Large accelerated filer
x
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
•
|
Underwriting - our underwriting operations are comprised of our risk-bearing insurance operations, which include the run-off of underwriting operations that were discontinued in conjunction with acquisitions
|
•
|
Investing - our investing activities are primarily related to our underwriting operations
|
•
|
Program Services - our program services business serves as a fronting platform that provides other insurance companies access to the U.S. property and casualty insurance market
|
•
|
Markel CATCo - our Markel CATCo operations include an investment fund manager that offers insurance-linked securities to investors
|
•
|
Markel Ventures - our Markel Ventures operations include our controlling interests in a diverse portfolio of businesses that operate outside of the specialty insurance marketplace
|
(1)
U.S. Surplus Lines Segment Review Special Report
, A.M. Best
(September 1, 2017)
.
|
(2)
London Company Market Statistics Report
, International Underwriting Association
(October 2017)
.
|
(3)
Swiss Re Sigma
(
March 2017
).
|
(4)
Global Reinsurance Segment Review Special Report,
A.M. Best
(September 5, 2017)
.
|
(5)
Lloyd's Annual Report 2016
.
|
(6) Bermuda Monetary Authority 2016 Annual Report.
|
•
|
General Liability
|
•
|
Professional Liability
|
•
|
Property
|
•
|
Personal Lines
|
•
|
Specialty 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 provide coverage on either an occurrence or claims-made basis and 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;
|
•
|
surety products, which consist primarily of contract, commercial and court bonds;
|
•
|
CPI, which provides coverage on automobiles or other vehicles held as collateral for loans made by credit unions, banks and specialty finance companies; 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;
|
•
|
coverage for legal expenses including before the event products that protect commercial clients in the event of legal actions and after the event products covering a wide range of litigation;
|
•
|
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
|
•
|
Specialty
|
|
Years Ended December 31,
|
||||||||||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Net investment income
|
$
|
405,709
|
|
|
$
|
373,230
|
|
|
$
|
353,213
|
|
|
$
|
363,230
|
|
|
$
|
317,373
|
|
Net realized investment gains (losses)
|
$
|
(5,303
|
)
|
|
$
|
65,147
|
|
|
$
|
106,480
|
|
|
$
|
46,000
|
|
|
$
|
63,152
|
|
Increase (decrease) in net unrealized gains on investments
|
$
|
1,125,440
|
|
|
$
|
342,111
|
|
|
$
|
(457,584
|
)
|
|
$
|
981,035
|
|
|
$
|
261,995
|
|
Investment yield
(1)
|
2.6
|
%
|
|
2.4
|
%
|
|
2.3
|
%
|
|
2.4
|
%
|
|
2.6
|
%
|
(1)
|
Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.
|
|
|
|
|
|
|
|
|
|
|
|
Five-Year
Annual
Return
|
|
Ten-Year
Annual
Return
|
||||||||||||
|
Years Ended December 31,
|
|
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
||||||||||||||
Equities
|
25.5
|
%
|
|
13.5
|
%
|
|
(2.5
|
)%
|
|
18.6
|
%
|
|
33.3
|
%
|
|
17.0
|
%
|
|
10.6
|
%
|
|||||
Fixed maturities
(1)
|
3.4
|
%
|
|
2.4
|
%
|
|
1.6
|
%
|
|
6.5
|
%
|
|
—
|
%
|
|
2.7
|
%
|
|
4.1
|
%
|
|||||
Total portfolio, before foreign currency effect
|
9.2
|
%
|
|
5.0
|
%
|
|
0.5
|
%
|
|
8.9
|
%
|
|
6.9
|
%
|
|
6.1
|
%
|
|
5.7
|
%
|
|||||
Total portfolio
|
10.2
|
%
|
|
4.4
|
%
|
|
(0.7
|
)%
|
|
7.4
|
%
|
|
6.8
|
%
|
|
5.5
|
%
|
|
5.3
|
%
|
|||||
Invested assets, end of year (in millions)
|
$
|
20,570
|
|
|
$
|
19,059
|
|
|
$
|
18,181
|
|
|
$
|
18,638
|
|
|
$
|
17,612
|
|
|
|
|
|
(1)
|
Includes short-term investments, cash and cash equivalents and restricted cash and cash equivalents.
|
|
Years Ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||
Investment yield
(1)
|
2.6
|
%
|
|
2.4
|
%
|
|
2.3
|
%
|
|
2.4
|
%
|
|
2.6
|
%
|
Adjustment of investment yield from amortized cost to fair value
|
(0.5
|
)%
|
|
(0.4
|
)%
|
|
(0.4
|
)%
|
|
(0.4
|
)%
|
|
(0.3
|
)%
|
Net amortization of net premium on fixed maturities
|
0.4
|
%
|
|
0.4
|
%
|
|
0.5
|
%
|
|
0.6
|
%
|
|
0.7
|
%
|
Net realized investment gains and change in net unrealized gains on investments
|
5.9
|
%
|
|
2.3
|
%
|
|
(2.0
|
)%
|
|
5.9
|
%
|
|
2.3
|
%
|
Taxable equivalent effect for interest and dividends
(2)
|
0.4
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
Other
(3)
|
1.4
|
%
|
|
(0.7
|
)%
|
|
(1.5
|
)%
|
|
(1.5
|
)%
|
|
1.1
|
%
|
Taxable equivalent total investment return
|
10.2
|
%
|
|
4.4
|
%
|
|
(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.
|
Reinsurance Group
|
A.M. Best
Rating
|
|
Gross Reinsurance Recoverable
|
|
Collateral Applied
(1)
|
|
Net Reinsurance Recoverable
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||
Fosun International Holdings Ltd.
|
B++
|
|
$
|
538,227
|
|
|
$
|
537,659
|
|
|
$
|
568
|
|
Knight Insurance Company Ltd.
|
B++
|
|
397,070
|
|
|
397,070
|
|
|
—
|
|
|||
Lloyd's of London
|
A
|
|
297,494
|
|
|
—
|
|
|
297,494
|
|
|||
James River Group Holdings, Ltd.
|
A
|
|
139,507
|
|
|
139,507
|
|
|
—
|
|
|||
Tokio Marine Holdings
|
A++
|
|
102,284
|
|
|
1,172
|
|
|
101,112
|
|
|||
Enstar Group Limited
|
A-
|
|
75,289
|
|
|
39,349
|
|
|
35,940
|
|
|||
State Automobile Mutual Insurance Company
|
A-
|
|
50,886
|
|
|
50,886
|
|
|
—
|
|
|||
Greenlight Capital Re, Ltd.
|
A-
|
|
48,833
|
|
|
48,833
|
|
|
—
|
|
|||
SOMPO Holdings, Inc.
|
A+
|
|
42,535
|
|
|
—
|
|
|
42,535
|
|
|||
Allianz SE
|
A+
|
|
42,534
|
|
|
—
|
|
|
42,534
|
|
|||
Reinsurance recoverable on paid and unpaid losses for ten largest gross reinsurers
|
|
1,734,659
|
|
|
1,214,476
|
|
|
520,183
|
|
||||
Total reinsurance recoverable on paid and unpaid losses
|
|
$
|
2,193,542
|
|
|
$
|
1,510,671
|
|
|
$
|
682,871
|
|
(1)
|
Collateral is applied to each reinsurer, up to the amount of the gross recoverable, to determine the net recoverable for each reinsurer presented in this table. As of December 31, 2017, we were the beneficiary of total letters of credit, trust accounts and funds withheld in the amount of $1.5 billion collateralizing reinsurance recoverable balances from our top 10 reinsurers and $1.9 billion for our total reinsurance recoverable balance.
|
•
|
For our Markel Ventures manufacturing operations, and certain consumer 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, and
|
•
|
changes in the regulatory and litigation environments.
|
•
|
result in a substantial loss of business as policyholders and ceding company clients move to other companies with higher claims-paying and financial strength ratings; and
|
•
|
trigger contract provisions that allow cedents to terminate their reinsurance contracts on terms disadvantageous to us or require us to collateralize our obligations through trusts or letters of credit.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Results of Operations
|
|
|
|
|
|
||||||
Earned premiums
|
$
|
4,248
|
|
|
$
|
3,866
|
|
|
$
|
3,824
|
|
Net investment income
|
406
|
|
|
373
|
|
|
353
|
|
|||
Total operating revenues
|
6,062
|
|
|
5,612
|
|
|
5,370
|
|
|||
Net income (loss) to shareholders
|
395
|
|
|
456
|
|
|
583
|
|
|||
Comprehensive income (loss) to shareholders
|
1,175
|
|
|
667
|
|
|
233
|
|
|||
Diluted net income (loss) per share
|
$
|
25.81
|
|
|
$
|
31.27
|
|
|
$
|
41.74
|
|
Financial Position
|
|
|
|
|
|
||||||
Total investments, cash and cash equivalents and restricted cash and cash equivalents (invested assets)
|
$
|
20,570
|
|
|
$
|
19,059
|
|
|
$
|
18,181
|
|
Total assets
|
32,805
|
|
|
25,875
|
|
|
24,939
|
|
|||
Unpaid losses and loss adjustment expenses
|
13,584
|
|
|
10,116
|
|
|
10,252
|
|
|||
Senior long-term debt and other debt
|
3,099
|
|
|
2,575
|
|
|
2,239
|
|
|||
Shareholders' equity
|
9,504
|
|
|
8,461
|
|
|
7,834
|
|
|||
Common shares outstanding (at year end, in thousands)
|
13,904
|
|
|
13,955
|
|
|
13,959
|
|
|||
OPERATING PERFORMANCE MEASURES
(1,2)
|
|
|
|
|
|
||||||
Operating Data
|
|
|
|
|
|
||||||
Book value per common share outstanding
|
$
|
683.55
|
|
|
$
|
606.30
|
|
|
$
|
561.23
|
|
Growth (decline) in book value per share
|
13
|
%
|
|
8
|
%
|
|
3
|
%
|
|||
5-Year CAGR in book value per share
(3)
|
11
|
%
|
|
11
|
%
|
|
11
|
%
|
|||
Closing stock price
|
$
|
1,139.13
|
|
|
$
|
904.50
|
|
|
$
|
883.35
|
|
Ratio Analysis
|
|
|
|
|
|
||||||
U.S. GAAP combined ratio
(4)
|
105
|
%
|
|
92
|
%
|
|
89
|
%
|
|||
Investment yield
(5)
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
|||
Taxable equivalent total investment return
(6)
|
10
|
%
|
|
4
|
%
|
|
(1
|
)%
|
|||
Investment leverage
(7)
|
2.2
|
|
|
2.3
|
|
|
2.3
|
|
|||
Debt to capital
|
25
|
%
|
|
23
|
%
|
|
22
|
%
|
(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.
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
5-Year CAGR
(3)
|
|
10-Year CAGR
(3)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
3,841
|
|
|
$
|
3,232
|
|
|
$
|
2,147
|
|
|
$
|
1,979
|
|
|
$
|
1,731
|
|
|
$
|
1,816
|
|
|
$
|
2,022
|
|
|
15
|
%
|
|
7
|
%
|
363
|
|
|
317
|
|
|
282
|
|
|
264
|
|
|
273
|
|
|
260
|
|
|
282
|
|
|
8
|
%
|
|
3
|
%
|
|||||||
5,134
|
|
|
4,323
|
|
|
3,000
|
|
|
2,630
|
|
|
2,225
|
|
|
2,069
|
|
|
1,977
|
|
|
15
|
%
|
|
9
|
%
|
|||||||
321
|
|
|
281
|
|
|
253
|
|
|
142
|
|
|
267
|
|
|
202
|
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|||||||
936
|
|
|
459
|
|
|
504
|
|
|
252
|
|
|
431
|
|
|
591
|
|
|
(403
|
)
|
|
—
|
|
|
—
|
|
|||||||
$
|
22.27
|
|
|
$
|
22.48
|
|
|
$
|
25.89
|
|
|
$
|
14.60
|
|
|
$
|
27.27
|
|
|
$
|
20.52
|
|
|
$
|
(5.95
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
18,638
|
|
|
$
|
17,612
|
|
|
$
|
9,333
|
|
|
$
|
8,728
|
|
|
$
|
8,224
|
|
|
$
|
7,849
|
|
|
$
|
6,893
|
|
|
17
|
%
|
|
10
|
%
|
25,198
|
|
|
23,956
|
|
|
12,557
|
|
|
11,532
|
|
|
10,826
|
|
|
10,242
|
|
|
9,512
|
|
|
21
|
%
|
|
12
|
%
|
|||||||
10,404
|
|
|
10,262
|
|
|
5,371
|
|
|
5,399
|
|
|
5,398
|
|
|
5,427
|
|
|
5,492
|
|
|
20
|
%
|
|
9
|
%
|
|||||||
2,251
|
|
|
2,256
|
|
|
1,493
|
|
|
1,294
|
|
|
1,016
|
|
|
964
|
|
|
694
|
|
|
—
|
|
|
—
|
|
|||||||
7,595
|
|
|
6,674
|
|
|
3,889
|
|
|
3,388
|
|
|
3,172
|
|
|
2,774
|
|
|
2,181
|
|
|
20
|
%
|
|
14
|
%
|
|||||||
13,962
|
|
|
13,986
|
|
|
9,629
|
|
|
9,621
|
|
|
9,718
|
|
|
9,819
|
|
|
9,814
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
543.96
|
|
|
$
|
477.16
|
|
|
$
|
403.85
|
|
|
$
|
352.10
|
|
|
$
|
326.36
|
|
|
$
|
282.55
|
|
|
$
|
222.20
|
|
|
11
|
%
|
|
10
|
%
|
14
|
%
|
|
18
|
%
|
|
15
|
%
|
|
8
|
%
|
|
16
|
%
|
|
27
|
%
|
|
(16
|
)%
|
|
—
|
|
|
—
|
|
|||||||
14
|
%
|
|
17
|
%
|
|
9
|
%
|
|
9
|
%
|
|
13
|
%
|
|
11
|
%
|
|
10
|
%
|
|
—
|
|
|
—
|
|
|||||||
$
|
682.84
|
|
|
$
|
580.35
|
|
|
$
|
433.42
|
|
|
$
|
414.67
|
|
|
$
|
378.13
|
|
|
$
|
340.00
|
|
|
$
|
299.00
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
95
|
%
|
|
97
|
%
|
|
97
|
%
|
|
102
|
%
|
|
97
|
%
|
|
95
|
%
|
|
99
|
%
|
|
—
|
|
|
—
|
|
|||||||
2
|
%
|
|
3
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
—
|
|
|
—
|
|
|||||||
7
|
%
|
|
7
|
%
|
|
9
|
%
|
|
7
|
%
|
|
8
|
%
|
|
13
|
%
|
|
(10
|
)%
|
|
—
|
|
|
—
|
|
|||||||
2.5
|
|
|
2.6
|
|
|
2.4
|
|
|
2.6
|
|
|
2.6
|
|
|
2.8
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|||||||
23
|
%
|
|
25
|
%
|
|
28
|
%
|
|
28
|
%
|
|
24
|
%
|
|
26
|
%
|
|
24
|
%
|
|
—
|
|
|
—
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(dollars in thousands)
|
||||||
ASSETS
|
|
|
|
||||
Investments, available-for-sale, at estimated fair value:
|
|
|
|
||||
Fixed maturities (amortized cost of $9,551,153 in 2017 and $9,591,734 in 2016)
|
$
|
9,940,670
|
|
|
$
|
9,891,510
|
|
Equity securities (cost of $2,667,661 in 2017 and $2,481,448 in 2016)
|
5,967,847
|
|
|
4,745,841
|
|
||
Short-term investments (estimated fair value approximates cost)
|
2,160,974
|
|
|
2,336,151
|
|
||
Total Investments
|
18,069,491
|
|
|
16,973,502
|
|
||
Cash and cash equivalents
|
2,198,459
|
|
|
1,738,747
|
|
||
Restricted cash and cash equivalents
|
302,387
|
|
|
346,417
|
|
||
Receivables
|
1,567,453
|
|
|
1,282,997
|
|
||
Reinsurance recoverable on unpaid losses
|
4,619,336
|
|
|
2,006,945
|
|
||
Reinsurance recoverable on paid losses
|
126,054
|
|
|
64,892
|
|
||
Deferred policy acquisition costs
|
465,569
|
|
|
392,410
|
|
||
Prepaid reinsurance premiums
|
1,099,757
|
|
|
299,923
|
|
||
Goodwill
|
1,777,464
|
|
|
1,142,248
|
|
||
Intangible assets
|
1,355,681
|
|
|
722,542
|
|
||
Other assets
|
1,223,365
|
|
|
904,676
|
|
||
Total Assets
|
$
|
32,805,016
|
|
|
$
|
25,875,299
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Unpaid losses and loss adjustment expenses
|
$
|
13,584,281
|
|
|
$
|
10,115,662
|
|
Life and annuity benefits
|
1,072,112
|
|
|
1,049,654
|
|
||
Unearned premiums
|
3,308,779
|
|
|
2,263,838
|
|
||
Payables to insurance and reinsurance companies
|
324,304
|
|
|
231,327
|
|
||
Senior long-term debt and other debt (estimated fair value of $3,351,000 in 2017 and $2,721,000 in 2016)
|
3,099,230
|
|
|
