|
|
—
|
|
|
614,752
|
|
|
4
|
|
|||||||||
Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
935,934
|
|
|
(1,981
|
)
|
|
933,953
|
|
|
4,491
|
|
|||||||||||
Issuance of common stock
|
19
|
|
|
5,691
|
|
|
—
|
|
|
—
|
|
|
5,691
|
|
|
—
|
|
|
5,691
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(43
|
)
|
|
—
|
|
|
(26,053
|
)
|
|
—
|
|
|
(26,053
|
)
|
|
—
|
|
|
(26,053
|
)
|
|
—
|
|
|||||||
Restricted stock awards expensed
|
—
|
|
|
22,935
|
|
|
—
|
|
|
—
|
|
|
22,935
|
|
|
—
|
|
|
22,935
|
|
|
—
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
(8,186
|
)
|
|
—
|
|
|
(8,186
|
)
|
|
—
|
|
|
(8,186
|
)
|
|
8,186
|
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
(10,257
|
)
|
|
—
|
|
|
—
|
|
|
(10,257
|
)
|
|
905
|
|
|
(9,352
|
)
|
|
(18,566
|
)
|
|||||||
Other
|
—
|
|
|
1,163
|
|
|
14
|
|
|
—
|
|
|
1,177
|
|
|
3,827
|
|
|
5,004
|
|
|
(5,246
|
)
|
|||||||
December 31, 2014
|
13,962
|
|
|
3,308,395
|
|
|
2,581,866
|
|
|
1,704,557
|
|
|
7,594,818
|
|
|
7,184
|
|
|
7,602,002
|
|
|
61,048
|
|
|||||||
Net income (loss)
|
|
|
|
|
582,772
|
|
|
—
|
|
|
582,772
|
|
|
(988
|
)
|
|
581,784
|
|
|
7,358
|
|
|||||||||
Other comprehensive loss
|
|
|
|
|
—
|
|
|
(350,049
|
)
|
|
(350,049
|
)
|
|
—
|
|
|
(350,049
|
)
|
|
(73
|
)
|
|||||||||
Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
232,723
|
|
|
(988
|
)
|
|
231,735
|
|
|
7,285
|
|
|||||||||||
Issuance of common stock
|
34
|
|
|
4,752
|
|
|
—
|
|
|
—
|
|
|
4,752
|
|
|
—
|
|
|
4,752
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(37
|
)
|
|
—
|
|
|
(31,491
|
)
|
|
—
|
|
|
(31,491
|
)
|
|
—
|
|
|
(31,491
|
)
|
|
—
|
|
|||||||
Restricted stock awards expensed
|
—
|
|
|
24,129
|
|
|
—
|
|
|
—
|
|
|
24,129
|
|
|
—
|
|
|
24,129
|
|
|
—
|
|
|||||||
Acquisition of CapTech
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,817
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
4,144
|
|
|
—
|
|
|
4,144
|
|
|
—
|
|
|
4,144
|
|
|
(4,144
|
)
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
(1,447
|
)
|
|
—
|
|
|
—
|
|
|
(1,447
|
)
|
|
—
|
|
|
(1,447
|
)
|
|
(8,224
|
)
|
|||||||
Other
|
—
|
|
|
6,528
|
|
|
(6
|
)
|
|
—
|
|
|
6,522
|
|
|
263
|
|
|
6,785
|
|
|
(6,824
|
)
|
|||||||
December 31, 2015
|
13,959
|
|
|
$
|
3,342,357
|
|
|
$
|
3,137,285
|
|
|
$
|
1,354,508
|
|
|
$
|
7,834,150
|
|
|
$
|
6,459
|
|
|
$
|
7,840,609
|
|
|
$
|
62,958
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(dollars in thousands)
|
||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
589,142
|
|
|
$
|
323,688
|
|
|
$
|
283,845
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Deferred income tax expense (benefit)
|
(9,678
|
)
|
|
84,543
|
|
|
4,050
|
|
|||
Depreciation and amortization
|
200,987
|
|
|
203,580
|
|
|
190,066
|
|
|||
Net realized investment gains
|
(106,480
|
)
|
|
(46,000
|
)
|
|
(63,152
|
)
|
|||
Decrease in receivables
|
5,604
|
|
|
21,148
|
|
|
142,065
|
|
|||
Increase in deferred policy acquisition costs
|
(7,360
|
)
|
|
(99,387
|
)
|
|
(103,704
|
)
|
|||
Increase (decrease) in unpaid losses and loss adjustment expenses, net
|
(91,960
|
)
|
|
249,873
|
|
|
290,130
|
|
|||
Decrease in life and annuity benefits
|
(85,257
|
)
|
|
(62,883
|
)
|
|
(40,235
|
)
|
|||
Increase (decrease) in unearned premiums, net
|
(4,522
|
)
|
|
147,840
|
|
|
97,249
|
|
|||
Decrease in payables to insurance and reinsurance companies
|
(31,829
|
)
|
|
(45,204
|
)
|
|
(150,764
|
)
|
|||
Increase (decrease) in income taxes payable
|
27,817
|
|
|
(46,576
|
)
|
|
81,995
|
|
|||
Increase in accrued expenses
|
97,273
|
|
|
56,042
|
|
|
19,144
|
|
|||
Other
|
67,414
|
|
|
(69,872
|
)
|
|
(5,168
|
)
|
|||
Net Cash Provided By Operating Activities
|
651,151
|
|
|
716,792
|
|
|
745,521
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from sales of fixed maturities and equity securities
|
538,978
|
|
|
1,286,871
|
|
|
879,564
|
|
|||
Proceeds from maturities, calls and prepayments of fixed maturities
|
1,503,616
|
|
|
1,420,817
|
|
|
1,475,938
|
|
|||
Cost of fixed maturities and equity securities purchased
|
(1,576,254
|
)
|
|
(3,153,055
|
)
|
|
(1,651,397
|
)
|
|||
Net change in short-term investments
|
(62,124
|
)
|
|
(129,164
|
)
|
|
(470,423
|
)
|
|||
Proceeds from sales of equity method investments
|
23,155
|
|
|
107,292
|
|
|
313,557
|
|
|||
Cost of equity method investments
|
(21,849
|
)
|
|
(16,081
|
)
|
|
(38,018
|
)
|
|||
Change in restricted cash and cash equivalents
|
62,324
|
|
|
264,701
|
|
|
(263,014
|
)
|
|||
Additions to property and equipment
|
(79,755
|
)
|
|
(82,132
|
)
|
|
(47,725
|
)
|
|||
Acquisitions, net of cash acquired
|
(261,521
|
)
|
|
(319,086
|
)
|
|
(12,198
|
)
|
|||
Other
|
(797
|
)
|
|
(2,368
|
)
|
|
1,103
|
|
|||
Net Cash Provided (Used) By Investing Activities
|
125,773
|
|
|
(622,205
|
)
|
|
187,387
|
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Additions to senior long-term debt and other debt
|
69,797
|
|
|
89,480
|
|
|
547,214
|
|
|||
Repayment and retirement of senior long-term debt and other debt
|
(88,020
|
)
|
|
(83,722
|
)
|
|
(321,978
|
)
|
|||
Repurchases of common stock
|
(31,491
|
)
|
|
(26,053
|
)
|
|
(57,388
|
)
|
|||
Issuance of common stock
|
4,752
|
|
|
5,691
|
|
|
24,518
|
|
|||
Purchase of redeemable noncontrolling interests
|
(12,474
|
)
|
|
(25,918
|
)
|
|
(11,852
|
)
|
|||
Distributions to noncontrolling interests
|
(6,287
|
)
|
|
(5,245
|
)
|
|
(5,124
|
)
|
|||
Other
|
(10,488
|
)
|
|
(21,357
|
)
|
|
(23
|
)
|
|||
Net Cash Provided (Used) By Financing Activities
|
(74,211
|
)
|
|
(67,124
|
)
|
|
175,367
|
|
|||
Effect of foreign currency rate changes on cash and cash equivalents
|
(32,873
|
)
|
|
(45,820
|
)
|
|
6,485
|
|
|||
Increase (decrease) in cash and cash equivalents
|
669,840
|
|
|
(18,357
|
)
|
|
1,114,760
|
|
|||
Cash and cash equivalents at beginning of year
|
1,960,169
|
|
|
1,978,526
|
|
|
863,766
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
2,630,009
|
|
|
$
|
1,960,169
|
|
|
$
|
1,978,526
|
|
(in thousands, except per share amounts)
|
|
||
Shares of Alterra common stock outstanding as of the Acquisition Date
|
96,433
|
|
|
Exchange ratio per the Merger Agreement
|
0.04315
|
|
|
Markel share issuance to Alterra shareholders
|
4,161
|
|
|
|
|
||
Shares of Alterra restricted stock outstanding as of the Acquisition Date
|
2,239
|
|
|
Incentive award ratio per the Merger Agreement
|
0.06252
|
|
|
Markel restricted stock issuance to Alterra restricted stock holders
|
140
|
|
|
|
|
||
Multiplied by Markel's weighted average stock price on April 30, 2013
(1)
|
$
|
529.59
|
|
|
|
||
Markel share and restricted stock issuance consideration, net of taxes
|
$
|
2,267,648
|
|
|
|
||
Alterra common shares outstanding as of the Acquisition Date that received cash consideration
|
96,433
|
|
|
Multiplied by cash price per share component per the Merger Agreement
|
$
|
10.00
|
|
Markel cash consideration
|
$
|
964,330
|
|
|
|
||
Fair value of Markel warrant issuance to Alterra warrant holders as of the Acquisition Date
|
$
|
73,685
|
|
Fair value of Markel stock option issuance to Alterra stock option holders as of the Acquisition Date, net of taxes
|
$
|
12,335
|
|
Fair value of partially vested Markel restricted stock unit issuance as of the Acquisition Date, net of taxes
|
$
|
6,867
|
|
Unrecognized compensation on unvested restricted stock and restricted stock units
|
$
|
(20,572
|
)
|
Total acquisition consideration
|
$
|
3,304,293
|
|
(1)
|
The fair value of the shares issued by the Company was calculated as the weighted average price of the Company's stock on April 30, 2013, the day preceding the Acquisition Date.
|
•
|
Investments
- Fixed maturity investments acquired include a net increase of
$223.1 million
to adjust the historical carrying amount of Alterra's investments to their estimated fair value as of the Acquisition Date. The difference in the historical amortized cost of the fixed maturity investments acquired and their estimated fair value as of the Acquisition Date,
$495.5 million
, represents incremental premium that will be amortized to net investment income over the term of the underlying securities. The amount of the unamortized incremental premium as of
December 31, 2015
and
2014
was
$198.3 million
and
$281.1 million
, respectively. The decrease in the unamortized incremental premium is due to amortization expense of
$39.6 million
,
$59.3 million
and
$58.3 million
for the years ended
December 31, 2015
,
2014
and
2013
, respectively, and sales of securities.
|
•
|
Intangible assets -
Establish the estimated fair value of intangible assets related to Alterra (see below for further detail).
|
•
|
Unearned Premiums -
Unearned premiums acquired include a decrease of
$176.3 million
to adjust the carrying value of Alterra's historical unearned premiums to fair value as of the Acquisition Date. The adjustment consists of the present value of the expected underwriting profit within the unearned premiums liability less costs to service the related policies and a risk premium. This adjustment was amortized to underwriting, acquisition and insurance expenses over a weighted average period of approximately
one year
, as the contracts for business in-force as of the Acquisition Date expired. As of December 31, 2014, this adjustment was fully amortized.
|
•
|
Unpaid losses and loss adjustment expenses -
Unpaid losses and loss adjustment expenses acquired include an increase of
$120.8 million
to adjust the carrying value of Alterra's historical unpaid losses and loss adjustment expenses, net of related reinsurance recoverable, to fair value as of the Acquisition Date. The estimated fair value consists of the present value of the expected net loss and loss adjustment expense payments plus a risk premium. This adjustment, plus the
$26.5 million
unamortized fair value adjustment included in Alterra's historical unpaid losses and loss adjustment expenses, will be amortized to losses and loss adjustment expenses over a weighted average period of approximately
five years
, based on the estimated payout pattern of net reserves as of the Acquisition Date. The amount of the unamortized fair value adjustment included in unpaid losses and loss adjustment expenses as of
December 31, 2015
and
2014
was
$91.0 million
and
$114.6 million
, respectively.
|
•
|
Life and Annuity Benefits
- Life and annuity benefits acquired include an increase of
$329.6 million
to adjust the carrying value of Alterra's historical life and annuity benefits to fair value as of the Acquisition Date. The estimated fair value consists of the present value of the expected net life and annuity benefit payments plus a risk premium. See note
10
for detail regarding accounting for life and annuity benefits.
|
•
|
Senior long-term debt -
Senior long-term debt acquired includes an increase of
$71.9 million
to adjust the carrying value of Alterra's senior long-term debt to its estimated fair value based on prevailing interest rates and other factors as of the Acquisition Date. This adjustment will be amortized to interest expense over the term of the notes. See note
11
. The amount of the unamortized premium on the acquired senior long-term debt as of
December 31, 2015
and
2014
was
$46.3 million
and
$56.7 million
, respectively.
|
(dollars in thousands)
|
Amount
|
|
Economic
Useful Life
|
||
Customer relationships
|
$
|
132,000
|
|
|
18 years
|
Broker relationships
|
19,000
|
|
|
18 years
|
|
Technology
|
18,000
|
|
|
Ten years
|
|
Trade names
|
1,000
|
|
|
One year
|
|
Lloyd's syndicate capacity
|
12,000
|
|
|
Indefinite
|
|
Insurance licenses
|
25,500
|
|
|
Indefinite
|
|
Intangible assets as of the Acquisition Date
|
$
|
207,500
|
|
|
|
(dollars in thousands)
|
Year Ended
December 31, 2013
|
||
Transaction costs
|
$
|
15,981
|
|
Acquisition-related costs:
|
|
||
Severance costs
|
31,734
|
|
|
Stay bonuses
|
14,804
|
|
|
Acceleration of Alterra long-term incentive compensation awards and restricted stock awards
|
12,621
|
|
|
Total transaction and acquisition-related costs
|
$
|
75,140
|
|
(dollars in thousands)
|
Year Ended
December 31, 2013
|
||
Operating revenues
|
$
|
912,387
|
|
Net loss to shareholders
|
$
|
(93,074
|
)
|
|
Unaudited
|
||
|
Consolidated
Pro Forma
|
||
(in thousands, except per share amounts)
|
Year Ended December 31, 2013
|
||
Earned premiums
|
$
|
3,680,220
|
|
Operating revenues
|
4,899,628
|
|
|
Net income to shareholders
|
422,829
|
|
|
|
|
||
U.S. GAAP combined ratio
(1)
|
95
|
%
|
|
|
|
||
Basic net income per share
|
$
|
30.33
|
|
Diluted net income per share
|
$
|
30.19
|
|
|
|
||
Weighted average common shares outstanding:
|
|
||
Basic
|
14,007
|
|
|
Diluted
|
14,069
|
|
(1)
|
The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
|
|
December 31, 2015
|
||||||||||||||||||
(dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Holding
Gains
|
|
Gross
Unrealized
Holding
Losses
|
|
Unrealized Other-
Than-Temporary
Impairment Losses
|
|
Estimated
Fair
Value
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities and obligations of U.S. government agencies
|
$
|
695,652
|
|
|
$
|
9,836
|
|
|
$
|
(4,781
|
)
|
|
$
|
—
|
|
|
$
|
700,707
|
|
Obligations of states, municipalities and political subdivisions
|
3,817,136
|
|
|
204,302
|
|
|
(8,225
|
)
|
|
—
|
|
|
4,013,213
|
|
|||||
Foreign governments
|
1,302,329
|
|
|
115,809
|
|
|
(1,681
|
)
|
|
—
|
|
|
1,416,457
|
|
|||||
Commercial mortgage-backed securities
|
657,670
|
|
|
6,867
|
|
|
(4,999
|
)
|
|
—
|
|
|
659,538
|
|
|||||
Residential mortgage-backed securities
|
837,964
|
|
|
22,563
|
|
|
(4,022
|
)
|
|
(2,258
|
)
|
|
854,247
|
|
|||||
Asset-backed securities
|
36,462
|
|
|
15
|
|
|
(406
|
)
|
|
—
|
|
|
36,071
|
|
|||||
Corporate bonds
|
1,690,945
|
|
|
41,123
|
|
|
(16,209
|
)
|
|
(1,624
|
)
|
|
1,714,235
|
|
|||||
Total fixed maturities
|
9,038,158
|
|
|
400,515
|
|
|
(40,323
|
)
|
|
(3,882
|
)
|
|
9,394,468
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance, banks and other financial institutions
|
651,002
|
|
|
690,271
|
|
|
(6,551
|
)
|
|
—
|
|
|
1,334,722
|
|
|||||
Industrial, consumer and all other
|
1,557,832
|
|
|
1,227,052
|
|
|
(45,131
|
)
|
|
—
|
|
|
2,739,753
|
|
|||||
Total equity securities
|
2,208,834
|
|
|
1,917,323
|
|
|
(51,682
|
)
|
|
—
|
|
|
4,074,475
|
|
|||||
Short-term investments
|
1,642,103
|
|
|
167
|
|
|
(9
|
)
|
|
—
|
|
|
1,642,261
|
|
|||||
Investments, available-for-sale
|
$
|
12,889,095
|
|
|
$
|
2,318,005
|
|
|
$
|
(92,014
|
)
|
|
$
|
(3,882
|
)
|
|
$
|
15,111,204
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31, 2014
|
||||||||||||||||||
(dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Holding
Gains
|
|
Gross
Unrealized
Holding
Losses
|
|
Unrealized Other-
Than-Temporary
Impairment Losses
|
|
Estimated
Fair
Value
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury securities and obligations of U.S. government agencies
|
$
|
662,462
|
|
|
$
|
12,963
|
|
|
$
|
(2,163
|
)
|
|
$
|
—
|
|
|
$
|
673,262
|
|
Obligations of states, municipalities and political subdivisions
|
4,075,748
|
|
|
245,158
|
|
|
(3,359
|
)
|
|
—
|
|
|
4,317,547
|
|
|||||
Foreign governments
|
1,458,255
|
|
|
154,707
|
|
|
(1,041
|
)
|
|
—
|
|
|
1,611,921
|
|
|||||
Commercial mortgage-backed securities
|
427,904
|
|
|
5,325
|
|
|
(2,602
|
)
|
|
—
|
|
|
430,627
|
|
|||||
Residential mortgage-backed securities
|
954,263
|
|
|
34,324
|
|
|
(3,482
|
)
|
|
(2,258
|
)
|
|
982,847
|
|
|||||
Asset-backed securities
|
100,073
|
|
|
99
|
|
|
(682
|
)
|
|
—
|
|
|
99,490
|
|
|||||
Corporate bonds
|
2,250,432
|
|
|
69,016
|
|
|
(10,441
|
)
|
|
(1,819
|
)
|
|
2,307,188
|
|
|||||
Total fixed maturities
|
9,929,137
|
|
|
521,592
|
|
|
(23,770
|
)
|
|
(4,077
|
)
|
|
10,422,882
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance, banks and other financial institutions
|
523,739
|
|
|
789,717
|
|
|
(1,531
|
)
|
|
—
|
|
|
1,311,925
|
|
|||||
Industrial, consumer and all other
|
1,427,919
|
|
|
1,403,566
|
|
|
(5,834
|
)
|
|
—
|
|
|
2,825,651
|
|
|||||
Total equity securities
|
1,951,658
|
|
|
2,193,283
|
|
|
(7,365
|
)
|
|
—
|
|
|
4,137,576
|
|
|||||
Short-term investments
|
1,594,819
|
|
|
36
|
|
|
(6
|
)
|
|
—
|
|
|
1,594,849
|
|
|||||
Investments, available-for-sale
|
$
|
13,475,614
|
|
|
$
|
2,714,911
|
|
|
$
|
(31,141
|
)
|
|
$
|
(4,077
|
)
|
|
$
|
16,155,307
|
|
|
December 31, 2015
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
(dollars in thousands)
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies
|
$
|
427,003
|
|
|
$
|
(3,648
|
)
|
|
$
|
92,552
|
|
|
$
|
(1,133
|
)
|
|
$
|
519,555
|
|
|
$
|
(4,781
|
)
|
Obligations of states, municipalities and political subdivisions
|
169,362
|
|
|
(4,864
|
)
|
|
70,101
|
|
|
(3,361
|
)
|
|
239,463
|
|
|
(8,225
|
)
|
||||||
Foreign governments
|
51,328
|
|
|
(249
|
)
|
|
40,345
|
|
|
(1,432
|
)
|
|
91,673
|
|
|
(1,681
|
)
|
||||||
Commercial mortgage-backed securities
|
289,058
|
|
|
(3,600
|
)
|
|
95,843
|
|
|
(1,399
|
)
|
|
384,901
|
|
|
(4,999
|
)
|
||||||
Residential mortgage-backed securities
|
78,814
|
|
|
(2,858
|
)
|
|
137,100
|
|
|
(3,422
|
)
|
|
215,914
|
|
|
(6,280
|
)
|
||||||
Asset-backed securities
|
6,228
|
|
|
(54
|
)
|
|
24,315
|
|
|
(352
|
)
|
|
30,543
|
|
|
(406
|
)
|
||||||
Corporate bonds
|
470,694
|
|
|
(9,509
|
)
|
|
343,737
|
|
|
(8,324
|
)
|
|
814,431
|
|
|
(17,833
|
)
|
||||||
Total fixed maturities
|
1,492,487
|
|
|
(24,782
|
)
|
|
803,993
|
|
|
(19,423
|
)
|
|
2,296,480
|
|
|
(44,205
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Insurance, banks and other financial institutions
|
63,873
|
|
|
(6,384
|
)
|
|
6,247
|
|
|
(167
|
)
|
|
70,120
|
|
|
(6,551
|
)
|
||||||
Industrial, consumer and all other
|
344,857
|
|
|
(44,879
|
)
|
|
2,907
|
|
|
(252
|
)
|
|
347,764
|
|
|
(45,131
|
)
|
||||||
Total equity securities
|
408,730
|
|
|
(51,263
|
)
|
|
9,154
|
|
|
(419
|
)
|
|
417,884
|
|
|
(51,682
|
)
|
||||||
Short-term investments
|
129,473
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
129,473
|
|
|
(9
|
)
|
||||||
Total
|
$
|
2,030,690
|
|
|
$
|
(76,054
|
)
|
|
$
|