2,574,529
|
|
||
Other liabilities
|
1,748,460
|
|
|
1,099,200
|
|
||
Total Liabilities
|
23,137,166
|
|
|
17,334,210
|
|
||
Redeemable noncontrolling interests
|
166,269
|
|
|
73,678
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Common stock
|
3,381,834
|
|
|
3,368,666
|
|
||
Retained earnings
|
3,776,743
|
|
|
3,526,395
|
|
||
Accumulated other comprehensive income
|
2,345,571
|
|
|
1,565,866
|
|
||
Total Shareholders' Equity
|
9,504,148
|
|
|
8,460,927
|
|
||
Noncontrolling interests
|
(2,567
|
)
|
|
6,484
|
|
||
Total Equity
|
9,501,581
|
|
|
8,467,411
|
|
||
Total Liabilities and Equity
|
$
|
32,805,016
|
|
|
$
|
25,875,299
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(dollars in thousands, except per share data)
|
||||||||||
OPERATING REVENUES
|
|
|
|
|
|
||||||
Earned premiums
|
$
|
4,247,978
|
|
|
$
|
3,865,870
|
|
|
$
|
3,823,532
|
|
Net investment income
|
405,709
|
|
|
373,230
|
|
|
353,213
|
|
|||
Net realized investment gains (losses):
|
|
|
|
|
|
||||||
Other-than-temporary impairment losses
|
(7,589
|
)
|
|
(18,355
|
)
|
|
(44,481
|
)
|
|||
Net realized investment gains, excluding other-than-temporary impairment losses
|
2,286
|
|
|
83,502
|
|
|
150,961
|
|
|||
Net realized investment gains (losses)
|
(5,303
|
)
|
|
65,147
|
|
|
106,480
|
|
|||
Other revenues
|
1,413,275
|
|
|
1,307,779
|
|
|
1,086,758
|
|
|||
Total Operating Revenues
|
6,061,659
|
|
|
5,612,026
|
|
|
5,369,983
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
||||||
Losses and loss adjustment expenses
|
2,865,761
|
|
|
2,050,744
|
|
|
1,938,745
|
|
|||
Underwriting, acquisition and insurance expenses
|
1,587,414
|
|
|
1,498,590
|
|
|
1,455,080
|
|
|||
Amortization of intangible assets
|
80,758
|
|
|
68,533
|
|
|
68,947
|
|
|||
Other expenses
|
1,307,980
|
|
|
1,190,243
|
|
|
1,046,805
|
|
|||
Total Operating Expenses
|
5,841,913
|
|
|
4,808,110
|
|
|
4,509,577
|
|
|||
Operating Income
|
219,746
|
|
|
803,916
|
|
|
860,406
|
|
|||
Interest expense
|
132,451
|
|
|
129,896
|
|
|
118,301
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
44,100
|
|
|
—
|
|
|||
Income Before Income Taxes
|
87,295
|
|
|
629,920
|
|
|
742,105
|
|
|||
Income tax expense (benefit)
|
(313,463
|
)
|
|
169,477
|
|
|
152,963
|
|
|||
Net Income
|
$
|
400,758
|
|
|
$
|
460,443
|
|
|
$
|
589,142
|
|
Net income attributable to noncontrolling interests
|
5,489
|
|
|
4,754
|
|
|
6,370
|
|
|||
Net Income to Shareholders
|
$
|
395,269
|
|
|
$
|
455,689
|
|
|
$
|
582,772
|
|
|
|
|
|
|
|
||||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
||||||
Change in net unrealized gains on investments, net of taxes:
|
|
|
|
|
|
||||||
Net holding gains (losses) arising during the period
|
$
|
787,339
|
|
|
$
|
275,661
|
|
|
$
|
(240,170
|
)
|
Change in unrealized other-than-temporary impairment losses on fixed maturities arising during the period
|
—
|
|
|
35
|
|
|
160
|
|
|||
Reclassification adjustments for net gains included in net income
|
(24,296
|
)
|
|
(33,528
|
)
|
|
(80,482
|
)
|
|||
Change in net unrealized gains on investments, net of taxes
|
763,043
|
|
|
242,168
|
|
|
(320,492
|
)
|
|||
Change in foreign currency translation adjustments, net of taxes
|
10,449
|
|
|
(11,704
|
)
|
|
(29,278
|
)
|
|||
Change in net actuarial pension loss, net of taxes
|
6,259
|
|
|
(19,100
|
)
|
|
(352
|
)
|
|||
Total Other Comprehensive Income (Loss)
|
779,751
|
|
|
211,364
|
|
|
(350,122
|
)
|
|||
Comprehensive Income
|
$
|
1,180,509
|
|
|
$
|
671,807
|
|
|
$
|
239,020
|
|
Comprehensive income attributable to noncontrolling interests
|
5,535
|
|
|
4,760
|
|
|
6,297
|
|
|||
Comprehensive Income to Shareholders
|
$
|
1,174,974
|
|
|
$
|
667,047
|
|
|
$
|
232,723
|
|
|
|
|
|
|
|
||||||
NET INCOME PER SHARE
|
|
|
|
|
|
||||||
Basic
|
$
|
25.89
|
|
|
$
|
31.41
|
|
|
$
|
41.99
|
|
Diluted
|
$
|
25.81
|
|
|
$
|
31.27
|
|
|
$
|
41.74
|
|
(in thousands)
|
Common
Shares
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
Shareholders'
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|
Redeemable Noncontrolling Interests
|
|||||||||||||||
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 income (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
|
|
|||||||
Net income
|
|
|
|
|
455,689
|
|
|
—
|
|
|
455,689
|
|
|
99
|
|
|
455,788
|
|
|
4,655
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
—
|
|
|
211,358
|
|
|
211,358
|
|
|
—
|
|
|
211,358
|
|
|
6
|
|
|||||||||
Comprehensive Income
|
|
|
|
|
|
|
|
|
667,047
|
|
|
99
|
|
|
667,146
|
|
|
4,661
|
|
|||||||||||
Issuance of common stock
|
54
|
|
|
4,623
|
|
|
—
|
|
|
|
|
|
4,623
|
|
|
—
|
|
|
4,623
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(58
|
)
|
|
—
|
|
|
(51,142
|
)
|
|
—
|
|
|
(51,142
|
)
|
|
—
|
|
|
(51,142
|
)
|
|
—
|
|
|||||||
Restricted stock awards expensed
|
—
|
|
|
21,336
|
|
|
—
|
|
|
—
|
|
|
21,336
|
|
|
—
|
|
|
21,336
|
|
|
—
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
(15,472
|
)
|
|
—
|
|
|
(15,472
|
)
|
|
—
|
|
|
(15,472
|
)
|
|
15,472
|
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
350
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|
—
|
|
|
350
|
|
|
(3,517
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
|
(74
|
)
|
|
(39
|
)
|
|
(5,896
|
)
|
|||||||
December 31, 2016
|
13,955
|
|
|
3,368,666
|
|
|
3,526,395
|
|
|
1,565,866
|
|
|
8,460,927
|
|
|
6,484
|
|
|
8,467,411
|
|
|
73,678
|
|
|||||||
Net income (loss)
|
|
|
|
|
395,269
|
|
|
—
|
|
|
395,269
|
|
|
(895
|
)
|
|
394,374
|
|
|
6,384
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
—
|
|
|
779,705
|
|
|
779,705
|
|
|
—
|
|
|
779,705
|
|
|
46
|
|
|||||||||
Comprehensive Income (loss)
|
|
|
|
|
|
|
|
|
1,174,974
|
|
|
(895
|
)
|
|
1,174,079
|
|
|
6,430
|
|
|||||||||||
Issuance of common stock
|
58
|
|
|
552
|
|
|
—
|
|
|
—
|
|
|
552
|
|
|
—
|
|
|
552
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(109
|
)
|
|
—
|
|
|
(110,838
|
)
|
|
—
|
|
|
(110,838
|
)
|
|
—
|
|
|
(110,838
|
)
|
|
—
|
|
|||||||
Restricted stock awards expensed
|
—
|
|
|
15,881
|
|
|
—
|
|
|
—
|
|
|
15,881
|
|
|
—
|
|
|
15,881
|
|
|
—
|
|
|||||||
Acquisition of Costa Farms
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,600
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
(33,738
|
)
|
|
—
|
|
|
(33,738
|
)
|
|
—
|
|
|
(33,738
|
)
|
|
33,738
|
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
(2,955
|
)
|
|
—
|
|
|
—
|
|
|
(2,955
|
)
|
|
(8,330
|
)
|
|
(11,285
|
)
|
|
(6,179
|
)
|
|||||||
Other
|
—
|
|
|
(310
|
)
|
|
(345
|
)
|
|
—
|
|
|
(655
|
)
|
|
174
|
|
|
(481
|
)
|
|
(7,998
|
)
|
|||||||
December 31, 2017
|
13,904
|
|
|
$
|
3,381,834
|
|
|
$
|
3,776,743
|
|
|
$
|
2,345,571
|
|
|
$
|
9,504,148
|
|
|
$
|
(2,567
|
)
|
|
$
|
9,501,581
|
|
|
$
|
166,269
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(dollars in thousands)
|
||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
400,758
|
|
|
$
|
460,443
|
|
|
$
|
589,142
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Deferred income tax expense (benefit)
|
(324,090
|
)
|
|
63,358
|
|
|
(9,678
|
)
|
|||
Depreciation and amortization
|
203,871
|
|
|
194,147
|
|
|
200,987
|
|
|||
Net realized investment (gains) losses
|
5,303
|
|
|
(65,147
|
)
|
|
(106,480
|
)
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
44,100
|
|
|
—
|
|
|||
Decrease (increase) in receivables
|
(38,259
|
)
|
|
(163,123
|
)
|
|
5,604
|
|
|||
Increase in deferred policy acquisition costs
|
(67,923
|
)
|
|
(41,619
|
)
|
|
(7,360
|
)
|
|||
Increase (decrease) in unpaid losses and loss adjustment expenses, net
|
619,305
|
|
|
(9,429
|
)
|
|
(91,960
|
)
|
|||
Decrease in life and annuity benefits
|
(55,647
|
)
|
|
(54,580
|
)
|
|
(85,257
|
)
|
|||
Increase (decrease) in unearned premiums, net
|
197,706
|
|
|
134,593
|
|
|
(4,522
|
)
|
|||
Increase (decrease) in payables to insurance and reinsurance companies
|
(40,761
|
)
|
|
11,582
|
|
|
(31,829
|
)
|
|||
Increase (decrease) in income taxes payable
|
(35,968
|
)
|
|
(16,484
|
)
|
|
27,817
|
|
|||
Increase (decrease) in accrued expenses
|
(71,669
|
)
|
|
67,994
|
|
|
97,273
|
|
|||
Increase (decrease) in other liabilities
|
45,051
|
|
|
(90,571
|
)
|
|
(5,793
|
)
|
|||
Other
|
20,852
|
|
|
(641
|
)
|
|
73,207
|
|
|||
Net Cash Provided By Operating Activities
|
858,529
|
|
|
534,623
|
|
|
651,151
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from sales of fixed maturities and equity securities
|
577,650
|
|
|
365,822
|
|
|
538,978
|
|
|||
Proceeds from maturities, calls and prepayments of fixed maturities
|
1,129,895
|
|
|
963,165
|
|
|
1,503,616
|
|
|||
Cost of fixed maturities and equity securities purchased
|
(1,176,281
|
)
|
|
(2,205,939
|
)
|
|
(1,576,254
|
)
|
|||
Net change in short-term investments
|
234,743
|
|
|
(689,194
|
)
|
|
(62,124
|
)
|
|||
Proceeds from sales of equity method investments
|
3,353
|
|
|
8,790
|
|
|
23,155
|
|
|||
Cost of equity method investments
|
(13,023
|
)
|
|
(8,576
|
)
|
|
(21,849
|
)
|
|||
Additions to property and equipment
|
(74,652
|
)
|
|
(63,674
|
)
|
|
(79,755
|
)
|
|||
Acquisitions, net of cash acquired
|
(1,431,712
|
)
|
|
(7,527
|
)
|
|
(261,521
|
)
|
|||
Other
|
5,570
|
|
|
(1,348
|
)
|
|
(797
|
)
|
|||
Net Cash Provided (Used) By Investing Activities
|
(744,457
|
)
|
|
(1,638,481
|
)
|
|
63,449
|
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Additions to senior long-term debt and other debt
|
664,657
|
|
|
559,300
|
|
|
69,797
|
|
|||
Repayment of senior long-term debt and other debt
|
(259,972
|
)
|
|
(278,363
|
)
|
|
(88,020
|
)
|
|||
Premiums and fees related to early extinguishment of debt
|
—
|
|
|
(43,691
|
)
|
|
—
|
|
|||
Repurchases of common stock
|
(110,838
|
)
|
|
(51,142
|
)
|
|
(31,491
|
)
|
|||
Issuance of common stock
|
552
|
|
|
4,623
|
|
|
4,752
|
|
|||
Payment of contingent consideration
|
(5,018
|
)
|
|
(14,219
|
)
|
|
(9,263
|
)
|
|||
Purchase of noncontrolling interests
|
(18,334
|
)
|
|
(3,167
|
)
|
|
(12,474
|
)
|
|||
Distributions to noncontrolling interests
|
(7,899
|
)
|
|
(5,949
|
)
|
|
(6,287
|
)
|
|||
Other
|
(6,833
|
)
|
|
(15,373
|
)
|
|
(1,225
|
)
|
|||
Net Cash Provided (Used) By Financing Activities
|
256,315
|
|
|
152,019
|
|
|
(74,211
|
)
|
|||
Effect of foreign currency rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
|
45,295
|
|
|
(33,138
|
)
|
|
(52,642
|
)
|
|||
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
|
415,682
|
|
|
(984,977
|
)
|
|
587,747
|
|
|||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year
|
2,085,164
|
|
|
3,070,141
|
|
|
2,482,394
|
|
|||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS AT END OF YEAR
|
$
|
2,500,846
|
|
|
$
|
2,085,164
|
|
|
$
|
3,070,141
|
|
•
|
ASU No. 2015-11,
Inventory (Topic 330): Simplifying the Measurement of Inventory
|
•
|
ASU No. 2016-07,
Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting
|
•
|
ASU No. 2016-17,
Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control
|
•
|
ASU No. 2017-01,
Business Combinations (Topic 805): Clarifying the Definition of a Business
|
•
|
ASU No. 2016-16,
Income Taxes (Topic 740): Intra-entity Transfers of Assets Other Than Inventory
|
•
|
ASU No. 2017-07,
Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
•
|
ASU No. 2017-08,
Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities
|
•
|
ASU No. 2017-09,
Stock Compensation (Topic 718): Scope of Modification Accounting
|
(dollars in thousands)
|
Amount
|
|
Economic
Useful Life
|
||
Customer relationships
|
$
|
302,000
|
|
|
13 years
|
Trade names
|
23,000
|
|
|
13 years
|
|
Technology
|
27,000
|
|
|
Nine years
|
|
Insurance licenses
|
32,000
|
|
|
Indefinite
|
|
Intangible assets, before amortization, as of the Acquisition Date
|
384,000
|
|
|
|
|
Amortization (from the Acquisition Date through December 31, 2017)
|
4,797
|
|
|
|
|
Net intangible assets as of December 31, 2017
|
$
|
379,203
|
|
|
|
|
December 31, 2017
|
||||||||||||||||||
(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
|
$
|
162,378
|
|
|
$
|
54
|
|
|
$
|
(1,819
|
)
|
|
$
|
—
|
|
|
$
|
160,613
|
|
U.S. government-sponsored enterprises
|
352,455
|
|
|
11,883
|
|
|
(818
|
)
|
|
—
|
|
|
363,520
|
|
|||||
Obligations of states, municipalities and political subdivisions
|
4,381,358
|
|
|
193,120
|
|
|
(7,916
|
)
|
|
—
|
|
|
4,566,562
|
|
|||||
Foreign governments
|
1,341,628
|
|
|
150,010
|
|
|
(2,410
|
)
|
|
—
|
|
|
1,489,228
|
|
|||||
Commercial mortgage-backed securities
|
1,244,777
|
|
|
6,108
|
|
|
(16,559
|
)
|
|
—
|
|
|
1,234,326
|
|
|||||
Residential mortgage-backed securities
|
846,916
|
|
|
14,115
|
|
|
(4,863
|
)
|
|
—
|
|
|
856,168
|
|
|||||
Asset-backed securities
|
34,942
|
|
|
8
|
|
|
(222
|
)
|
|
—
|
|
|
34,728
|
|
|||||
Corporate bonds
|
1,186,699
|
|
|
51,563
|
|
|
(2,737
|
)
|
|
—
|
|
|
1,235,525
|
|
|||||
Total fixed maturities
|
9,551,153
|
|
|
426,861
|
|
|
(37,344
|
)
|
|
—
|
|
|
9,940,670
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance, banks and other financial institutions