813,147
|
|
|
$
|
(19,842
|
)
|
|
$
|
2,843,837
|
|
|
$
|
(95,896
|
)
|
|
December 31, 2014
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
(dollars in thousands)
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding and
Other-Than-
Temporary
Impairment
Losses
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies
|
$
|
108,250
|
|
|
$
|
(62
|
)
|
|
$
|
163,359
|
|
|
$
|
(2,101
|
)
|
|
$
|
271,609
|
|
|
$
|
(2,163
|
)
|
Obligations of states, municipalities and political subdivisions
|
58,583
|
|
|
(542
|
)
|
|
92,441
|
|
|
(2,817
|
)
|
|
151,024
|
|
|
(3,359
|
)
|
||||||
Foreign governments
|
18,856
|
|
|
(386
|
)
|
|
56,217
|
|
|
(655
|
)
|
|
75,073
|
|
|
(1,041
|
)
|
||||||
Commercial mortgage-backed securities
|
45,931
|
|
|
(210
|
)
|
|
147,558
|
|
|
(2,392
|
)
|
|
193,489
|
|
|
(2,602
|
)
|
||||||
Residential mortgage-backed securities
|
9,613
|
|
|
(2,285
|
)
|
|
207,374
|
|
|
(3,455
|
)
|
|
216,987
|
|
|
(5,740
|
)
|
||||||
Asset-backed securities
|
30,448
|
|
|
(20
|
)
|
|
45,160
|
|
|
(662
|
)
|
|
75,608
|
|
|
(682
|
)
|
||||||
Corporate bonds
|
141,176
|
|
|
(2,263
|
)
|
|
621,821
|
|
|
(9,997
|
)
|
|
762,997
|
|
|
(12,260
|
)
|
||||||
Total fixed maturities
|
412,857
|
|
|
(5,768
|
)
|
|
1,333,930
|
|
|
(22,079
|
)
|
|
1,746,787
|
|
|
(27,847
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Insurance, banks and other financial institutions
|
16,219
|
|
|
(1,531
|
)
|
|
—
|
|
|
—
|
|
|
16,219
|
|
|
(1,531
|
)
|
||||||
Industrial, consumer and all other
|
86,062
|
|
|
(5,834
|
)
|
|
—
|
|
|
—
|
|
|
86,062
|
|
|
(5,834
|
)
|
||||||
Total equity securities
|
102,281
|
|
|
(7,365
|
)
|
|
—
|
|
|
—
|
|
|
102,281
|
|
|
(7,365
|
)
|
||||||
Short-term investments
|
181,964
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
181,964
|
|
|
(6
|
)
|
||||||
Total
|
$
|
697,102
|
|
|
$
|
(13,139
|
)
|
|
$
|
1,333,930
|
|
|
$
|
(22,079
|
)
|
|
$
|
2,031,032
|
|
|
$
|
(35,218
|
)
|
(dollars in thousands)
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
482,284
|
|
|
$
|
485,605
|
|
Due after one year through five years
|
1,820,680
|
|
|
1,857,267
|
|
||
Due after five years through ten years
|
1,576,656
|
|
|
1,663,076
|
|
||
Due after ten years
|
3,626,442
|
|
|
3,838,664
|
|
||
|
7,506,062
|
|
|
7,844,612
|
|
||
Commercial mortgage-backed securities
|
657,670
|
|
|
659,538
|
|
||
Residential mortgage-backed securities
|
837,964
|
|
|
854,247
|
|
||
Asset-backed securities
|
36,462
|
|
|
36,071
|
|
||
Total fixed maturities
|
$
|
9,038,158
|
|
|
$
|
9,394,468
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Interest:
|
|
|
|
|
|
||||||
Municipal bonds (tax-exempt)
|
$
|
93,580
|
|
|
$
|
98,262
|
|
|
$
|
82,308
|
|
Municipal bonds (taxable)
|
57,550
|
|
|
49,345
|
|
|
28,041
|
|
|||
Other taxable bonds
|
138,763
|
|
|
152,789
|
|
|
134,377
|
|
|||
Short-term investments, including overnight deposits
|
5,223
|
|
|
5,959
|
|
|
3,573
|
|
|||
Dividends on equity securities
|
74,705
|
|
|
65,031
|
|
|
48,641
|
|
|||
Change in fair value of credit default swap
|
—
|
|
|
2,230
|
|
|
10,460
|
|
|||
Income (loss) from equity method investments
|
(262
|
)
|
|
4,766
|
|
|
21,898
|
|
|||
Other
|
651
|
|
|
108
|
|
|
355
|
|
|||
|
370,210
|
|
|
378,490
|
|
|
329,653
|
|
|||
Investment expenses
|
(16,997
|
)
|
|
(15,260
|
)
|
|
(12,280
|
)
|
|||
Net investment income
|
$
|
353,213
|
|
|
$
|
363,230
|
|
|
$
|
317,373
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Realized gains:
|
|
|
|
|
|
||||||
Sales of fixed maturities
|
$
|
3,073
|
|
|
$
|
8,417
|
|
|
$
|
13,772
|
|
Sales of equity securities
|
156,987
|
|
|
51,356
|
|
|
73,592
|
|
|||
Other
|
8,103
|
|
|
15,205
|
|
|
5,940
|
|
|||
Total realized gains
|
168,163
|
|
|
74,978
|
|
|
93,304
|
|
|||
Realized losses:
|
|
|
|
|
|
||||||
Sales of fixed maturities
|
(4,598
|
)
|
|
(18,136
|
)
|
|
(25,168
|
)
|
|||
Sales of equity securities
|
(1,232
|
)
|
|
(802
|
)
|
|
(278
|
)
|
|||
Other-than-temporary impairments
|
(44,481
|
)
|
|
(4,784
|
)
|
|
(4,706
|
)
|
|||
Other
|
(11,372
|
)
|
|
(5,256
|
)
|
|
—
|
|
|||
Total realized losses
|
(61,683
|
)
|
|
(28,978
|
)
|
|
(30,152
|
)
|
|||
Net realized investment gains
|
$
|
106,480
|
|
|
$
|
46,000
|
|
|
$
|
63,152
|
|
Change in net unrealized gains on investments:
|
|
|
|
|
|
||||||
Fixed maturities
|
$
|
(137,435
|
)
|
|
$
|
480,350
|
|
|
$
|
(403,610
|
)
|
Equity securities
|
(320,277
|
)
|
|
500,673
|
|
|
665,599
|
|
|||
Short-term investments
|
128
|
|
|
12
|
|
|
6
|
|
|||
Net increase (decrease)
|
$
|
(457,584
|
)
|
|
$
|
981,035
|
|
|
$
|
261,995
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Fixed maturities:
|
|
|
|
|
|
||||||
Obligations of states, municipalities and political subdivisions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,242
|
)
|
Commercial mortgage-backed securities
|
—
|
|
|
(61
|
)
|
|
—
|
|
|||
Residential mortgage-backed securities
|
—
|
|
|
—
|
|
|
(640
|
)
|
|||
Asset-backed securities
|
—
|
|
|
(197
|
)
|
|
—
|
|
|||
Corporate bonds
|
—
|
|
|
(46
|
)
|
|
—
|
|
|||
Total fixed maturities
|
—
|
|
|
(304
|
)
|
|
(1,882
|
)
|
|||
Equity securities:
|
|
|
|
|
|
||||||
Insurance, banks and other financial institutions
|
(9,835
|
)
|
|
(341
|
)
|
|
—
|
|
|||
Industrial, consumer and all other
|
(34,646
|
)
|
|
(4,139
|
)
|
|
(2,824
|
)
|
|||
Total equity securities
|
(44,481
|
)
|
|
(4,480
|
)
|
|
(2,824
|
)
|
|||
Total
|
$
|
(44,481
|
)
|
|
$
|
(4,784
|
)
|
|
$
|
(4,706
|
)
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Restricted assets held in trust or on deposit to support underwriting activities
|
$
|
4,037,458
|
|
|
$
|
4,961,061
|
|
Investments and cash and cash equivalents pledged as security for letters of credit
|
745,744
|
|
|
635,340
|
|
||
Total
|
$
|
4,783,202
|
|
|
$
|
5,596,401
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Investments, available-for-sale
|
$
|
4,343,070
|
|
|
$
|
5,040,413
|
|
Restricted cash and cash equivalents
|
440,132
|
|
|
522,225
|
|
||
Other assets
|
—
|
|
|
33,763
|
|
||
Total
|
$
|
4,783,202
|
|
|
$
|
5,596,401
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Amounts receivable from agents, brokers and insureds
|
$
|
1,009,115
|
|
|
$
|
1,031,519
|
|
Trade accounts receivable
|
93,953
|
|
|
97,225
|
|
||
Employee stock loans receivable (see note 12(c))
|
16,900
|
|
|
15,044
|
|
||
Other
|
6,165
|
|
|
8,601
|
|
||
|
1,126,133
|
|
|
1,152,389
|
|
||
Allowance for doubtful receivables
|
(12,430
|
)
|
|
(17,172
|
)
|
||
Receivables
|
$
|
1,113,703
|
|
|
$
|
1,135,217
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Balance, beginning of year
|
$
|
353,410
|
|
|
$
|
260,967
|
|
|
$
|
157,465
|
|
Policy acquisition costs deferred
|
752,324
|
|
|
754,303
|
|
|
577,620
|
|
|||
Amortization of policy acquisition costs
|
(744,964
|
)
|
|
(654,916
|
)
|
|
(471,915
|
)
|
|||
Foreign currency movements
|
(8,014
|
)
|
|
(6,944
|
)
|
|
(2,203
|
)
|
|||
Deferred policy acquisition costs
|
$
|
352,756
|
|
|
$
|
353,410
|
|
|
$
|
260,967
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Amortization of policy acquisition costs
|
744,964
|
|
|
654,916
|
|
|
471,915
|
|
|||
Transaction costs and other acquisition-related expenses
(1)
|
—
|
|
|
—
|
|
|
75,140
|
|
|||
Other operating expenses
|
710,116
|
|
|
805,966
|
|
|
765,257
|
|
|||
Underwriting, acquisition and insurance expenses
|
$
|
1,455,080
|
|
|
$
|
1,460,882
|
|
|
$
|
1,312,312
|
|
(1)
|
In connection with the acquisition of Alterra, the Company incurred transaction costs of
$16.0 million
for the year ended December 31, 2013, which primarily consist of due diligence, legal and investment banking costs. Additionally, the Company incurred severance costs of
$31.7 million
, stay bonuses of
$14.8 million
and other compensation costs totaling
$12.6 million
related to the acceleration of certain long-term incentive compensation awards and restricted stock awards that were granted by Alterra prior to the acquisition.
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Land
|
$
|
56,408
|
|
|
$
|
56,848
|
|
Buildings
|
77,488
|
|
|
78,786
|
|
||
Leasehold improvements
|
104,003
|
|
|
98,098
|
|
||
Land improvements
|
71,585
|
|
|
70,596
|
|
||
Furniture and equipment
|
291,736
|
|
|
255,566
|
|
||
Other
|
134,939
|
|
|
116,884
|
|
||
|
736,159
|
|
|
676,778
|
|
||
Accumulated depreciation and amortization
|
(305,324
|
)
|
|
(255,388
|
)
|
||
Property and equipment
|
$
|
430,835
|
|
|
$
|
421,390
|
|
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
(1)
|
|
Total
|
||||||||||
January 1, 2014
|
$
|
280,579
|
|
|
$
|
372,764
|
|
|
$
|
122,745
|
|
|
$
|
191,629
|
|
|
$
|
967,717
|
|
Acquisitions (see note 2)
|
—
|
|
|
42,989
|
|
|
—
|
|
|
61,539
|
|
|
104,528
|
|
|||||
Impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,737
|
)
|
|
(13,737
|
)
|
|||||
Foreign currency movements and other adjustments
|
—
|
|
|
(7,570
|
)
|
|
—
|
|
|
(1,823
|
)
|
|
(9,393
|
)
|
|||||
December 31, 2014
(2)
|
$
|
280,579
|
|
|
$
|
408,183
|
|
|
$
|
122,745
|
|
|
$
|
237,608
|
|
|
$
|
1,049,115
|
|
Acquisitions (see note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
146,659
|
|
|
146,659
|
|
|||||
Impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,880
|
)
|
|
(14,880
|
)
|
|||||
Foreign currency movements and other adjustments
|
—
|
|
|
(10,190
|
)
|
|
—
|
|
|
(2,860
|
)
|
|
(13,050
|
)
|
|||||
December 31, 2015
(2)
|
$
|
280,579
|
|
|
$
|
397,993
|
|
|
$
|
122,745
|
|
|
$
|
366,527
|
|
|
$
|
1,167,844
|
|
(1)
|
Amounts included in Other above are related to the Company's non-insurance operations, which are not included in a reportable segment.
|
(2)
|
Goodwill is net of accumulated impairment losses of
$28.6 million
and
$13.7 million
, as of December 31, 2015 and 2014, respectively, included in Other.
|
|
December 31,
|
||||||||||||||
|
2015
|
|
2014
|
||||||||||||
(dollars in thousands)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Customer relationships
|
$
|
481,547
|
|
|
$
|
(97,892
|
)
|
|
$
|
452,157
|
|
|
$
|
(69,483
|
)
|
Broker relationships
|
182,626
|
|
|
(45,135
|
)
|
|
175,681
|
|
|
(34,827
|
)
|
||||
Trade names
|
103,681
|
|
|
(23,821
|
)
|
|
94,795
|
|
|
(17,673
|
)
|
||||
Investment management agreements
|
98,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Technology
|
54,241
|
|
|
(22,288
|
)
|
|
62,288
|
|
|
(22,671
|
)
|
||||
Insurance licenses
|
30,185
|
|
|
—
|
|
|
39,985
|
|
|
—
|
|
||||
Lloyd's syndicate capacity
|
12,000
|
|
|
—
|
|
|
12,000
|
|
|
—
|
|
||||
Other
|
30,496
|
|
|
(11,268
|
)
|
|
18,903
|
|
|
(8,408
|
)
|
||||
Total
|
$
|
992,776
|
|
|
$
|
(200,404
|
)
|
|
$
|
855,809
|
|
|
$
|
(153,062
|
)
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Domestic operations
|
$
|
323,954
|
|
|
$
|
240,279
|
|
|
$
|
325,133
|
|
Foreign operations
|
418,151
|
|
|
200,099
|
|
|
36,610
|
|
|||
Income before income taxes
|
$
|
742,105
|
|
|
$
|
440,378
|
|
|
$
|
361,743
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
||||||
Domestic
|
$
|
44,406
|
|
|
$
|
7,573
|
|
|
$
|
50,683
|
|
Foreign
|
118,235
|
|
|
24,574
|
|
|
23,165
|
|
|||
Total current tax expense
|
162,641
|
|
|
32,147
|
|
|
73,848
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Domestic
|
9,415
|
|
|
43,673
|
|
|
23,906
|
|
|||
Foreign
|
(19,093
|
)
|
|
40,870
|
|
|
(19,856
|
)
|
|||
Total deferred tax expense (benefit)
|
(9,678
|
)
|
|
84,543
|
|
|
4,050
|
|
|||
Income tax expense
|
$
|
152,963
|
|
|
$
|
116,690
|
|
|
$
|
77,898
|
|
|
Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
United States corporate tax rate
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
Tax credits
|
(8
|
)
|
|
(1
|
)
|
|
—
|
|
Tax-exempt investment income
|
(5
|
)
|
|
(9
|
)
|
|
(9
|
)
|
Foreign operations
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
Other
|
—
|
|
|
1
|
|
|
—
|
|
Effective tax rate
|
21
|
%
|
|
26
|
%
|
|
22
|
%
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Assets:
|
|
|
|
||||
Unpaid losses and loss adjustment expenses
|
$
|
212,012
|
|
|
$
|
239,588
|
|
Life and annuity benefits
|
156,950
|
|
|
143,102
|
|
||
Unearned premiums recognized for income tax purposes
|
102,076
|
|
|
108,960
|
|
||
Investments, including other-than-temporary impairments
|
65,641
|
|
|
28,106
|
|
||
Accrued incentive compensation
|
53,586
|
|
|
37,329
|
|
||
Stock-based compensation
|
21,948
|
|
|
31,314
|
|
||
Net operating loss carryforwards
|
18,771
|
|
|
36,359
|
|
||
Tax credit carryforwards
|
18,158
|
|
|
32,525
|
|
||
Other differences between financial reporting and tax bases
|
40,497
|
|
|
64,235
|
|
||
Total gross deferred tax assets
|
689,639
|
|
|
721,518
|
|
||
Less valuation allowance
|
(5,131
|
)
|
|
(4,801
|
)
|
||
Total gross deferred tax assets, net of allowance
|
684,508
|
|
|
716,717
|
|
||
Liabilities:
|
|
|
|
||||
Net unrealized gains on investments
|
626,776
|
|
|
759,212
|
|
||
Amortization of goodwill and other intangible assets
|
107,271
|
|
|
106,927
|
|
||
Deferred policy acquisition costs
|
88,036
|
|
|
101,766
|
|
||
Other differences between financial reporting and tax bases
|
38,613
|
|
|
59,359
|
|
||
Total gross deferred tax liabilities
|
860,696
|
|
|
1,027,264
|
|
||
Net deferred tax liability
|
$
|
176,188
|
|
|
$
|
310,547
|
|
|
Years Ended December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Unrecognized tax benefits, beginning of year
|
$
|
17,700
|
|
|
$
|
18,219
|
|
Increases for tax positions taken in prior years
|
—
|
|
|
3
|
|
||
Decreases for tax positions taken in prior years
|
(146
|
)
|
|
—
|
|
||
Lapse of statute of limitations
|
(606
|
)
|
|
(522
|
)
|
||
Settlement with taxing authorities
|
(1,624
|
)
|
|
—
|
|
||
Unrecognized tax benefits, end of year
|
$
|
15,324
|
|
|
$
|
17,700
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net reserves for losses and loss adjustment expenses, beginning of year
|
$
|
8,535,483
|
|
|
$
|
8,407,642
|
|
|
$
|
4,592,652
|
|
Foreign currency movements, commutations and other
|
(134,173
|
)
|
|
(137,385
|
)
|
|
(780
|
)
|
|||
Adjusted net reserves for losses and loss adjustment expenses, beginning of year
|
8,401,310
|
|
|
8,270,257
|
|
|
4,591,872
|
|
|||
Incurred losses and loss adjustment expenses:
|
|
|
|
|
|
||||||
Current year
|
2,566,545
|
|
|
2,638,012
|
|
|
2,227,402
|
|
|||
Prior years
|
(627,800
|
)
|
|
(435,545
|
)
|
|
(411,129
|
)
|
|||
Total incurred losses and loss adjustment expenses
|
1,938,745
|
|
|
2,202,467
|
|
|
1,816,273
|
|
|||
Payments:
|
|
|
|
|
|
||||||
Current year
|
486,551
|
|
|
502,107
|
|
|
670,928
|
|
|||
Prior years
|
1,423,286
|
|
|
1,436,851
|
|
|
906,302
|
|
|||
Total payments
|
1,909,837
|
|
|
1,938,958
|
|
|
1,577,230
|
|
|||
Effect of foreign currency rate changes
|
(17,281
|
)
|
|
(19,476
|
)
|
|
(7,915
|
)
|
|||
Net reserves for losses and loss adjustment expenses of acquired insurance companies
|
—
|
|
|
21,193
|
|
|
3,584,642
|
|
|||
Reinsurance recoverable on retroactive reinsurance transactions
|
(177,649
|
)
|
|
—
|
|
|
—
|
|
|||
Net reserves for losses and loss adjustment expenses, end of year
|
8,235,288
|
|
|
8,535,483
|
|
|
8,407,642
|
|
|||
Reinsurance recoverable on unpaid losses
|
2,016,665
|
|
|
1,868,669
|
|
|
1,854,414
|
|
|||
Gross reserves for losses and loss adjustment expenses, end of year
|
$
|
10,251,953
|
|
|
$
|
10,404,152
|
|
|
$
|
10,262,056
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net reserves for A&E losses and loss adjustment expenses, beginning of year
|
$
|
287,723
|
|
|
$
|
272,194
|
|
|
$
|
260,791
|
|
Commutations and other
|
—
|
|
|
115
|
|
|
(5,067
|
)
|
|||
Adjusted net reserves for A&E losses and loss adjustment expenses, beginning of year
|
287,723
|
|
|
272,309
|
|
|
255,724
|
|
|||
Incurred losses and loss adjustment expenses
|
25,415
|
|
|
32,840
|
|
|
30,128
|
|
|||
Payments
|
(20,628
|
)
|
|
(17,426
|
)
|
|
(13,658
|
)
|
|||
Reinsurance recoverable on retroactive reinsurance transactions
|
(159,641
|
)
|
|
—
|
|
|
—
|
|
|||
Net reserves for A&E losses and loss adjustment expenses, end of year
|
132,869
|
|
|
287,723
|
|
|
272,194
|
|
|||
Reinsurance recoverable on unpaid losses
|
253,756
|
|
|
102,719
|
|
|
100,784
|
|
|||
Gross reserves for A&E losses and loss adjustment expenses, end of year
|
$
|
386,625
|
|
|
$
|
390,442
|
|
|
$
|
372,978
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Life
|
$
|
142,068
|
|
|
$
|
182,604
|
|
Annuities
|
901,218
|
|
|
1,031,946
|
|
||
Accident and health
|
79,989
|
|
|
91,268
|
|
||
Total
|
$
|
1,123,275
|
|
|
$
|
1,305,818
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
7.20% unsecured senior notes, due April 14, 2017, interest payable semi-annually, net of unamortized premium of $1,808 in 2015 and $3,526 in 2014
|
$
|
92,436
|
|
|
$
|
94,155
|
|
7.125% unsecured senior notes, due September 30, 2019, interest payable semi-annually, net of unamortized discount of $1,060 in 2015 and $1,343 in 2014
|
346,940
|
|
|
348,657
|
|
||
6.25% unsecured senior notes, due September 30, 2020, interest payable semi-annually, net of unamortized premium of $44,519 in 2015 and $53,172 in 2014
|
394,517
|
|
|
403,172
|
|
||
5.35% unsecured senior notes, due June 1, 2021, interest payable semi-annually, net of unamortized discount of $1,119 in 2015 and $1,325 in 2014
|
248,881
|
|
|
248,675
|
|
||
4.90% unsecured senior notes, due July 1, 2022, interest payable semi-annually, net of unamortized discount of $1,815 in 2015 and $2,095 in 2014
|
348,185
|
|
|
347,905
|
|
||
3.625% unsecured senior notes, due March 30, 2023, interest payable semi-annually, net of unamortized discount of $1,458 in 2015 and $1,659 in 2014
|
248,542
|
|
|
248,341
|
|
||
7.35% unsecured senior notes, due August 15, 2034, interest payable semi-annually, net of unamortized discount of $1,972 in 2015 and $2,078 in 2014
|
198,028
|
|
|
197,922
|
|
||
5.0% unsecured senior notes, due March 30, 2043, interest payable semi-annually, net of unamortized discount of $6,103 in 2015 and $6,327 in 2014
|
243,897
|
|
|
243,673
|
|
||
Subsidiary debt, at various interest rates ranging from 1.9% to 6.5%
|