|
899,324
|
|
|
1,209,162
|
|
|
(5,453
|
)
|
|
—
|
|
|
2,103,033
|
|
|||||
Industrial, consumer and all other
|
1,768,337
|
|
|
2,110,959
|
|
|
(14,482
|
)
|
|
—
|
|
|
3,864,814
|
|
|||||
Total equity securities
|
2,667,661
|
|
|
3,320,121
|
|
|
(19,935
|
)
|
|
—
|
|
|
5,967,847
|
|
|||||
Short-term investments
|
2,161,017
|
|
|
26
|
|
|
(69
|
)
|
|
—
|
|
|
2,160,974
|
|
|||||
Investments, available-for-sale
|
$
|
14,379,831
|
|
|
$
|
3,747,008
|
|
|
$
|
(57,348
|
)
|
|
$
|
—
|
|
|
$
|
18,069,491
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31, 2016
|
||||||||||||||||||
(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
|
$
|
259,379
|
|
|
$
|
99
|
|
|
$
|
(894
|
)
|
|
$
|
—
|
|
|
$
|
258,584
|
|
U.S. government-sponsored enterprises
|
418,457
|
|
|
9,083
|
|
|
(4,328
|
)
|
|
—
|
|
|
423,212
|
|
|||||
Obligations of states, municipalities and political subdivisions
|
4,324,332
|
|
|
145,678
|
|
|
(41,805
|
)
|
|
—
|
|
|
4,428,205
|
|
|||||
Foreign governments
|
1,306,324
|
|
|
159,291
|
|
|
(2,153
|
)
|
|
—
|
|
|
1,463,462
|
|
|||||
Commercial mortgage-backed securities
|
1,055,947
|
|
|
3,953
|
|
|
(19,544
|
)
|
|
—
|
|
|
1,040,356
|
|
|||||
Residential mortgage-backed securities
|
779,503
|
|
|
18,749
|
|
|
(5,048
|
)
|
|
(2,258
|
)
|
|
790,946
|
|
|||||
Asset-backed securities
|
27,494
|
|
|
2
|
|
|
(158
|
)
|
|
—
|
|
|
27,338
|
|
|||||
Corporate bonds
|
1,420,298
|
|
|
49,146
|
|
|
(9,364
|
)
|
|
(673
|
)
|
|
1,459,407
|
|
|||||
Total fixed maturities
|
9,591,734
|
|
|
386,001
|
|
|
(83,294
|
)
|
|
(2,931
|
)
|
|
9,891,510
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Insurance, banks and other financial institutions
|
846,343
|
|
|
857,063
|
|
|
(5,596
|
)
|
|
—
|
|
|
1,697,810
|
|
|||||
Industrial, consumer and all other
|
1,635,105
|
|
|
1,421,080
|
|
|
(8,154
|
)
|
|
—
|
|
|
3,048,031
|
|
|||||
Total equity securities
|
2,481,448
|
|
|
2,278,143
|
|
|
(13,750
|
)
|
|
—
|
|
|
4,745,841
|
|
|||||
Short-term investments
|
2,336,100
|
|
|
57
|
|
|
(6
|
)
|
|
—
|
|
|
2,336,151
|
|
|||||
Investments, available-for-sale
|
$
|
14,409,282
|
|
|
$
|
2,664,201
|
|
|
$
|
(97,050
|
)
|
|
$
|
(2,931
|
)
|
|
$
|
16,973,502
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
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
|
$
|
78,756
|
|
|
$
|
(659
|
)
|
|
$
|
78,298
|
|
|
$
|
(1,160
|
)
|
|
$
|
157,054
|
|
|
$
|
(1,819
|
)
|
U.S. government-sponsored enterprises
|
11,593
|
|
|
(79
|
)
|
|
89,194
|
|
|
(739
|
)
|
|
100,787
|
|
|
(818
|
)
|
||||||
Obligations of states, municipalities and political subdivisions
|
80,654
|
|
|
(789
|
)
|
|
404,814
|
|
|
(7,127
|
)
|
|
485,468
|
|
|
(7,916
|
)
|
||||||
Foreign governments
|
31,752
|
|
|
(452
|
)
|
|
63,406
|
|
|
(1,958
|
)
|
|
95,158
|
|
|
(2,410
|
)
|
||||||
Commercial mortgage-backed securities
|
253,936
|
|
|
(1,980
|
)
|
|
481,216
|
|
|
(14,579
|
)
|
|
735,152
|
|
|
(16,559
|
)
|
||||||
Residential mortgage-backed securities
|
157,508
|
|
|
(1,345
|
)
|
|
148,960
|
|
|
(3,518
|
)
|
|
306,468
|
|
|
(4,863
|
)
|
||||||
Asset-backed securities
|
14,263
|
|
|
(123
|
)
|
|
15,165
|
|
|
(99
|
)
|
|
29,428
|
|
|
(222
|
)
|
||||||
Corporate bonds
|
149,345
|
|
|
(863
|
)
|
|
187,754
|
|
|
(1,874
|
)
|
|
337,099
|
|
|
(2,737
|
)
|
||||||
Total fixed maturities
|
777,807
|
|
|
(6,290
|
)
|
|
1,468,807
|
|
|
(31,054
|
)
|
|
2,246,614
|
|
|
(37,344
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Insurance, banks and other financial institutions
|
60,848
|
|
|
(4,843
|
)
|
|
1,291
|
|
|
(610
|
)
|
|
62,139
|
|
|
(5,453
|
)
|
||||||
Industrial, consumer and all other
|
78,552
|
|
|
(11,798
|
)
|
|
11,243
|
|
|
(2,684
|
)
|
|
89,795
|
|
|
(14,482
|
)
|
||||||
Total equity securities
|
139,400
|
|
|
(16,641
|
)
|
|
12,534
|
|
|
(3,294
|
)
|
|
151,934
|
|
|
(19,935
|
)
|
||||||
Short-term investments
|
369,104
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
369,104
|
|
|
(69
|
)
|
||||||
Total
|
$
|
1,286,311
|
|
|
$
|
(23,000
|
)
|
|
$
|
1,481,341
|
|
|
$
|
(34,348
|
)
|
|
$
|
2,767,652
|
|
|
$
|
(57,348
|
)
|
|
December 31, 2016
|
||||||||||||||||||||||
|
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
|
$
|
122,950
|
|
|
$
|
(894
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
122,950
|
|
|
$
|
(894
|
)
|
U.S. government-sponsored enterprises
|
220,333
|
|
|
(4,324
|
)
|
|
7,618
|
|
|
(4
|
)
|
|
227,951
|
|
|
(4,328
|
)
|
||||||
Obligations of states, municipalities and political subdivisions
|
1,004,947
|
|
|
(37,685
|
)
|
|
31,723
|
|
|
(4,120
|
)
|
|
1,036,670
|
|
|
(41,805
|
)
|
||||||
Foreign governments
|
68,887
|
|
|
(2,145
|
)
|
|
5,005
|
|
|
(8
|
)
|
|
73,892
|
|
|
(2,153
|
)
|
||||||
Commercial mortgage-backed securities
|
749,889
|
|
|
(19,091
|
)
|
|
29,988
|
|
|
(453
|
)
|
|
779,877
|
|
|
(19,544
|
)
|
||||||
Residential mortgage-backed securities
|
181,557
|
|
|
(4,987
|
)
|
|
79,936
|
|
|
(2,319
|
)
|
|
261,493
|
|
|
(7,306
|
)
|
||||||
Asset-backed securities
|
14,501
|
|
|
(106
|
)
|
|
5,869
|
|
|
(52
|
)
|
|
20,370
|
|
|
(158
|
)
|
||||||
Corporate bonds
|
494,573
|
|
|
(8,357
|
)
|
|
93,790
|
|
|
(1,680
|
)
|
|
588,363
|
|
|
(10,037
|
)
|
||||||
Total fixed maturities
|
2,857,637
|
|
|
(77,589
|
)
|
|
253,929
|
|
|
(8,636
|
)
|
|
3,111,566
|
|
|
(86,225
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Insurance, banks and other financial institutions
|
8,808
|
|
|
(410
|
)
|
|
37,973
|
|
|
(5,186
|
)
|
|
46,781
|
|
|
(5,596
|
)
|
||||||
Industrial, consumer and all other
|
98,406
|
|
|
(4,772
|
)
|
|
29,650
|
|
|
(3,382
|
)
|
|
128,056
|
|
|
(8,154
|
)
|
||||||
Total equity securities
|
107,214
|
|
|
(5,182
|
)
|
|
67,623
|
|
|
(8,568
|
)
|
|
174,837
|
|
|
(13,750
|
)
|
||||||
Short-term investments
|
504,211
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
504,211
|
|
|
(6
|
)
|
||||||
Total
|
$
|
3,469,062
|
|
|
$
|
(82,777
|
)
|
|
$
|
321,552
|
|
|
$
|
(17,204
|
)
|
|
$
|
3,790,614
|
|
|
$
|
(99,981
|
)
|
(dollars in thousands)
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
288,292
|
|
|
$
|
289,171
|
|
Due after one year through five years
|
1,297,635
|
|
|
1,334,823
|
|
||
Due after five years through ten years
|
1,671,171
|
|
|
1,744,280
|
|
||
Due after ten years
|
4,167,420
|
|
|
4,447,174
|
|
||
|
7,424,518
|
|
|
7,815,448
|
|
||
Commercial mortgage-backed securities
|
1,244,777
|
|
|
1,234,326
|
|
||
Residential mortgage-backed securities
|
846,916
|
|
|
856,168
|
|
||
Asset-backed securities
|
34,942
|
|
|
34,728
|
|
||
Total fixed maturities
|
$
|
9,551,153
|
|
|
$
|
9,940,670
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Interest:
|
|
|
|
|
|
||||||
Municipal bonds (tax-exempt)
|
$
|
87,768
|
|
|
$
|
88,654
|
|
|
$
|
93,580
|
|
Municipal bonds (taxable)
|
70,771
|
|
|
65,749
|
|
|
57,550
|
|
|||
Other taxable bonds
|
145,085
|
|
|
144,752
|
|
|
138,763
|
|
|||
Short-term investments, including overnight deposits
|
26,772
|
|
|
11,177
|
|
|
5,223
|
|
|||
Dividends on equity securities
|
82,096
|
|
|
70,577
|
|
|
74,705
|
|
|||
Income (loss) from equity method investments
|
11,076
|
|
|
6,852
|
|
|
(262
|
)
|
|||
Other
|
(828
|
)
|
|
2,676
|
|
|
651
|
|
|||
|
422,740
|
|
|
390,437
|
|
|
370,210
|
|
|||
Investment expenses
|
(17,031
|
)
|
|
(17,207
|
)
|
|
(16,997
|
)
|
|||
Net investment income
|
$
|
405,709
|
|
|
$
|
373,230
|
|
|
$
|
353,213
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Realized gains:
|
|
|
|
|
|
||||||
Sales of fixed maturities
|
$
|
5,525
|
|
|
$
|
5,160
|
|
|
$
|
3,073
|
|
Sales of equity securities
|
40,113
|
|
|
70,177
|
|
|
156,987
|
|
|||
Other
|
6,644
|
|
|
1,415
|
|
|
8,103
|
|
|||
Total realized gains
|
52,282
|
|
|
76,752
|
|
|
168,163
|
|
|||
Realized losses:
|
|
|
|
|
|
||||||
Sales of fixed maturities
|
(1,983
|
)
|
|
(704
|
)
|
|
(4,598
|
)
|
|||
Sales of equity securities
|
(1,830
|
)
|
|
(6,988
|
)
|
|
(1,232
|
)
|
|||
Other-than-temporary impairments
|
(7,589
|
)
|
|
(18,355
|
)
|
|
(44,481
|
)
|
|||
Other
|
(1,295
|
)
|
|
(2,349
|
)
|
|
(486
|
)
|
|||
Total realized losses
|
(12,697
|
)
|
|
(28,396
|
)
|
|
(50,797
|
)
|
|||
Gains (losses) on securities measured at fair value through net income
|
(44,888
|
)
|
|
16,791
|
|
|
(10,886
|
)
|
|||
Net realized investment gains (losses)
|
$
|
(5,303
|
)
|
|
$
|
65,147
|
|
|
$
|
106,480
|
|
Change in net unrealized gains on investments included in other comprehensive income (loss):
|
|
|
|
|
|
||||||
Fixed maturities
|
$
|
89,741
|
|
|
$
|
(56,534
|
)
|
|
$
|
(137,435
|
)
|
Equity securities
|
1,035,793
|
|
|
398,752
|
|
|
(320,277
|
)
|
|||
Short-term investments
|
(94
|
)
|
|
(107
|
)
|
|
128
|
|
|||
Net increase (decrease)
|
$
|
1,125,440
|
|
|
$
|
342,111
|
|
|
$
|
(457,584
|
)
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Fixed maturities:
|
|
|
|
|
|
||||||
Corporate bonds
|
$
|
(328
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Total fixed maturities
|
(328
|
)
|
|
—
|
|
|
—
|
|
|||
Equity securities:
|
|
|
|
|
|
||||||
Insurance, banks and other financial institutions
|
(604
|
)
|
|
(7,586
|
)
|
|
(9,835
|
)
|
|||
Industrial, consumer and all other
|
(6,657
|
)
|
|
(10,769
|
)
|
|
(34,646
|
)
|
|||
Total equity securities
|
(7,261
|
)
|
|
(18,355
|
)
|
|
(44,481
|
)
|
|||
Total
|
$
|
(7,589
|
)
|
|
$
|
(18,355
|
)
|
|
$
|
(44,481
|
)
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Restricted assets held in trust or on deposit to support underwriting activities
|
$
|
4,624,998
|
|
|
$
|
4,059,336
|
|
Investments and cash and cash equivalents pledged as security for letters of credit
|
349,462
|
|
|
355,616
|
|
||
Total
|
$
|
4,974,460
|
|
|
$
|
4,414,952
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Investments, available-for-sale
|
$
|
4,672,073
|
|
|
$
|
4,068,535
|
|
Restricted cash and cash equivalents
|
302,387
|
|
|
346,417
|
|
||
Total
|
$
|
4,974,460
|
|
|
$
|
4,414,952
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Amounts receivable from agents, brokers and insureds
|
$
|
1,281,366
|
|
|
$
|
1,102,538
|
|
Trade accounts receivable
|
181,666
|
|
|
123,341
|
|
||
Insurance proceeds receivable
|
39,196
|
|
|
—
|
|
||
Program services fees receivable
|
22,767
|
|
|
—
|
|
||
Employee stock loans receivable (see note 12(c))
|
18,499
|
|
|
20,171
|
|
||
Investment management and performance fees receivable
|
5,796
|
|
|
38,735
|
|
||
Other
|
31,938
|
|
|
10,122
|
|
||
|
1,581,228
|
|
|
1,294,907
|
|
||
Allowance for doubtful receivables
|
(13,775
|
)
|
|
(11,910
|
)
|
||
Receivables
|
$
|
1,567,453
|
|
|
$
|
1,282,997
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, beginning of year
|
$
|
392,410
|
|
|
$
|
352,756
|
|
|
$
|
353,410
|
|
Policy acquisition costs deferred
|
964,755
|
|
|
823,840
|
|
|
752,324
|
|
|||
Amortization of policy acquisition costs
|
(894,353
|
)
|
|
(782,221
|
)
|
|
(744,964
|
)
|
|||
Foreign currency movements
|
2,757
|
|
|
(1,965
|
)
|
|
(8,014
|
)
|
|||
Deferred policy acquisition costs
|
$
|
465,569
|
|
|
$
|
392,410
|
|
|
$
|
352,756
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Amortization of policy acquisition costs
|
$
|
894,353
|
|
|
$
|
782,221
|
|
|
$
|
744,964
|
|
Other operating expenses
|
693,061
|
|
|
716,369
|
|
|
710,116
|
|
|||
Underwriting, acquisition and insurance expenses
|
$
|
1,587,414
|
|
|
$
|
1,498,590
|
|
|
$
|
1,455,080
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Land
|
$
|
66,885
|
|
|
$
|
56,783
|
|
Buildings
|
119,729
|
|
|
76,159
|
|
||
Leasehold improvements
|
98,246
|
|
|
95,898
|
|
||
Land improvements
|
89,444
|
|
|
74,040
|
|
||
Furniture and equipment
|
341,450
|
|
|
301,146
|
|
||
Other
|
196,465
|
|
|
162,385
|
|
||
|
912,219
|
|
|
766,411
|
|
||
Accumulated depreciation and amortization
|
(410,602
|
)
|
|
(354,009
|
)
|
||
Property and equipment
|
$
|
501,617
|
|
|
$
|
412,402
|
|
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
(1)
|
|
Total
|
||||||||||
January 1, 2016
|
$
|
280,579
|
|
|
$
|
397,993
|
|
|
$
|
122,745
|
|
|
$
|
366,527
|
|
|
$
|
1,167,844
|
|
Impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,723
|
)
|
|
(18,723
|
)
|
|||||
Foreign currency movements and other adjustments
|
—
|
|
|
(5,809
|
)
|
|
—
|
|
|
(1,064
|
)
|
|
(6,873
|
)
|
|||||
December 31, 2016
(2)
|
$
|
280,579
|
|
|
$
|
392,184
|
|
|
$
|
122,745
|
|
|
$
|
346,740
|
|
|
$
|
1,142,248
|
|
Acquisitions (see note 2)
|
93,123
|
|
|
—
|
|
|
—
|
|
|
533,612
|
|
|
626,735
|
|
|||||
Foreign currency movements and other adjustments
|
—
|
|
|
5,935
|
|
|
—
|
|
|
2,546
|
|
|
8,481
|
|
|||||
December 31, 2017
(2)
|
$
|
373,702
|
|
|
$
|
398,119
|
|
|
$
|
122,745
|
|
|
$
|
882,898
|
|
|
$
|
1,777,464
|
|
(1)
|
Amounts included in Other above are related to the Company's other operations, which are not included in a reportable segment.
|
(2)
|
Goodwill is net of accumulated impairment losses of
$47.3 million
as of December 31,
2017
and
2016
, included in Other.
|
|
December 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
(dollars in thousands)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Customer relationships
|
$
|
938,536
|
|
|
$
|
(156,725
|
)
|
|
$
|
460,327
|
|
|
$
|
(119,376
|
)
|
Broker relationships
|
183,514
|
|
|
(68,273
|
)
|
|
183,092
|
|
|
(56,888
|
)
|
||||
Trade names
|
163,736
|
|
|
(39,057
|
)
|
|
100,966
|
|
|
(29,745
|
)
|
||||
Investment management agreements
|
98,000
|
|
|
(14,000
|
)
|
|
98,000
|
|
|
(7,000
|
)
|
||||
Agent relationships
|
92,000
|
|
|
(4,042
|
)
|
|
—
|
|
|
—
|
|
||||
Technology
|
84,242
|
|
|
(35,106
|
)
|
|
54,408
|
|
|
(28,220
|
)
|
||||
Insurance licenses
|
70,185
|
|
|
—
|
|
|
30,185
|
|
|
—
|
|
||||
Lloyd's syndicate capacity
|
12,000
|
|
|
—
|
|
|
12,000
|
|
|
—
|
|
||||
Other
|
42,959
|
|
|
(12,288
|
)
|
|
34,172
|
|
|
(9,379
|
)
|
||||
Total
|
$
|
1,685,172
|
|
|
$
|
(329,491
|
)
|
|
$
|
973,150
|
|
|
$
|
(250,608
|
)
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic operations
|
$
|
337,704
|
|
|
$
|
288,905
|
|
|
$
|
323,954
|
|
Foreign operations
|
(250,409
|
)
|
|
341,015
|
|
|
418,151
|
|
|||
Income before income taxes
|
$
|
87,295
|
|
|
$
|
629,920
|
|
|
$
|
742,105
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Domestic
|
$
|
(19,255
|
)
|
|
$
|
57,916
|
|
|
$
|
44,406
|
|
Foreign
|
29,882
|
|
|
48,203
|
|
|
118,235
|
|
|||
Total current tax expense
|
10,627
|
|
|
106,119
|
|
|
162,641
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Domestic
|
(222,427
|
)
|
|
19,991
|
|
|
9,415
|
|
|||
Foreign
|
(101,663
|
)
|
|
43,367
|
|
|
(19,093
|
)
|
|||
Total deferred tax expense (benefit)
|
(324,090
|
)
|
|
63,358
|
|
|
(9,678
|
)
|
|||
Income tax expense (benefit)
|
$
|
(313,463
|
)
|
|
$
|
169,477
|
|
|
$
|
152,963
|
|
|
Year Ended
|
||
(dollars in thousands)
|
December 31, 2017
|
||
Tax rate change on net unrealized gains on investments
|
$
|
(401,538
|
)
|
Tax rate change on other temporary differences - Markel Ventures (provisional)
|
(37,129
|
)
|
|
Tax rate change on other temporary differences - Other operations (provisional)
|
69,268
|
|
|
Tax on deemed repatriation of foreign earnings (provisional)
|
29,500
|
|
|
Total
|
$
|
(339,899
|
)
|
|
|
Years Ended December 31,
|
|||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Income taxes at U.S. corporate tax rate
|
$
|
30,553
|
|
35
|
%
|
|
$
|
220,472
|
|
35
|
%
|
|
$
|
259,737
|
|
35
|
%
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|
|
|
|||||||||
TCJA
|
(339,899
|
)
|
(389
|
)
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||
Tax-exempt investment income
|
(41,565
|
)
|
(48
|
)
|
|
(39,710
|
)
|
(6
|
)
|
|
(40,483
|
)
|
(5
|
)
|
|||
Tax credits
|
(10,236
|
)
|
(12
|
)
|
|
(13,294
|
)
|
(2
|
)
|
|
(56,409
|
)
|
(8
|
)
|
|||
Stock based compensation
|
(9,001
|
)
|
(10
|
)
|
|
(5,411
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
|||
Foreign operations
|
54,920
|
|
63
|
|
|
4,672
|
|
1
|
|
|
(10,766
|
)
|
(1
|
)
|
|||
Other
|
1,765
|
|
2
|
|
|
2,748
|
|
—
|
|
|
884
|
|
—
|
|
|||
Income tax expense (benefit)
|
$
|
(313,463
|
)
|
(359
|
)%
|
|
$
|
169,477
|
|
27
|
%
|
|
$
|
152,963
|
|
21
|
%
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Assets:
|
|
|
|
||||
Unpaid losses and loss adjustment expenses
|
$
|
144,761
|
|
|
$
|
181,303
|
|
Life and annuity benefits
|
77,945
|
|
|
135,075
|
|
||
Unearned premiums recognized for income tax purposes
|
74,282
|
|
|
121,852
|
|
||
Tax credit carryforwards
|
48,938
|
|
|
23,037
|
|
||
Net operating loss carryforwards
|
29,252
|
|
|
26,743
|
|
||
Accrued incentive compensation
|
23,167
|
|
|
67,719
|
|
||
Other differences between financial reporting and tax bases
|
60,995
|
|
|
64,177
|
|
||
Total gross deferred tax assets
|
459,340
|
|
|
619,906
|
|
||
Less valuation allowance
|
(25,225
|
)
|
|
(18,781
|
)
|
||
Total gross deferred tax assets, net of allowance
|
434,115
|
|
|
601,125
|
|
||
Liabilities:
|
|
|
|
||||
Investments
|
603,523
|
|
|
664,950
|
|
||
Amortization of goodwill and other intangible assets
|
171,681
|
|
|
102,631
|
|
||
Deferred policy acquisition costs
|
90,826
|
|
|
128,302
|
|
||
Other differences between financial reporting and tax bases
|
73,664
|
|
|
35,727
|
|
||
Total gross deferred tax liabilities
|
939,694
|
|
|
931,610
|
|
||
Net deferred tax liability
|
$
|
505,579
|
|
|
$
|
330,485
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net reserves for losses and loss adjustment expenses, beginning of year
|
$
|
8,108,717
|
|
|
$
|
8,235,288
|
|
|
$
|
8,535,483
|
|
Foreign currency movements
|
110,079
|
|
|
(129,692
|
)
|
|
(134,173
|
)
|
|||
Adjusted net reserves for losses and loss adjustment expenses, beginning of year
|
8,218,796
|
|
|
8,105,596
|
|
|
8,401,310
|
|
|||
Incurred losses and loss adjustment expenses:
|
|
|
|
|
|
||||||
Current accident year
|
3,367,223
|
|
|
2,555,902
|
|
|
2,566,545
|
|
|||
Prior accident years
|
(497,627
|
)
|
|
(493,495
|
)
|
|
(627,800
|
)
|
|||
Total incurred losses and loss adjustment expenses
|
2,869,596
|
|
|
2,062,407
|
|
|
1,938,745
|
|
|||
Payments:
|
|
|
|
|
|
||||||
Current accident year
|
671,112
|
|
|
532,140
|
|
|
486,551
|
|
|||
Prior accident years
|
1,513,580
|
|
|
1,529,206
|
|
|
1,423,286
|
|
|||
Total payments
|
2,184,692
|
|
|
2,061,346
|
|
|
1,909,837
|
|
|||
Effect of foreign currency rate changes
|
3,752
|
|
|
2,060
|
|
|
(17,281
|
)
|
|||
Net reserves for losses and loss adjustment expenses of acquired insurance companies
|
57,493
|
|
|
—
|
|
|
—
|
|
|||
Reinsurance recoverable on retroactive reinsurance transactions
|
—
|
|
|
—
|
|
|
(177,649
|
)
|
|||
Net reserves for losses and loss adjustment expenses, end of year
|
8,964,945
|
|
|
8,108,717
|
|
|
8,235,288
|
|
|||
Reinsurance recoverable on unpaid losses
|
4,619,336
|
|
|
2,006,945
|
|
|
2,016,665
|
|
|||
Gross reserves for losses and loss adjustment expenses, end of year
|
$
|
13,584,281
|
|
|
$
|
10,115,662
|
|
|
$
|
10,251,953
|
|
|
Ultimate Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
|
|
Total of Incurred-but-Not-Reported Liabilities, Net of Reinsurance
|
|
Cumulative Number of Reported Claims
|
|||||||||||||||||||||||||
|
Unaudited
|
|
Year Ended December 31,
|
|
|
|||||||||||||||||||||||||
(in thousands)
|
Years Ended December 31,
|
|
|
|
||||||||||||||||||||||||||
Accident Year
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
December 31, 2017
|
|||||||||||||||||
2012
|
$
|
949,141
|
|
|
$
|
985,721
|
|
|
$
|
924,138
|
|
|
$
|
924,621
|
|
|
$
|
909,237
|
|
|
$
|
891,641
|
|
|
$
|
88,973
|
|
|
107
|
|
2013
|
|
|
1,130,681
|
|
|
1,105,927
|
|
|
1,042,100
|
|
|
1,009,438
|
|
|
996,204
|
|
|
124,412
|
|
|
66
|
|
||||||||
2014
|
|
|
|
|
1,278,116
|
|
|
1,140,685
|
|
|
1,116,093
|
|
|
1,088,667
|
|
|
193,049
|
|
|
57
|
|
|||||||||
2015
|
|
|
|
|
|
|
1,285,411
|
|
|
1,211,389
|
|
|
1,136,033
|
|
|
305,158
|
|
|
57
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
1,319,731
|
|
|
1,224,207
|
|
|
476,971
|
|
|
59
|
|
|||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
1,572,585
|
|
|
911,675
|
|
|
67
|
|
||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,909,337
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
|
|
|
|
|
|||||||||||||||||||||||||
|
Unaudited
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||||||||||
|
Years Ended December 31,
|
|
|
|
|
|
||||||||||||||||||||||||
Accident Year
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
|
|||||||||||||||||
2012
|
$
|
193,708
|
|
|
$
|
401,773
|
|
|
$
|
546,635
|
|
|
$
|
644,658
|
|
|
$
|
728,802
|
|
|
$
|
763,455
|
|
|
|
|
|
|||
2013
|
|
|
222,890
|
|
|
443,392
|
|
|
594,558
|
|
|
725,782
|
|
|
799,385
|
|
|
|
|
|
||||||||||
2014
|
|
|
|
|
264,697
|
|
|
487,068
|
|
|
650,118
|
|
|
770,490
|
|
|
|
|
|
|||||||||||
2015
|
|
|
|
|
|
|
260,121
|
|
|
514,497
|
|
|
660,699
|
|
|
|
|
|
||||||||||||
2016
|
|
|
|
|
|
|
|
|
278,650
|
|
|
523,226
|
|
|
|
|
|
|||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
336,553
|
|
|
|
|
|
||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
3,853,808
|
|
|
|
|
|
|||||||||||||
All outstanding liabilities for unpaid losses and loss adjustment expenses before 2012, net of reinsurance
|
|
289,191
|
|
|
|
|
|
|||||||||||||||||||||||
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance
|
|
$
|
3,344,720
|
|
|
|
|
|
|
Ultimate Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
|
|
Total of Incurred-but-Not-Reported Liabilities, Net of Reinsurance
|
|
Cumulative Number of Reported Claims
|
|||||||||||||||||||||||||
|
Unaudited
|
|
Year Ended December 31,
|
|
|
|||||||||||||||||||||||||
(in thousands)
|
Years Ended December 31,
|
|
|
|
||||||||||||||||||||||||||
Accident Year
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
December 31, 2017
|
|||||||||||||||||
2012
|
$
|
428,711
|
|
|
$
|
633,511
|
|
|
$
|
573,945
|
|
|
$
|
511,144
|
|
|
$
|
493,563
|
|
|
$
|
477,855
|
|
|
$
|
58,151
|
|
|
19
|
|
2013
|
|
|
614,829
|
|
|
598,638
|
|
|
492,290
|
|
|
460,978
|
|
|
439,992
|
|
|
128,109
|
|
|
18
|
|
||||||||
2014
|
|
|
|
|
594,055
|
|
|
566,049
|
|
|
522,778
|
|
|
491,882
|
|
|
117,588
|
|
|
18
|
|
|||||||||
2015
|
|
|
|
|
|
|
508,159
|
|
|
510,035
|
|
|
460,851
|
|
|
119,232
|
|
|
22
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
562,190
|
|
|
573,593
|
|
|
142,890
|
|
|
22
|
|
|||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
765,959
|
|
|
427,823
|
|
|
21
|
|
||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
3,210,132
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
|
|
|
|
|
|||||||||||||||||||||||||
|
Unaudited
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||||||||||
|
Years Ended December 31,
|
|
|
|
|
|
||||||||||||||||||||||||
Accident Year
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
|
|||||||||||||||||
2012
|
$
|
40,545
|
|
|
$
|
168,322
|
|
|
$
|
237,084
|
|
|
$
|
297,752
|
|
|
$
|
329,766
|
|
|
$
|
360,164
|
|
|
|
|
|
|||
2013
|
|
|
49,426
|
|
|
130,088
|
|
|
187,671
|
|
|
227,922
|
|
|
243,043
|
|
|
|
|
|
||||||||||
2014
|
|
|
|
|
68,464
|
|
|
174,294
|
|
|
249,408
|
|
|
297,887
|
|
|
|
|
|
|||||||||||
2015
|
|
|
|
|
|
|
63,564
|
|
|
153,418
|
|
|
219,574
|
|
|
|
|
|
||||||||||||
2016
|
|
|
|
|
|
|
|
|
94,926
|
|
|
232,921
|
|
|
|
|
|
|||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
103,780
|
|
|
|
|
|
||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
1,457,369
|
|
|
|
|
|
|||||||||||||
All outstanding liabilities for unpaid losses and loss adjustment expenses before 2012, net of reinsurance
|
|
482,546
|
|
|
|
|
|
|||||||||||||||||||||||
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance
|
|
$
|
2,235,309
|
|
|
|
|
|
|
Ultimate Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
|
|
Total of Incurred-but-Not-Reported Liabilities, Net of Reinsurance
|
|
|
||||||||||||||||||||||||
|
Unaudited
|
|
Year Ended December 31,
|
|
|
||||||||||||||||||||||||
(in thousands)
|
Years Ended December 31,
|
|
|
|
|||||||||||||||||||||||||
Accident Year
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
December 31, 2017
|
|
|
||||||||||||||
2012
|
$
|
73,177
|
|
|
$
|
553,865
|
|
|
$
|
511,264
|
|
|
$
|
489,767
|
|
|
$
|
460,002
|
|
|
$
|
458,643
|
|
|
$
|
82,453
|
|
|
|
2013
|
|
|
591,730
|
|
|
583,775
|
|
|
553,046
|
|
|
538,223
|
|
|
549,500
|
|
|
129,940
|
|
|
|
||||||||
2014
|
|
|
|
|
580,964
|
|
|
571,056
|
|
|
541,967
|
|
|
587,525
|
|
|
159,911
|
|
|
|
|||||||||
2015
|
|
|
|
|
|
|
530,245
|
|
|
516,568
|
|
|
535,936
|
|
|
247,838
|
|
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
531,083
|
|
|
541,645
|
|
|
285,157
|
|
|
|
|||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
910,948
|
|
|
563,757
|
|
|
|
||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
3,584,197
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
|
|
|
|
|
||||||||||||||||||||||||
|
Unaudited
|
|
Year Ended December 31,
|
|
|
|
|
||||||||||||||||||||||
|
Years Ended December 31,
|
|
|
|
|
|
|||||||||||||||||||||||
Accident Year
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
|
||||||||||||||||
2012
|
$
|
4,127
|
|
|
$
|
64,982
|
|
|
$
|
129,633
|
|
|
$
|
185,315
|
|
|
$
|
233,284
|
|
|
$
|
265,833
|
|
|
|
|
|
||
2013
|
|
|
71,983
|
|
|
156,903
|
|
|
212,106
|
|
|
271,598
|
|
|
304,797
|
|
|
|
|
|
|||||||||
2014
|
|
|
|
|
98,241
|
|
|
159,221
|
|
|
229,572
|
|
|
278,786
|
|
|
|
|
|
||||||||||
2015
|
|
|
|
|
|
|
64,130
|
|
|
135,132
|
|
|
210,289
|
|
|
|
|
|
|||||||||||
2016
|
|
|
|
|
|
|
|
|
80,026
|
|
|
171,547
|
|
|
|
|
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
158,420
|
|
|
|
|
|
|||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
1,389,672
|
|
|
|
|
|
||||||||||||
All outstanding liabilities for unpaid losses and loss adjustment expenses before 2012, net of reinsurance
|
|
757,569
|
|
|
|
|
|
||||||||||||||||||||||
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance
|
|
$
|
2,952,094
|
|
|
|
|
|
|
Average Annual Percentage Payout of Incurred Losses by Age (in Years), Net of Reinsurance
|
||||||||||||||||
Unaudited
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|
6
|
||||||
U.S. Insurance
|
22.6
|
%
|
|
21.7
|
%
|
|
14.8
|
%
|
|
11.7
|
%
|
|
8.4
|
%
|
|
3.9
|
%
|
International Insurance
|
12.9
|
%
|
|
22.2
|
%
|
|
14.3
|
%
|
|
10.6
|
%
|
|
5.1
|
%
|
|
6.4
|
%
|
Reinsurance
|
12.5
|
%
|
|
13.8
|
%
|
|
12.5
|
%
|
|
10.4
|
%
|
|
8.3
|
%
|
|
7.1
|
%
|
(dollars in thousands)
|
December 31, 2017
|
||
Net outstanding liabilities
|
|
||
U.S. Insurance
|
$
|
3,344,720
|
|
International Insurance
|
2,235,309
|
|
|
Reinsurance
|
2,952,094
|
|
|
Other Insurance (Discontinued Lines)
|
246,365
|
|
|
Program Services
|
2,441
|
|
|
Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance
|
8,780,929
|
|
|
|
|
||
Reinsurance recoverable on unpaid losses
|
|
||
U.S. Insurance
|
827,113
|
|
|
International Insurance
|
1,091,785
|
|
|
Reinsurance
|
341,168
|
|
|
Other Insurance (Discontinued Lines)
|
166,281
|
|
|
Program Services
|
2,192,989
|
|
|
Total reinsurance recoverable on unpaid losses
|
4,619,336
|
|
|
|
|
||
Unallocated loss adjustment expenses
|
230,016
|
|
|
Unamortized fair value adjustments
|
(46,000
|
)
|
|
|
184,016
|
|
|
Total gross liability for unpaid losses and loss adjustment expenses
|
$
|
13,584,281
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net reserves for A&E losses and loss adjustment expenses, beginning of year
|
$
|
111,604
|
|
|
$
|
132,869
|
|
|
$
|
287,723
|
|
Commutations and other
|
6,827
|
|
|
—
|
|
|
—
|
|
|||
Adjusted net reserves for A&E losses and loss adjustment expenses, beginning of year
|
118,431
|
|
|
132,869
|
|
|
287,723
|
|
|||
Incurred losses and loss adjustment expenses
|
659
|
|
|
(5,277
|
)
|
|
25,415
|
|
|||
Payments
|
(14,429
|
)
|
|
(15,988
|
)
|
|
(20,628
|
)
|
|||
Reinsurance recoverable on retroactive reinsurance transactions
|
—
|
|
|
—
|
|
|
(159,641
|
)
|
|||
Net reserves for A&E losses and loss adjustment expenses, end of year
|
104,661
|
|
|
111,604
|
|
|
132,869
|
|
|||
Reinsurance recoverable on unpaid losses
|
169,866
|
|
|
212,300
|
|
|
253,756
|
|
|||
Gross reserves for A&E losses and loss adjustment expenses, end of year
|
$
|
274,527
|
|
|
$
|
323,904
|
|
|
$
|
386,625
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Life
|
$
|
127,208
|
|
|
$
|
131,768
|
|
Annuities
|
885,984
|
|
|
849,226
|
|
||
Accident and health
|
58,920
|
|
|
68,660
|
|
||
Total
|
$
|
1,072,112
|
|
|
$
|
1,049,654
|
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
7.20% unsecured senior notes, due April 14, 2017, interest payable semi-annually, net of unamortized premium of $0 in 2017 and $417 in 2016
|
$
|
—
|
|
|
$
|
91,046
|
|
7.125% unsecured senior notes, due September 30, 2019, interest payable semi-annually, net of unamortized discount of $332 in 2017 and $522 in 2016
|
234,411
|
|
|
234,183
|
|
||
6.25% unsecured senior notes, due September 30, 2020, interest payable semi-annually, net of unamortized premium of $26,618 in 2017 and $35,717 in 2016
|
376,616
|
|
|
385,714
|
|
||
5.35% unsecured senior notes, due June 1, 2021, interest payable semi-annually, net of unamortized discount of $706 in 2017 and $912 in 2016
|
249,176
|
|
|
248,957
|
|
||
4.90% unsecured senior notes, due July 1, 2022, interest payable semi-annually, net of unamortized discount of $1,257 in 2017 and $1,536 in 2016
|
348,540
|
|
|
348,215
|
|
||
3.625% unsecured senior notes, due March 30, 2023, interest payable semi-annually, net of unamortized discount of $1,056 in 2017 and $1,257 in 2016
|
248,749
|
|
|
248,508
|
|
||
3.50% unsecured senior notes, due November 1, 2027, interest payable semi-annually, net of unamortized discount of $2,558 in 2017
|
296,728
|
|
|
—
|
|
||
7.35% unsecured senior notes, due August 15, 2034, interest payable semi-annually, net of unamortized discount of $1,143 in 2017 and $1,212 in 2016