120,001
|
|
|
121,094
|
|
||
Senior long-term debt and other debt
|
$
|
2,241,427
|
|
|
$
|
2,253,594
|
|
Years Ending December 31,
|
(dollars in
thousands)
|
||
2016
|
$
|
30,267
|
|
2017
|
120,268
|
|
|
2018
|
4,845
|
|
|
2019
|
352,843
|
|
|
2020
|
359,128
|
|
|
2021 and thereafter
|
1,341,276
|
|
|
Total principal payments
|
$
|
2,208,627
|
|
Net unamortized premium
|
32,800
|
|
|
Senior long-term debt and other debt
|
$
|
2,241,427
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands, except per share amounts)
|
2015
|
|
2014
|
|
2013
|
||||||
Net income to shareholders
|
$
|
582,772
|
|
|
$
|
321,182
|
|
|
$
|
281,021
|
|
Adjustment of redeemable noncontrolling interests
|
4,144
|
|
|
(8,186
|
)
|
|
1,963
|
|
|||
Adjusted net income to shareholders
|
$
|
586,916
|
|
|
$
|
312,996
|
|
|
$
|
282,984
|
|
|
|
|
|
|
|
||||||
Basic common shares outstanding
|
13,978
|
|
|
13,984
|
|
|
12,538
|
|
|||
Dilutive potential common shares from conversion of options
|
9
|
|
|
11
|
|
|
12
|
|
|||
Dilutive potential common shares from conversion of restricted stock
|
74
|
|
|
62
|
|
|
36
|
|
|||
Diluted shares outstanding
|
14,061
|
|
|
14,057
|
|
|
12,586
|
|
|||
Basic net income per share
|
$
|
41.99
|
|
|
$
|
22.38
|
|
|
$
|
22.57
|
|
Diluted net income per share
|
$
|
41.74
|
|
|
$
|
22.27
|
|
|
$
|
22.48
|
|
|
Number
of Awards
|
|
Weighted Average
Grant-Date
Fair Value
|
|||
Nonvested awards at January 1, 2015
|
118,132
|
|
|
$
|
479.11
|
|
Granted
|
23,013
|
|
|
740.80
|
|
|
Vested
|
(37,262
|
)
|
|
424.51
|
|
|
Nonvested awards at December 31, 2015
|
103,883
|
|
|
$
|
556.66
|
|
|
Number
of
Shares
|
|
Weighted
Average
Exercise Price
|
|
Weighted Average
Remaining
Contractual Term
(years)
|
|
Intrinsic Value
(in millions)
|
|||||
Outstanding and exercisable, January 1, 2015
|
22,305
|
|
|
$
|
411.98
|
|
|
|
|
|
||
Exercised
|
10,787
|
|
|
$
|
418.41
|
|
|
|
|
|
||
Outstanding and exercisable, December 31, 2015
|
11,518
|
|
|
$
|
405.97
|
|
|
0.9
|
|
$
|
5.5
|
|
|
Number
of Awards
|
|
Weighted Average
Grant-Date
Fair Value
|
|||
Nonvested awards at January 1, 2015
|
33,915
|
|
|
$
|
529.59
|
|
Vested
|
(33,915
|
)
|
|
529.59
|
|
|
Nonvested awards at December 31, 2015
|
—
|
|
|
$
|
—
|
|
(dollars in thousands)
|
Unrealized
Holding Gains
on Available-for-
Sale Securities
|
|
Foreign
Currency
|
|
Net Actuarial
Pension Loss
|
|
Total
|
||||||||
December 31, 2012
|
$
|
946,933
|
|
|
$
|
(1,075
|
)
|
|
$
|
(34,521
|
)
|
|
$
|
911,337
|
|
Other comprehensive income (loss) before reclassifications
|
225,404
|
|
|
(10,171
|
)
|
|
2,517
|
|
|
217,750
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(40,830
|
)
|
|
—
|
|
|
1,548
|
|
|
(39,282
|
)
|
||||
Total other comprehensive income (loss)
|
184,574
|
|
|
(10,171
|
)
|
|
4,065
|
|
|
178,468
|
|
||||
December 31, 2013
|
$
|
1,131,507
|
|
|
$
|
(11,246
|
)
|
|
$
|
(30,456
|
)
|
|
$
|
1,089,805
|
|
Other comprehensive income (loss) before reclassifications
|
687,908
|
|
|
(32,245
|
)
|
|
(16,516
|
)
|
|
639,147
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(26,161
|
)
|
|
—
|
|
|
1,766
|
|
|
(24,395
|
)
|
||||
Total other comprehensive income (loss)
|
661,747
|
|
|
(32,245
|
)
|
|
(14,750
|
)
|
|
614,752
|
|
||||
December 31, 2014
|
$
|
1,793,254
|
|
|
$
|
(43,491
|
)
|
|
$
|
(45,206
|
)
|
|
$
|
1,704,557
|
|
Other comprehensive loss before reclassifications
|
(240,010
|
)
|
|
(29,205
|
)
|
|
(2,482
|
)
|
|
(271,697
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(80,482
|
)
|
|
—
|
|
|
2,130
|
|
|
(78,352
|
)
|
||||
Total other comprehensive loss
|
(320,492
|
)
|
|
(29,205
|
)
|
|
(352
|
)
|
|
(350,049
|
)
|
||||
December 31, 2015
|
$
|
1,472,762
|
|
|
$
|
(72,696
|
)
|
|
$
|
(45,558
|
)
|
|
$
|
1,354,508
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Change in net unrealized gains on investments:
|
|
|
|
|
|
||||||
Net holding gains (losses) arising during the period
|
$
|
(107,860
|
)
|
|
$
|
328,564
|
|
|
$
|
93,837
|
|
Change in unrealized other-than-temporary impairment losses on fixed maturities arising during the period
|
35
|
|
|
614
|
|
|
(34
|
)
|
|||
Reclassification adjustments for net gains included in net income
|
(29,267
|
)
|
|
(9,890
|
)
|
|
(16,382
|
)
|
|||
Change in net unrealized gains on investments
|
(137,092
|
)
|
|
319,288
|
|
|
77,421
|
|
|||
Change in foreign currency translation adjustments
|
408
|
|
|
1,918
|
|
|
(1,619
|
)
|
|||
Change in net actuarial pension loss
|
(88
|
)
|
|
(3,687
|
)
|
|
1,015
|
|
|||
Total
|
$
|
(136,772
|
)
|
|
$
|
317,519
|
|
|
$
|
76,817
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Unrealized holding gains on available-for-sale securities:
|
|
|
|
|
|
||||||
Other-than-temporary impairment losses
|
$
|
(44,481
|
)
|
|
$
|
(4,784
|
)
|
|
$
|
(4,706
|
)
|
Net realized investment gains, excluding other-than-temporary impairment losses
|
154,230
|
|
|
40,835
|
|
|
61,918
|
|
|||
Total before taxes
|
109,749
|
|
|
36,051
|
|
|
57,212
|
|
|||
Income taxes
|
(29,267
|
)
|
|
(9,890
|
)
|
|
(16,382
|
)
|
|||
Reclassification of unrealized holding gains, net of taxes
|
$
|
80,482
|
|
|
$
|
26,161
|
|
|
$
|
40,830
|
|
|
|
|
|
|
|
||||||
Net actuarial pension loss:
|
|
|
|
|
|
||||||
Underwriting, acquisition and insurance expenses
|
$
|
(2,662
|
)
|
|
$
|
(2,084
|
)
|
|
$
|
(1,934
|
)
|
Income taxes
|
532
|
|
|
318
|
|
|
386
|
|
|||
Reclassification of net actuarial pension loss, net of taxes
|
$
|
(2,130
|
)
|
|
$
|
(1,766
|
)
|
|
$
|
(1,548
|
)
|
|
December 31, 2015
|
||||||||||||||
(dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities and obligations of U.S. government agencies
|
$
|
—
|
|
|
$
|
700,707
|
|
|
$
|
—
|
|
|
$
|
700,707
|
|
Obligations of states, municipalities and political subdivisions
|
—
|
|
|
4,013,213
|
|
|
—
|
|
|
4,013,213
|
|
||||
Foreign governments
|
—
|
|
|
1,416,457
|
|
|
—
|
|
|
1,416,457
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
659,538
|
|
|
—
|
|
|
659,538
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
854,247
|
|
|
—
|
|
|
854,247
|
|
||||
Asset-backed securities
|
—
|
|
|
36,071
|
|
|
—
|
|
|
36,071
|
|
||||
Corporate bonds
|
—
|
|
|
1,714,235
|
|
|
—
|
|
|
1,714,235
|
|
||||
Total fixed maturities
|
—
|
|
|
9,394,468
|
|
|
—
|
|
|
9,394,468
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Insurance, banks and other financial institutions
|
1,334,722
|
|
|
—
|
|
|
—
|
|
|
1,334,722
|
|
||||
Industrial, consumer and all other
|
2,739,753
|
|
|
—
|
|
|
—
|
|
|
2,739,753
|
|
||||
Total equity securities
|
4,074,475
|
|
|
—
|
|
|
—
|
|
|
4,074,475
|
|
||||
Short-term investments
|
1,529,924
|
|
|
112,337
|
|
|
—
|
|
|
1,642,261
|
|
||||
Total investments available-for-sale
|
$
|
5,604,399
|
|
|
$
|
9,506,805
|
|
|
$
|
—
|
|
|
$
|
15,111,204
|
|
|
December 31, 2014
|
||||||||||||||
(dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities and obligations of U.S. government agencies
|
$
|
—
|
|
|
$
|
673,262
|
|
|
$
|
—
|
|
|
$
|
673,262
|
|
Obligations of states, municipalities and political subdivisions
|
—
|
|
|
4,317,547
|
|
|
—
|
|
|
4,317,547
|
|
||||
Foreign governments
|
—
|
|
|
1,611,921
|
|
|
—
|
|
|
1,611,921
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
430,627
|
|
|
—
|
|
|
430,627
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
982,847
|
|
|
—
|
|
|
982,847
|
|
||||
Asset-backed securities
|
—
|
|
|
99,490
|
|
|
—
|
|
|
99,490
|
|
||||
Corporate bonds
|
—
|
|
|
2,307,188
|
|
|
—
|
|
|
2,307,188
|
|
||||
Total fixed maturities
|
—
|
|
|
10,422,882
|
|
|
—
|
|
|
10,422,882
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Insurance, banks and other financial institutions
|
1,311,925
|
|
|
—
|
|
|
—
|
|
|
1,311,925
|
|
||||
Industrial, consumer and all other
|
2,825,651
|
|
|
—
|
|
|
—
|
|
|
2,825,651
|
|
||||
Total equity securities
|
4,137,576
|
|
|
—
|
|
|
—
|
|
|
4,137,576
|
|
||||
Short-term investments
|
1,469,975
|
|
|
124,874
|
|
|
—
|
|
|
1,594,849
|
|
||||
Total investments available-for-sale
|
$
|
5,607,551
|
|
|
$
|
10,547,756
|
|
|
$
|
—
|
|
|
$
|
16,155,307
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Reinsurance allowance, beginning of year
|
$
|
59,813
|
|
|
$
|
76,210
|
|
|
$
|
71,148
|
|
Additions
|
5,897
|
|
|
10,316
|
|
|
13,621
|
|
|||
Deductions
|
(6,360
|
)
|
|
(26,713
|
)
|
|
(8,559
|
)
|
|||
Reinsurance allowance, end of year
|
$
|
59,350
|
|
|
$
|
59,813
|
|
|
$
|
76,210
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
(dollars in thousands)
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
||||||||||||
Direct
|
$
|
3,474,510
|
|
|
$
|
3,480,297
|
|
|
$
|
3,478,273
|
|
|
$
|
3,443,912
|
|
|
$
|
3,143,957
|
|
|
$
|
2,947,812
|
|
Assumed
|
1,158,402
|
|
|
1,194,772
|
|
|
1,327,240
|
|
|
1,298,371
|
|
|
776,269
|
|
|
1,016,853
|
|
||||||
Ceded
|
(813,619
|
)
|
|
(851,537
|
)
|
|
(888,498
|
)
|
|
(901,371
|
)
|
|
(683,543
|
)
|
|
(733,049
|
)
|
||||||
Net premiums
|
$
|
3,819,293
|
|
|
$
|
3,823,532
|
|
|
$
|
3,917,015
|
|
|
$
|
3,840,912
|
|
|
$
|
3,236,683
|
|
|
$
|
3,231,616
|
|
Years Ending December 31,
|
(dollars in
thousands)
|
||
2016
|
$
|
29,664
|
|
2017
|
34,083
|
|
|
2018
|
30,708
|
|
|
2019
|
27,947
|
|
|
2020
|
21,597
|
|
|
2021 and thereafter
|
130,844
|
|
|
Total
|
$
|
274,843
|
|
Statutory Capital and Surplus
|
|
|
|
||||
|
|
|
|
||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
United States
|
$
|
2,569,928
|
|
|
$
|
2,619,001
|
|
United Kingdom
|
$
|
608,342
|
|
|
$
|
608,001
|
|
Bermuda
|
$
|
1,966,021
|
|
|
$
|
1,890,218
|
|
Other
|
$
|
17,305
|
|
|
$
|
177,824
|
|
Statutory Net Income (Loss)
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
291,783
|
|
|
$
|
212,909
|
|
|
$
|
235,009
|
|
United Kingdom
|
$
|
63,583
|
|
|
$
|
73,697
|
|
|
$
|
109,983
|
|
Bermuda
|
$
|
189,800
|
|
|
$
|
110,401
|
|
|
$
|
249,772
|
|
Other
|
$
|
(3,181
|
)
|
|
$
|
1,367
|
|
|
$
|
(12,617
|
)
|
|
Years Ended December 31,
|
|||||||||||||||||||
(dollars in thousands)
|
2015
|
|
% of
Total
|
|
2014
|
|
% of
Total
|
|
2013
|
|
% of
Total
|
|||||||||
United States
|
$
|
3,519,487
|
|
|
76
|
%
|
|
$
|
3,523,239
|
|
|
73
|
%
|
|
$
|
2,934,868
|
|
|
75
|
%
|
United Kingdom
|
414,941
|
|
|
9
|
|
|
441,669
|
|
|
9
|
|
|
245,143
|
|
|
6
|
|
|||
Canada
|
115,191
|
|
|
2
|
|
|
125,617
|
|
|
3
|
|
|
128,420
|
|
|
3
|
|
|||
Other countries
|
583,293
|
|
|
13
|
|
|
714,988
|
|
|
15
|
|
|
611,795
|
|
|
16
|
|
|||
Total
|
$
|
4,632,912
|
|
|
100
|
%
|
|
$
|
4,805,513
|
|
|
100
|
%
|
|
$
|
3,920,226
|
|
|
100
|
%
|
a)
|
The following tables summarize the Company's segment disclosures.
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Investing
|
|
Consolidated
|
||||||||||||
Gross premium volume
|
$
|
2,504,096
|
|
|
$
|
1,164,866
|
|
|
$
|
965,374
|
|
|
$
|
(1,424
|
)
|
|
$
|
—
|
|
|
$
|
4,632,912
|
|
Net written premiums
|
2,106,490
|
|
|
888,214
|
|
|
824,324
|
|
|
265
|
|
|
—
|
|
|
3,819,293
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earned premiums
|
2,105,212
|
|
|
879,426
|
|
|
838,543
|
|
|
351
|
|
|
—
|
|
|
3,823,532
|
|
||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current accident year
|
(1,367,159
|
)
|
|
(638,144
|
)
|
|
(561,242
|
)
|
|
—
|
|
|
—
|
|
|
(2,566,545
|
)
|
||||||
Prior accident years
|
298,967
|
|
|
248,834
|
|
|
97,860
|
|
|
(17,861
|
)
|
|
—
|
|
|
627,800
|
|
||||||
Amortization of policy acquisition costs
|
(420,289
|
)
|
|
(142,657
|
)
|
|
(182,018
|
)
|
|
—
|
|
|
—
|
|
|
(744,964
|
)
|
||||||
Other operating expenses
|
(378,563
|
)
|
|
(221,758
|
)
|
|
(106,863
|
)
|
|
(2,932
|
)
|
|
—
|
|
|
(710,116
|
)
|
||||||
Underwriting profit (loss)
|
238,168
|
|
|
125,701
|
|
|
86,280
|
|
|
(20,442
|
)
|
|
—
|
|
|
429,707
|
|
||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
353,213
|
|
|
353,213
|
|
||||||
Net realized investment gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106,480
|
|
|
106,480
|
|
||||||
Other revenues (insurance)
|
3,331
|
|
|
7,790
|
|
|
593
|
|
|
617
|
|
|
—
|
|
|
12,331
|
|
||||||
Other expenses (insurance)
|
(3,902
|
)
|
|
(5,717
|
)
|
|
(1,419
|
)
|
|
(29,057
|
)
|
|
—
|
|
|
(40,095
|
)
|
||||||
Segment profit (loss)
|
$
|
237,597
|
|
|
$
|
127,774
|
|
|
$
|
85,454
|
|
|
$
|
(48,882
|
)
|
|
$
|
459,693
|
|
|
$
|
861,636
|
|
Other revenues (non-insurance)
|
|
|
|
|
|
|
|
|
|
|
1,074,427
|
|
|||||||||||
Other expenses (non-insurance)
|
|
|
|
|
|
|
|
|
|
|
(1,006,710
|
)
|
|||||||||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(68,947
|
)
|
|||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(118,301
|
)
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
742,105
|
|
||||||||||
U.S. GAAP combined ratio
(1)
|
89
|
%
|
|
86
|
%
|
|
90
|
%
|
|
NM
|
|
(2)
|
|
|
89
|
%
|
(1)
|
The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
|
(2)
|
NM — Ratio is not meaningful.
|
|
Year Ended December 31, 2014
|
||||||||||||||||||||||
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Investing
|
|
Consolidated
|
||||||||||||
Gross premium volume
|
$
|
2,493,823
|
|
|
$
|
1,200,403
|
|
|
$
|
1,112,728
|
|
|
$
|
(1,441
|
)
|
|
$
|
—
|
|
|
$
|
4,805,513
|
|
Net written premiums
|
2,071,466
|
|
|
889,336
|
|
|
956,584
|
|
|
(371
|
)
|
|
—
|
|
|
3,917,015
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earned premiums
|
2,022,860
|
|
|
909,679
|
|
|
908,385
|
|
|
(12
|
)
|
|
—
|
|
|
3,840,912
|
|
||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current accident year
|
(1,340,129
|
)
|
|
(660,409
|
)
|
|
(637,474
|
)
|
|
—
|
|
|
—
|
|
|
(2,638,012
|
)
|
||||||
Prior accident years
|
216,557
|
|
|
166,615
|
|
|
79,951
|
|
|
(27,578
|
)
|
|
—
|
|
|
435,545
|
|
||||||
Amortization of policy acquisition costs
|
(403,233
|
)
|
|
(141,394
|
)
|
|
(110,289
|
)
|
|
—
|
|
|
—
|
|
|
(654,916
|
)
|
||||||
Other operating expenses
|
(396,737
|
)
|
|
(207,175
|
)
|
|
(201,673
|
)
|
|
(381
|
)
|
|
—
|
|
|
(805,966
|
)
|
||||||
Underwriting profit (loss)
|
99,318
|
|
|
67,316
|
|
|
38,900
|
|
|
(27,971
|
)
|
|
—
|
|
|
177,563
|
|
||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
363,230
|
|
|
363,230
|
|
||||||
Net realized investment gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,000
|
|
|
46,000
|
|
||||||
Other revenues (insurance)
|
2,478
|
|
|
21,827
|
|
|
2,696
|
|
|
1,631
|
|
|
—
|
|
|
28,632
|
|
||||||
Other expenses (insurance)
|
(5,149
|
)
|
|
(18,706
|
)
|
|
(1,847
|
)
|
|
(37,132
|
)
|
|
—
|
|
|
(62,834
|
)
|
||||||
Segment profit (loss)
|
$
|
96,647
|
|
|
$
|
70,437
|
|
|
$
|
39,749
|
|
|
$
|
(63,472
|
)
|
|
$
|
409,230
|
|
|
$
|
552,591
|
|
Other revenues (non-insurance)
|
|
|
|
|
|
|
|
|
|
|
854,893
|
|
|||||||||||
Other expenses (non-insurance)
|
|
|
|
|
|
|
|
|
|
|
(792,037
|
)
|
|||||||||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(57,627
|
)
|
|||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(117,442
|
)
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
440,378
|
|
||||||||||
U.S. GAAP combined ratio
(1)
|
95
|
%
|
|
93
|
%
|
|
96
|
%
|
|
NM
|
|
(2)
|
|
|
95
|
%
|
(1)
|
The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
|
(2)
|
NM — Ratio is not meaningful.
|
|
Year Ended December 31, 2013
|
||||||||||||||||||||||
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Investing
|
|
Consolidated
|
||||||||||||
Gross premium volume
|
$
|
2,252,739
|
|
|
$
|
1,101,099
|
|
|
$
|
566,348
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
3,920,226
|
|
Net written premiums
|
1,915,770
|
|
|
840,050
|
|
|
480,822
|
|
|
41
|
|
|
—
|
|
|
3,236,683
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earned premiums
|
1,727,766
|
|
|
833,984
|
|
|
669,826
|
|
|
40
|
|
|
—
|
|
|
3,231,616
|
|
||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current accident year
|
(1,173,258
|
)
|
|
(588,759
|
)
|
|
(465,385
|
)
|
|
—
|
|
|
—
|
|
|
(2,227,402
|
)
|
||||||
Prior accident years
|
298,113
|
|
|
130,660
|
|
|
12,938
|
|
|
(30,582
|
)
|
|
—
|
|
|
411,129
|
|
||||||
Transaction costs and other acquisition-related expenses
(1)
|
(12,724
|
)
|
|
(13,366
|
)
|
|
(49,050
|
)
|
|
—
|
|
|
—
|
|
|
(75,140
|
)
|
||||||
Amortization of policy acquisition costs
|
(287,795
|
)
|
|
(138,626
|
)
|
|
(45,494
|
)
|
|
—
|
|
|
—
|
|
|
(471,915
|
)
|
||||||
Other operating expenses
|
(409,886
|
)
|
|
(171,666
|
)
|
|
(183,817
|
)
|
|
112
|
|
|
—
|
|
|
(765,257
|
)
|
||||||
Underwriting profit (loss)
|
142,216
|
|
|
52,227
|
|
|
(60,982
|
)
|
|
(30,430
|
)
|
|
—
|
|
|
103,031
|
|
||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
317,373
|
|
|
317,373
|
|
||||||
Net realized investment gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,152
|
|
|
63,152
|
|
||||||
Other revenues (insurance)
|
13,648
|
|
|
4,284
|
|
|
5,432
|
|
|
1,130
|
|
|
—
|
|
|
24,494
|
|
||||||
Other expenses (insurance)
|
(17,087
|
)
|
|
(5,065
|
)
|
|
—
|
|
|
(28,126
|
)
|
|
—
|
|
|
(50,278
|
)
|
||||||
Segment profit (loss)
|
$
|
138,777
|
|
|
$
|
51,446
|
|
|
$
|
(55,550
|
)
|
|
$
|
(57,426
|
)
|
|
$
|
380,525
|
|
|
$
|
457,772
|
|
Other revenues (non-insurance)
|
|
|
|
|
|
|
|
|
|
|
686,448
|
|
|||||||||||
Other expenses (non-insurance)
|
|
|
|
|
|
|
|
|
|
|
(613,250
|
)
|
|||||||||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(55,223
|
)
|
|||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(114,004
|
)
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
361,743
|
|
||||||||||
U.S. GAAP combined ratio
(2)
|
92
|
%
|
|
94
|
%
|
|
109
|
%
|
|
NM
|
|
(3)
|
|
|
97
|
%
|
(1)
|
In connection with the acquisition of Alterra, the Company incurred transaction costs of
$16.0 million
for the year ended December 31, 2013, which primarily consist of due diligence, legal and investment banking costs. Additionally, the Company incurred severance costs of
$31.7 million
, stay bonuses of
$14.8 million
and other compensation costs totaling
$12.6 million
related to the acceleration of certain long-term incentive compensation awards and restricted stock awards that were granted by Alterra prior to the acquisition.
|
(2)
|
The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
|
(3)
|
NM — Ratio is not meaningful.