|
128,642
|
|
|
128,570
|
|
||
5.0% unsecured senior notes, due March 30, 2043, interest payable semi-annually, net of unamortized discount of $5,655 in 2017 and $5,879 in 2016
|
244,033
|
|
|
243,796
|
|
||
5.0% unsecured senior notes, due April 5, 2046, interest payable semi-annually, net of unamortized discount of $6,909 in 2017 and $7,154 in 2016
|
492,219
|
|
|
491,943
|
|
||
4.30% unsecured senior notes, due November 1, 2047, interest payable semi-annually, net of unamortized discount of $4,451 in 2017
|
294,834
|
|
|
—
|
|
||
Other debt, at various interest rates ranging from 1.7% to 6.1%
|
185,282
|
|
|
153,597
|
|
||
Senior long-term debt and other debt
|
$
|
3,099,230
|
|
|
$
|
2,574,529
|
|
Years Ending December 31,
|
(dollars in
thousands)
|
||
2018
|
$
|
86,312
|
|
2019
|
239,765
|
|
|
2020
|
355,074
|
|
|
2021
|
277,072
|
|
|
2022
|
357,245
|
|
|
2023 and thereafter
|
1,785,340
|
|
|
Total principal payments
|
$
|
3,100,808
|
|
Net unamortized premium
|
2,552
|
|
|
Net unamortized debt issuance costs
|
(4,130
|
)
|
|
Senior long-term debt and other debt
|
$
|
3,099,230
|
|
|
Years Ended December 31,
|
||||||||||
(in thousands, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income to shareholders
|
$
|
395,269
|
|
|
$
|
455,689
|
|
|
$
|
582,772
|
|
Adjustment of redeemable noncontrolling interests
|
(33,738
|
)
|
|
(15,472
|
)
|
|
4,144
|
|
|||
Adjusted net income to shareholders
|
$
|
361,531
|
|
|
$
|
440,217
|
|
|
$
|
586,916
|
|
|
|
|
|
|
|
||||||
Basic common shares outstanding
|
13,964
|
|
|
14,013
|
|
|
13,978
|
|
|||
Dilutive potential common shares from conversion of options
|
1
|
|
|
4
|
|
|
9
|
|
|||
Dilutive potential common shares from conversion of restricted stock
|
41
|
|
|
61
|
|
|
74
|
|
|||
Diluted shares outstanding
|
14,006
|
|
|
14,078
|
|
|
14,061
|
|
|||
Basic net income per share
|
$
|
25.89
|
|
|
$
|
31.41
|
|
|
$
|
41.99
|
|
Diluted net income per share
|
$
|
25.81
|
|
|
$
|
31.27
|
|
|
$
|
41.74
|
|
|
Number
of Awards
|
|
Weighted Average
Grant-Date
Fair Value
|
|||
Nonvested awards at January 1, 2017
|
65,618
|
|
|
$
|
634.71
|
|
Granted
|
12,888
|
|
|
979.23
|
|
|
Vested
|
(46,988
|
)
|
|
612.54
|
|
|
Nonvested awards at December 31, 2017
|
31,518
|
|
|
$
|
808.63
|
|
(dollars in thousands)
|
Unrealized
Holding Gains
on Available-for-
Sale Securities
|
|
Foreign
Currency
|
|
Net Actuarial
Pension Loss
|
|
Total
|
||||||||
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
|
|
Other comprehensive income (loss) before reclassifications
|
275,696
|
|
|
(11,710
|
)
|
|
(20,700
|
)
|
|
243,286
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(33,528
|
)
|
|
—
|
|
|
1,600
|
|
|
(31,928
|
)
|
||||
Total other comprehensive income (loss)
|
242,168
|
|
|
(11,710
|
)
|
|
(19,100
|
)
|
|
211,358
|
|
||||
December 31, 2016
|
$
|
1,714,930
|
|
|
$
|
(84,406
|
)
|
|
$
|
(64,658
|
)
|
|
$
|
1,565,866
|
|
Other comprehensive income before reclassifications
|
787,339
|
|
|
10,403
|
|
|
3,092
|
|
|
800,834
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(24,296
|
)
|
|
—
|
|
|
3,167
|
|
|
(21,129
|
)
|
||||
Total other comprehensive income
|
763,043
|
|
|
10,403
|
|
|
6,259
|
|
|
779,705
|
|
||||
December 31, 2017
|
$
|
2,477,973
|
|
|
$
|
(74,003
|
)
|
|
$
|
(58,399
|
)
|
|
$
|
2,345,571
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Change in net unrealized gains on investments:
|
|
|
|
|
|
||||||
Net holding gains (losses) arising during the period
|
$
|
372,469
|
|
|
$
|
112,399
|
|
|
$
|
(107,860
|
)
|
Change in unrealized other-than-temporary impairment losses on fixed maturities arising during the period
|
—
|
|
|
6
|
|
|
35
|
|
|||
Reclassification adjustments for net gains included in net income
|
(10,072
|
)
|
|
(12,462
|
)
|
|
(29,267
|
)
|
|||
Change in net unrealized gains (losses) on investments
|
362,397
|
|
|
99,943
|
|
|
(137,092
|
)
|
|||
Change in foreign currency translation adjustments
|
28
|
|
|
1,037
|
|
|
408
|
|
|||
Change in net actuarial pension loss
|
1,284
|
|
|
(4,192
|
)
|
|
(88
|
)
|
|||
Total
|
$
|
363,709
|
|
|
$
|
96,788
|
|
|
$
|
(136,772
|
)
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Unrealized holding gains on available-for-sale securities:
|
|
|
|
|
|
||||||
Other-than-temporary impairment losses
|
$
|
(7,589
|
)
|
|
$
|
(18,355
|
)
|
|
$
|
(44,481
|
)
|
Net realized investment gains, excluding other-than-temporary impairment losses
|
41,957
|
|
|
64,345
|
|
|
154,230
|
|
|||
Total before taxes
|
34,368
|
|
|
45,990
|
|
|
109,749
|
|
|||
Income taxes
|
(10,072
|
)
|
|
(12,462
|
)
|
|
(29,267
|
)
|
|||
Reclassification of unrealized holding gains, net of taxes
|
$
|
24,296
|
|
|
$
|
33,528
|
|
|
$
|
80,482
|
|
|
|
|
|
|
|
||||||
Net actuarial pension loss:
|
|
|
|
|
|
||||||
Underwriting, acquisition and insurance expenses
|
$
|
(3,815
|
)
|
|
$
|
(1,951
|
)
|
|
$
|
(2,662
|
)
|
Income taxes
|
648
|
|
|
351
|
|
|
532
|
|
|||
Reclassification of net actuarial pension loss, net of taxes
|
$
|
(3,167
|
)
|
|
$
|
(1,600
|
)
|
|
$
|
(2,130
|
)
|
|
December 31, 2017
|
||||||||||||||
(dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
—
|
|
|
$
|
160,613
|
|
|
$
|
—
|
|
|
$
|
160,613
|
|
U.S. government-sponsored enterprises
|
—
|
|
|
363,520
|
|
|
—
|
|
|
363,520
|
|
||||
Obligations of states, municipalities and political subdivisions
|
—
|
|
|
4,566,562
|
|
|
—
|
|
|
4,566,562
|
|
||||
Foreign governments
|
—
|
|
|
1,489,228
|
|
|
—
|
|
|
1,489,228
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
1,234,326
|
|
|
—
|
|
|
1,234,326
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
856,168
|
|
|
—
|
|
|
856,168
|
|
||||
Asset-backed securities
|
—
|
|
|
34,728
|
|
|
—
|
|
|
34,728
|
|
||||
Corporate bonds
|
—
|
|
|
1,235,525
|
|
|
—
|
|
|
1,235,525
|
|
||||
Total fixed maturities
|
—
|
|
|
9,940,670
|
|
|
—
|
|
|
9,940,670
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Insurance, banks and other financial institutions
|
1,934,224
|
|
|
—
|
|
|
168,809
|
|
|
2,103,033
|
|
||||
Industrial, consumer and all other
|
3,864,814
|
|
|
—
|
|
|
—
|
|
|
3,864,814
|
|
||||
Total equity securities
|
5,799,038
|
|
|
—
|
|
|
168,809
|
|
|
5,967,847
|
|
||||
Short-term investments
|
2,065,749
|
|
|
95,225
|
|
|
—
|
|
|
2,160,974
|
|
||||
Total investments available-for-sale
|
$
|
7,864,787
|
|
|
$
|
10,035,895
|
|
|
$
|
168,809
|
|
|
$
|
18,069,491
|
|
|
December 31, 2016
|
||||||||||||||
(dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
—
|
|
|
$
|
258,584
|
|
|
$
|
—
|
|
|
$
|
258,584
|
|
U.S. government-sponsored enterprises
|
—
|
|
|
423,212
|
|
|
—
|
|
|
423,212
|
|
||||
Obligations of states, municipalities and political subdivisions
|
—
|
|
|
4,428,205
|
|
|
—
|
|
|
4,428,205
|
|
||||
Foreign governments
|
—
|
|
|
1,463,462
|
|
|
—
|
|
|
1,463,462
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
1,040,356
|
|
|
—
|
|
|
1,040,356
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
790,946
|
|
|
—
|
|
|
790,946
|
|
||||
Asset-backed securities
|
—
|
|
|
27,338
|
|
|
—
|
|
|
27,338
|
|
||||
Corporate bonds
|
—
|
|
|
1,459,407
|
|
|
—
|
|
|
1,459,407
|
|
||||
Total fixed maturities
|
—
|
|
|
9,891,510
|
|
|
—
|
|
|
9,891,510
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Insurance, banks and other financial institutions
|
1,506,607
|
|
|
—
|
|
|
191,203
|
|
|
1,697,810
|
|
||||
Industrial, consumer and all other
|
3,048,031
|
|
|
—
|
|
|
—
|
|
|
3,048,031
|
|
||||
Total equity securities
|
4,554,638
|
|
|
—
|
|
|
191,203
|
|
|
4,745,841
|
|
||||
Short-term investments
|
2,255,898
|
|
|
80,253
|
|
|
—
|
|
|
2,336,151
|
|
||||
Total investments available-for-sale
|
$
|
6,810,536
|
|
|
$
|
9,971,763
|
|
|
$
|
191,203
|
|
|
$
|
16,973,502
|
|
(dollars in thousands)
|
2017
|
|
2016
|
||||
Equity securities, beginning of period
|
$
|
191,203
|
|
|
$
|
—
|
|
Purchases
|
56,250
|
|
|
195,250
|
|
||
Sales
|
(26,674
|
)
|
|
(25,000
|
)
|
||
Total gains (losses) included in:
|
|
|
|
||||
Net income (loss)
|
(51,970
|
)
|
|
20,953
|
|
||
Other comprehensive income
|
—
|
|
|
—
|
|
||
Transfers into Level 3
|
—
|
|
|
—
|
|
||
Transfers out of Level 3
|
—
|
|
|
—
|
|
||
Equity securities, end of period
|
$
|
168,809
|
|
|
$
|
191,203
|
|
Net unrealized gains (losses) included in net income relating to assets held at December 31, 2017 and 2016
(1)
|
$
|
(51,970
|
)
|
|
$
|
20,953
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Reinsurance allowance, beginning of year
|
$
|
36,770
|
|
|
$
|
59,350
|
|
|
$
|
59,813
|
|
Additions
|
2,669
|
|
|
980
|
|
|
5,897
|
|
|||
Deductions
|
(5,464
|
)
|
|
(23,560
|
)
|
|
(6,360
|
)
|
|||
Reinsurance allowance, end of year
|
$
|
33,975
|
|
|
$
|
36,770
|
|
|
$
|
59,350
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
(dollars in thousands)
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
||||||||||||
Direct
(1)
|
$
|
4,172,467
|
|
|
$
|
4,068,622
|
|
|
$
|
3,560,635
|
|
|
$
|
3,506,687
|
|
|
$
|
3,474,510
|
|
|
$
|
3,480,297
|
|
Assumed
(1)
|
1,334,493
|
|
|
1,287,395
|
|
|
1,236,010
|
|
|
1,176,205
|
|
|
1,158,402
|
|
|
1,194,772
|
|
||||||
Ceded
(1)
|
(1,089,173
|
)
|
|
(1,108,039
|
)
|
|
(795,625
|
)
|
|
(817,022
|
)
|
|
(813,619
|
)
|
|
(851,537
|
)
|
||||||
Net premiums
|
$
|
4,417,787
|
|
|
$
|
4,247,978
|
|
|
$
|
4,001,020
|
|
|
$
|
3,865,870
|
|
|
$
|
3,819,293
|
|
|
$
|
3,823,532
|
|
(1)
|
Written premium includes
$252.9 million
,
$1.0 million
and
$253.9 million
of direct, assumed and ceded premium, respectively, in the Company's program services business in 2017. Earned premium includes
$291.3 million
,
$1.4 million
and
$292.7 million
of direct, assumed and ceded premium, respectively, in the Company's program services business in 2017.
|
Years Ending December 31,
|
(dollars in
thousands)
|
||
2018
|
$
|
53,398
|
|
2019
|
44,820
|
|
|
2020
|
37,166
|
|
|
2021
|
33,567
|
|
|
2022
|
30,356
|
|
|
2023 and thereafter
|
112,415
|
|
|
Total
|
$
|
311,722
|
|
Statutory Capital and Surplus
|
|
|
|
||||
|
|
|
|
||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
United States
|
$
|
3,334,303
|
|
|
$
|
2,761,454
|
|
United Kingdom
|
$
|
642,418
|
|
|
$
|
670,030
|
|
Bermuda
|
$
|
1,774,012
|
|
|
$
|
2,189,649
|
|
Other
|
$
|
24,544
|
|
|
$
|
24,726
|
|
Statutory Net Income (Loss)
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
312,828
|
|
|
$
|
249,176
|
|
|
$
|
291,783
|
|
United Kingdom
|
$
|
(25,785
|
)
|
|
$
|
78,033
|
|
|
$
|
74,330
|
|
Bermuda
|
$
|
(83,445
|
)
|
|
$
|
132,442
|
|
|
$
|
185,289
|
|
Other
|
$
|
127
|
|
|
$
|
(965
|
)
|
|
$
|
(3,181
|
)
|
|
Years Ended December 31,
|
|||||||||||||||||||
(dollars in thousands)
|
2017
|
|
% of
Total
|
|
2016
|
|
% of
Total
|
|
2015
|
|
% of
Total
|
|||||||||
United States
|
$
|
4,163,753
|
|
|
79
|
%
|
|
$
|
3,691,840
|
|
|
77
|
%
|
|
$
|
3,519,487
|
|
|
76
|
%
|
United Kingdom
|
374,941
|
|
|
7
|
|
|
358,348
|
|
|
7
|
|
|
414,941
|
|
|
9
|
|
|||
Canada
|
132,018
|
|
|
3
|
|
|
125,444
|
|
|
3
|
|
|
115,191
|
|
|
2
|
|
|||
Other countries
|
582,395
|
|
|
11
|
|
|
621,013
|
|
|
13
|
|
|
583,293
|
|
|
13
|
|
|||
Total Underwriting
|
5,253,107
|
|
|
100
|
%
|
|
4,796,645
|
|
|
100
|
%
|
|
4,632,912
|
|
|
100
|
%
|
|||
United States - Program Services
|
253,853
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
||||||
Total
|
$
|
5,506,960
|
|
|
|
|
|
$
|
4,796,645
|
|
|
|
|
|
$
|
4,632,912
|
|
|
|
|
a)
|
The following tables summarize the Company's segment disclosures.
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||||||||
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Investing
|
|
Other
|
|
Consolidated
|
||||||||||||||
Gross premium volume
|
$
|
2,885,279
|
|
|
$
|
1,255,922
|
|
|
$
|
1,112,101
|
|
|
$
|
(195
|
)
|
|
$
|
—
|
|
|
$
|
253,853
|
|
|
$
|
5,506,960
|
|
Net written premiums
|
2,432,477
|
|
|
1,007,319
|
|
|
978,160
|
|
|
(169
|
)
|
|
—
|
|
|
—
|
|
|
4,417,787
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earned premiums
|
2,364,121
|
|
|
949,912
|
|
|
934,114
|
|
|
(169
|
)
|
|
—
|
|
|
—
|
|
|
4,247,978
|
|
|||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current accident year
|
(1,648,427
|
)
|
|
(793,917
|
)
|
|
(924,879
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,367,223
|
)
|
|||||||
Prior accident years
|
301,939
|
|
|
198,688
|
|
|
(7,803
|
)
|
|
8,459
|
|
|
—
|
|
|
179
|
|
|
501,462
|
|
|||||||
Amortization of policy acquisition costs
|
(502,217
|
)
|
|
(173,253
|
)
|
|
(218,883
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(894,353
|
)
|
|||||||
Other operating expenses
|
(395,472
|
)
|
|
(215,028
|
)
|
|
(81,766
|
)
|
|
(795
|
)
|
|
—
|
|
|
—
|
|
|
(693,061
|
)
|
|||||||
Underwriting profit (loss)
|
119,944
|
|
|
(33,598
|
)
|
|
(299,217
|
)
|
|
7,495
|
|
|
—
|
|
|
179
|
|
|
(205,197
|
)
|
|||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
405,709
|
|
|
—
|
|
|
405,709
|
|
|||||||
Net realized investment losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,303
|
)
|
|
—
|
|
|
(5,303
|
)
|
|||||||
Other revenues
|
3,419
|
|
|
5,886
|
|
|
417
|
|
|
2,022
|
|
|
—
|
|
|
1,401,531
|
|
|
1,413,275
|
|
|||||||
Other expenses
|
(1,093
|
)
|
|
(7,388
|
)
|
|
—
|
|
|
(28,218
|
)
|
|
—
|
|
|
(1,271,281
|
)
|
|
(1,307,980
|
)
|
|||||||
Total profit (loss)
|
$
|
122,270
|
|
|
$
|
(35,100
|
)
|
|
$
|
(298,800
|
)
|
|
$
|
(18,701
|
)
|
|
$
|
400,406
|
|
|
$
|
130,429
|
|
|
$
|
300,504
|
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
(80,758
|
)
|
|||||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(132,451
|
)
|
|||||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
87,295
|
|
||||||||||||
U.S. GAAP combined ratio
(1)
|
95
|
%
|
|
104
|
%
|
|
132
|
%
|
|
NM
|
|
(2)
|
|
|
NM
|
|
(2)
|
105
|
%
|
(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, 2016
|
||||||||||||||||||||||||||
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Investing
|
|
Other
|
|
Consolidated
|
||||||||||||||
Gross premium volume
|
$
|
2,635,266
|
|
|
$
|
1,119,815
|
|
|
$
|
1,041,055
|
|
|
$
|
509
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,796,645
|
|
Net written premiums
|
2,237,163
|
|
|
864,494
|
|
|
898,728
|
|
|
635
|
|
|
—
|
|
|
—
|
|
|
4,001,020
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earned premiums
|
2,175,332
|
|
|
853,512
|
|
|
836,264
|
|
|
762
|
|
|
—
|
|
|
—
|
|
|
3,865,870
|
|
|||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current accident year
|
(1,403,589
|
)
|
|
(605,837
|
)
|
|
(546,476
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,555,902
|
)
|
|||||||
Prior accident years
|
204,881
|
|
|
164,713
|
|
|
125,514
|
|
|
10,050
|
|
|
—
|
|
|
—
|
|
|
505,158
|
|
|||||||
Amortization of policy acquisition costs
|
(446,649
|
)
|
|
(146,117
|
)
|
|
(189,455
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(782,221
|
)
|
|||||||
Other operating expenses
|
(377,230
|
)
|
|
(219,066
|
)
|
|
(119,012
|
)
|
|
(1,061
|
)
|
|
—
|
|
|
—
|
|
|
(716,369
|
)
|
|||||||
Underwriting profit
|
152,745
|
|
|
47,205
|
|
|
106,835
|
|
|
9,751
|
|
|
—
|
|
|
—
|
|
|
316,536
|
|
|||||||
Net investment income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
373,230
|
|
|
—
|
|
|
373,230
|
|
|||||||
Net realized investment gains
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,147
|
|
|
—
|
|
|
65,147
|
|
|||||||
Other revenues
|
7,143
|
|
|
5,560
|
|
|
—
|
|
|
1,891
|
|
|
—
|
|
|
1,293,185
|
|
|
1,307,779
|
|
|||||||
Other expenses
|
(15,407
|
)
|
|
(5,712
|
)
|
|
—
|
|
|
(26,504
|
)
|
|
—
|
|
|
(1,142,620
|
)
|
|
(1,190,243
|
)
|
|||||||
Total profit (loss)
|
$
|
144,481
|
|
|
$
|
47,053
|
|
|
$
|
106,835
|
|
|
$
|
(14,862
|
)
|
|
$
|
438,377
|
|
|
$
|
150,565
|
|
|
$
|
872,449
|
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
(68,533
|
)
|
|||||||||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
(129,896
|
)
|
|||||||||||||
Loss on early extinguishment of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
(44,100
|
)
|
|||||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
629,920
|
|
||||||||||||
U.S. GAAP combined ratio
(1)
|
93
|
%
|
|
94
|
%
|
|
87
|
%
|
|
NM
|
|
(2)
|
|
|
|
|
92
|
%
|
(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, 2015
|
||||||||||||||||||||||||||
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Investing
|
|
Other
|
|
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
|
3,331
|
|
|
7,790
|
|
|
593
|
|
|
617
|
|
|
—
|
|
|
1,074,427
|
|
|
1,086,758
|
|
|||||||
Other expenses
|
(3,902
|
)
|
|
(5,717
|
)
|
|
(1,419
|
)
|
|
(29,057
|
)
|
|
—
|
|
|
(1,006,710
|
)
|
|
(1,046,805
|
)
|
|||||||
Total profit (loss)
|
$
|
237,597
|
|
|
$
|
127,774
|
|
|
$
|
85,454
|
|
|
$
|
(48,882
|
)
|
|
$
|
459,693
|
|
|
$
|
67,717
|
|
|
$
|
929,353
|
|
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.