|
(dollars in thousands)
|
Deferred Policy
Acquisition Costs
|
|
Unearned
Premiums
|
|
Unpaid Losses and
Loss Adjustment Expenses
|
||||||
December 31, 2015
|
|
|
|
|
|
||||||
U.S. Insurance
|
$
|
162,289
|
|
|
$
|
1,105,456
|
|
|
$
|
3,720,429
|
|
International Insurance
|
48,913
|
|
|
467,158
|
|
|
3,140,000
|
|
|||
Reinsurance
|
141,554
|
|
|
593,491
|
|
|
2,750,258
|
|
|||
Other Insurance (Discontinued Lines)
|
—
|
|
|
—
|
|
|
641,266
|
|
|||
Total
|
$
|
352,756
|
|
|
$
|
2,166,105
|
|
|
$
|
10,251,953
|
|
December 31, 2014
|
|
|
|
|
|
||||||
U.S. Insurance
|
$
|
165,333
|
|
|
$
|
1,110,910
|
|
|
$
|
3,577,166
|
|
International Insurance
|
47,618
|
|
|
491,708
|
|
|
3,353,417
|
|
|||
Reinsurance
|
140,459
|
|
|
643,072
|
|
|
2,818,792
|
|
|||
Other Insurance (Discontinued Lines)
|
—
|
|
|
—
|
|
|
654,777
|
|
|||
Total
|
$
|
353,410
|
|
|
$
|
2,245,690
|
|
|
$
|
10,404,152
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
U.S. Insurance:
|
|
|
|
|
|
||||||
General liability
|
$
|
522,358
|
|
|
$
|
491,645
|
|
|
$
|
431,798
|
|
Professional liability
|
324,230
|
|
|
321,005
|
|
|
268,203
|
|
|||
Property
|
264,232
|
|
|
266,019
|
|
|
190,530
|
|
|||
Personal lines
|
325,811
|
|
|
299,442
|
|
|
185,935
|
|
|||
Programs
|
277,829
|
|
|
244,216
|
|
|
205,004
|
|
|||
Workers compensation
|
281,954
|
|
|
263,164
|
|
|
250,790
|
|
|||
Other
|
108,798
|
|
|
137,369
|
|
|
195,506
|
|
|||
Total U.S. Insurance
|
2,105,212
|
|
|
2,022,860
|
|
|
1,727,766
|
|
|||
International Insurance:
|
|
|
|
|
|
||||||
General liability
|
124,198
|
|
|
146,178
|
|
|
128,171
|
|
|||
Professional liability
|
268,637
|
|
|
285,300
|
|
|
252,816
|
|
|||
Property
|
85,152
|
|
|
76,691
|
|
|
91,497
|
|
|||
Marine and energy
|
262,307
|
|
|
287,263
|
|
|
287,745
|
|
|||
Other
|
139,132
|
|
|
114,247
|
|
|
73,755
|
|
|||
Total International Insurance
|
879,426
|
|
|
909,679
|
|
|
833,984
|
|
|||
Reinsurance:
|
|
|
|
|
|
||||||
Property
|
265,373
|
|
|
270,461
|
|
|
227,394
|
|
|||
Casualty
|
315,027
|
|
|
323,390
|
|
|
244,981
|
|
|||
Auto
|
102,227
|
|
|
152,645
|
|
|
84,042
|
|
|||
Other
|
155,916
|
|
|
161,889
|
|
|
113,409
|
|
|||
Total Reinsurance
|
838,543
|
|
|
908,385
|
|
|
669,826
|
|
|||
Other Insurance (Discontinued Lines)
|
351
|
|
|
(12
|
)
|
|
40
|
|
|||
Total earned premiums
|
$
|
3,823,532
|
|
|
$
|
3,840,912
|
|
|
$
|
3,231,616
|
|
|
December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Segment assets:
|
|
|
|
|
|
||||||
Investing
|
$
|
18,056,947
|
|
|
$
|
18,531,150
|
|
|
$
|
17,550,332
|
|
Underwriting
|
5,386,710
|
|
|
5,422,445
|
|
|
5,468,731
|
|
|||
Total segment assets
|
23,443,657
|
|
|
23,953,595
|
|
|
23,019,063
|
|
|||
Non-insurance operations
|
1,497,614
|
|
|
1,246,762
|
|
|
936,448
|
|
|||
Total assets
|
$
|
24,941,271
|
|
|
$
|
25,200,357
|
|
|
$
|
23,955,511
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
(dollars in thousands)
|
Other
Revenues
|
|
Other
Expenses
|
|
Other
Revenues
|
|
Other
Expenses
|
|
Other
Revenues
|
|
Other
Expenses
|
||||||||||||
Insurance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Managing general agent operations
|
$
|
10,202
|
|
|
$
|
9,619
|
|
|
$
|
23,324
|
|
|
$
|
22,527
|
|
|
$
|
17,399
|
|
|
$
|
20,382
|
|
Life and annuity
|
617
|
|
|
29,057
|
|
|
1,631
|
|
|
37,132
|
|
|
1,130
|
|
|
28,126
|
|
||||||
Other
|
1,512
|
|
|
1,419
|
|
|
3,677
|
|
|
3,175
|
|
|
5,965
|
|
|
1,770
|
|
||||||
|
12,331
|
|
|
40,095
|
|
|
28,632
|
|
|
62,834
|
|
|
24,494
|
|
|
50,278
|
|
||||||
Non-Insurance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Markel Ventures: Manufacturing
|
755,802
|
|
|
677,054
|
|
|
575,353
|
|
|
513,668
|
|
|
495,138
|
|
|
437,712
|
|
||||||
Markel Ventures: Non-Manufacturing
|
291,714
|
|
|
301,004
|
|
|
262,767
|
|
|
261,551
|
|
|
191,310
|
|
|
175,538
|
|
||||||
Other
|
26,911
|
|
|
28,652
|
|
|
16,773
|
|
|
16,818
|
|
|
—
|
|
|
—
|
|
||||||
|
1,074,427
|
|
|
1,006,710
|
|
|
854,893
|
|
|
792,037
|
|
|
686,448
|
|
|
613,250
|
|
||||||
Total
|
$
|
1,086,758
|
|
|
$
|
1,046,805
|
|
|
$
|
883,525
|
|
|
$
|
854,871
|
|
|
$
|
710,942
|
|
|
$
|
663,528
|
|
|
Years Ended December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation at beginning of period
|
$
|
185,556
|
|
|
$
|
163,010
|
|
Interest cost
|
6,645
|
|
|
7,572
|
|
||
Plan amendments
|
—
|
|
|
495
|
|
||
Plan settlements
|
(2,863
|
)
|
|
—
|
|
||
Benefits paid
|
(3,970
|
)
|
|
(4,424
|
)
|
||
Actuarial loss (gain)
|
(6,051
|
)
|
|
29,609
|
|
||
Effect of foreign currency rate changes
|
(9,312
|
)
|
|
(10,706
|
)
|
||
Projected benefit obligation at end of year
|
$
|
170,005
|
|
|
$
|
185,556
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of period
|
$
|
201,399
|
|
|
$
|
189,437
|
|
Actual gain on plan assets
|
2,246
|
|
|
22,395
|
|
||
Employer contributions
|
—
|
|
|
5,610
|
|
||
Plan settlements
|
(2,766
|
)
|
|
—
|
|
||
Benefits paid
|
(3,970
|
)
|
|
(4,424
|
)
|
||
Effect of foreign currency rate changes
|
(10,182
|
)
|
|
(11,619
|
)
|
||
Fair value of plan assets at end of year
|
$
|
186,727
|
|
|
$
|
201,399
|
|
Funded status of the plan
|
$
|
16,722
|
|
|
$
|
15,843
|
|
Net actuarial pension loss
|
61,818
|
|
|
61,378
|
|
||
Total
|
$
|
78,540
|
|
|
$
|
77,221
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net actuarial gain (loss)
|
$
|
(3,102
|
)
|
|
$
|
(20,521
|
)
|
|
$
|
3,146
|
|
Settlement loss recognized
|
343
|
|
|
—
|
|
|
—
|
|
|||
Amortization of:
|
|
|
|
|
|
||||||
Net actuarial loss
|
2,319
|
|
|
1,589
|
|
|
1,934
|
|
|||
Prior service costs
|
—
|
|
|
495
|
|
|
—
|
|
|||
Tax benefit (expense)
|
88
|
|
|
3,687
|
|
|
(1,015
|
)
|
|||
Total other comprehensive income (loss)
|
$
|
(352
|
)
|
|
$
|
(14,750
|
)
|
|
$
|
4,065
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Components of net periodic benefit income:
|
|
|
|
|
|
||||||
Interest cost
|
$
|
6,645
|
|
|
$
|
7,572
|
|
|
$
|
6,533
|
|
Expected return on plan assets
|
(11,496
|
)
|
|
(12,812
|
)
|
|
(10,825
|
)
|
|||
Amortization of prior service cost
|
—
|
|
|
495
|
|
|
—
|
|
|||
Amortization of net actuarial pension loss
|
2,319
|
|
|
1,589
|
|
|
1,934
|
|
|||
Settlement loss recognized
|
343
|
|
|
—
|
|
|
—
|
|
|||
Net periodic benefit income
|
$
|
(2,189
|
)
|
|
$
|
(3,156
|
)
|
|
$
|
(2,358
|
)
|
Weighted average assumptions as of December 31:
|
|
|
|
|
|
||||||
Discount rate
|
4.0
|
%
|
|
3.8
|
%
|
|
4.7
|
%
|
|||
Expected return on plan assets
|
5.4
|
%
|
|
6.0
|
%
|
|
6.6
|
%
|
|||
Rate of compensation increase
|
2.9
|
%
|
|
2.9
|
%
|
|
3.2
|
%
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
Plan assets:
|
|
|
|
||||
Fixed maturity index funds
|
$
|
107,033
|
|
|
$
|
114,243
|
|
Equity security index funds
|
79,686
|
|
|
87,148
|
|
||
Cash and cash equivalents
|
8
|
|
|
8
|
|
||
Total
|
$
|
186,727
|
|
|
$
|
201,399
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(dollars in thousands)
|
||||||
ASSETS
|
|
|
|
||||
Investments, available-for-sale, at estimated fair value:
|
|
|
|
||||
Fixed maturities (amortized cost of $35,475 in 2015 and $47,346 in 2014)
|
$
|
36,618
|
|
|
$
|
48,807
|
|
Equity securities (cost of $204,289 in 2015 and $193,864 in 2014)
|
311,405
|
|
|
434,714
|
|
||
Short-term investments (estimated fair value approximates cost)
|
755,619
|
|
|
764,953
|
|
||
Total Investments
|
1,103,642
|
|
|
1,248,474
|
|
||
Cash and cash equivalents
|
460,271
|
|
|
243,702
|
|
||
Restricted cash and cash equivalents
|
670
|
|
|
959
|
|
||
Receivables
|
17,200
|
|
|
16,110
|
|
||
Investments in consolidated subsidiaries
|
7,961,315
|
|
|
7,560,862
|
|
||
Notes receivable from subsidiaries
|
212,636
|
|
|
212,631
|
|
||
Income taxes receivable
|
—
|
|
|
10,951
|
|
||
Other assets
|
91,151
|
|
|
93,434
|
|
||
Total Assets
|
$
|
9,846,885
|
|
|
$
|
9,387,123
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Senior long-term debt
|
$
|
1,634,472
|
|
|
$
|
1,635,173
|
|
Notes payable to subsidiaries
|
300,000
|
|
|
15,000
|
|
||
Income taxes payable
|
4,262
|
|
|
—
|
|
||
Net deferred tax liability
|
7,498
|
|
|
74,534
|
|
||
Other liabilities
|
66,503
|
|
|
67,598
|
|
||
Total Liabilities
|
2,012,735
|
|
|
1,792,305
|
|
||
Total Shareholders' Equity
|
7,834,150
|
|
|
7,594,818
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
9,846,885
|
|
|
$
|
9,387,123
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(dollars in thousands)
|
||||||||||
REVENUES
|
|
|
|
|
|
||||||
Net investment income
|
$
|
2,565
|
|
|
$
|
5,354
|
|
|
$
|
21,946
|
|
Dividends on common stock of consolidated subsidiaries
|
187,496
|
|
|
217,121
|
|
|
806,233
|
|
|||
Net realized investment gains:
|
|
|
|
|
|
||||||
Other-than-temporary impairment losses
|
(3,455
|
)
|
|
(120
|
)
|
|
(15
|
)
|
|||
Net realized investment gains, excluding other-than-temporary impairment losses
|
75,000
|
|
|
3,873
|
|
|
67,232
|
|
|||
Net realized investment gains
|
71,545
|
|
|
3,753
|
|
|
67,217
|
|
|||
Other
|
—
|
|
|
—
|
|
|
1
|
|
|||
Total Revenues
|
261,606
|
|
|
226,228
|
|
|
895,397
|
|
|||
EXPENSES
|
|
|
|
|
|
||||||
Interest expense
|
95,620
|
|
|
94,097
|
|
|
92,743
|
|
|||
Other expenses
|
11,287
|
|
|
2,685
|
|
|
2,617
|
|
|||
Total Expenses
|
106,907
|
|
|
96,782
|
|
|
95,360
|
|
|||
Income Before Equity in Undistributed Earnings of Consolidated Subsidiaries and Income Taxes
|
154,699
|
|
|
129,446
|
|
|
800,037
|
|
|||
Equity in undistributed earnings of consolidated subsidiaries
|
407,489
|
|
|
163,341
|
|
|
(520,323
|
)
|
|||
Income tax benefit
|
(20,584
|
)
|
|
(28,395
|
)
|
|
(1,307
|
)
|
|||
Net Income to Shareholders
|
$
|
582,772
|
|
|
$
|
321,182
|
|
|
$
|
281,021
|
|
OTHER COMPREHENSIVE INCOME (LOSS) TO SHAREHOLDERS
|
|
|
|
|
|
||||||
Change in net unrealized gains on investments, net of taxes:
|
|
|
|
|
|
||||||
Net holding gains (losses) arising during the period
|
$
|
(41,861
|
)
|
|
$
|
32,118
|
|
|
$
|
66,623
|
|
Consolidated subsidiaries' net holding gains (losses) arising during the period
|
(198,309
|
)
|
|
655,617
|
|
|
158,922
|
|
|||
Consolidated subsidiaries' change in unrealized other-than-temporary impairment losses on fixed maturities arising during the period
|
160
|
|
|
173
|
|
|
(141
|
)
|
|||
Reclassification adjustments for net losses included in net income to shareholders
|
(45,273
|
)
|
|
(1,874
|
)
|
|
(43,220
|
)
|
|||
Consolidated subsidiaries' reclassification adjustments for net gains (losses) included in net income to shareholders
|
(35,209
|
)
|
|
(24,287
|
)
|
|
2,390
|
|
|||
Change in net unrealized gains on investments, net of taxes
|
(320,492
|
)
|
|
661,747
|
|
|
184,574
|
|
|||
Change in foreign currency translation adjustments, net of taxes
|
2,970
|
|
|
1,949
|
|
|
(2,670
|
)
|
|||
Consolidated subsidiaries' change in foreign currency translation adjustments, net of taxes
|
(32,175
|
)
|
|
(34,194
|
)
|
|
(7,501
|
)
|
|||
Consolidated subsidiaries' change in net actuarial pension loss, net of taxes
|
(352
|
)
|
|
(14,750
|
)
|
|
4,065
|
|
|||
Total Other Comprehensive Income (Loss) to Shareholders
|
(350,049
|
)
|
|
614,752
|
|
|
178,468
|
|
|||
Comprehensive Income to Shareholders
|
$
|
232,723
|
|
|
$
|
935,934
|
|
|
$
|
459,489
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(dollars in thousands)
|
||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income to shareholders
|
$
|
582,772
|
|
|
$
|
321,182
|
|
|
$
|
281,021
|
|
Adjustments to reconcile net income to shareholders to net cash provided by operating activities
|
(464,193
|
)
|
|
(218,396
|
)
|
|
186,574
|
|
|||
Net Cash Provided By Operating Activities
|
118,579
|
|
|
102,786
|
|
|
467,595
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from sales of fixed maturities and equity securities
|
100,633
|
|
|
9,306
|
|
|
142,259
|
|
|||
Proceeds from maturities, calls and prepayments of fixed maturities
|
24,945
|
|
|
15,710
|
|
|
2,819
|
|
|||
Cost of fixed maturities and equity securities purchased
|
(55,656
|
)
|
|
(687
|
)
|
|
(23,412
|
)
|
|||
Net change in short-term investments
|
9,956
|
|
|
(109,728
|
)
|
|
10,251
|
|
|||
Securities received from subsidiaries as dividends or repayment of notes receivable
|
—
|
|
|
89,996
|
|
|
249,996
|
|
|||
Decrease in notes receivable due from subsidiaries
|
—
|
|
|
28,506
|
|
|
5,302
|
|
|||
Capital contributions to subsidiaries
|
(228,578
|
)
|
|
(74,788
|
)
|
|
(67,878
|
)
|
|||
Acquisitions
|
—
|
|
|
—
|
|
|
(1,017,988
|
)
|
|||
Cost of equity method investments
|
(13,164
|
)
|
|
—
|
|
|
(5,291
|
)
|
|||
Change in restricted cash and cash equivalents
|
289
|
|
|
51
|
|
|
(348
|
)
|
|||
Additions to property and equipment
|
(305
|
)
|
|
(342
|
)
|
|
(3,653
|
)
|
|||
Other
|
(376
|
)
|
|
(2,150
|
)
|
|
3,207
|
|
|||
Net Cash Used By Investing Activities
|
(162,256
|
)
|
|
(44,126
|
)
|
|
(704,736
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Additions to senior long-term debt
|
—
|
|
|
—
|
|
|
491,235
|
|
|||
Increase in notes payable to subsidiaries
|
285,000
|
|
|
—
|
|
|
—
|
|
|||
Repayment and retirement of senior long-term debt
|
(2,000
|
)
|
|
—
|
|
|
(246,665
|
)
|
|||
Repurchases of common stock
|
(31,491
|
)
|
|
(26,053
|
)
|
|
(57,388
|
)
|
|||
Issuance of common stock
|
4,752
|
|
|
5,691
|
|
|
24,518
|
|
|||
Other
|
3,985
|
|
|
(1,948
|
)
|
|
(5,023
|
)
|
|||
Net Cash Provided (Used) By Financing Activities
|
260,246
|
|
|
(22,310
|
)
|
|
206,677
|
|
|||
Increase (decrease) in cash and cash equivalents
|
216,569
|
|
|
36,350
|
|
|
(30,464
|
)
|
|||
Cash and cash equivalents at beginning of year
|
243,702
|
|
|
207,352
|
|
|
237,816
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
460,271
|
|
|
$
|
243,702
|
|
|
$
|
207,352
|
|
|
Quarters Ended
|
||||||||||||||
(dollars in thousands, except per share amounts)
|
Mar. 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
1,302,154
|
|
|
$
|
1,304,605
|
|
|
$
|
1,342,764
|
|
|
$
|
1,420,460
|
|
Net income
|
194,006
|
|
|
92,453
|
|
|
104,410
|
|
|
198,273
|
|
||||
Net income to shareholders
|
190,992
|
|
|
91,369
|
|
|
102,519
|
|
|
197,892
|
|
||||
Comprehensive income (loss) to shareholders
|
281,807
|
|
|
(132,925
|
)
|
|
(51,143
|
)
|
|
134,984
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
13.57
|
|
|
$
|
6.76
|
|
|
$
|
7.43
|
|
|
$
|
14.23
|
|
Diluted
|
13.49
|
|
|
6.72
|
|
|
7.39
|
|
|
14.14
|
|
||||
Common stock price ranges:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
783.50
|
|
|
$
|
821.00
|
|
|
$
|
898.08
|
|
|
$
|
937.91
|
|
Low
|
660.05
|
|
|
736.96
|
|
|
775.00
|
|
|
791.97
|
|
||||
2014
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
1,239,655
|
|
|
$
|
1,258,971
|
|
|
$
|
1,299,286
|
|
|
$
|
1,335,755
|
|
Net income
|
87,501
|
|
|
41,141
|
|
|
76,824
|
|
|
118,222
|
|
||||
Net income to shareholders
|
87,716
|
|
|
40,068
|
|
|
75,803
|
|
|
117,595
|
|
||||
Comprehensive income to shareholders
|
230,273
|
|
|
250,588
|
|
|
36,502
|
|
|
418,571
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
6.28
|
|
|
$
|
2.67
|
|
|
$
|
5.33
|
|
|
$
|
8.10
|
|
Diluted
|
6.25
|
|
|
2.66
|
|
|
5.30
|
|
|
8.05
|
|
||||
Common stock price ranges:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
596.87
|
|
|
$
|
655.75
|
|
|
$
|
666.00
|
|
|
$
|
707.36
|
|
Low
|
527.17
|
|
|
593.76
|
|
|
623.90
|
|
|
632.65
|
|
||||
2013
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
819,864
|
|
|
$
|
1,031,769
|
|
|
$
|
1,191,665
|
|
|
$
|
1,279,785
|
|
Net income
|
89,263
|
|
|
28,676
|
|
|
66,967
|
|
|
98,939
|
|
||||
Net income to shareholders
|
88,902
|
|
|
27,756
|
|
|
65,599
|
|
|
98,764
|
|
||||
Comprehensive income (loss) to shareholders
|
257,684
|
|
|
(149,054
|
)
|
|
144,409
|
|
|
206,450
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
9.53
|
|
|
$
|
2.24
|
|
|
$
|
4.69
|
|
|
$
|
6.98
|
|
Diluted
|
9.50
|
|
|
2.24
|
|
|
4.67
|
|
|
6.95
|
|
||||
Common stock price ranges:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
510.05
|
|
|
$
|
546.94
|
|
|
$
|
549.09
|
|
|
$
|
582.59
|
|
Low
|
434.98
|
|
|
501.76
|
|
|
506.64
|
|
|
511.06
|
|
(dollars in millions)
|
Net Loss
Reserves Held
(1)
|
|
Low End of
Actuarial
Range
(2)
|
|
High End of
Actuarial
Range
(2)
|
||||||
U.S. Insurance
|
$
|
3,082.2
|
|
|
$
|
2,709.7
|
|
|
$
|
3,279.0
|
|
International Insurance
|
2,132.1
|
|
|
1,691.4
|
|
|
2,288.2
|
|
|||
Reinsurance
|
2,599.7
|
|
|
1,881.2
|
|
|
2,892.8
|
|
|||
Other Insurance (Discontinued Lines)
|
330.3
|
|
|
265.6
|
|
|
514.6
|
|
(1)
|
As described in note
2
of the notes to consolidated financial statements, unpaid losses and loss adjustment expenses attributable to Alterra were recorded at fair value as of May 1, 2013 (the Acquisition Date), which consists of the present value of the expected net loss and loss adjustment expense payments plus a risk premium. The net loss reserves presented in this table represent our estimated future payments for losses and loss adjustment expenses, whereas the reserves for unpaid losses and loss adjustment expenses included in the consolidated balance sheet include the unamortized portion of the fair value adjustment recorded at the Acquisition Date.
|
(2)
|
Due to the actuarial methods used to determine the separate ranges for each segment of our business, it is not appropriate to aggregate the high or low ends of the separate ranges to determine the high and low ends of the actuarial range on a consolidated basis.
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Underwriting profit
|
$
|
429,707
|
|
|
$
|
177,563
|
|
|
$
|
103,031
|
|
Net investment income
|
353,213
|
|
|
363,230
|
|
|
317,373
|
|
|||
Net realized investment gains
|
106,480
|
|
|
46,000
|
|
|
63,152
|
|
|||
Other revenues
|
1,086,758
|
|
|
883,525
|
|
|
710,942
|
|
|||
Amortization of intangible assets
|
(68,947
|
)
|
|
(57,627
|
)
|
|
(55,223
|
)
|
|||
Other expenses
|
(1,046,805
|
)
|
|
(854,871
|
)
|
|
(663,528
|
)
|
|||
Interest expense
|
(118,301
|
)
|
|
(117,442
|
)
|
|
(114,004
|
)
|
|||
Income tax expense
|
(152,963
|
)
|
|
(116,690
|
)
|
|
(77,898
|
)
|
|||
Net income attributable to noncontrolling interests
|
(6,370
|
)
|
|
(2,506
|
)
|
|
(2,824
|
)
|
|||
Net income to shareholders
|
$
|
582,772
|
|
|
$
|
321,182
|
|
|
$
|
281,021
|
|
|
Years Ended December 31,
|
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
||||||
Gross premium volume
|
$
|
4,632,912
|
|
|
$
|
4,805,513
|
|
|
$
|
3,920,226
|
|
|
Net written premiums
|
$
|
3,819,293
|
|
|
$
|
3,917,015
|
|
|
$
|
3,236,683
|
|
|
Net retention
|
82
|
%
|
|
82
|
%
|
|
83
|
%
|
|
|||
Earned premiums
|
$
|
3,823,532
|
|
|
$
|
3,840,912
|
|
|
$
|
3,231,616
|
|
|
Losses and loss adjustment expenses
|
$
|
1,938,745
|
|
|
$
|
2,202,467
|
|
|
$
|
1,816,273
|
|
|
Underwriting, acquisition and insurance expenses
|
$
|
1,455,080
|
|
|
$
|
1,460,882
|
|
|
$
|
1,312,312
|
|
|
Underwriting profit
|
$
|
429,707
|
|
|
$
|
177,563
|
|
|
$
|
103,031
|
|
|
|
|
|
|
|
|
|
||||||
U.S. GAAP Combined Ratios
(1)
|
|
|
|
|
|
|
||||||
U.S. Insurance
|
89
|
%
|
|
95
|
%
|
|
92
|
%
|
|
|||
International Insurance
|
86
|
%
|
|
93
|
%
|
|
94
|
%
|
|
|||
Reinsurance
|
90
|
%
|
|
96
|
%
|
|
109
|
%
|
|
|||
Other Insurance (Discontinued Lines)
|
NM
|
|
(2)
|
NM
|
|
(2)
|
NM
|
|
(2)
|
|||
Markel Corporation (Consolidated)
|
89
|
%
|
|
95
|
%
|
|
97
|
%
|
|
(1)
|
The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums. The U.S. GAAP combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio less than 100% indicates an underwriting profit, while a combined ratio greater than 100% reflects an underwriting loss. The loss ratio represents the relationship of incurred losses and loss adjustment expenses to earned premiums. The expense ratio represents the relationship of underwriting, acquisition and insurance expenses to earned premiums.
|
(2)
|
NM—Ratio is not meaningful. Further discussion of Other Insurance (Discontinued Lines) underwriting loss follows.
|
|
Year Ended December 31, 2015
|
||||||||||||||||||
(dollars in millions)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Total
|
||||||||||
U.S. Insurance:
|
|
|
|
|
|
|
|
|
|
||||||||||
General liability
|
$
|
(111.3
|
)
|
|
|
|
|
|
|
|
$
|
(111.3
|
)
|
||||||
Workers' compensation
|
(36.6
|
)
|
|
|
|
|
|
|
|
(36.6
|
)
|
||||||||
Property:
|
|
|
|
|
|
|
|
|
|
||||||||||
Brokerage property
|
(35.0
|
)
|
|
|
|
|
|
|
|
(35.0
|
)
|
||||||||
Inland marine
|
(27.5
|
)
|
|
|
|
|
|
|
|
(27.5
|
)
|
||||||||
International Insurance:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Marine and energy
|
|
|
$
|
(64.8
|
)
|
|
|
|
|
|
(64.8
|
)
|
|||||||
General liability
|
|
|
(60.9
|
)
|
|
|
|
|
|
(60.9
|
)
|
||||||||
Professional liability
|
|
|
(39.7
|
)
|
|
|
|
|
|
(39.7
|
)
|
||||||||
Reinsurance:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Casualty
|
|
|
|
|
$
|
(27.4
|
)
|
|
|
|
(27.4
|
)
|
|||||||
Property
|
|
|
|
|
(21.1
|
)
|
|
|
|
(21.1
|
)
|
||||||||
Other Insurance (Discontinued Lines):
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss on retroactive reinsurance transaction
|
|
|
|
|
|
|
$
|
7.1
|
|
|
7.1
|
|
|||||||
Other A&E exposures
|
|
|
|
|
|
|
18.3
|
|
|
18.3
|
|
||||||||
Impact of retroactive reinsurance transactions on reserve volatility
|
(35.2
|
)
|
|
(32.3
|
)
|
|
(15.2
|
)
|
|
—
|
|
|
(82.7
|
)
|
|||||
Net other prior years' redundancy
|
(53.4
|
)
|
|
(51.1
|
)
|
|
(34.2
|
)
|
|
(7.5
|
)
|
|
(146.2
|
)
|
|||||
Increase (decrease)
|
$
|
(299.0
|
)
|
|
$
|
(248.8
|
)
|
|
$
|
(97.9
|
)
|
|
$
|
17.9
|
|
|
$
|
(627.8
|
)
|
|
Year Ended December 31, 2014
|
||||||||||||||||||
(dollars in millions)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Total
|
||||||||||
U.S. Insurance:
|
|
|
|
|
|
|
|
|
|
||||||||||
General liability
|
$
|
(93.4
|
)
|
|
|
|
|
|
|
|
$
|
(93.4
|
)
|
||||||
Professional liability:
|
|
|
|
|
|
|
|
|
|
||||||||||
Architects and engineers
|
20.2
|
|
|
|
|
|
|
|
|
20.2
|
|
||||||||
All other
|
(48.4
|
)
|
|
|
|
|
|
|
|
(48.4
|
)
|
||||||||
Workers' compensation
|
(25.7
|
)
|
|
|
|
|
|
|
|
(25.7
|
)
|
||||||||
International Insurance:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Professional liability
|
|
|
$
|
(62.7
|
)
|
|
|
|
|
|
(62.7
|
)
|
|||||||
Marine and energy
|
|
|
(45.9
|
)
|
|
|
|
|
|
(45.9
|
)
|
||||||||
Reinsurance:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Property
|
|
|
|
|
$
|
(44.7
|
)
|
|
|
|
(44.7
|
)
|
|||||||
Other Insurance (Discontinued Lines):
|
|
|
|
|
|
|
|
|
|
|
|||||||||
A&E exposures
|
|
|
|
|
|
|
$
|
32.8
|
|
|
32.8
|
|
|||||||
Net other prior years' redundancy
|
(69.3
|
)
|
|
(58.0
|
)
|
|
(35.3
|
)
|
|
(5.1
|
)
|
|
(167.7
|
)
|
|||||
Increase (decrease)
|
$
|
(216.6
|
)
|
|
$
|
(166.6
|
)
|
|
$
|
(80.0
|
)
|
|
$
|
27.7
|
|
|
$
|
(435.5
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year Ended December 31, 2013
|
||||||||||||||||||
(dollars in millions)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Total
|
||||||||||
U.S. Insurance:
|
|
|
|
|
|
|
|
|
|
||||||||||
General liability
|
$
|
(136.3
|
)
|
|
|
|
|
|
|
|
$
|
(136.3
|
)
|
||||||
Professional liability:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Architects and engineers
|
7.0
|
|
|
|
|
|
|
|
|
7.0
|
|
||||||||
All other
|
(22.8
|
)
|
|
|
|
|
|
|
|
(22.8
|
)
|
||||||||
Workers' compensation
|
(32.8
|
)
|
|
|
|
|
|
|
|
(32.8
|
)
|
||||||||
Specialty programs
|
(27.9
|
)
|
|
|
|
|
|
|
|
(27.9
|
)
|
||||||||
International Insurance:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Professional liability
|
|
|
$
|
(46.8
|
)
|
|
|
|
|
|
(46.8
|
)
|
|||||||
Marine and energy
|
|
|
(49.3
|
)
|
|
|
|
|
|
(49.3
|
)
|
||||||||
Reinsurance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Property
|
|
|
|
|
$
|
(12.1
|
)
|
|
|
|
(12.1
|
)
|
|||||||
Other Insurance (Discontinued Lines):
|
|
|
|
|
|
|
|
|
|
|
|||||||||
A&E exposures
|
|
|
|
|
|
|
$
|
30.1
|
|
|
30.1
|
|
|||||||
Net other prior years' redundancy
|
(85.3
|
)
|
|
(34.6
|
)
|
|
(0.8
|
)
|
|
0.5
|
|
|
(120.2
|
)
|
|||||
Increase (decrease)
|
$
|
(298.1
|
)
|
|
$
|
(130.7
|
)
|
|
$
|
(12.9
|
)
|
|
$
|
30.6
|
|
|
$
|
(411.1
|
)
|
Gross Premium Volume
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
U.S. Insurance
|
$
|
2,504,096
|
|
|
$
|
2,493,823
|
|
|
$
|
2,252,739
|
|
International Insurance
|
1,164,866
|
|
|
1,200,403
|
|
|
1,101,099
|
|
|||
Reinsurance
|
965,374
|
|
|
1,112,728
|
|
|
566,348
|
|
|||
Other Insurance (Discontinued Lines)
|
(1,424
|
)
|
|
(1,441
|
)
|
|
40
|
|
|||
Total
|
$
|
4,632,912
|
|
|
$
|
4,805,513
|
|
|
$
|
3,920,226
|
|
Net Written Premiums
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
U.S. Insurance
|
$
|
2,106,490
|
|
|
$
|
2,071,466
|
|
|
$
|
1,915,770
|
|
International Insurance
|
888,214
|
|
|
889,336
|
|
|
840,050
|
|
|||
Reinsurance
|
824,324
|
|
|
956,584
|
|
|
480,822
|
|
|||
Other Insurance (Discontinued Lines)
|
265
|
|
|
(371
|
)
|
|
41
|
|
|||
Total
|
$
|
3,819,293
|
|
|
$
|
3,917,015
|
|
|
$
|
3,236,683
|
|
Earned Premiums
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
U.S. Insurance
|
$
|
2,105,212
|
|
|
$
|
2,022,860
|
|
|
$
|
1,727,766
|
|
International Insurance
|
879,426
|
|
|
909,679
|
|
|
833,984
|
|
|||
Reinsurance
|
838,543
|
|
|
908,385
|
|
|
669,826
|
|
|||
Other Insurance (Discontinued Lines)
|
351
|
|
|
(12
|
)
|
|
40
|
|
|||
Total
|
$
|
3,823,532
|
|
|
$
|
3,840,912
|
|
|
$
|
3,231,616
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net investment income
|
$
|
353,213
|
|
|
$
|
363,230
|
|
|
$
|
317,373
|
|
Net realized investment gains
|
$
|
106,480
|
|
|
$
|
46,000
|
|
|
$
|
63,152
|
|
Change in net unrealized gains on investments
|
$
|
(457,584
|
)
|
|
$
|
981,035
|
|
|
$
|
261,995
|
|
Investment yield
(1)
|
2.3
|
%
|
|
2.4
|
%
|
|
2.6
|
%
|
|||
Taxable equivalent total investment return, before foreign currency effect
|
0.5
|
%
|
|
8.9
|
%
|
|
6.9
|
%
|
|||
Taxable equivalent total investment return
|
(0.7
|
)%
|
|
7.4
|
%
|
|
6.8
|
%
|
|||
Invested assets, end of year
|
$
|
18,181,345
|
|
|
$
|
18,637,701
|
|
|
$
|
17,612,074
|
|
(1)
|
Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.
|
|
Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Investment yield
(1)
|
2.3
|
%
|
|
2.4
|
%
|
|
2.6
|
%
|
Adjustment of investment yield from book value to market value
|
(0.4
|
)%
|
|
(0.4
|
)%
|
|
(0.3
|
)%
|
Net amortization of net premium on fixed maturity securities
|
0.5
|
%
|
|
0.6
|
%
|
|
0.7
|
%
|
Net realized investment gains and change in net unrealized gains on investments
|
(2.0
|
)%
|
|
5.9
|
%
|
|
2.3
|
%
|
Taxable equivalent effect for interest and dividends
(2)
|
0.4
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
Other
(3)
|
(1.5
|
)%
|
|
(1.5
|
)%
|
|
1.1
|
%
|
Taxable equivalent total investment return
|
(0.7
|
)%
|
|
7.4
|
%
|
|
6.8
|
%
|
(1)
|
Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.
|
(2)
|
Adjustment to tax-exempt interest and dividend income to reflect a taxable equivalent basis.
|
(3)
|
Adjustment to reflect the impact of changes in foreign currency exchange rates and time-weighting the inputs to the calculation of taxable equivalent total investment return.
|
|
December 31,
|
||||||
(dollars in thousands)
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
120,889
|
|
|
$
|
106,552
|
|
Receivables
|
90,977
|
|
|
92,036
|
|
||
Goodwill
|
254,086
|
|
|
215,967
|
|
||
Intangible assets
|
261,333
|
|
|
237,070
|
|
||
Other assets
|
504,480
|
|
|
534,725
|
|
||
Total Assets
|
$
|
1,231,765
|
|
|
$
|
1,186,350
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Senior long-term debt and other debt
(1)
|
$
|
322,375
|
|
|
$
|
359,263
|
|
Other liabilities
|
268,956
|
|
|
213,794
|
|
||
Total Liabilities
|
591,331
|
|
|
573,057
|
|
||
Redeemable noncontrolling interests
|
62,958
|
|
|
61,048
|
|
||
Shareholders' equity
(2)
|
579,981
|
|
|
553,972
|
|
||
Noncontrolling interests
|
(2,505
|
)
|
|
(1,727
|
)
|
||
Total Equity
|
577,476
|
|
|
552,245
|
|
||
Total Liabilities and Equity
|
$
|
1,231,765
|
|
|
$
|
1,186,350
|
|
(1)
|
Senior long-term debt and other debt as of
December 31, 2015
and
2014
included $216.9 million and $252.9 million, respectively, of debt due to other subsidiaries of Markel Corporation, which is eliminated in consolidation.
|
(2)
|
Shareholders' equity includes $520.3 million and $498.6 million as of
December 31, 2015
and
2014
, respectively, which represents Markel Corporation's investment in Markel Ventures and is eliminated in consolidation.
|
|
Years ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
OPERATING REVENUES
|
|
|
|
|
|
||||||
Net investment income
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Other revenues
|
1,047,516
|
|
|
838,121
|
|
|
686,448
|
|
|||
Total Operating Revenues
|
1,047,521
|
|
|
838,125
|
|
|
686,452
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
||||||
Amortization of intangible assets
|
27,443
|
|
|
24,283
|
|
|
20,674
|
|
|||
Other expenses
|
978,058
|
|
|
775,219
|
|
|
613,250
|
|
|||
Total Operating Expenses
|
1,005,501
|
|
|
799,502
|
|
|
633,924
|
|
|||
Operating Income
|
42,020
|
|
|
38,623
|
|
|
52,528
|
|
|||
Interest expense
(1)
|
13,982
|
|
|
13,400
|
|
|
11,230
|
|
|||
Income Before Income Taxes
|
28,038
|
|
|
25,223
|
|
|
41,298
|
|
|||
Income tax expense
|
10,641
|
|
|
13,160
|
|
|
14,654
|
|
|||
Net Income
|
17,397
|
|
|
12,063
|
|
|
26,644
|
|
|||
Net income attributable to noncontrolling interests
|
6,370
|
|
|
2,506
|
|
|
2,824
|
|
|||
Net Income to Shareholders
|
$
|
11,027
|
|
|
$
|
9,557
|
|
|
$
|
23,820
|
|
(1)
|
Interest expense for the years ended
December 31, 2015
,
2014
and
2013
includes intercompany interest expense of $9.4 million, $8.7 million and $6.4 million, respectively, which is eliminated in consolidation.
|
|
Years ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Cash and cash equivalents, beginning of year
|
$
|
106,552
|
|
|
$
|
61,742
|
|
|
$
|
55,048
|
|
Net cash provided by operating activities
|
166,702
|
|
|
59,915
|
|
|
75,926
|
|
|||
Net cash used by investing activities
|
(96,073
|
)
|
|
(189,729
|
)
|
|
(60,533
|
)
|
|||
Net cash provided (used) by financing activities
(1,2)
|
(56,292
|
)
|
|
174,624
|
|
|
(8,699
|
)
|
|||
Increase in cash and cash equivalents
|
14,337
|
|
|
44,810
|
|
|
6,694
|
|
|||
Cash and cash equivalents, end of year
|
$
|
120,889
|
|
|
$
|
106,552
|
|
|
$
|
61,742
|
|
(1)
|
Net cash provided (used) by financing activities for the years ended
December 31, 2015
,
2014
and
2013
includes capital contributions from our holding company of $22.8 million, $64.8 million and $28.7 million, respectively, which are eliminated in consolidation.
|
(2)
|
Net cash used by financing activities for the year ended
December 31, 2015
includes net repayments of debt of $36.0 million, which are eliminated in consolidation. Net cash provided by financing activities for the year ended
December 31, 2014
includes net additions to debt of $136.5 million, which are eliminated in consolidation. Net cash used by financing activities for the year ended
December 31, 2013
includes repayments of debt totaling $5.3 million which are eliminated in consolidation.
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Markel Ventures EBITDA - Manufacturing
|
$
|
88,822
|
|
|
$
|
71,133
|
|
|
$
|
64,415
|
|
Markel Ventures EBITDA - Non-Manufacturing
|
2,456
|
|
|
10,194
|
|
|
19,372
|
|
|||
Markel Ventures EBITDA - Total
|
91,278
|
|
|
81,327
|
|
|
83,787
|
|
|||
Interest expense
(1)
|
(13,287
|
)
|
|
(12,184
|
)
|
|
(9,283
|
)
|
|||
Income tax expense
|
(10,710
|
)
|
|
(12,848
|
)
|
|
(13,988
|
)
|
|||
Depreciation expense
|
(30,478
|
)
|
|
(24,706
|
)
|
|
(19,313
|
)
|
|||
Amortization of intangible assets
|
(25,776
|
)
|
|
(22,032
|
)
|
|
(17,383
|
)
|
|||
Markel Ventures net income to shareholders
|
11,027
|
|
|
9,557
|
|
|
23,820
|
|
|||
Net income from other Markel operations
|
571,745
|
|
|
311,625
|
|
|
257,201
|
|
|||
Net income to shareholders
|
$
|
582,772
|
|
|
$
|
321,182
|
|
|
$
|
281,021
|
|
(1)
|
Interest expense for the years ended
December 31, 2015
,
2014
and
2013
includes intercompany interest expense of $9.4 million, $8.7 million and $6.4 million, respectively.
|
(dollars in millions)
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||
Net reserves, end of year, adjusted for commutations, foreign currency movements and other
|
$
|
4,213.7
|
|
|
4,348.4
|
|
|
4,329.3
|
|
|
4,561.9
|
|
|
4,538.0
|
|
|
4,593.9
|
|
|
4,605.8
|
|
|
4,551.4
|
|
|
8,232.5
|
|
|
8,401.3
|
|
|
8,235.3
|
|
Paid (cumulative) as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One year later
|
799.5
|
|
|
783.8
|
|
|
727.6
|
|
|
759.5
|
|
|
796.1
|
|
|
898.3
|
|
|
932.0
|
|
|
906.3
|
|
|
1,436.9
|
|
|
1,423.3
|
|
|
|
||
Two years later
|
1,375.4
|
|
|
1,312.1
|
|
|
1,270.8
|
|
|
1,364.8
|
|
|
1,417.0
|
|
|
1,531.0
|
|
|
1,548.7
|
|
|
1,506.7
|
|
|
2,675.9
|
|
|
|
|
|
|||
Three years later
|
1,752.4
|
|
|
1,689.6
|
|
|
1,686.3
|
|
|
1,841.0
|
|
|
1,881.5
|
|
|
1,918.5
|
|
|
1,937.2
|
|
|
2,112.7
|
|
|
|
|
|
|
|
||||
Four years later
|
2,018.2
|
|
|
1,994.1
|
|
|
1,983.9
|
|
|
2,189.7
|
|
|
2,118.7
|
|
|
2,180.8
|
|
|
2,383.2
|
|
|
|
|
|
|
|
|
|
|||||
Five years later
|
2,243.3
|
|
|
2,201.5
|
|
|
2,245.4
|
|
|
2,350.9
|
|
|
2,280.4
|
|
|
2,546.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Six years later
|
2,406.5
|
|
|
2,396.8
|
|
|
2,353.7
|
|
|
2,471.6
|
|
|
2,588.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Seven years later
|
2,581.1
|
|
|
2,473.2
|
|
|
2,438.6
|
|
|
2,753.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Eight years later
|
2,642.7
|
|
|
2,543.3
|
|
|
2,694.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Nine years later
|
2,699.4
|
|
|
2,785.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ten years later
|
2,936.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One year later
|
4,094.7
|
|
|
4,084.4
|
|
|
4,187.4
|
|
|
4,316.2
|
|
|
4,256.7
|
|
|
4,246.1
|
|
|
4,210.4
|
|
|
4,121.6
|
|
|
7,795.2
|
|
|
7,773.5
|
|
|
|
||
Two years later
|
3,893.8
|
|
|
3,962.4
|
|
|
3,943.9
|
|
|
4,076.7
|
|
|
3,918.1
|
|
|
3,873.2
|
|
|
3,856.2
|
|
|
3,821.1
|
|
|
7,327.7
|
|
|
|
|
|
|||
Three years later
|
3,802.6
|
|
|
3,768.6
|
|
|
3,727.2
|
|
|
3,815.1
|
|
|
3,627.4
|
|
|
3,610.6
|
|
|
3,653.1
|
|
|
3,665.9
|
|
|
|
|
|
|
|
||||
Four years later
|
3,687.9
|
|
|
3,606.2
|
|
|
3,528.4
|
|
|
3,620.1
|
|
|
3,423.6
|
|
|
3,498.5
|
|
|
3,536.7
|
|
|
|
|
|
|
|
|
|
|||||
Five years later
|
3,574.6
|
|
|
3,453.8
|
|
|
3,380.7
|
|
|
3,461.9
|
|
|
3,358.8
|
|
|
3,418.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Six years later
|
3,461.5
|
|
|
3,356.6
|
|
|
3,264.4
|
|
|
3,423.6
|
|
|
3,296.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Seven years later
|
3,396.8
|
|
|
3,283.5
|
|
|
3,232.6
|
|
|
3,355.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Eight years later
|
3,346.7
|
|
|
3,269.3
|
|
|
3,199.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Nine years later
|
3,343.7
|
|
|
3,241.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ten years later
|
3,341.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net cumulative redundancy
|
$
|
872.2
|
|
|
1,106.5
|
|
|
1,129.9
|
|
|
1,206.7
|
|
|
1,241.6
|
|
|
1,175.5
|
|
|
1,069.1
|
|
|
885.5
|
|
|
904.8
|
|
|
627.8
|
|
|
|
|
Cumulative %
|
21
|
%
|
|
25
|
%
|
|
26
|
%
|
|
26
|
%
|
|
27
|
%
|
|
26
|
%
|
|
23
|
%
|
|
19
|
%
|
|
11
|
%
|
|
7
|
%
|
|
|
||
Gross reserves, end of year, adjusted for commutations, foreign currency movements and other
|
$
|
5,845.8
|
|
|
5,497.6
|
|
|
5,280.6
|
|
|
5,569.5
|
|
|
5,391.3
|
|
|
5,386.5
|
|
|
5,404.3
|
|
|
5,351.6
|
|
|
10,109.0
|
|
|
10,363.0
|
|
|
10,252.0
|
|
Reinsurance recoverable, adjusted for commutations, foreign currency movements and other
|
1,632.1
|
|
|
1,149.2
|
|
|
951.3
|
|
|
1,007.6
|
|
|
853.3
|
|
|
792.6
|
|
|
798.5
|
|
|
800.2
|
|
|
1,876.5
|
|
|
1,961.7
|
|
|
2,016.7
|
|
|
Net reserves, end of year, adjusted for commutations, foreign currency movements and other
|
$
|
4,213.7
|
|
|
4,348.4
|
|
|
4,329.3
|
|
|
4,561.9
|
|
|
4,538.0
|
|
|
4,593.9
|
|
|
4,605.8
|
|
|
4,551.4
|
|
|
8,232.5
|
|
|
8,401.3
|
|
|
8,235.3
|
|
Gross re-estimated reserves
|
4,789.1
|
|
|
4,239.1
|
|
|
4,021.7
|
|
|
4,193.2
|
|
|
4,039.4
|
|
|
4,145.7
|
|
|
4,321.1
|
|
|
4,457.9
|
|
|
9,150.9
|
|
|
9,722.0
|
|
|
|
||
Re-estimated recoverable
|
1,447.6
|
|
|
997.2
|
|
|
822.3
|
|
|
838.0
|
|
|
743.0
|
|
|
727.3
|
|
|
784.4
|
|
|
792.0
|
|
|
1,823.2
|
|
|
1,948.5
|
|
|
|
||
Net re-estimated reserves
|
$
|
3,341.5
|
|
|
3,241.9
|
|
|
3,199.4
|
|
|
3,355.2
|
|
|
3,296.4
|
|
|
3,418.4
|
|
|
3,536.7
|
|
|
3,665.9
|
|
|
7,327.7
|
|
|
7,773.5
|
|
|
|
|
Gross cumulative redundancy
|
$
|
1,056.7
|
|
|
1,258.5
|
|
|
1,258.9
|
|
|
1,376.3
|
|
|
1,351.9
|
|
|
1,240.8
|
|
|
1,083.2
|
|
|
893.7
|
|
|
958.1
|
|
|
641.0
|
|
|
|
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Consolidated
|
||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Case reserves
|
$
|
1,092,677
|
|
|
$
|
1,242,138
|
|
|
$
|
942,891
|
|
|
$
|
319,988
|
|
|
$
|
3,597,694
|
|
IBNR reserves
|
2,617,871
|
|
|
1,855,666
|
|
|
1,768,396
|
|
|
321,277
|
|
|
6,563,210
|
|
|||||
Total
|
$
|
3,710,548
|
|
|
$
|
3,097,804
|
|
|
$
|
2,711,287
|
|
|
$
|
641,265
|
|
|
$
|
10,160,904
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Case reserves
|
$
|
979,088
|
|
|
$
|
1,266,222
|
|
|
$
|
984,627
|
|
|
$
|
332,712
|
|
|
$
|
3,562,649
|
|
IBNR reserves
|
2,586,505
|
|
|
2,036,744
|
|
|
1,781,569
|
|
|
322,065
|
|
|
6,726,883
|
|
|||||
Total
|
$
|
3,565,593
|
|
|
$
|
3,302,966
|
|
|
$
|
2,766,196
|
|
|
$
|
654,777
|
|
|
$
|
10,289,532
|
|
|
Payments Due by Period
(1)
|
||||||||||||||||||
(dollars in thousands)
|
Total
|
|
Less than 1
year
|
|
1-3 years
|
|
4-5 years
|
|
More than
5 years
|
||||||||||
Senior long-term debt and other debt
(2)
|
$
|
3,300,778
|
|
|
$
|
156,372
|
|
|
$
|
362,764
|
|
|
$
|
908,469
|
|
|
$
|
1,873,173
|
|
Unpaid losses and loss adjustment expenses (estimated)
|
10,160,904
|
|
|
2,339,106
|
|
|
3,121,406
|
|
|
1,819,300
|
|
|
2,881,092
|
|
|||||
Life and annuity benefits (estimated)
|
1,510,432
|
|
|
92,124
|
|
|
151,265
|
|
|
138,593
|
|
|
1,128,450
|
|
|||||
Operating leases
|
274,843
|
|
|
29,664
|
|
|
64,791
|
|
|
49,544
|
|
|
130,844
|
|
|||||
Total
|
$
|
15,246,957
|
|
|
$
|
2,617,266
|
|
|
$
|
3,700,226
|
|
|
$
|
2,915,906
|
|
|
$
|
6,013,559
|
|
(1)
|
See notes
9
,
10
,
11
and
16
of the notes to consolidated financial statements for further discussion of these obligations.
|
(2)
|
Amounts include interest.
|
(dollars in millions)
|
Estimated
Fair Value
|
|
Hypothetical
Price Change
|
|
Estimated
Fair Value after
Hypothetical
Change in Prices
|
|
Estimated
Hypothetical
Percentage Increase
(Decrease) in
Shareholders' Equity
|
|||||
As of December 31, 2015
|
|
|
|
|
|
|
|
|||||
Equity securities
|
$
|
4,074
|
|
|
35% increase
|
|
$
|
5,501
|
|
|
12.1
|
%
|
|
|
|
35% decrease
|
|
2,648
|
|
|
(12.1
|
)
|
|||
As of December 31, 2014
|
|
|
|
|
|
|
|
|||||
Equity securities
|
$
|
4,138
|
|
|
35% increase
|
|
$
|
5,586
|
|
|
12.8
|
%
|
|
|
|
35% decrease
|
|
2,689
|
|
|
(12.8
|
)
|
(dollars in millions)
|
Estimated
Fair Value
|
|
Hypothetical
Change in
Interest Rates
(bp=basis points)
|
|
Estimated
Fair Value after
Hypothetical Change
in Interest Rates
|
|
Hypothetical Percentage
Increase (Decrease) in
|
||||||||
Fair Value of
Fixed Maturities
|
|
Shareholders'
Equity
|
|||||||||||||
Fixed Maturity Investments
|
|
|
|
|
|
|
|
|
|
||||||
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||
Total fixed maturity investments
|
$
|
9,394
|
|
|
200 bp decrease
|
|
$
|
10,591
|
|
|
12.7
|
%
|
|
10.1
|
%
|
|
|
|
100 bp decrease
|
|
9,977
|
|
|
6.2
|
|
|
4.9
|
|
|||
|
|
|
100 bp increase
|
|
8,832
|
|
|
(6.0
|
)
|
|
(4.8
|
)
|
|||
|
|
|
200 bp increase
|
|
8,296
|
|
|
(11.7
|
)
|
|
(9.3
|
)
|
|||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||
Total fixed maturity investments
|
$
|
10,423
|
|
|
200 bp decrease
|
|
$
|
11,734
|
|
|
12.6
|
%
|
|
11.6
|
%
|
|
|
|
100 bp decrease
|
|
11,057
|
|
|
6.1
|
|
|
5.6
|
|
|||
|
|
|
100 bp increase
|
|
9,812
|
|
|
(5.9
|
)
|
|
(5.4
|
)
|
|||
|
|
|
200 bp increase
|
|
9,222
|
|
|
(11.5
|
)
|
|
(10.6
|
)
|
|||
Liabilities
(1)
|
|
|
|
|
|
|
|
|
|
||||||
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||
Borrowings
|
$
|
2,403
|
|
|
200 bp decrease
|
|
$
|
2,731
|
|
|
|
|
|
||
|
|
|
100 bp decrease
|
|
2,557
|
|
|
|
|
|
|||||
|
|
|
100 bp increase
|
|
2,266
|
|
|
|
|
|
|||||
|
|
|
200 bp increase
|
|
2,143
|
|
|
|
|
|
|||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||
Borrowings
|
$
|
2,493
|
|
|
200 bp decrease
|
|
$
|
2,878
|
|
|
|
|
|
||
|
|
|
100 bp decrease
|
|
2,673
|
|
|
|
|
|
|||||
|
|
|
100 bp increase
|
|
2,333
|
|
|
|
|
|
|||||
|
|
|
200 bp increase
|
|
2,190
|
|
|
|
|
|
(1)
|
Changes in estimated fair value have no impact on shareholders' equity.