|
(dollars in thousands)
|
Deferred Policy
Acquisition Costs
|
|
Unearned
Premiums
|
|
Unpaid Losses and
Loss Adjustment Expenses
|
||||||
December 31, 2017
|
|
|
|
|
|
||||||
U.S. Insurance
|
$
|
212,102
|
|
|
$
|
1,324,591
|
|
|
$
|
4,331,541
|
|
International Insurance
|
74,678
|
|
|
530,740
|
|
|
3,379,969
|
|
|||
Reinsurance
|
178,789
|
|
|
690,565
|
|
|
3,248,070
|
|
|||
Other Insurance (Discontinued Lines)
|
—
|
|
|
—
|
|
|
429,270
|
|
|||
Total Underwriting
|
465,569
|
|
|
2,545,896
|
|
|
11,388,850
|
|
|||
Program Services
|
—
|
|
|
762,883
|
|
|
2,195,431
|
|
|||
Total
|
$
|
465,569
|
|
|
$
|
3,308,779
|
|
|
$
|
13,584,281
|
|
December 31, 2016
|
|
|
|
|
|
||||||
U.S. Insurance
|
$
|
176,348
|
|
|
$
|
1,166,914
|
|
|
$
|
3,849,541
|
|
International Insurance
|
51,948
|
|
|
445,183
|
|
|
3,062,725
|
|
|||
Reinsurance
|
164,114
|
|
|
651,741
|
|
|
2,661,209
|
|
|||
Other Insurance (Discontinued Lines)
|
—
|
|
|
—
|
|
|
542,187
|
|
|||
Total
|
$
|
392,410
|
|
|
$
|
2,263,838
|
|
|
$
|
10,115,662
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. Insurance:
|
|
|
|
|
|
||||||
General liability
|
$
|
642,283
|
|
|
$
|
563,908
|
|
|
$
|
522,358
|
|
Professional liability
|
333,758
|
|
|
328,597
|
|
|
324,230
|
|
|||
Property
|
273,735
|
|
|
270,026
|
|
|
264,232
|
|
|||
Personal lines
|
367,073
|
|
|
364,843
|
|
|
325,811
|
|
|||
Programs
|
273,954
|
|
|
263,783
|
|
|
277,829
|
|
|||
Workers compensation
|
319,679
|
|
|
301,126
|
|
|
281,954
|
|
|||
Other
|
153,639
|
|
|
83,049
|
|
|
108,798
|
|
|||
Total U.S. Insurance
|
2,364,121
|
|
|
2,175,332
|
|
|
2,105,212
|
|
|||
International Insurance:
|
|
|
|
|
|
||||||
General liability
|
122,673
|
|
|
111,291
|
|
|
124,198
|
|
|||
Professional liability
|
295,120
|
|
|
272,010
|
|
|
268,637
|
|
|||
Property
|
91,778
|
|
|
87,294
|
|
|
85,152
|
|
|||
Marine and energy
|
276,134
|
|
|
242,070
|
|
|
262,307
|
|
|||
Other
|
164,207
|
|
|
140,847
|
|
|
139,132
|
|
|||
Total International Insurance
|
949,912
|
|
|
853,512
|
|
|
879,426
|
|
|||
Reinsurance:
|
|
|
|
|
|
||||||
Property
|
321,178
|
|
|
288,771
|
|
|
265,373
|
|
|||
Casualty
|
351,457
|
|
|
327,383
|
|
|
315,027
|
|
|||
Auto
|
28,700
|
|
|
65,363
|
|
|
102,227
|
|
|||
Other
|
232,779
|
|
|
154,747
|
|
|
155,916
|
|
|||
Total Reinsurance
|
934,114
|
|
|
836,264
|
|
|
838,543
|
|
|||
Other Insurance (Discontinued Lines)
|
(169
|
)
|
|
762
|
|
|
351
|
|
|||
Total earned premiums
|
$
|
4,247,978
|
|
|
$
|
3,865,870
|
|
|
$
|
3,823,532
|
|
|
December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Segment assets:
|
|
|
|
|
|
||||||
Investing
|
$
|
20,317,160
|
|
|
$
|
19,029,584
|
|
|
$
|
18,056,947
|
|
Underwriting
|
6,828,048
|
|
|
5,397,696
|
|
|
5,385,126
|
|
|||
Total segment assets
|
27,145,208
|
|
|
24,427,280
|
|
|
23,442,073
|
|
|||
Other operations
|
5,659,808
|
|
|
1,448,019
|
|
|
1,497,042
|
|
|||
Total assets
|
$
|
32,805,016
|
|
|
$
|
25,875,299
|
|
|
$
|
24,939,115
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
(dollars in thousands)
|
Other
Revenues
|
|
Other
Expenses
|
|
Other
Revenues
|
|
Other
Expenses
|
|
Other
Revenues
|
|
Other
Expenses
|
||||||||||||
Markel Ventures: Manufacturing
|
$
|
742,591
|
|
|
$
|
650,491
|
|
|
$
|
784,745
|
|
|
$
|
675,620
|
|
|
$
|
755,802
|
|
|
$
|
677,054
|
|
Markel Ventures: Non-Manufacturing
|
590,689
|
|
|
535,352
|
|
|
429,704
|
|
|
396,323
|
|
|
291,714
|
|
|
301,004
|
|
||||||
Investment management
|
28,740
|
|
|
52,636
|
|
|
56,455
|
|
|
46,190
|
|
|
—
|
|
|
—
|
|
||||||
Program services
|
15,328
|
|
|
6,508
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Managing general agent operations
|
8,821
|
|
|
5,803
|
|
|
12,703
|
|
|
21,119
|
|
|
10,202
|
|
|
9,619
|
|
||||||
Life and annuity
|
2,022
|
|
|
28,218
|
|
|
1,891
|
|
|
26,504
|
|
|
617
|
|
|
29,057
|
|
||||||
Other
|
25,084
|
|
|
28,972
|
|
|
22,281
|
|
|
24,487
|
|
|
28,423
|
|
|
30,071
|
|
||||||
Total
|
1,413,275
|
|
|
1,307,980
|
|
|
1,307,779
|
|
|
1,190,243
|
|
|
1,086,758
|
|
|
1,046,805
|
|
|
Years Ended December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Change in projected benefit obligation:
|
|
|
|
||||
Projected benefit obligation at beginning of period
|
$
|
178,618
|
|
|
$
|
170,005
|
|
Interest cost
|
5,016
|
|
|
6,113
|
|
||
Benefits paid
|
(5,644
|
)
|
|
(3,322
|
)
|
||
Actuarial loss
|
4,985
|
|
|
38,485
|
|
||
Effect of foreign currency rate changes
|
16,142
|
|
|
(32,663
|
)
|
||
Projected benefit obligation at end of year
|
$
|
199,117
|
|
|
$
|
178,618
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of period
|
$
|
175,644
|
|
|
$
|
186,727
|
|
Actual gain on plan assets
|
16,902
|
|
|
22,367
|
|
||
Employer contributions
|
3,393
|
|
|
3,577
|
|
||
Benefits paid
|
(5,644
|
)
|
|
(3,322
|
)
|
||
Effect of foreign currency rate changes
|
16,275
|
|
|
(33,705
|
)
|
||
Fair value of plan assets at end of year
|
$
|
206,570
|
|
|
$
|
175,644
|
|
Funded status of the plan
|
$
|
7,453
|
|
|
$
|
(2,974
|
)
|
Net actuarial pension loss
|
77,567
|
|
|
85,110
|
|
||
Total
|
$
|
85,020
|
|
|
$
|
82,136
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net actuarial gain (loss)
|
$
|
3,728
|
|
|
$
|
(25,243
|
)
|
|
$
|
(3,102
|
)
|
Settlement loss recognized
|
—
|
|
|
—
|
|
|
343
|
|
|||
Amortization of:
|
|
|
|
|
|
||||||
Net actuarial loss
|
3,815
|
|
|
1,951
|
|
|
2,319
|
|
|||
Tax benefit (expense)
|
(1,284
|
)
|
|
4,192
|
|
|
88
|
|
|||
Total other comprehensive income (loss)
|
$
|
6,259
|
|
|
$
|
(19,100
|
)
|
|
$
|
(352
|
)
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Components of net periodic benefit income (loss):
|
|
|
|
|
|
||||||
Interest cost
|
$
|
5,016
|
|
|
$
|
6,113
|
|
|
$
|
6,645
|
|
Expected return on plan assets
|
(8,189
|
)
|
|
(9,124
|
)
|
|
(11,496
|
)
|
|||
Amortization of net actuarial pension loss
|
3,815
|
|
|
1,951
|
|
|
2,319
|
|
|||
Settlement loss recognized
|
—
|
|
|
—
|
|
|
343
|
|
|||
Net periodic benefit income (loss)
|
$
|
642
|
|
|
$
|
(1,060
|
)
|
|
$
|
(2,189
|
)
|
Weighted average assumptions as of December 31:
|
|
|
|
|
|
||||||
Discount rate
|
2.6
|
%
|
|
2.7
|
%
|
|
4.0
|
%
|
|||
Expected return on plan assets
|
4.5
|
%
|
|
4.5
|
%
|
|
5.4
|
%
|
|||
Rate of compensation increase
|
3.0
|
%
|
|
3.0
|
%
|
|
2.9
|
%
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Plan assets:
|
|
|
|
||||
Fixed maturity index funds
|
$
|
110,936
|
|
|
$
|
103,218
|
|
Equity security index funds
|
95,452
|
|
|
72,419
|
|
||
Cash and cash equivalents
|
182
|
|
|
7
|
|
||
Total
|
$
|
206,570
|
|
|
$
|
175,644
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(dollars in thousands)
|
||||||
ASSETS
|
|
|
|
||||
Investments, available-for-sale, at estimated fair value:
|
|
|
|
||||
Fixed maturities (amortized cost of $533,183 in 2017 and $51,181 in 2016)
|
$
|
532,438
|
|
|
$
|
52,234
|
|
Equity securities (cost of $402,694 in 2017 and $203,708 in 2016)
|
646,060
|
|
|
367,156
|
|
||
Short-term investments (estimated fair value approximates cost)
|
1,159,323
|
|
|
1,729,400
|
|
||
Total Investments
|
2,337,821
|
|
|
2,148,790
|
|
||
Cash and cash equivalents
|
349,347
|
|
|
369,641
|
|
||
Restricted cash and cash equivalents
|
1,419
|
|
|
1,013
|
|
||
Receivables
|
18,684
|
|
|
20,477
|
|
||
Investments in consolidated subsidiaries
|
9,510,215
|
|
|
8,107,450
|
|
||
Notes receivable from subsidiaries
|
140,110
|
|
|
60,110
|
|
||
Income taxes receivable
|
5,704
|
|
|
—
|
|
||
Other assets
|
121,233
|
|
|
97,364
|
|
||
Total Assets
|
$
|
12,484,533
|
|
|
$
|
10,804,845
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Senior long-term debt
|
$
|
2,537,331
|
|
|
$
|
1,944,171
|
|
Notes payable to subsidiaries
|
285,000
|
|
|
285,000
|
|
||
Income taxes payable
|
—
|
|
|
25,240
|
|
||
Net deferred tax liability
|
84,507
|
|
|
25,902
|
|
||
Other liabilities
|
73,547
|
|
|
63,605
|
|
||
Total Liabilities
|
2,980,385
|
|
|
2,343,918
|
|
||
Total Shareholders' Equity
|
9,504,148
|
|
|
8,460,927
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
12,484,533
|
|
|
$
|
10,804,845
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(dollars in thousands)
|
||||||||||
REVENUES
|
|
|
|
|
|
||||||
Net investment income
|
$
|
21,076
|
|
|
$
|
9,561
|
|
|
$
|
2,565
|
|
Dividends on common stock of consolidated subsidiaries
|
895,920
|
|
|
349,622
|
|
|
187,496
|
|
|||
Net realized investment gains:
|
|
|
|
|
|
||||||
Other-than-temporary impairment losses
|
—
|
|
|
(98
|
)
|
|
(3,455
|
)
|
|||
Net realized investment gains, excluding other-than-temporary impairment losses
|
3,383
|
|
|
1,166
|
|
|
75,000
|
|
|||
Net realized investment gains
|
3,383
|
|
|
1,068
|
|
|
71,545
|
|
|||
Total Revenues
|
920,379
|
|
|
360,251
|
|
|
261,606
|
|
|||
EXPENSES
|
|
|
|
|
|
||||||
Interest expense
|
122,151
|
|
|
116,013
|
|
|
95,620
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
44,100
|
|
|
—
|
|
|||
Other expenses
|
11,708
|
|
|
13,076
|
|
|
11,287
|
|
|||
Total Expenses
|
133,859
|
|
|
173,189
|
|
|
106,907
|
|
|||
Income Before Equity in Undistributed Earnings of Consolidated Subsidiaries and Income Taxes
|
786,520
|
|
|
187,062
|
|
|
154,699
|
|
|||
Equity in undistributed earnings of consolidated subsidiaries
|
(469,365
|
)
|
|
196,615
|
|
|
407,489
|
|
|||
Income tax benefit
|
(78,114
|
)
|
|
(72,012
|
)
|
|
(20,584
|
)
|
|||
Net Income to Shareholders
|
$
|
395,269
|
|
|
$
|
455,689
|
|
|
$
|
582,772
|
|
OTHER COMPREHENSIVE INCOME (LOSS) TO SHAREHOLDERS
|
|
|
|
|
|
||||||
Change in net unrealized gains on investments, net of taxes:
|
|
|
|
|
|
||||||
Net holding gains (losses) arising during the period
|
$
|
52,277
|
|
|
$
|
37,045
|
|
|
$
|
(41,861
|
)
|
Consolidated subsidiaries' net holding gains (losses) arising during the period
|
735,062
|
|
|
238,616
|
|
|
(198,309
|
)
|
|||
Consolidated subsidiaries' change in unrealized other-than-temporary impairment losses on fixed maturities arising during the period
|
—
|
|
|
35
|
|
|
160
|
|
|||
Reclassification adjustments for net gains included in net income to shareholders
|
(1,513
|
)
|
|
(558
|
)
|
|
(45,273
|
)
|
|||
Consolidated subsidiaries' reclassification adjustments for net gains included in net income to shareholders
|
(22,783
|
)
|
|
(32,970
|
)
|
|
(35,209
|
)
|
|||
Change in net unrealized gains on investments, net of taxes
|
763,043
|
|
|
242,168
|
|
|
(320,492
|
)
|
|||
Change in foreign currency translation adjustments, net of taxes
|
(2,260
|
)
|
|
(1,326
|
)
|
|
2,970
|
|
|||
Consolidated subsidiaries' change in foreign currency translation adjustments, net of taxes
|
12,663
|
|
|
(10,384
|
)
|
|
(32,175
|
)
|
|||
Consolidated subsidiaries' change in net actuarial pension loss, net of taxes
|
6,259
|
|
|
(19,100
|
)
|
|
(352
|
)
|
|||
Total Other Comprehensive Income (Loss) to Shareholders
|
779,705
|
|
|
211,358
|
|
|
(350,049
|
)
|
|||
Comprehensive Income to Shareholders
|
$
|
1,174,974
|
|
|
$
|
667,047
|
|
|
$
|
232,723
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(dollars in thousands)
|
||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income to shareholders
|
$
|
395,269
|
|
|
$
|
455,689
|
|
|
$
|
582,772
|
|
Adjustments to reconcile net income to shareholders to net cash provided by operating activities
|
(166,132
|
)
|
|
(120,564
|
)
|
|
(464,193
|
)
|
|||
Net Cash Provided By Operating Activities
|
229,137
|
|
|
335,125
|
|
|
118,579
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from sales of fixed maturities and equity securities
|
20,562
|
|
|
1,831
|
|
|
100,633
|
|
|||
Proceeds from maturities, calls and prepayments of fixed maturities
|
64,705
|
|
|
11,960
|
|
|
24,945
|
|
|||
Cost of fixed maturities and equity securities purchased
|
(765,602
|
)
|
|
(29,110
|
)
|
|
(55,656
|
)
|
|||
Net change in short-term investments
|
579,261
|
|
|
(970,364
|
)
|
|
9,956
|
|
|||
Securities received from subsidiaries as dividends, repayment of notes receivable and return of capital
|
862,554
|
|
|
238,975
|
|
|
—
|
|
|||
Securities provided to subsidiaries for issuance of notes receivable and capital contributions
|
(99,942
|
)
|
|
—
|
|
|
—
|
|
|||
Return of capital from subsidiaries
|
45,225
|
|
|
21,021
|
|
|
—
|
|
|||
Decrease (increase) in notes receivable due from subsidiaries
|
(58
|
)
|
|
92,530
|
|
|
—
|
|
|||
Capital contributions to subsidiaries
|
(270,623
|
)
|
|
—
|
|
|
(228,578
|
)
|
|||
Acquisitions, net of cash acquired
|
(1,153,683
|
)
|
|
—
|
|
|
—
|
|
|||
Cost of equity method investments
|
(10,633
|
)
|
|
(3,100
|
)
|
|
(13,164
|
)
|
|||
Additions to property and equipment
|
—
|
|
|
(584
|
)
|
|
(305
|
)
|
|||
Other
|
6,972
|
|
|
(3,207
|
)
|
|
(376
|
)
|
|||
Net Cash Used By Investing Activities
|
(721,262
|
)
|
|
(640,048
|
)
|
|
(162,545
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Additions to senior long-term debt
|
592,923
|
|
|
493,149
|
|
|
—
|
|
|||
Increase in notes payable to subsidiaries
|
—
|
|
|
—
|
|
|
285,000
|
|
|||
Repayment and retirement of senior long-term debt
|
—
|
|
|
(183,343
|
)
|
|
(2,000
|
)
|
|||
Premiums and fees related to early extinguishment of debt
|
—
|
|
|
(43,691
|
)
|
|
—
|
|
|||
Repurchases of common stock
|
(110,838
|
)
|
|
(51,142
|
)
|
|
(31,491
|
)
|
|||
Issuance of common stock
|
552
|
|
|
4,623
|
|
|
4,752
|
|
|||
Purchase of noncontrolling interests
|
(8,970
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(1,430
|
)
|
|
(4,960
|
)
|
|
3,985
|
|
|||
Net Cash Provided By Financing Activities
|
472,237
|
|
|
214,636
|
|
|
260,246
|
|
|||
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
|
(19,888
|
)
|
|
(90,287
|
)
|
|
216,280
|
|