|
|
December 31, 2015
|
||||||||||||||
(dollars in thousands)
|
Sovereign
|
|
Non-Sovereign
Financial
Institutions
|
|
Non-Sovereign
Non-Financial
Institutions
|
|
Total
|
||||||||
European exposures:
|
|
|
|
|
|
|
|
||||||||
Portugal, Ireland, Italy, Greece and Spain
|
$
|
—
|
|
|
$
|
5,291
|
|
|
$
|
2,161
|
|
|
$
|
7,452
|
|
Eurozone (excluding Portugal, Ireland, Italy, Greece and Spain)
|
803,560
|
|
|
205,233
|
|
|
94,387
|
|
|
1,103,180
|
|
||||
Supranationals
|
—
|
|
|
208,660
|
|
|
—
|
|
|
208,660
|
|
||||
Other
|
120,072
|
|
|
139,882
|
|
|
90,517
|
|
|
350,471
|
|
||||
Total European exposures
|
923,632
|
|
|
559,066
|
|
|
187,065
|
|
|
1,669,763
|
|
||||
Brazil
|
22,298
|
|
|
—
|
|
|
—
|
|
|
22,298
|
|
||||
All other foreign exposures
|
470,527
|
|
|
98,191
|
|
|
91,407
|
|
|
660,125
|
|
||||
Total foreign exposures
|
$
|
1,416,457
|
|
|
$
|
657,257
|
|
|
$
|
278,472
|
|
|
$
|
2,352,186
|
|
|
December 31, 2014
|
||||||||||||||
(dollars in thousands)
|
Sovereign
|
|
Non-Sovereign
Financial
Institutions
|
|
Non-Sovereign
Non-Financial
Institutions
|
|
Total
|
||||||||
European exposures:
|
|
|
|
|
|
|
|
||||||||
Portugal, Ireland, Italy, Greece and Spain
|
$
|
—
|
|
|
$
|
5,471
|
|
|
$
|
2,210
|
|
|
$
|
7,681
|
|
Eurozone (excluding Portugal, Ireland, Italy, Greece and Spain)
|
928,730
|
|
|
265,591
|
|
|
131,873
|
|
|
1,326,194
|
|
||||
Supranationals
|
—
|
|
|
217,953
|
|
|
—
|
|
|
217,953
|
|
||||
Other
|
129,201
|
|
|
128,111
|
|
|
148,201
|
|
|
405,513
|
|
||||
Total European exposures
|
1,057,931
|
|
|
617,126
|
|
|
282,284
|
|
|
1,957,341
|
|
||||
Brazil
|
33,667
|
|
|
—
|
|
|
—
|
|
|
33,667
|
|
||||
All other foreign exposures
|
520,323
|
|
|
148,187
|
|
|
128,639
|
|
|
797,149
|
|
||||
Total foreign exposures
|
$
|
1,611,921
|
|
|
$
|
765,313
|
|
|
$
|
410,923
|
|
|
$
|
2,788,157
|
|
•
|
our anticipated premium volume is based on current knowledge and assumes no significant man-made or natural catastrophes, no significant changes in products or personnel and no adverse changes in market conditions;
|
•
|
the effect of cyclical trends, including demand and pricing in the insurance and reinsurance markets;
|
•
|
actions by competitors, including consolidation, and the effect of competition on market trends and pricing;
|
•
|
we offer insurance and reinsurance coverage against terrorist acts in connection with some of our programs, and in other instances we are legally required to offer terrorism insurance; in both circumstances, we actively manage our exposure, but if there is a covered terrorist attack, we could sustain material losses;
|
•
|
the frequency and severity of man-made and natural catastrophes (including earthquakes and weather-related catastrophes) may exceed expectations, are unpredictable and, in the case of weather-related catastrophes, may be exacerbated if, as many forecast, conditions in the oceans and atmosphere result in increased hurricane, flood, drought or other adverse weather-related activity;
|
•
|
emerging claim and coverage issues, changing legal and social trends, and inherent uncertainties (including but not limited to those uncertainties associated with our A&E reserves) in the loss estimation process can adversely impact the adequacy of our loss reserves and our allowance for reinsurance recoverables;
|
•
|
reinsurance reserves are subject to greater uncertainty than insurance reserves, primarily because of reliance upon the original underwriting decisions made by ceding companies and the longer lapse of time from the occurrence of loss events to their reporting to the reinsurer for ultimate resolution;
|
•
|
changes in the assumptions and estimates used in establishing reserves for our life and annuity reinsurance book (which is in runoff), for example, changes in assumptions and estimates of mortality, longevity, morbidity and interest rates, could result in material increases in our estimated loss reserves for such business;
|
•
|
adverse developments in insurance coverage litigation or other legal or administrative proceedings could result in material increases in our estimates of loss reserves;
|
•
|
the failure or inadequacy of any loss limitation methods we employ;
|
•
|
changes in the availability, costs and quality of reinsurance coverage, which may impact our ability to write or continue to write certain lines of business;
|
•
|
industry and economic conditions, deterioration in reinsurer credit quality and coverage disputes can affect the ability or willingness of reinsurers to pay balances due;
|
•
|
after the commutation of ceded reinsurance contracts, any subsequent adverse development in the re-assumed loss reserves will result in a charge to earnings;
|
•
|
regulatory actions can impede our ability to charge adequate rates and efficiently allocate capital;
|
•
|
general economic and market conditions and industry specific conditions, including extended economic recessions or expansions; prolonged periods of slow economic growth; inflation or deflation; fluctuations in foreign currency exchange rates, commodity and energy prices and interest rates; volatility in the credit and capital markets; and other factors;
|
•
|
economic conditions, actual or potential defaults in municipal bonds or sovereign debt obligations, volatility in interest and foreign currency exchange rates and changes in market value of concentrated investments can have a significant impact on the fair value of our fixed maturities and equity securities, as well as the carrying value of our other assets and liabilities, and this impact may be heightened by market volatility;
|
•
|
economic conditions may adversely affect our access to capital and credit markets;
|
•
|
the effects of government intervention, including material changes in the monetary policies of central banks, to address financial downturns and economic and currency concerns;
|
•
|
the impacts that political and civil unrest and regional conflicts may have on our businesses and the markets they serve or that any disruptions in regional or worldwide economic conditions generally arising from these situations may have on our businesses, industries or investments;
|
•
|
the impacts that health epidemics and pandemics may have on our business operations and claims activity;
|
•
|
the impact of the implementation of U.S. health care reform legislation and regulations under that legislation on our businesses;
|
•
|
we are dependent upon the successful functioning and security of our computer systems; if our information technology systems fail or suffer a security breach, our businesses or reputation could be adversely impacted;
|
•
|
our acquisition of insurance and non-insurance businesses may increase our operational and control risks for a period of time;
|
•
|
we may not realize the contemplated benefits, including cost savings and synergies, of our acquisitions;
|
•
|
any determination requiring the write-off of a significant portion of our goodwill and intangible assets;
|
•
|
the loss of services of any executive officer or other key personnel could adversely impact one or more of our operations;
|
•
|
our expanding international operations expose us to increased investment, political and economic risks, including foreign currency exchange rate and credit risk;
|
•
|
our ability to raise third party capital for existing or new investment vehicles and risks related to our management of third party capital;
|
•
|
the effectiveness of our procedures for compliance with existing and ever increasing guidelines, policies and legal and regulatory standards, rules, laws and regulations;
|
•
|
the impact of economic and trade sanctions and embargo programs on our businesses, including instances in which the requirements and limitations applicable to the global operations of U.S. companies and their affiliates are more restrictive than those applicable to non-U.S. companies and their affiliates;
|
•
|
a number of additional factors may adversely affect our Markel Ventures operations, and the markets they serve, and negatively impact their revenues and profitability, including, among others: changes in government support for education, healthcare and infrastructure projects; changes in capital spending levels; changes in the housing market; and volatility in interest and foreign currency exchange rates; and
|
•
|
adverse changes in our assigned financial strength or debt ratings could adversely impact our ability to attract and retain business or obtain capital.
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2010
(1)
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||
Markel Corporation
|
$
|
100
|
|
|
$
|
110
|
|
|
$
|
115
|
|
|
$
|
153
|
|
|
$
|
181
|
|
|
$
|
234
|
|
S&P 500
|
100
|
|
|
102
|
|
|
118
|
|
|
157
|
|
|
178
|
|
|
181
|
|
||||||
Dow Jones Property & Casualty Insurance
|
100
|
|
|
105
|
|
|
125
|
|
|
166
|
|
|
186
|
|
|
203
|
|
(1)
|
$100 invested on
December 31, 2010
in our common stock or the listed index. Includes reinvestment of dividends.
|
Exhibit No.
|
|
Document Description
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of December 18, 2012, by and among Alterra Capital Holdings Limited, Markel Corporation and Commonwealth Merger Subsidiary Limited (2.1)
a
|
|
|
|
3(i)
|
|
Amended and Restated Articles of Incorporation (3.1)
b
|
|
|
|
3(ii)
|
|
Bylaws, as amended (3.1)
c
|
|
|
|
4.1
|
|
Indenture dated as of June 5, 2001 between Markel Corporation and The Chase Manhattan Bank, as Trustee (4.1)
d
|
|
|
|
4.2
|
|
Form of Third Supplemental Indenture dated as of August 13, 2004 between Markel Corporation and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (4.2)
e
|
|
|
|
4.3
|
|
Form of Fifth Supplemental Indenture dated as of September 22, 2009 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (4.2)
f
|
|
|
|
4.4
|
|
Form of Sixth Supplemental Indenture dated as of June 1, 2011 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (4.2)
g
|
|
|
|
4.5
|
|
Form of Seventh Supplemental Indenture dated as of July 2, 2012 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (4.2)
h
|
|
|
|
4.6
|
|
Form of Eighth Supplemental Indenture dated as of March 8, 2013 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (4.2)
i
|
|
|
|
4.7
|
|
Form of Ninth Supplemental Indenture dated as of March 8, 2013 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (4.3)
i
|
|
|
|
4.8
|
|
Indenture dated as of September 1, 2010, among Alterra Finance LLC, Alterra Capital Holdings Limited and The Bank of New York Mellon, as Trustee (4.14)
j
|
|
|
|
4.9
|
|
First Supplemental Indenture, dated as of September 27, 2010 between Alterra Finance LLC, Alterra Capital Holdings Limited and The Bank of New York Mellon, as Trustee, including the form of the securities as Exhibit A (4.15)
j
|
|
|
|
4.10
|
|
Form of Second Supplemental Indenture dated as of June 30, 2014 among Alterra Finance LLC, Alterra Capital Holdings Limited and the Bank of New York Mellon, as Trustee (4.16)
k
|
|
|
|
4.11
|
|
Form of Guaranty Agreement by Markel Corporation dated as of June 30, 2014 in connection with the Alterra Finance LLC 6.25% Senior Notes due 2020 (4.17)
k
|
Exhibit No.
|
|
Document Description
|
|
|
|
10.1
|
|
Form of Credit Agreement dated as of August 1, 2014 among Markel Corporation, Markel Bermuda Limited, Alterra Reinsurance USA Inc., Alterra Finance LLC, Alterra USA Holdings Limited, the lenders party from time to time thereto, and Wells Fargo Bank, National Association, Administrative Agent, a Fronting Bank and Swingline Lender ("Wells Fargo Credit Agreement") (4.1)
k
|
|
|
|
10.2
|
|
First Amendment to Credit Agreement dated as of November 13, 2015, to the Wells Fargo Credit Agreement**
|
|
|
|
10.3
|
|
Credit Agreement, dated as of December 16, 2011, among Alterra Capital Holdings Limited, Alterra Bermuda Limited (n/k/a Markel Bermuda Limited), the lenders parties thereto and Bank of America, N.A., as Administrative Agent ("Bank of America Credit Agreement") (4.5)
j
|
|
|
|
10.4
|
|
First Amendment and Consent dated as of February 7, 2013, to the Bank of America Credit Agreement (4.6)
j
|
|
|
|
10.5
|
|
Form of Second Amendment dated as of March 14, 2014, to the Bank of America Credit Agreement (4.7)
l
|
|
|
|
10.6
|
|
Form of Guaranty Agreement by Markel Corporation dated March 14, 2014 in connection with the Bank of America Credit Agreement (4.8)
l
|
|
|
|
10.7
|
|
Form of Third Amendment dated as of August 1, 2014, to the Bank of America Credit Agreement (4.6)
k
|
|
|
|
10.8
|
|
Markel Corporation 2012 Equity Incentive Compensation Plan (Appendix A)
m
|
|
|
|
10.9
|
|
Form of Amended and Restated Employment Agreement with Alan I. Kirshner (10.2)
n
|
|
|
|
10.10
|
|
Amended and Restated Employment Agreement with Steven A. Markel (10.1)
aa
|
|
|
|
10.11
|
|
Form of Amended and Restated Employment Agreement with Anthony F. Markel (10.4)
n
|
|
|
|
10.12
|
|
Form of Executive Employment Agreement with F. Michael Crowley, Thomas S. Gayner, Richard R. Whitt, III, Gerard Albanese, Jr., Britton L. Glisson, Anne G. Waleski and Bradley J. Kiscaden (10.5)
n
|
|
|
|
10.13
|
|
Markel Corporation Executive Bonus Plan (10.1)
o
|
|
|
|
10.14
|
|
Markel Corporation Voluntary Deferred Compensation Plan**
|
|
|
|
10.15
|
|
Employee Stock Purchase and Bonus Plan (10.9)
n
|
|
|
|
10.16
|
|
Markel Corporation Omnibus Incentive Plan (Appendix B)
p
|
|
|
|
10.17
|
|
Form of Restricted Stock Award Agreement for Outside Directors (10.2)
q
|
|
|
|
10.18
|
|
Form of Restricted Stock Unit Award Agreement for Executive Officers under the Markel Corporation Omnibus Incentive Plan (10.1)
r
|
|
|
|
10.19
|
|
Form of Restricted Stock Unit Award Agreement for Executive Officers under the Markel Corporation 2012 Equity Incentive Compensation Plan (10.1)
s
|
|
|
|
10.20
|
|
Form of 2009 Restricted Stock Unit Award Agreement for Executive Officers (10.2)
t
|
|
|
|
10.21
|
|
Form of Restricted Stock Unit Award Agreement for Executive Officers (revised 2010) (10.2)
u
|
|
|
|
10.22
|
|
Form of Amended and Restated May 2010 Restricted Stock Unit Award Agreement for Executive Officers (10.1)
v
|
|
|
|
10.23
|
|
May 2010 Restricted Stock Units Deferral Election Form (10.2)
v
|
|
|
|
10.24
|
|
Description of Permitted Acceleration of Vesting Date of Restricted Stock Units by Up to Thirty Days (10.2)
w
|
|
|
|
10.25
|
|
Form of May 2011 Restricted Stock Unit Award Agreement for Anne Waleski (10.1)
b
|
|
|
|
10.26
|
|
Aspen Holdings, Inc. Amended and Restated 2008 Stock Option Plan (99.1)
x
|
|
|
|
10.27
|
|
Form of Time Based Restricted Stock Unit Award Agreement for Executive Officers for the 2012 Equity Incentive Compensation Plan (10.22)
y
|
|
|
|
10.28
|
|
Form of Performance Based Restricted Stock Unit Award Agreement for Executive Officers for the 2012 Equity Incentive Compensation Plan (10.23)
y
|
|
|
|
10.29
|
|
Restricted Stock Units Deferral Election Form for the 2012 Equity Incentive Compensation Plan (10.24)
y
|
|
|
|
10.30
|
|
Alterra Capital Holdings Limited 2008 Stock Incentive Plan (99.1)
z
|
|
|
|
10.31
|
|
Alterra Capital Holdings Limited 2006 Equity Incentive Plan (99.2)
z
|
|
|
|
10.32
|
|
Alterra Capital Holdings Limited 2000 Stock Incentive Plan (99.3)
z
|
|
|
|
21
|
|
Certain Subsidiaries of Markel Corporation**
|
|
|
|
23
|
|
Consent of KPMG LLP**
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/ 15d-14(a)**
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/ 15d-14(a)**
|
|
|
|
32.1
|
|
Certification of Principal Executive Officer furnished Pursuant to 18 U.S.C. Section 1350**
|
|
|
|
32.2
|
|
Certification of Principal Financial Officer furnished Pursuant to 18 U.S.C. Section 1350**
|
|
|
|
101
|
|
The following consolidated financial statements from Markel Corporation's Annual Report on Form 10-K for the year ended December 31, 2015, filed on February 26, 2016, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements.**
|
a.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on December 19, 2012.
|
b.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on May 13, 2011.
|
c.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on November 20, 2015.
|
d.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on June 5, 2001.
|
e.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on August 11, 2004.
|
f.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on September 21, 2009.
|
g.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on May 31, 2011.
|
h.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on June 29, 2012.
|
i.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on March 7, 2013.
|
j.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended June 30, 2013.
|
k.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended June 30, 2014.
|
l.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended March 31, 2014.
|
m.
|
Incorporated by reference from the Appendix shown in parentheses filed with the Commission in the Registrant's Proxy Statement and Definitive 14A filed March 16, 2012.
|
n.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-K for the year ended December 31, 2008.
|
o.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on May 14, 2015.
|
p.
|
Incorporated by reference from the Appendix shown in parentheses filed with the Commission in the Registrant's Proxy Statement and Definitive 14A filed April 2, 2003.
|
q.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended June 30, 2012.
|
r.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on March 3, 2008.
|
s.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 8-K filed on May 17, 2013.
|
t.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended March 31, 2009.
|
u.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended March 31, 2010.
|
v.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended June 30, 2010.
|
w.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended September 30, 2008.
|
x.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's Registration Statement on Form S-8 (Reg. No. 333-170047).
|
y.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-K for the year ended December 31, 2012.
|
z.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's Registration Statement on Form S-8 (Reg. No. 333-188294).
|
aa.
|
Incorporated by reference from the Exhibit shown in parentheses filed with the Commission in the Registrant's report on Form 10-Q for the quarter ended September 30, 2015.
|
|
MARKEL CORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ Steven A. Markel
|
|
|
|
Steven A. Markel
|
|
|
|
Vice Chairman
|
|
|
|
February 26, 2016
|
Signatures
|
|
Title
|
Date
|
|
|
|
|
/s/ Alan I. Kirshner
|
|
Executive Chairman
|
February 26, 2016
|
Alan I. Kirshner
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Anthony F. Markel
|
|
Director
|
February 26, 2016
|
Anthony F. Markel
|
|
|
|
|
|
|
|
/s/ Steven A. Markel
|
|
Director
|
February 26, 2016
|
Steven A. Markel
|
|
|
|
|
|
|
|
/s/ Anne G. Waleski
|
|
Executive Vice President and Chief Financial Officer
|
February 26, 2016
|
Anne G. Waleski
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ Nora N. Crouch
|
|
Chief Accounting Officer
|
February 26, 2016
|
Nora N. Crouch
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ J. Alfred Broaddus, Jr.
|
|
Director
|
February 26, 2016
|
J. Alfred Broaddus, Jr.
|
|
|
|
|
|
|
|
/s/ K. Bruce Connell
|
|
Director
|
February 26, 2016
|
K. Bruce Connell
|
|
|
|
|
|
|
|
/s/ Douglas C. Eby
|
|
Director
|
February 26, 2016
|
Douglas C. Eby
|
|
|
|
|
|
|
|
/s/ Stewart M. Kasen
|
|
Director
|
February 26, 2016
|
Stewart M. Kasen
|
|
|
|
|
|
|
|
/s/ Lemuel E. Lewis
|
|
Director
|
February 26, 2016
|
Lemuel E. Lewis
|
|
|
|
|
|
|
|
/s/ Darrell D. Martin
|
|
Director
|
February 26, 2016
|
Darrell D. Martin
|
|
|
|
|
|
|
|
/s/ Michael O'Reilly
|
|
Director
|
February 26, 2016
|
Michael O'Reilly
|
|
|
|
|
|
|
|
/s/ Michael J. Schewel
|
|
Director
|
February 26, 2016
|
Michael J. Schewel
|
|
|
|
|
|
|
|
/s/ Jay M. Weinberg
|
|
Director
|
February 26, 2016
|
Jay M. Weinberg
|
|
|
|
|
|
|
|
/s/ Debora J. Wilson
|
|
Director
|
February 26, 2016
|
Debora J. Wilson
|
|
|
|
By:
|
/s/ Anne G. Waleski
|
Name:
|
Anne G. Waleski
|
Title:
|
Executive Vice President and Chief Financial Officer
|
By:
|
/s/ Anne G. Waleski
|
Name:
|
Anne G. Waleski
|
Title:
|
Chief Financial Officer
|
By:
|
/s/ Anne G. Waleski
|
Name:
|
Anne G. Waleski
|
Title:
|
Vice President and Chief Financial Officer
|
By:
|
/s/ Anne G. Waleski
|
Name:
|
Anne G. Waleski
|
Title:
|
Vice President, Chief Financial Officer and Treasurer
|
By:
|
/s/ Anne G. Waleski
|
Name:
|
Anne G. Waleski
|
Title:
|
Chief Financial Officer and Treasurer
|
Title:
|
Managing Director
|
Title:
|
Managing Director and Vice President
|
Title:
|
Director
|
Title:
|
Vice President
|
Title:
|
Director
|
Title:
|
Senior Vice President
|
Title:
|
2VP
|
Title:
|
Vice President
|
(a)
|
x
adopts a new plan as of
April 1, 2016
[month, day, year]
|
(b)
|
¨
amends and restates its existing plan as of
[month, day, year] which is the Amendment Restatement Date. Except as otherwise provided in Appendix A, all amounts deferred under the Plan prior to the Amendment Restatement Date shall be governed by the terms of the Plan as in effect on the day before the Amendment Restatement Date.
|
1.02
|
PLAN
|
1.03
|
PLAN SPONSOR
|
Name:
|
Markel Corporation
|
Address:
|
4521 Highwoods Parkway, Glen Allen, VA 23060-6148
|
Phone # :
|
(804) 747-0136
|
EIN:
|
54-1959284
|
Fiscal Yr:
|
January 1 to December 31
|
1.04
|
EMPLOYER
|
Entity
|
|
Publicly Traded on Est. Securities Market
|
||
|
|
|
|
|
|
|
Yes
|
|
No
|
Markel Service, Incorporated
|
|
¨
|
|
x
|
|
|
¨
|
|
¨
|
|
|
¨
|
|
¨
|
|
|
¨
|
|
¨
|
|
|
¨
|
|
¨
|
|
|
¨
|
|
¨
|
1.05
|
ADMINISTRATOR
|
Name:
|
Markel Corporation Board of Directors Compensation Committee
|
Address:
|
4521 Highwoods Parkway, Glen Allen, VA 23060-6148
|
Note
:
|
The Administrator is the person or persons designated by the Plan Sponsor to be responsible for the administration of the Plan. Neither Fidelity Employer Services Company nor any other Fidelity affiliate can be the Administrator.
|
1.06
|
KEY EMPLOYEE DETERMINATION DATES
|
2.01
|
PARTICIPATION
|
|
Participants in the Restricted Stock Unit Program as identified by the Administrator
|
|
|
|
|
|
|
|
|
3.01
|
COMPENSATION
|
(a)
|
x
|
Compensation is defined as:
|
|
|
Base salary, plus
|
|
|
Cash bonus under the Annual Bonus Plan, plus
|
|
|
Cash bonus under the Executive Bonus Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
¨
|
Compensation as defined in
[insert name of qualified plan] without regard to the limitation in Section 401(a)(17) of the Code for such Plan Year.