|||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year
|
370,654
|
|
|
460,941
|
|
|
244,661
|
|
|||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS AT END OF YEAR
|
$
|
350,766
|
|
|
$
|
370,654
|
|
|
$
|
460,941
|
|
|
Quarters Ended
|
||||||||||||||
(dollars in thousands, except per share amounts)
|
Mar. 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
1,411,751
|
|
|
$
|
1,481,493
|
|
|
$
|
1,506,148
|
|
|
$
|
1,662,267
|
|
Net income (loss)
|
71,040
|
|
|
151,427
|
|
|
(261,035
|
)
|
|
439,326
|
|
||||
Net income (loss) to shareholders
|
69,869
|
|
|
149,660
|
|
|
(259,141
|
)
|
|
434,881
|
|
||||
Comprehensive income (loss) to shareholders
|
223,239
|
|
|
342,357
|
|
|
(19,869
|
)
|
|
629,247
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
3.91
|
|
|
$
|
10.34
|
|
|
$
|
(18.82
|
)
|
|
$
|
30.48
|
|
Diluted
|
3.90
|
|
|
10.31
|
|
|
(18.82
|
)
|
|
30.39
|
|
||||
Common stock price ranges:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
992.00
|
|
|
$
|
996.38
|
|
|
$
|
1,086.68
|
|
|
$
|
1,157.30
|
|
Low
|
887.40
|
|
|
936.95
|
|
|
963.79
|
|
|
1,054.20
|
|
||||
2016
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
1,376,182
|
|
|
$
|
1,375,937
|
|
|
$
|
1,431,282
|
|
|
$
|
1,428,625
|
|
Net income
|
163,646
|
|
|
80,673
|
|
|
83,421
|
|
|
132,703
|
|
||||
Net income to shareholders
|
160,370
|
|
|
78,797
|
|
|
83,796
|
|
|
132,726
|
|
||||
Comprehensive income (loss) to shareholders
|
396,994
|
|
|
209,942
|
|
|
89,161
|
|
|
(29,050
|
)
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
11.21
|
|
|
$
|
5.44
|
|
|
$
|
5.62
|
|
|
$
|
9.14
|
|
Diluted
|
11.15
|
|
|
5.41
|
|
|
5.60
|
|
|
9.11
|
|
||||
Common stock price ranges:
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
895.03
|
|
|
$
|
989.18
|
|
|
$
|
961.78
|
|
|
$
|
931.94
|
|
Low
|
805.03
|
|
|
880.01
|
|
|
909.84
|
|
|
811.05
|
|
||||
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
|
|
•
|
Underwriting - our underwriting operations are comprised of our risk-bearing insurance operations, which include the run-off of underwriting operations that were discontinued in conjunction with acquisitions
|
•
|
Investing - our investing activities are primarily related to our underwriting operations
|
•
|
Program Services - our program services business serves as a fronting platform that provides other insurance companies access to the U.S. property and casualty insurance market
|
•
|
Markel CATCo - our Markel CATCo operations include an investment fund manager that offers insurance-linked securities to investors
|
•
|
Markel Ventures - our Markel Ventures operations include our controlling interests in a diverse portfolio of businesses that operate outside of the specialty insurance marketplace
|
(dollars in millions)
|
Net Loss
Reserves Held
|
|
Low End of
Actuarial
Range
(1)
|
|
High End of
Actuarial
Range
(1)
|
||||||
U.S. Insurance
|
$
|
3,500.1
|
|
|
$
|
3,033.5
|
|
|
$
|
3,786.3
|
|
International Insurance
|
2,261.7
|
|
|
1,805.8
|
|
|
2,520.5
|
|
|||
Reinsurance
|
2,886.1
|
|
|
2,087.3
|
|
|
3,240.7
|
|
|||
Other Insurance (Discontinued Lines)
|
263.0
|
|
|
208.1
|
|
|
426.8
|
|
(1)
|
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.
|
•
|
ASU No. 2016-02,
Leases (Topic 842)
|
•
|
ASU No. 2016-13,
Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
•
|
ASU No. 2018-02,
Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. Insurance segment underwriting profit
|
$
|
119,944
|
|
|
$
|
152,745
|
|
|
$
|
238,168
|
|
International Insurance segment underwriting profit (loss)
|
(33,598
|
)
|
|
47,205
|
|
|
125,701
|
|
|||
Reinsurance segment underwriting profit (loss)
|
(299,217
|
)
|
|
106,835
|
|
|
86,280
|
|
|||
Other Insurance (Discontinued Lines) segment underwriting profit (loss)
|
7,495
|
|
|
9,751
|
|
|
(20,442
|
)
|
|||
Other underwriting profit
|
179
|
|
|
—
|
|
|
—
|
|
|||
Net investment income
|
405,709
|
|
|
373,230
|
|
|
353,213
|
|
|||
Net realized investment gains (losses)
|
(5,303
|
)
|
|
65,147
|
|
|
106,480
|
|
|||
Other revenues
|
1,413,275
|
|
|
1,307,779
|
|
|
1,086,758
|
|
|||
Other expenses
|
(1,307,980
|
)
|
|
(1,190,243
|
)
|
|
(1,046,805
|
)
|
|||
Amortization of intangible assets
|
(80,758
|
)
|
|
(68,533
|
)
|
|
(68,947
|
)
|
|||
Interest expense
|
(132,451
|
)
|
|
(129,896
|
)
|
|
(118,301
|
)
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
(44,100
|
)
|
|
—
|
|
|||
Income tax benefit (expense)
|
313,463
|
|
|
(169,477
|
)
|
|
(152,963
|
)
|
|||
Net income attributable to noncontrolling interests
|
(5,489
|
)
|
|
(4,754
|
)
|
|
(6,370
|
)
|
|||
Net income to shareholders
|
$
|
395,269
|
|
|
$
|
455,689
|
|
|
$
|
582,772
|
|
|
Years Ended December 31,
|
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
|
||||||
Gross premium volume
(1)
|
$
|
5,253,107
|
|
|
$
|
4,796,645
|
|
|
$
|
4,632,912
|
|
|
Net written premiums
|
$
|
4,417,787
|
|
|
$
|
4,001,020
|
|
|
$
|
3,819,293
|
|
|
Net retention
(1)
|
84
|
%
|
|
83
|
%
|
|
82
|
%
|
|
|||
Earned premiums
|
$
|
4,247,978
|
|
|
$
|
3,865,870
|
|
|
$
|
3,823,532
|
|
|
Losses and loss adjustment expenses
|
$
|
2,865,761
|
|
|
$
|
2,050,744
|
|
|
$
|
1,938,745
|
|
|
Underwriting, acquisition and insurance expenses
|
$
|
1,587,414
|
|
|
$
|
1,498,590
|
|
|
$
|
1,455,080
|
|
|
Underwriting profit (loss)
|
$
|
(205,197
|
)
|
|
$
|
316,536
|
|
|
$
|
429,707
|
|
|
|
|
|
|
|
|
|
||||||
U.S. GAAP Combined Ratios
|
|
|
|
|
|
|
||||||
U.S. Insurance
|
95
|
%
|
|
93
|
%
|
|
89
|
%
|
|
|||
International Insurance
|
104
|
%
|
|
94
|
%
|
|
86
|
%
|
|
|||
Reinsurance
|
132
|
%
|
|
87
|
%
|
|
90
|
%
|
|
|||
Other Insurance (Discontinued Lines)
|
NM
|
|
(2)
|
NM
|
|
(2)
|
NM
|
|
(2)
|
|||
Markel Corporation (Consolidated)
|
105
|
%
|
|
92
|
%
|
|
89
|
%
|
|
(1)
|
Gross premium volume and net retention for the year ended December 31, 2017 exclude $253.9 million of gross written premium attributable to our program services business, which was 100% ceded.
|
(2)
|
NM—Ratio is not meaningful. Further discussion of Other Insurance (Discontinued Lines) underwriting profit (loss) follows.
|
|
Year Ended December 31, 2017
|
||||||||||||||
(dollars in thousands)
|
U.S.
Insurance |
|
International
Insurance |
|
Reinsurance
|
|
Consolidated
|
||||||||
Losses and loss adjustment expenses
|
$
|
132,159
|
|
|
$
|
122,817
|
|
|
$
|
330,384
|
|
|
$
|
585,360
|
|
Ceded (assumed) reinstatement premiums
|
9,001
|
|
|
3,390
|
|
|
(32,465
|
)
|
|
(20,074
|
)
|
||||
Underwriting loss
|
$
|
141,160
|
|
|
$
|
126,207
|
|
|
$
|
297,919
|
|
|
$
|
565,286
|
|
Impact on combined ratio
|
6
|
%
|
|
13
|
%
|
|
32
|
%
|
|
13
|
%
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
(dollars in millions)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Total
|
||||||||||
U.S. Insurance:
|
|
|
|
|
|
|
|
|
|
||||||||||
General liability
|
$
|
(93.9
|
)
|
|
|
|
|
|
|
|
$
|
(93.9
|
)
|
||||||
Workers' compensation
|
(65.6
|
)
|
|
|
|
|
|
|
|
(65.6
|
)
|
||||||||
Professional liability
|
(25.5
|
)
|
|
|
|
|
|
|
|
(25.5
|
)
|
||||||||
Personal Lines
|
(27.4
|
)
|
|
|
|
|
|
|
|
(27.4
|
)
|
||||||||
International Insurance:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Professional liability
|
|
|
$
|
(74.9
|
)
|
|
|
|
|
|
(74.9
|
)
|
|||||||
Marine and energy
|
|
|
(35.5
|
)
|
|
|
|
|
|
(35.5
|
)
|
||||||||
General liability
|
|
|
(50.2
|
)
|
|
|
|
|
|
(50.2
|
)
|
||||||||
Reinsurance:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Ogden rate decrease
|
|
|
|
|
$
|
85.0
|
|
|
|
|
85.0
|
|
|||||||
Property
|
|
|
|
|
(41.2
|
)
|
|
|
|
(41.2
|
)
|
||||||||
Other Insurance (Discontinued Lines):
|
|
|
|
|
|
|
|
|
|
|
|||||||||
A&E and other discontinued lines
|
|
|
|
|
|
|
$
|
(8.5
|
)
|
|
(8.5
|
)
|
|||||||
Net other prior years' redundancy
|
(89.5
|
)
|
|
(38.1
|
)
|
|
(36.0
|
)
|
|
—
|
|
|
(163.6
|
)
|
|||||
Increase (decrease)
|
$
|
(301.9
|
)
|
|
$
|
(198.7
|
)
|
|
$
|
7.8
|
|
|
$
|
(8.5
|
)
|
|
$
|
(501.3
|
)
|
(1)
|
Total decrease in prior years' loss reserves excludes $0.2 million of favorable development on our program services business, which is included in our consolidated underwriting results but is not included in a reportable segment.
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
(dollars in millions)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Total
|
||||||||||
U.S. Insurance:
|
|
|
|
|
|
|
|
|
|
||||||||||
General liability
|
$
|
(104.0
|
)
|
|
|
|
|
|
|
|
$
|
(104.0
|
)
|
||||||
Workers' compensation
|
(41.1
|
)
|
|
|
|
|
|
|
|
(41.1
|
)
|
||||||||
Property:
|
|
|
|
|
|
|
|
|
|
||||||||||
Brokerage property
|
(17.9
|
)
|
|
|
|
|
|
|
|
(17.9
|
)
|
||||||||
Inland marine
|
(20.1
|
)
|
|
|
|
|
|
|
|
(20.1
|
)
|
||||||||
Professional liability:
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical malpractice and specified medical
|
71.2
|
|
|
|
|
|
|
|
|
71.2
|
|
||||||||
All other
|
(38.0
|
)
|
|
|
|
|
|
|
|
(38.0
|
)
|
||||||||
International Insurance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Professional liability
|
|
|
$
|
(66.6
|
)
|
|
|
|
|
|
(66.6
|
)
|
|||||||
Marine and energy
|
|
|
(39.6
|
)
|
|
|
|
|
|
(39.6
|
)
|
||||||||
General liability
|
|
|
(23.1
|
)
|
|
|
|
|
|
(23.1
|
)
|
||||||||
Reinsurance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Property
|
|
|
|
|
$
|
(67.6
|
)
|
|
|
|
(67.6
|
)
|
|||||||
Other Insurance (Discontinued Lines):
|
|
|
|
|
|
|
|
|
|
||||||||||
A&E and other discontinued lines
|
|
|
|
|
|
|
$
|
(10.1
|
)
|
|
(10.1
|
)
|
|||||||
Net other prior years' redundancy
|
(55.0
|
)
|
|
(35.4
|
)
|
|
(57.9
|
)
|
|
—
|
|
|
(148.3
|
)
|
|||||
Decrease
|
$
|
(204.9
|
)
|
|
$
|
(164.7
|
)
|
|
$
|
(125.5
|
)
|
|
$
|
(10.1
|
)
|
|
$
|
(505.2
|
)
|
|
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
|
)
|
Gross Premium Volume
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. Insurance
|
$
|
2,885,279
|
|
|
$
|
2,635,266
|
|
|
$
|
2,504,096
|
|
International Insurance
|
1,255,922
|
|
|
1,119,815
|
|
|
1,164,866
|
|
|||
Reinsurance
|
1,112,101
|
|
|
1,041,055
|
|
|
965,374
|
|
|||
Other Insurance (Discontinued Lines)
|
(195
|
)
|
|
509
|
|
|
(1,424
|
)
|
|||
Total Underwriting
|
5,253,107
|
|
|
4,796,645
|
|
|
4,632,912
|
|
|||
Program Services
|
253,853
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
5,506,960
|
|
|
$
|
4,796,645
|
|
|
$
|
4,632,912
|
|
Net Written Premiums
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. Insurance
|
$
|
2,432,477
|
|
|
$
|
2,237,163
|
|
|
$
|
2,106,490
|
|
International Insurance
|
1,007,319
|
|
|
864,494
|
|
|
888,214
|
|
|||
Reinsurance
|
978,160
|
|
|
898,728
|
|
|
824,324
|
|
|||
Other Insurance (Discontinued Lines)
|
(169
|
)
|
|
635
|
|
|
265
|
|
|||
Total
|
$
|
4,417,787
|
|
|
$
|
4,001,020
|
|
|
$
|
3,819,293
|
|
Earned Premiums
|
|
|
|
|
|
||||||
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
U.S. Insurance
|
$
|
2,364,121
|
|
|
$
|
2,175,332
|
|
|
$
|
2,105,212
|
|
International Insurance
|
949,912
|
|
|
853,512
|
|
|
879,426
|
|
|||
Reinsurance
|
934,114
|
|
|
836,264
|
|
|
838,543
|
|
|||
Other Insurance (Discontinued Lines)
|
(169
|
)
|
|
762
|
|
|
351
|
|
|||
Total
|
$
|
4,247,978
|
|
|
$
|
3,865,870
|
|
|
$
|
3,823,532
|
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net investment income
|
$
|
405,709
|
|
|
$
|
373,230
|
|
|
$
|
353,213
|
|
Net realized investment gains (losses)
|
$
|
(5,303
|
)
|
|
$
|
65,147
|
|
|
$
|
106,480
|
|
Change in net unrealized gains on investments
|
$
|
1,125,440
|
|
|
$
|
342,111
|
|
|
$
|
(457,584
|
)
|
Investment yield
(1)
|
2.6
|
%
|
|
2.4
|
%
|
|
2.3
|
%
|
|||
Taxable equivalent total investment return, before foreign currency effect
|
9.2
|
%
|
|
5.0
|
%
|
|
0.5
|
%
|
|||
Taxable equivalent total investment return
|
10.2
|
%
|
|
4.4
|
%
|
|
(0.7
|
)%
|
|||
Invested assets, end of year
|
$
|
20,570,337
|
|
|
$
|
19,058,666
|
|
|
$
|
18,181,345
|
|
(1)
|
Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Investment yield
(1)
|
2.6
|
%
|
|
2.4
|
%
|
|
2.3
|
%
|
Adjustment of investment yield from amortized cost to fair value
|
(0.5
|
)%
|
|
(0.4
|
)%
|
|
(0.4
|
)%
|
Net amortization of net premium on fixed maturities
|
0.4
|
%
|
|
0.4
|
%
|
|
0.5
|
%
|
Net realized investment gains (losses) and change in net unrealized gains on investments
|
5.9
|
%
|
|
2.3
|
%
|
|
(2.0
|
)%
|
Taxable equivalent effect for interest and dividends
(2)
|
0.4
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
Other
(3)
|
1.4
|
%
|
|
(0.7
|
)%
|
|
(1.5
|
)%
|
Taxable equivalent total investment return
|
10.2
|
%
|
|
4.4
|
%
|
|
(0.7
|
)%
|
(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)
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
165,172
|
|
|
$
|
105,316
|
|
Receivables
|
190,300
|
|
|
97,921
|
|
||
Goodwill
|
424,982
|
|
|
237,767
|
|
||
Intangible assets
|
400,656
|
|
|
234,113
|
|
||
Other assets
|
719,618
|
|
|
531,106
|
|
||
Total Assets
|
$
|
1,900,728
|
|
|
$
|
1,206,223
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Senior long-term debt and other debt
(1)
|
$
|
554,282
|
|
|
$
|
294,702
|
|
Other liabilities
|
345,608
|
|
|
217,804
|
|
||
Total Liabilities
|
899,890
|
|
|
512,506
|
|
||
Redeemable noncontrolling interests
|
166,270
|
|
|
73,678
|
|
||
Shareholders' equity
(2)
|
837,060
|
|
|
621,639
|
|
||
Noncontrolling interests
|
(2,492
|
)
|
|
(1,600
|
)
|
||
Total Equity
|
834,568
|
|
|
620,039
|
|
||
Total Liabilities and Equity
|
$
|
1,900,728
|
|
|
$
|
1,206,223
|
|
(1)
|
Senior long-term debt and other debt as of
December 31, 2017
and
2016
included $476.0 million and $211.0 million, respectively, of debt due to other subsidiaries of Markel Corporation, which is eliminated in consolidation.