|
|
|
|
(c)
|
¨
|
Director Compensation is defined as:
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
¨
|
Compensation shall, for all Plan purposes, be limited to $
.
|
|
|
|
(e)
|
¨
|
Not Applicable.
|
3.02
|
BONUSES
|
Type
|
Will be treated as Performance
Based Compensation
|
||||
|
|
||||
|
|
Yes
|
|
No
|
|
Annual Bonus Plan
|
|
¨
|
|
x
|
|
Executive Bonus Plan
|
|
¨
|
|
x
|
|
|
|
¨
|
|
¨
|
|
|
|
¨
|
|
¨
|
|
|
|
¨
|
|
¨
|
|
¨
|
Not Applicable.
|
4.01
|
PARTICIPANT CONTRIBUTIONS
|
(a)
|
Amount of Deferrals
|
(i)
|
Compensation Other than Bonuses [do not complete if you complete (iii)]
|
(ii)
|
Bonuses [do not complete if you complete (iii)]
|
Type of Bonus
|
Dollar Amount
|
% Amount
|
Increment
|
||
Min
|
Max
|
Min
|
Max
|
||
(a) Annual Bonus Plan
|
|
|
0%
|
100%
|
5%
|
(b) Executive Bonus Plan
|
|
|
0%
|
100%
|
5%
|
(c)
|
|
|
|
|
|
(iii)
|
Compensation [do not complete if you completed (i) and (ii)]
|
Dollar Amount
|
% Amount
|
Increment
|
||
Min
|
Max
|
Min
|
Max
|
|
|
|
|
|
|
(iv)
|
Director Compensation
|
Type of Compensation
|
Dollar Amount
|
% Amount
|
Increment
|
||
Min
|
Max
|
Min
|
Max
|
||
Annual Retainer
|
|
|
|
|
|
Meeting Fees
|
|
|
|
|
|
Other:
|
|
|
|
|
|
Other:
|
|
|
|
|
|
(b)
|
Election Period
|
(i)
|
Performance Based Compensation
|
(ii)
|
Newly Eligible Participants
|
(c)
|
Revocation of Deferral Agreement
|
¨
|
Will
|
x
|
Will Not
|
(d)
|
No Participant Contributions
|
¨
|
Participant contributions are not permitted under the Plan.
|
5.01
|
EMPLOYER CONTRIBUTIONS
|
(a)
|
Matching Contributions
|
(i)
|
Amount
|
(A)
|
¨
[insert percentage] of the Compensation the Participant has elected to defer for the Plan Year
|
(B)
|
¨
An amount determined by the Employer in its sole discretion
|
(C)
|
¨
Matching Contributions for each Participant shall be limited to $
and/or
% of Compensation.
|
(D)
|
¨
Other:
|
(E)
|
¨
Not Applicable [Proceed to Section 5.01(b)]
|
(ii)
|
Eligibility for Matching Contribution
|
(A)
|
¨
Describe requirements:
|
(B)
|
¨
Is selected by the Employer in its sole discretion to receive an allocation of Matching Contributions
|
(C)
|
¨
No requirements
|
(iii)
|
Time of Allocation
|
(A)
|
¨
As of the last day of the Plan Year
|
(B)
|
¨
At such times as the Employer shall determine in it sole discretion
|
(C)
|
¨
At the time the Compensation on account of which the Matching Contribution is being made would otherwise have been paid to the Participant
|
(D)
|
¨
Other:
|
(b)
|
Other Contributions
|
(i)
|
Amount
|
(A)
|
¨
An amount equal to
[insert number] % of the Participant’s Compensation
|
(B)
|
¨
An amount determined by the Employer in its sole discretion
|
(C)
|
¨
Contributions for each Participant shall be limited to $
|
(D)
|
¨
Other:
|
(E)
|
¨
Not Applicable [Proceed to Section 6.01]
|
(ii)
|
Eligibility for Other Contributions
|
(A)
|
¨
Describe requirements
|
(B)
|
¨
Is selected by the Employer in its sole discretion to receive an allocation of other Employer contributions
|
(C)
|
¨
No requirements
|
(iii)
|
Time of Allocation
|
(A)
|
¨
As of the last day of the Plan Year
|
(B)
|
¨
At such time or times as the Employer shall determine in its sole discretion
|
(C)
|
¨
Other:
|
(c)
|
No Employer Contributions
|
6.01
|
DISTRIBUTIONS
|
(a)
|
Timing of Distributions
|
(i)
|
All distributions shall commence in accordance with the following [choose one]:
|
(A)
|
¨
As soon as administratively feasible following the distribution event but in no event later than the time prescribed by Treas. Reg. Sec. 1.409A-3(d).
|
(B)
|
¨
Monthly on specified day
[insert day]
|
(C)
|
x
Annually on specified month and day
April 10
[insert month and day]
|
(D)
|
¨
Calendar quarter on specified month and day [
month of quarter (insert 1,2 or 3);
__
day (insert day)]
|
(ii)
|
The timing of distributions as determined in Section 6.01(a)(i) shall be modified by the adoption of:
|
(A)
|
¨
Event Delay – Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for
months [insert number of months].
|
(B)
|
¨
Hold Until Next Year – Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for twelve months from the date of the event if payment pursuant to Section 6.01(a)(i) will thereby occur in the next calendar year or on the first payment date in the next calendar year in all other cases.
|
(C)
|
¨
Immediate Processing – The timing method selected by the Plan Sponsor under Section 6.01(a)(i) shall be overridden for the following distribution events [insert events]:
|
(D)
|
x
Not applicable
|
(b)
|
Distribution Events
|
|
|
Lump Sum
|
Installments
|
|
|
|
|
|
|
(i)
|
x
Specified Date
|
X
|
5, 10, 15
years
|
|
|
|
|||
(ii)
|
x
Specified Age
|
X
|
5, 10, 15
years
|
|
|
|
|||
(iii)
|
x
Separation from Service
|
X
|
3-5
years
|
|
|
|
|||
(iv)
|
¨
Separation from Service plus 6 months
|
|
years
|
|
|
|
|||
(v)
|
¨
Separation from Service plus
months [not to exceed
months]
|
|
years
|
|
|
|
|||
(vi)
|
¨
Retirement
|
|
years
|
|
|
|
|||
(vii)
|
¨
Retirement plus 6 months
|
|
years
|
|
|
|
|||
(viii)
|
¨
Retirement plus
months [not to exceed
months]
|
|
years
|
|
|
|
|||
(ix)
|
¨
Disability
|
|
years
|
|
|
|
|||
(x)
|
¨
Death
|
|
years
|
|
|
|
|||
(xi)
|
¨
Change in Control
|
|
years
|
¨
|
Monthly
|
x
|
Quarterly
|
¨
|
Annually
|
(c)
|
Specified Date and Specified Age elections may not extend beyond age
Not Applicable
[insert age or “Not Applicable” if no maximum age applies].
|
(d)
|
Payment Election Override
Payment of the remaining vested balance of the Participant’s Account will automatically occur at the time specified in Section 6.01(a) of the Adoption Agreement in the form indicated upon the earliest to occur of the following events [check each event that applies and for each event include only a single form of payment]: |
|
EVENTS
|
FORM OF PAYMENT
|
|||
¨
|
Separation from Service
|
|
Lump sum
|
|
Installments
|
¨
|
Separation from
Service before Retirement
|
|
Lump sum
|
|
Installments
|
x
|
Death
|
X
|
Lump sum
|
|
Installments
|
¨
|
Disability
|
|
Lump sum
|
|
Installments
|
¨
|
Not Applicable
|
|
|
|
|
(e)
|
Involuntary Cashouts
|
x
|
If the Participant’s vested Account at the time of his Separation from Service does not exceed $
10,000
distribution of the vested Account shall automatically be made in the form of a single lump sum in accordance with Section 9.5 of the Plan.
|
¨
|
There are no involuntary cashouts.
|
(f)
|
Retirement
|
¨
|
Retirement shall be defined as a Separation from Service that occurs on or after the Participant [insert description of requirements]:
|
|
|
|
|
x
|
No special definition of Retirement applies.
|
(g)
|
Distribution Election Change
A Participant |
x
|
Shall
|
¨
|
Shall Not
|
(h)
|
Frequency of Elections
|
x
|
Has
|
¨
|
Has Not
|
7.01
|
VESTING
|
(a)
|
Matching Contributions
The Participant’s vested interest in the amount credited to his Account attributable to Matching Contributions shall be based on the following schedule: |
(b)
|
Other Employer Contributions
The Participant’s vested interest in the amount credited to his Account attributable to Employer contributions other than Matching Contributions shall be based on the following schedule: |
(c)
|
Acceleration of Vesting
|
(i)
|
¨
Death
|
|
|
(ii)
|
¨
Disability
|
|
|
(iii)
|
¨
Change in Control
|
|
|
(iv)
|
¨
Eligibility for Retirement
|
|
|
(v)
|
¨
Other:
|
|
|
|
|
(vi)
|
x
Not applicable.
|
(d)
|
Years of Service
|
(i)
|
A Participant’s Years of Service shall include all service performed for the Employer and
|
¨
Shall
|
¨
Shall Not
|
(ii)
|
Years of Service shall also include service performed for the following entities:
|
|
|
|
|
|
(iii)
|
Years of Service shall be determined in accordance with (select one)
|
(iv)
|
x
Not applicable.
|
8.01
|
UNFORESEEABLE EMERGENCY
|
¨
|
Will
|
x
|
Will Not [if Unforeseeable Emergency withdrawals are not permitted, proceed to Section 9.01]
|
(b)
|
Upon a withdrawal due to an Unforeseeable Emergency, a Participant’s deferral election for the remainder of the Plan Year:
|
¨
|
Will
|
¨
|
Will Not
|
9.01
|
INVESTMENT DECISIONS
|
(a)
|
x
The Participant or his Beneficiary
|
(b)
|
¨
The Employer
|
10.01
|
TRUST
|
¨
|
Does
|
x
|
Does Not
|
11.01
|
TERMINATION UPON CHANGE IN CONTROL
|
x
|
Reserves
|
¨
|
Does Not Reserve
|
11.02
|
AUTOMATIC DISTRIBUTION UPON CHANGE IN CONTROL
|
¨
|
Shall
|
x
|
Shall Not
|
11.03
|
CHANGE IN CONTROL
|
(a)
|
x
A change in the ownership of the Employer as described in Section 9.7(c) of the Plan.
|
(b)
|
x
A change in the effective control of the Employer as described in Section 9.7(d) of the Plan.
|
(c)
|
x
A change in the ownership of a substantial portion of the assets of the Employer as described in Section 9.7(e) of the Plan.
|
(d)
|
¨
Not Applicable.
|
12.01
|
GOVERNING STATE LAW
|
PLAN SPONSOR:
|
Markel Corporation
|
By:
|
/s/ Douglas C. Eby
|
Name/Title:
|
Douglas C. Eby, Chair, Compensation Committee of the Markel Corporation Board of Directors
|
1.1
|
Plan
|
1.2
|
Effective Dates
|
1.3
|
Amounts Not Subject to Code Section 409A
|
2.1
|
Account
|
2.2
|
Administrator
|
2.3
|
Adoption Agreement
|
2.4
|
Beneficiary
|
2.5
|
Board or Board of Directors
|
2.6
|
Bonus
|
2.7
|
Change in Control
|
2.8
|
Code
|
2.9
|
Compensation
|
2.10
|
Director
|
2.11
|
Disability
|
2.12
|
Eligible Employee
|
2.13
|
Employer
|
2.14
|
ERISA
|
2.15
|
Identification Date
|
2.16
|
Key Employee
|
2.17
|
Participant
|
2.18
|
Plan
|
2.19
|
Plan Sponsor
|
2.20
|
Plan Year
|
2.21
|
Related Employer
|
2.22
|
Retirement
|
2.23
|
Separation from Service
|
2.24
|
Unforeseeable Emergency
|
2.25
|
Valuation Date
|
2.26
|
Years of Service
|
3.1
|
Participation
|
3.2
|
Termination of Participation
|
4.1
|
Deferral Agreement
|
4.2
|
Amount of Deferral
|
4.3
|
Timing of Election to Defer
|
4.4
|
Election of Payment Schedule and Form of Payment
|
5.1
|
Matching Contributions
|
5.2
|
Other Contributions
|
6.1
|
Establishment of Account
|
6.2
|
Credits to Account
|
7.1
|
Investment Options
|
7.2
|
Adjustment of Accounts
|
8.1
|
Vesting
|
8.2
|
Death
|
8.3
|
Disability
|
9.1
|
Amount of Benefits
|
9.2
|
Method and Timing of Distributions
|
9.3
|
Unforeseeable Emergency
|
9.4
|
Payment Election Overrides
|
9.5
|
Cashouts of Amounts Not Exceeding Stated Limit
|
9.6
|
Required Delay in Payment to Key Employees
|
9.7
|
Change in Control
|
9.8
|
Permissible Delays in Payment
|
9.9
|
Permitted Acceleration of Payment
|
10.1
|
Amendment by Plan Sponsor
|
10.2
|
Plan Termination Following Change in Control or Corporate Dissolution
|
10.3
|
Other Plan Terminations
|
11.1
|
Establishment of Trust
|
11.2
|
Rabbi Trust
|
11.3
|
Investment of Trust Funds
|
12.1
|
Powers and Responsibilities of the Administrator
|
12.2
|
Claims and Review Procedures
|
12.3
|
Plan Administrative Costs
|
13.1
|
Unsecured General Creditor of the Employer
|
13.2
|
Employer’s Liability
|
13.3
|
Limitation of Rights
|
13.4
|
Anti-Assignment
|
13.5
|
Facility of Payment
|
13.6
|
Notices
|
13.7
|
Tax Withholding
|
13.8
|
Indemnification
|
13.9
|
Successors
|
13.10
|
Disclaimer
|
13.11
|
Governing Law
|
1.1
|
Plan.
The Plan will be referred to by the name specified in the Adoption Agreement.
|
1.2
|
Effective Dates.
|
(a)
|
Original Effective Date.
The Original Effective Date is the date as of which the Plan was initially adopted.
|
(b)
|
Amendment Effective Date.
The Amendment Effective Date is the date specified in the Adoption Agreement as of which the Plan is amended and restated. Except to the extent otherwise provided herein or in the Adoption Agreement, the Plan shall apply to amounts deferred and benefit payments made on or after the Amendment Effective Date.
|
(c)
|
Special Effective Date.
A Special Effective Date may apply to any given provision if so specified in Appendix A of the Adoption Agreement. A Special Effective Date will control over the Original Effective Date or Amendment Effective Date, whichever is applicable, with respect to such provision of the Plan.
|
1.3
|
Amounts Not Subject to Code Section 409A
|
2.1
|
“Account”
means an account established for the purpose of recording amounts credited on behalf of a Participant and any income, expenses, gains, losses or distributions included thereon. The Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant or to the Participant’s Beneficiary pursuant to the Plan.
|
2.2
|
“Administrator”
means the person or persons designated by the Plan Sponsor in Section 1.05 of the Adoption Agreement to be responsible for the administration of the Plan. If no Administrator is designated in the Adoption Agreement, the Administrator is the Plan Sponsor.
|
2.3
|
“Adoption Agreement”
means the agreement adopted by the Plan Sponsor that establishes the Plan.
|
2.4
|
“Beneficiary”
means the persons, trusts, estates or other entities entitled under Section 8.2 to receive benefits under the Plan upon the death of a Participant.
|
2.5
|
“Board” or “Board of Directors”
means the Board of Directors of the Plan Sponsor.
|
2.6
|
“Bonus”
means an amount of incentive remuneration payable by the Employer to a Participant.
|
2.7
|
“Change in Control”
means the occurrence of an event involving the Plan Sponsor that is described in Section 9.7.
|
2.8
|
“Code”
means the Internal Revenue Code of 1986, as amended.
|
2.9
|
“Compensation”
has the meaning specified in Section 3.01 of the Adoption Agreement.
|
2.10
|
“Director”
means a non-employee member of the Board who has been designated by the Employer as eligible to participate in the Plan.
|
2.11
|
“Disability”
means a determination by the Administrator that the Participant is either (a) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer. A Participant will be considered to have incurred a Disability if he is determined to be totally disabled by the Social Security Administration or the Railroad Retirement Board.
|
2.12
|
“Eligible Employee”
means an employee of the Employer who satisfies the requirements in Section 2.01 of the Adoption Agreement.
|
2.13
|
“Employer”
means the Plan Sponsor and any other entity which is authorized by the Plan Sponsor to participate in and, in fact, does adopt the Plan.
|
2.14
|
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
|
2.15
|
“Identification Date”
means the date as of which Key Employees are determined which is specified in Section 1.06 of the Adoption Agreement.
|
2.16
|
“Key Employee”
means an employee who satisfies the conditions set forth in Section 9.6.
|
2.17
|
“Participant”
means an Eligible Employee or Director who commences participation in the Plan in accordance with Article 3.
|
2.18
|
“Plan”
means the unfunded plan of deferred compensation set forth herein, including the Adoption Agreement and any trust agreement, as adopted by the Plan Sponsor and as amended from time to time.
|
2.19
|
“Plan Sponsor”
means the entity identified in Section 1.03 of the Adoption Agreement or any successor by merger, consolidation or otherwise.
|
2.20
|
“Plan Year”
means the period identified in Section 1.02 of the Adoption Agreement.
|
2.21
|
“Related Employer”
means the Employer and (a) any corporation that is a member of a controlled group of corporations as defined in Code Section 414(b) that includes the Employer and (b) any trade or business that is under common control as defined in Code Section 414(c) that includes the Employer.
|
2.22
|
“Retirement”
has the meaning specified in 6.01(f) of the Adoption Agreement.
|
2.23
|
“Separation from Service”
means the date that the Participant dies, retires or otherwise has a termination of employment with respect to all entities comprising the Related Employer. A Separation from Service does not occur if the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six months or such longer period during which the Participant’s right to re- employment is provided by statute or contract. If the period of leave exceeds six months and the Participant’s right to re-employment is not provided either by statute or contract, a Separation from Service will be deemed to have occurred on the first day following the six-month period. If the period of leave is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where the impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29 month period of absence may be substituted for the six month period.
|
2.24
|
“Unforeseeable Emergency”
means a severe financial hardship of the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the Participant’s dependent (as defined in Code Section 152, without regard to Code section 152(b)(1), (b)(2) and (d)(1)(B); loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
|
2.25
|
“Valuation Date”
means each business day of the Plan Year that the New York Stock Exchange is open.
|
2.26
|
“Years of Service”
means each one year period for which the Participant receives service credit in accordance with the provisions of Section 7.01(d) of the Adoption Agreement.
|
3.1
|
Participation.
The Participants in the Plan shall be those Directors and employees of the Employer who satisfy the requirements of Section 2.01 of the Adoption Agreement.
|
3.2
|
Termination of Participation.
The Administrator may terminate a Participant’s participation in the Plan in a manner consistent with Code Section 409A. If the Employer terminates a Participant’s participation before the Participant experiences a Separation from Service the Participant’s vested Accounts shall be paid in accordance with the provisions of Article 9.
|
4.1
|
Deferral Agreement.
If permitted by the Plan Sponsor in accordance with Section 4.01 of the Adoption Agreement, each Eligible Employee and Director may elect to defer his Compensation within the meaning of Section 3.01 of the Adoption Agreement by executing in writing or electronically, a deferral agreement in accordance with rules and procedures established by the Administrator and the provisions of this Article 4.
|
4.2
|
Amount of Deferral.
An Eligible Employee or Director may elect to defer Compensation in any amount permitted by Section 4.01(a) of the Adoption Agreement.
|
4.3
|
Timing of Election to Defer.
Each Eligible Employee or Director who desires to defer Compensation otherwise payable during a Plan Year must execute a deferral agreement within the period preceding the Plan Year specified by the Administrator. Each Eligible Employee who desires to defer Compensation that is a Bonus must execute a deferral agreement within the period preceding the Plan Year during which the Bonus is earned that is specified by the Administrator, except that if the Bonus can be treated as performance based compensation as described in Code Section 409A(a)(4)(B)(iii), the deferral agreement may be executed within the period specified by the Administrator, which period, in no event, shall end after the date which is six months prior to the end of the period during which the Bonus is earned, provided the Participant has performed services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date the Participant executed the deferral agreement and provided further that the compensation has not yet become ‘readily ascertainable’ within the meaning of Reg. Sec 1.409A-2(a)(8). In addition, if the Compensation qualifies as ‘fiscal year compensation’ within the meaning of Reg. Sec. 1.409A-2(a)(6), the deferral agreement may be made not later than the
|
4.4
|
Election of Payment Schedule and Form of Payment.
|
5.1
|
Matching Contributions.
If elected by the Plan Sponsor in Section 5.01(a) of the Adoption Agreement, the Employer will credit the Participant’s Account with a matching contribution determined in accordance with the formula specified in Section 5.01(a) of the Adoption Agreement. The matching contribution will be treated as allocated to the Participant’s Account at the time specified in Section 5.01(a)(iii) of the Adoption Agreement.
|
5.2
|
Other Contributions.
If elected by the Plan Sponsor in Section 5.01(b) of the Adoption Agreement, the Employer will credit the Participant’s Account with a contribution determined in accordance with the formula or method specified in Section 5.01(b) of the Adoption Agreement. The contribution will be treated as allocated to the Participant’s Account at the time specified in Section 5.01(b)(iii) of the Adoption Agreement.
|
6.1
|
Establishment of Account.
For accounting and computational purposes only, the Administrator will establish and maintain an Account on behalf of each Participant which will reflect the credits made pursuant to Section 6.2, distributions or withdrawals, along with the earnings, expenses, gains and losses allocated thereto, attributable to the hypothetical investments made with the amounts in the Account as provided in Article 7. The Administrator will establish and maintain such other records and accounts, as it decides in its discretion to be reasonably required or appropriate to discharge its duties under the Plan.
|
6.2
|
Credits to Account.
A Participant’s Account will be credited for each Plan Year with the amount of his elective deferrals under Section 4.1 at the time the amount subject to the deferral election would otherwise have been payable to the Participant and the amount of Employer contributions treated as allocated on his behalf under Article 5.
|
7.1
|
Investment Options.
The amount credited to each Account shall be treated as invested in the investment options designated for this purpose by the Administrator.
|
7.2
|
Adjustment of Accounts.
The amount credited to each Account shall be adjusted for hypothetical investment earnings, expenses, gains or losses in an amount equal to the earnings, expenses, gains or losses attributable to the investment options selected by the party designated in Section 9.01 of the Adoption Agreement from among the investment options provided in Section 7.1. If permitted by Section 9.01 of the Adoption Agreement, a Participant (or the Participant’s Beneficiary after the death of the Participant) may, in accordance with rules and procedures established by the Administrator, select the investments from among the options provided in Section 7.1 to be used for the purpose of calculating future hypothetical investment adjustments to the Account or to future credits to the Account under Section 6.2 effective as of the Valuation Date coincident with or next following notice to the Administrator. Each Account shall be adjusted as of each Valuation Date to reflect: (a) the hypothetical earnings, expenses, gains and losses described above; (b) amounts credited pursuant to Section 6.2; and (c) distributions or withdrawals. In addition, each Account may be adjusted for its allocable share of the hypothetical costs and expenses associated with the maintenance of the hypothetical investments provided in Section 7.1.
|
8.1
|
Vesting.
A Participant, at all times, has a 100% nonforfeitable interest in the amounts credited to his Account attributable to his elective deferrals made in accordance with Section 4.1.
|
8.2
|
Death.
The Plan Sponsor may elect to accelerate vesting upon the death of the Participant in accordance with Section 7.01(c) of the Adoption Agreement and/or to accelerate distributions upon Death in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement. If the Plan Sponsor does not elect to accelerate distributions upon death in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement, the vested amount credited to the Participant’s Account will be paid in accordance with the provisions of Article 9.
|
8.3
|
Disability.
If the Plan Sponsor has elected to accelerate vesting upon the occurrence of a Disability in accordance with Section 7.01(c) of the Adoption Agreement and/or to permit distributions upon Disability in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement, the determination of whether a Participant has incurred a Disability shall be made by the Administrator in its sole discretion in a manner consistent with the requirements of Code Section 409A.
|
9.1
|
Amount of Benefits.
The vested amount credited to a Participant’s Account as determined under Articles 6, 7 and 8 shall determine and constitute the basis for the value of benefits payable to the Participant under the Plan.
|
9.2
|
Method and Timing of Distributions.
Except as otherwise provided in this Article 9, distributions under the Plan shall be made in accordance with the elections made or deemed made by the Participant under Article 4. Subject to the provisions of Section 9.6 requiring a six month delay for certain distributions to Key Employees, distributions following a payment event shall commence at the time specified in Section 6.01(a) of the Adoption Agreement. If permitted by Section 6.01(g) of the Adoption Agreement, a Participant may elect, at least twelve months before a scheduled distribution event, to delay the payment date for a minimum period of sixty months from the originally scheduled date of payment, provided the election does not take effect for at least twelve months from the date on which the election is made. The distribution election change must be made in accordance with procedures and rules established by the Administrator. The Participant may, at the same time the date of payment is deferred, change the form of payment but such change in the form of payment may not effect an acceleration of payment in violation of Code Section 409A or the provisions of Reg. Sec. 1.409A-2(b). For purposes of this Section 9.2, a series of installment payments is always treated as a single payment and not as a series of separate payments.
|
9.3
|
Unforeseeable Emergency.
A Participant may request a distribution due to an Unforeseeable Emergency if the Plan Sponsor has elected to permit Unforeseeable Emergency withdrawals under Section 8.01(a) of the Adoption Agreement. The request must be in writing and must be submitted to the Administrator along with evidence that the circumstances constitute an Unforeseeable Emergency. The Administrator has the discretion to require whatever evidence it deems necessary to determine whether a distribution is warranted, and may require the Participant to certify that the need cannot be met from other sources reasonably available to the Participant. Whether a Participant has incurred an Unforeseeable Emergency will be determined by the Administrator on the basis of the relevant facts and circumstances in its sole discretion, but, in no event, will an Unforeseeable Emergency be deemed to exist if the hardship can be relieved: (a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation of the Participant’s assets to the
|
9.4
|
Payment Election Overrides.
If the Plan Sponsor has elected one or more payment election overrides in accordance with Section 6.01(d) of the Adoption Agreement, the following provisions apply. Upon the occurrence of the first event selected by the Plan Sponsor, the remaining vested amount credited to the Participant’s Account shall be paid in the form designated to the Participant or his Beneficiary regardless of whether the Participant had made different elections of time and /or form of payment or whether the Participant was receiving installment payments at the time of the event.
|
9.5
|
Cashouts Of Amounts Not Exceeding Stated Limit.
If the vested amount credited to the Participant’s Account does not exceed the limit established for this purpose by the Plan Sponsor in Section 6.01(e) of the Adoption Agreement at the time he incurs a Separation from Service for any reason, the Employer shall distribute such amount to the Participant at the time specified in Section 6.01(a) of the Adoption Agreement in a single lump sum cash payment following such Separation from Service regardless of whether the Participant had made different elections of time or form of payment as to the vested amount credited to his Account or whether the Participant was receiving installments at the time of such termination. A Participant’s Account, for purposes of this Section 9.5, shall include any amounts described in Section 1.3.
|
9.6
|
Required Delay in Payment to Key Employees
. Except as otherwise provided in this Section 9.6, a distribution made on account of Separation from Service (or Retirement, if applicable) to a Participant who is a Key Employee as of the date of his Separation from Service (or Retirement, if applicable) shall not be made before the date which is six months after the Separation from Service (or Retirement, if applicable). If payments to a
|
9.7
|
Change in Control.
If the Plan Sponsor has elected to permit distributions upon a Change in Control, the following provisions shall
|
(a)
|
Relevant Corporations.
To constitute a Change in Control for purposes of the Plan, the event must relate to (i) the corporation for whom the Participant is performing services at the time of the Change in Control, (ii) the corporation that is liable for the payment of the Participant’s benefits under the Plan (or all corporations liable if more than one corporation is liable) but only if either the deferred compensation is attributable to the performance of services by the Participant for such corporation (or corporations) or there is a bona fide business purpose for such corporation (or corporations) to be liable for such payment and, in either case, no significant purpose of making such corporation (or corporations) liable for such payment is the avoidance of federal income tax, or (iii) a corporation that is a majority shareholder of a corporation identified in (i) or (ii), or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified in (i) or (ii). A majority shareholder is defined
|
(b)
|
Stock Ownership.
Code Section 318(a) applies for purposes of determining stock ownership. Stock underlying a vested option is considered owned by the individual who owns the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). If, however, a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulation Section 1.83-3(b) and (j)) the stock underlying the option is not treated as owned by the individual who holds the option.
|
(c)
|
Change in the Ownership of a Corporation.
A change in the ownership of a corporation occurs on the date that any one person or more than one person acting as a group, acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of such corporation. If any one person or more than one person acting as a group is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation as discussed below in Section 9.7(d)). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock. Section 9.7(c) applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction. For purposes of this Section 9.7(c), persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time or as a result of a public offering. Persons will, however, be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
|
(d)
|
Change in the effective control of a corporation.
A change in the effective control of a corporation occurs on the date that either (i) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing thirty percent (30%) or more of the total voting power of the stock of such corporation, or (ii) a majority of members of the corporation’s board of directors is replaced during any twelve month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation’s board of directors prior to the date of the appointment or election, provided that for purposes of this paragraph (ii), the term corporation refers solely to the relevant corporation identified in Section 9.7(a) for which no other corporation is a majority shareholder for purposes of Section 9.7(a). In the absence of an event described in Section 9.7(d)(i) or (ii), a change in the effective control of a corporation will not have occurred. A change in effective control may also occur in any transaction in which either of the two corporations involved in the transaction has a change in the ownership of such corporation as described in Section 9.7(c) or a change in the ownership of a substantial portion of the assets of such corporation as described in Section 9.7(e). If any one person, or more than one person acting as a group, is considered to effectively control a corporation within the meaning of this Section 9.7(d), the acquisition of additional control of the corporation by the same person or persons is not considered to cause a change in the effective control of the corporation or to cause a change in the ownership of the corporation within the meaning of Section 9.7(c). For purposes of this Section 9.7(d), persons will or will not be considered to be acting as a group in accordance with rules similar to those set forth in Section 9.7(c) with the following exception. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
|
(e)
|
Change in the ownership of a substantial portion of a corporation’s assets.
A change in the ownership of a substantial portion of a corporation’s assets occurs on the date that any one person, or more than one person acting as a group (as determined in accordance with rules similar to those set forth in Section 9.7(d)), acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value
|
9.8
|
Permissible Delays in Payment.
Distributions may be delayed beyond the date payment would otherwise occur in accordance with the provisions of Articles 8 and 9 in any of the following circumstances as long as the Employer treats all payments to similarly situated Participants on a reasonably consistent basis.
|
(a)
|
The Employer may delay payment if it reasonably anticipates that its deduction with respect to such payment would be limited or eliminated by the application of Code Section 162(m). Payment must be made during the Participant’s first taxable year in which the Employer reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year the deduction of such payment will not be barred by the application of Code Section 162(m) or during the period beginning with the Participant’s Separation from Service and ending on the later of the last day of the Employer’s taxable year in which the Participant separates from service or the 15th day of the third month following the Participant’s Separation from Service. If a scheduled payment to a Participant is delayed in accordance with this Section 9.8(a), all scheduled payments to the Participant that could be delayed in accordance with this Section 9.8(a) will also be delayed.
|
(b)
|
The Employer may also delay payment if it reasonably anticipates that the making of the payment will violate federal securities laws or other applicable laws provided payment is made at the earliest date on which the Employer reasonably anticipates that the making of the payment will not cause such violation.
|
(c)
|
The Employer reserves the right to amend the Plan to provide for a delay in payment upon such other events and conditions as the Secretary of the Treasury may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.
|
9.9
|
Permitted Acceleration of Payment
.
The Employer may permit acceleration of the time or schedule of any payment or amount scheduled to be paid pursuant to a payment under the Plan provided such acceleration would be permitted by the provisions of Reg. Sec. 1.409A- 3(j)(4), including the following events:
|
(a)
|
Domestic Relations Order.
A payment may be accelerated if such payment is made to an alternate payee pursuant to and following the receipt and qualification of a domestic relations order as defined in Code Section 414(p).
|
(b)
|
Compliance with Ethics Agreements and Legal Requirements.
A payment may be accelerated as may be necessary to comply with ethics agreements with the Federal government or as may be reasonably necessary to avoid the violation of Federal, state, local or foreign ethics law or conflicts of laws, in accordance with the requirements of Code Section 409A.
|
(c)
|
De Minimis Amounts.
A payment will be accelerated if (i) the amount of the payment is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), (ii) at the time the payment is made the amount constitutes the Participant’s entire interest under the Plan and all other plans that are aggregated with the Plan under Reg. Sec. 1.409A-1(c)(2).
|
(d)
|
FICA Tax.
A payment may be accelerated to the extent required to pay the Federal Insurance Contributions Act tax imposed under Code Sections 3101, 3121(a) and 3121(v)(2) of the Code with respect to compensation deferred under the Plan (the “FICA Amount”). Additionally, a payment may be accelerated to pay the income tax on wages imposed under Code Section 3401 of the Code on the FICA Amount and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. The total payment under this subsection (d) may not exceed the aggregate of the FICA Amount and the income tax withholding related to the FICA Amount.
|
(e)
|
Section 409A Additional Tax.
A payment may be accelerated if the Plan fails to meet the requirements of Code Section 409A; provided that such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.
|
(f)
|
Offset.
A payment may be accelerated in the Employer’s discretion as satisfaction of a debt of the Participant to the Employer, where such debt is incurred in the ordinary course of the service relationship between the Participant and the Employer, the entire amount of the reduction in any of the Employer’s taxable years does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.
|
(g)
|
Other Events.
A payment may be accelerated in the Administrator’s discretion in connection with such other events and conditions as permitted by Code Section 409A.
|
10.1
|
Amendment by Plan Sponsor.
The Plan Sponsor reserves the right to amend the Plan (for itself and each Employer) through action of its Board of Directors. No amendment can directly or indirectly deprive any current or former Participant or Beneficiary of all or any portion of his Account which had accrued and vested prior to the amendment.
|
10.2
|
Plan Termination Following Change in Control or Corporate Dissolution.
If so elected by the Plan Sponsor in 11.01 of the Adoption Agreement, the Plan Sponsor reserves the right to terminate the Plan and distribute all amounts credited to all Participant Accounts within the 30 days preceding or the twelve months following a Change in Control as determined in accordance with the rules set forth in Section 9.7. For this purpose, the Plan will be treated as terminated only if all agreements, methods, programs and other arrangements sponsored by the Related Employer immediately after the Change in Control which are treated as a single plan under Reg. Sec. 1.409A-1(c)(2) are also terminated so that all participants under the Plan and all similar arrangements are required to receive all amounts deferred under the terminated arrangements within twelve months of the date the Plan Sponsor irrevocably takes all necessary action to terminate the arrangements. In addition, the Plan Sponsor reserves the right to terminate the Plan within twelve months of a corporate dissolution taxed under Code Section 331 or with the approval of a bankruptcy court pursuant to 11 U. S. C. Section 503(b)(1)(A) provided that amounts deferred under the Plan are included in the gross incomes of Participants in the latest of (a) the calendar year in which the termination and liquidation occurs, (b) the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture, or (c) the first calendar year in which payment is administratively practicable.
|
10.3
|
Other Plan Terminations.
The Plan Sponsor retains the discretion to terminate the Plan if (a) all arrangements sponsored by the Plan Sponsor that would be aggregated with any terminated arrangement under Code Section 409A and Reg. Sec. 1.409A-1(c)(2) are terminated, (b) no payments other than payments that would be payable under the terms of the arrangements if the termination had not occurred are made within twelve months of the termination of the arrangements, (c) all payments are made within twenty-four months of the date the Plan Sponsor takes all necessary action to irrevocably terminate and liquidate the arrangements, (d) the Plan Sponsor does not adopt a new arrangement that would be aggregated with any terminated arrangement under Code Section 409A and the regulations thereunder at any time within the three year period following the date of termination of the arrangement, and (e) the termination does not occur proximate to a downturn in the financial health
|
11.1
|
Establishment of Trust.
The Plan Sponsor may but is not required to establish a trust to hold amounts which the Plan Sponsor may contribute from time to time to correspond to some or all amounts credited to Participants under Section 6.2. In the event that the Plan Sponsor wishes to establish a trust to provide a source of funds for the payment of Plan benefits, any such trust shall be constructed to constitute an unfunded arrangement that does not affect the status of the Plan as an unfunded plan for purposes of Title I of ERISA and the Code. If the Plan Sponsor elects to establish a trust in accordance with Section 10.01 of the Adoption Agreement, the provisions of Sections 11.2 and 11.3 shall become operative.
|
11.2
|
Rabbi Trust.
Any trust established by the Plan Sponsor shall be between the Plan Sponsor and a trustee pursuant to a separate written agreement under which assets are held, administered and managed, subject to the claims of the Plan Sponsor’s creditors in the event of the Plan Sponsor’s insolvency. The trust is intended to be treated as a rabbi trust in accordance with existing guidance of the Internal Revenue Service, and the establishment of the trust shall not cause the Participant to realize current income on amounts contributed thereto. The Plan Sponsor must notify the trustee in the event of a bankruptcy or insolvency.
|
11.3
|
Investment of Trust Funds.
Any amounts contributed to the trust by the Plan Sponsor shall be invested by the trustee in accordance with the provisions of the trust and the instructions of the Administrator. Trust investments need not reflect the hypothetical investments selected by Participants under Section 7.1 for the purpose of adjusting Accounts and the earnings or investment results of the trust need not affect the hypothetical investment adjustments to Participant Accounts under the Plan.
|
12.1
|
Powers and Responsibilities of the Administrator.
The Administrator has the full power and the full responsibility to administer the Plan in all of its details, subject, however, to the applicable requirements of ERISA. The Administrator’s powers and responsibilities include, but are not limited to, the following:
|
(a)
|
To make and enforce such rules and procedures as it deems necessary or proper for the efficient administration of the Plan;
|
(b)
|
To interpret the Plan, its interpretation thereof to be final, except as provided in Section 12.2, on all persons claiming benefits under the Plan;
|
(c)
|
To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;
|
(d)
|
To administer the claims and review procedures specified in Section 12.2;
|
(e)
|
To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan;
|
(f)
|
To determine the person or persons to whom such benefits will be paid;
|
(g)
|
To authorize the payment of benefits;
|
(h)
|
To comply with the reporting and disclosure requirements of Part 1 of Subtitle B of Title I of ERISA;
|
(i)
|
To appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan;
|
(j)
|
By written instrument, to allocate and delegate its responsibilities, including the formation of an Administrative Committee to administer the Plan.
|
12.2
|
Claims and Review Procedures.
|
(a)
|
Claims Procedure.
|
(b)
|
Review Procedure.
|
(c)
|
Exhaustion of Claims Procedures and Right to Bring Legal Claim
|
12.3
|
Plan Administrative Costs.
All reasonable costs and expenses (including legal, accounting, and employee communication fees) incurred by the Administrator in administering the Plan shall be paid by the Plan to the extent not paid by the Employer.
|
13.1
|
Unsecured General Creditor of the Employer.
Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Employer. For purposes of the payment of benefits under the Plan, any and all of the Employer’s assets shall be, and shall remain, the general, unpledged, unrestricted assets of the Employer. Each Employer's obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.
|
13.2
|
Employer’s Liability
.
Each Employer’s liability for the payment of benefits under the Plan shall be defined only by the Plan and by the deferral agreements entered into between a Participant and the Employer. An Employer shall have no obligation or liability to a Participant under the Plan except as provided by the Plan and a deferral agreement or agreements. An Employer shall have no liability to Participants employed by other Employers.
|
13.3
|
Limitation of Rights
.
Neither the establishment of the Plan, nor any amendment thereof, nor the creation of any fund or account, nor the payment of any benefits, will be construed as giving to the Participant or any other person any legal or equitable right against the Employer, the Plan or the Administrator, except as provided herein; and in no event will the terms of employment or service of the Participant be modified or in any way affected hereby.
|
13.4
|
Anti-Assignment
.
Except as may be necessary to fulfill a domestic relations order within the meaning of Code Section 414(p), none of the benefits or rights of a Participant or any Beneficiary of a Participant shall be subject to the claim of any creditor. In particular, to the fullest extent permitted by law, all such benefits and rights shall be free from attachment, garnishment, or any other legal or equitable process available to any creditor of the Participant and his or her Beneficiary. Neither the Participant nor his or her Beneficiary shall have the right to alienate, anticipate, commute, pledge, encumber, or assign any of the payments which he or she may expect to receive, contingently or otherwise, under the Plan, except the right to designate a Beneficiary to receive death benefits provided hereunder. Notwithstanding the preceding, the benefit payable from a Participant’s Account may be reduced, at the discretion of the administrator, to satisfy any debt or liability to the Employer.
|
13.5
|
Facility of Payment
.
If the Administrator determines, on the basis of medical reports or other evidence satisfactory to the Administrator, that the recipient of any benefit payments under the Plan is incapable of handling his affairs by reason of minority, illness, infirmity or other incapacity, the Administrator may
|
13.6
|
Notices.
Any notice or other communication to the Employer or Administrator in connection with the Plan shall be deemed delivered in writing if addressed to the Plan Sponsor at the address specified in Section 1.03 of the Adoption Agreement and if either actually delivered at said address or, in the case or a letter, 5 business days shall have elapsed after the same shall have been deposited in the United States mails, first-class postage prepaid and registered or certified.
|
13.7
|
Tax Withholding
.
If the Employer concludes that tax is owing with respect to any deferral or payment hereunder, the Employer shall withhold such amounts from any payments due the Participant or from amounts deferred, as permitted by law, or otherwise make appropriate arrangements with the Participant or his Beneficiary for satisfaction of such obligation. Tax, for purposes of this Section 13.7 means any federal, state, local or any other governmental income tax, employment or payroll tax, excise tax, or any other tax or assessment owing with respect to amounts deferred, any earnings thereon, and any payments made to Participants under the Plan.
|
13.8
|
Indemnification.
|
13.9
|
Successors
.
The provisions of the Plan shall bind and inure to the benefit of the Plan Sponsor, the Employer and their successors and assigns and the Participant and the Participant’s designated Beneficiaries.
|
13.10
|
Disclaimer.
It is the Plan Sponsor’s intention that the Plan comply with the requirements of Code Section 409A. Neither the Plan Sponsor nor the Employer shall have any liability to any Participant should any provision of the Plan fail to satisfy the requirements of Code Section 409A.
|
13.11
|
Governing Law
.
The Plan will be construed, administered and enforced according to the laws of the State specified by the Plan Sponsor in Section 12.01 of the Adoption Agreement.
|
Subsidiary
|
|
State or Other Jurisdiction of
Incorporation or Organization
|
|
|
|
Essentia Insurance Company
|
|
Missouri
|
Essex Insurance Company
|
|
Delaware
|
Markel Insurance Company
|
|
Illinois
|
Markel American Insurance Company
|
|
Virginia
|
Evanston Insurance Company
|
|
Illinois
|
Associated International Insurance Company
|
|
Illinois
|
Markel Aspen, Inc.
|
|
Delaware
|
FirstComp Insurance Company
|
|
Nebraska
|
Markel International Holdings (Delaware) Limited
|
|
Delaware
|
Markel International Limited
|
|
England
|
Markel Capital Holdings Limited
|
|
England
|
Markel Capital Limited
|
|
England
|
Markel International Insurance Company Limited
|
|
England
|
Markel Syndicate Management Limited
|
|
England
|
Alterra Capital UK Limited
|
|
England
|
Alterra at Lloyd's Limited
|
|
England
|
Alterra Corporate Capital 2 Limited
|
|
England
|
Alterra Corporate Capital 3 Limited
|
|
England
|
Alterra Corporate Capital 4 Limited
|
|
England
|
Alterra Corporate Capital 5 Limited
|
|
England
|
Alterra Corporate Capital 6 Limited
|
|
England
|
Markel Underwriting Services Limited
|
|
England
|
Markel Servicios S.A.
|
|
Argentina
|
Abbey Protection plc
|
|
England
|
Abbey Protection Group Ltd.
|
|
England
|
Abbey Legal Holdings Limited
|
|
England
|
Abbey Legal Protection Limited
|
|
England
|
Abbey Tax & Consultancy Services Limited
|
|
England
|
Effective Tax Solutions Ltd
|
|
England
|
Abbey Tax Protection Limited
|
|
England
|
Accountax Consulting Limited
|
|
England
|
Accountax UK Limited
|
|
England
|
Accountax Law Limited
|
|
England
|
LHS Solicitors LLP
|
|
England
|
MINT Canadian Specialty Underwriters Limited
|
|
Canada
|
Markel Canada LP
|
|
Canada
|
Alterra Capital Holdings Limited
|
|
Bermuda
|
Alterra Capital America Limited
|
|
England
|
Alterra USA Holdings Limited
|
|
Delaware
|
Alterra Finance LLC
|
|
Delaware
|
Alterra Insurance USA Inc.
|
|
Delaware
|
Markel Global Reinsurance Company
|
|
Delaware
|
Alterra America Insurance Company
|
|
Delaware
|
Alterra Specialty Insurance Services Limited
|
|
Delaware
|
Alterra Capital Services Limited
|
|
Ireland
|
Alterra Holdings Limited
|
|
Bermuda
|
Alterra Agency Limited
|
|
Bermuda
|
Alterra Capital Brazil Limited
|
|
England
|
Markel Participações Ltda.
|
|
Brazil
|
Markel Resseguradora do Brasil S.A.
|
|
Brazil
|
Markel Bermuda Limited
|
|
Bermuda
|
Alterra Diversified Strategies Limited
|
|
Bermuda
|
Markel CATCo Investment Management Ltd.
|
|
Bermuda
|
Markel Service, Incorporated
|
|
Virginia
|
Thompson Insurance Enterprises, LLC
|
|
Delaware
|
Markel Ventures, Inc.
|
|
Virginia
|
Eagle Construction of Va., LLC
|
|
Virginia
|
Eagle Realty of Virginia, LLC
|
|
Virginia
|
Innslake Title Agency, LLC
|
|
Virginia
|
Eagle Construction of Va. Properties, LLC
|
|
Virginia
|
Eagle Commercial Construction, LLC
|
|
Virginia
|
Eagle Commercial Realty, LLC
|
|
Virginia
|
Ellicott Dredge Enterprises, LLC
|
|
Maryland
|
Ellicott Dredges, LLC
|
|
Maryland
|
Baltimore Dredge International, Inc.
|
|
Maryland
|
Liquid Waste Technology, LLC
|
|
Maryland
|
Rohr International Dredge Co., LLC
|
|
Maryland
|
Rohr Dredge North America, LLC
|
|
Maryland
|
Rohr International Dredge Holdings, Inc.
|
|
Maryland
|
Rohr Bagger GmbH
|
|
Germany
|
Rohr France, societie responsibilitie limitee
|
|
France
|
IDRECO B.V.
|
|
The Netherlands
|
Tennessee Dredge Company, LLC
|
|
Maryland
|
Markel Food Group, Inc.
|
|
Virginia
|
AMF Automation Technologies, LLC
|
|
Virginia
|
Baking Technology Systems, Inc.
|
|
Georgia
|
Solbern, Inc.
|
|
Virginia
|
Reading Pretzel Machinery Corporation
|
|
Pennsylvania
|
Tromp Group Americas, LLC
|
|
Virginia
|
Tromp Group B.V.
|
|
The Netherlands
|
Panel Specialists, Inc.
|
|
Texas
|
ParkLand Ventures, Inc.
|
|
Virginia
|
Havco WP LLC
|
|
Delaware
|
Diamond Healthcare Corporation
|
|
Virginia
|
RD Holdings, LLC
|
|
Virginia
|
Retail Data, LLC
|
|
Virginia
|
PMD Holdings, Inc.
|
|
Virginia
|
PartnerMD, LLC
|
|
Virginia
|
WI Holdings Inc.
|
|
Pennsylvania
|
Weldship Industries, Inc.
|
|
New Jersey
|
Texas Trailer Corporation
|
|
Texas
|
Cottrell, Inc.
|
|
Georgia
|
Cottrell Properties, L.P.
|
|
Georgia
|
Cottrell Enterprises, Inc.
|
|
Georgia
|
CapTech Ventures, Inc.
|
|
Virginia
|
Markel West, Inc.
|
|
California
|
Black/White & Associates Insurance Brokers
|
|
California
|
Prairie State Administrative Services, Inc.
|
|
Illinois
|
Markel-Gayner Asset Management Corporation
|
|
Virginia
|
Markel Properties, LLC
|
|
Virginia
|
Mark IV Realty Corporation
|
|
Virginia
|
Schultz-Markel Associates, LLC
|
|
Delaware
|
Schultz Markel II, LLC
|
|
New Jersey
|
Markel Holdings Netherlands B.V.
|
|
The Netherlands
|
1.
|
I have reviewed this annual report on Form 10-K of Markel Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
February 26, 2016
|
|
/s/ Alan I. Kirshner
|
|
|
Alan I. Kirshner
|
|
|
Executive Chairman
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Markel Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
February 26, 2016
|
|
/s/ Anne G. Waleski
|
|
|
Anne G. Waleski
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Alan I. Kirshner
|
Alan I. Kirshner
|
Executive Chairman
|
(Principal Executive Officer)
|
February 26, 2016
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Anne G. Waleski
|
Anne G. Waleski
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
February 26, 2016
|