|
(2)
|
Shareholders' equity includes $663.6 million and $520.7 million as of
December 31, 2017
and
2016
, respectively, which represents Markel Corporation's investment in Markel Ventures and is eliminated in consolidation.
|
|
Years ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
OPERATING REVENUES
|
|
|
|
|
|
||||||
Net investment income
|
$
|
332
|
|
|
$
|
109
|
|
|
$
|
5
|
|
Other revenues
|
1,336,820
|
|
|
1,214,449
|
|
|
1,047,516
|
|
|||
Total Operating Revenues
|
1,337,152
|
|
|
1,214,558
|
|
|
1,047,521
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
||||||
Amortization of intangible assets
|
31,429
|
|
|
29,105
|
|
|
27,443
|
|
|||
Other expenses
|
1,185,843
|
|
|
1,071,943
|
|
|
978,058
|
|
|||
Total Operating Expenses
|
1,217,272
|
|
|
1,101,048
|
|
|
1,005,501
|
|
|||
Operating Income
|
119,880
|
|
|
113,510
|
|
|
42,020
|
|
|||
Interest expense
(1)
|
20,009
|
|
|
15,718
|
|
|
13,982
|
|
|||
Income Before Income Taxes
|
99,871
|
|
|
97,792
|
|
|
28,038
|
|
|||
Income tax expense (benefit)
|
(9,303
|
)
|
|
36,005
|
|
|
10,641
|
|
|||
Net Income
|
109,174
|
|
|
61,787
|
|
|
17,397
|
|
|||
Net income attributable to noncontrolling interests
|
5,615
|
|
|
5,615
|
|
|
6,370
|
|
|||
Net Income to Shareholders
|
$
|
103,559
|
|
|
$
|
56,172
|
|
|
$
|
11,027
|
|
(1)
|
Interest expense for the years ended
December 31, 2017
,
2016
and
2015
includes intercompany interest expense of
$12.3 million
,
$9.7 million
and
$9.4 million
, respectively, which is eliminated in consolidation.
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Insurance recoveries
|
$
|
(64,029
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Storm losses
|
19,598
|
|
|
—
|
|
|
—
|
|
|||
Increase in contingent consideration obligations
|
18,997
|
|
|
10,276
|
|
|
31,187
|
|
|||
Goodwill impairment
|
—
|
|
|
18,723
|
|
|
14,880
|
|
|||
Total
|
$
|
(25,434
|
)
|
|
$
|
28,999
|
|
|
$
|
46,067
|
|
|
Years ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash and cash equivalents, beginning of year
|
$
|
105,316
|
|
|
$
|
120,889
|
|
|
$
|
106,552
|
|
Net cash provided by operating activities
|
195,054
|
|
|
100,105
|
|
|
166,702
|
|
|||
Net cash used by investing activities
|
(456,586
|
)
|
|
(55,293
|
)
|
|
(96,073
|
)
|
|||
Net cash provided (used) by financing activities
(1,2)
|
321,388
|
|
|
(60,385
|
)
|
|
(56,292
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
59,856
|
|
|
(15,573
|
)
|
|
14,337
|
|
|||
Cash and cash equivalents, end of year
|
$
|
165,172
|
|
|
$
|
105,316
|
|
|
$
|
120,889
|
|
(1)
|
Net cash provided (used) by financing activities for the years ended
December 31, 2017
and
2015
includes capital contributions from our holding company (Markel Corporation) of $145.0 million and $22.8 million, respectively, which are eliminated in consolidation. There were no capital contributions from our holding company for the year ended
December 31, 2016
.
|
(2)
|
Net cash provided (used) by financing activities for the year ended
December 31, 2017
includes net additions to debt of $265.0 million, which are eliminated in consolidation. Net cash provided (used) by financing activities for the years ended December 31,
2016
and
2015
includes net repayments of debt of $5.9 million and $36.0 million, respectively, which are eliminated in consolidation.
|
|
Years Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income to shareholders
|
$
|
395,269
|
|
|
$
|
455,689
|
|
|
$
|
582,772
|
|
(Income) Loss before income taxes from other Markel operations
|
12,450
|
|
|
(532,989
|
)
|
|
(714,067
|
)
|
|||
Income tax expense (benefit) from other Markel operations
|
(304,160
|
)
|
|
133,472
|
|
|
142,322
|
|
|||
Markel Ventures net income to shareholders
|
103,559
|
|
|
56,172
|
|
|
11,027
|
|
|||
Interest expense
(1)
|
18,345
|
|
|
14,900
|
|
|
13,287
|
|
|||
Income tax expense
|
(11,494
|
)
|
|
34,502
|
|
|
10,710
|
|
|||
Depreciation expense
|
38,514
|
|
|
32,759
|
|
|
30,478
|
|
|||
Amortization of intangible assets
|
28,691
|
|
|
26,796
|
|
|
25,776
|
|
|||
Markel Ventures EBITDA - Total
|
$
|
177,615
|
|
|
$
|
165,129
|
|
|
$
|
91,278
|
|
|
|
|
|
|
|
||||||
Markel Ventures EBITDA - Manufacturing
|
$
|
104,938
|
|
|
$
|
120,993
|
|
|
$
|
88,822
|
|
Markel Ventures EBITDA - Non-Manufacturing
|
72,677
|
|
|
44,136
|
|
|
2,456
|
|
|||
Markel Ventures EBITDA - Total
|
$
|
177,615
|
|
|
$
|
165,129
|
|
|
$
|
91,278
|
|
(1)
|
Interest expense for the years ended
December 31, 2017
,
2016
and
2015
includes intercompany interest expense of
$12.3 million
,
$9.7 million
and
$9.4 million
, respectively.
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Effective tax rate
|
(359
|
)%
|
|
27
|
%
|
|
21
|
%
|
Impact of TCJA on effective tax rate
|
(389
|
)
|
|
—
|
|
|
—
|
|
Adjusted effective tax rate
|
30
|
%
|
|
27
|
%
|
|
21
|
%
|
(dollars in thousands)
|
U.S. Insurance
|
|
International Insurance
|
|
Reinsurance
|
|
Other
Insurance
(Discontinued
Lines)
|
|
Program Services
|
|
Consolidated
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Case reserves
|
$
|
1,355,146
|
|
|
$
|
1,350,517
|
|
|
$
|
1,219,119
|
|
|
$
|
188,892
|
|
|
$
|
759,943
|
|
|
$
|
4,873,617
|
|
IBNR reserves
|
2,972,020
|
|
|
2,003,996
|
|
|
2,104,783
|
|
|
240,377
|
|
|
1,435,488
|
|
|
8,756,664
|
|
||||||
Total
|
$
|
4,327,166
|
|
|
$
|
3,354,513
|
|
|
$
|
3,323,902
|
|
|
$
|
429,269
|
|
|
$
|
2,195,431
|
|
(1)
|
$
|
13,630,281
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Case reserves
|
$
|
1,088,388
|
|
|
$
|
1,188,171
|
|
|
$
|
819,405
|
|
|
$
|
248,729
|
|
|
$
|
—
|
|
|
$
|
3,344,693
|
|
IBNR reserves
|
2,754,209
|
|
|
1,841,042
|
|
|
1,813,361
|
|
|
293,458
|
|
|
—
|
|
|
6,702,070
|
|
||||||
Total
|
$
|
3,842,597
|
|
|
$
|
3,029,213
|
|
|
$
|
2,632,766
|
|
|
$
|
542,187
|
|
|
$
|
—
|
|
|
$
|
10,046,763
|
|
(1)
|
All of the premium written in our program services business is ceded to third parties, resulting in reinsurance recoverables on paid and unpaid losses of $2.2 billion as of December 31, 2017. We are the beneficiary of letters of credit, trust accounts and funds withheld in the aggregate amount of $1.9 billion at
December 31, 2017
, collateralizing these reinsurance recoverable balances in our program services business.
|
|
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)
|
$
|
5,080,481
|
|
|
$
|
241,513
|
|
|
$
|
876,499
|
|
|
$
|
831,574
|
|
|
$
|
3,130,895
|
|
Unpaid losses and loss adjustment expenses (estimated)
|
13,630,281
|
|
|
3,203,638
|
|
|
4,598,591
|
|
|
2,565,085
|
|
|
3,262,967
|
|
|||||
Life and annuity benefits (estimated)
|
1,423,225
|
|
|
88,828
|
|
|
146,103
|
|
|
135,343
|
|
|
1,052,951
|
|
|||||
Operating leases
|
311,722
|
|
|
53,398
|
|
|
81,985
|
|
|
63,924
|
|
|
112,415
|
|
|||||
Total
|
$
|
20,445,709
|
|
|
$
|
3,587,377
|
|
|
$
|
5,703,178
|
|
|
$
|
3,595,926
|
|
|
$
|
7,559,228
|
|
(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, 2017
|
|
|
|
|
|
|
|
|||||
Equity securities
|
$
|
5,968
|
|
|
35% increase
|
|
$
|
8,057
|
|
|
17.1
|
%
|
|
|
|
35% decrease
|
|
3,879
|
|
|
(17.1
|
)
|
|||
As of December 31, 2016
|
|
|
|
|
|
|
|
|||||
Equity securities
|
$
|
4,746
|
|
|
35% increase
|
|
$
|
6,407
|
|
|
13.1
|
%
|
|
|
|
35% decrease
|
|
3,085
|
|
|
(13.1
|
)
|
(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, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Total fixed maturity investments
|
$
|
9,941
|
|
|
200 bp decrease
|
|
$
|
11,323
|
|
|
13.9
|
%
|
|
11.3
|
%
|
|
|
|
100 bp decrease
|
|
10,606
|
|
|
6.7
|
|
|
5.5
|
|
|||
|
|
|
100 bp increase
|
|
9,319
|
|
|
(6.3
|
)
|
|
(5.1
|
)
|
|||
|
|
|
200 bp increase
|
|
8,720
|
|
|
(12.3
|
)
|
|
(10.0
|
)
|
|||
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Total fixed maturity investments
|
$
|
9,892
|
|
|
200 bp decrease
|
|
$
|
11,252
|
|
|
13.8
|
%
|
|
10.8
|
%
|
|
|
|
100 bp decrease
|
|
10,549
|
|
|
6.6
|
|
|
5.2
|
|
|||
|
|
|
100 bp increase
|
|
9,264
|
|
|
(6.3
|
)
|
|
(5.0
|
)
|
|||
|
|
|
200 bp increase
|
|
8,669
|
|
|
(12.4
|
)
|
|
(9.7
|
)
|
|||
Liabilities
(1)
|
|
|
|
|
|
|
|
|
|
||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Borrowings
|
$
|
3,351
|
|
|
200 bp decrease
|
|
$
|
4,015
|
|
|
|
|
|
||
|
|
|
100 bp decrease
|
|
3,653
|
|
|
|
|
|
|||||
|
|
|
100 bp increase
|
|
3,096
|
|
|
|
|
|
|||||
|
|
|
200 bp increase
|
|
2,880
|
|
|
|
|
|
|||||
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Borrowings
|
$
|
2,721
|
|
|
200 bp decrease
|
|
$
|
3,184
|
|
|
|
|
|
||
|
|
|
100 bp decrease
|
|
2,933
|
|
|
|
|
|
|||||
|
|
|
100 bp increase
|
|
2,540
|
|
|
|
|
|
|||||
|
|
|
200 bp increase
|
|
2,384
|
|
|
|
|
|
(1)
|
Changes in estimated fair value have no impact on shareholders' equity.
|
•
|
our expectations about future results of our underwriting, investing and other operations are based on current knowledge and assume 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 on our underwriting, investing and other operations, including demand and pricing in the insurance, reinsurance and other markets in which we operate;
|
•
|
actions by competitors, including the application of new or "disruptive" technologies or business models and 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, fires and weather-related catastrophes) may exceed expectations, are unpredictable and, in the case of fires and 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 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;
|
•
|
the ability or willingness of reinsurers to pay balances due may be adversely affected by industry and economic conditions, deterioration in reinsurer credit quality and coverage disputes, and collateral we hold may not be sufficient to cover a reinsurer's obligation to us;
|
•
|
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 maturity 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 on our businesses of the repeal, in part or in whole, or modification of U.S. health care reform legislation and regulations;
|
•
|
changes in U.S. tax laws or in the tax laws of other jurisdictions in which we operate and adjustments we may make in our operations in response to those changes;
|
•
|
a failure of our enterprise systems, or those of third parties upon which we may rely, or a failure to comply with data protection or privacy regulations;
|
•
|
our acquisitions 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 substantial international operations and investments expose us to increased political, operational and economic risks, including foreign currency exchange rate and credit risk;
|
•
|
the vote by the United Kingdom to leave the European Union, which could have adverse consequences for our businesses, particularly our London-based international insurance operations;
|
•
|
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;
|
•
|
regulatory changes, or challenges by regulators, regarding the use of certain issuing carrier or fronting arrangements;
|
•
|
our dependence on a limited number of brokers for a large portion of our revenues;
|
•
|
adverse changes in our assigned financial strength or debt ratings could adversely impact us, including our ability to attract and retain business, the amount of capital our insurance subsidiaries must hold and the availability and cost of capital;
|
•
|
the political, legal, regulatory, financial, tax and general economic impacts, and others we cannot anticipate, of Brexit; and
|
•
|
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: adverse weather conditions, plant disease and other contaminants; changes in government support for education, healthcare and infrastructure projects; changes in capital spending levels; changes in the housing market; liability for environmental matters; volatility in the market prices for their products; and volatility in commodity prices and interest and foreign currency exchange rates.
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2012
(1)
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
Markel Corporation
|
$
|
100
|
|
|
$
|
134
|
|
|
$
|
158
|
|
|
$
|
204
|
|
|
$
|
209
|
|
|
$
|
263
|
|
S&P 500
|
100
|
|
|
132
|
|
|
151
|
|
|
153
|
|
|
171
|
|
|
208
|
|
||||||
Dow Jones Property & Casualty Insurance
|
100
|
|
|
132
|
|
|
148
|
|
|
162
|
|
|
190
|
|
|
223
|
|
(1)
|
$100 invested on
December 31, 2012
in our common stock or the listed index. Includes reinvestment of dividends.
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
||||||
Period
|
Total
Number of
Shares
Purchased
|
|
Average
Price
Paid per
Share
|
|
Total
Number of
Shares
Purchased as
Part
of Publicly
Announced
Plans
or Programs
(1)
|
|
Approximate
Dollar
Value of
Shares that
May Yet Be
Purchased
Under
the Plans or
Programs
(in thousands)
|
||||||
October 1, 2017 through October 31, 2017
|
3,630
|
|
|
$
|
1,076.61
|
|
|
3,630
|
|
|
$
|
149,229
|
|
November 1, 2017 through November 30, 2017
|
3,465
|
|
|
$
|
1,082.03
|
|
|
3,465
|
|
|
$
|
145,480
|
|
December 1, 2017 through December 31, 2017
|
3,135
|
|
|
$
|
1,120.67
|
|
|
3,135
|
|
|
$
|
141,967
|
|
Total
|
10,230
|
|
|
$
|
1,091.95
|
|
|
10,230
|
|
|
$
|
141,967
|
|
(1)
|
The Board of Directors approved the repurchase of up to $300 million of our common stock pursuant to a share repurchase program publicly announced on November 21, 2013 (the Program). Under the Program, we may repurchase outstanding shares of our common stock from time to time in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934. The Program has no expiration date but may be terminated by the Board of Directors at any time.
|
Exhibit No.
|
|
Document Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
Exhibit No.
|
|
Document Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101
|
|
The following consolidated financial statements from Markel Corporation's Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 23, 2018, 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.**
|
MARKEL CORPORATION
|
|
|
|
|
|
|
|
/s/ Alan I. Kirshner
|
|
|
/s/ Anne G. Waleski
|
Alan I. Kirshner
|
|
|
Anne G. Waleski
|
Executive Chairman
|
|
|
Executive Vice President and Chief Financial Officer
|
(Principal Executive Officer)
|
|
|
(Principal Financial Officer)
|
February 23, 2018
|
|
|
February 23, 2018
|
Signatures
|
|
Title
|
Date
|
|
|
|
|
/s/ Alan I. Kirshner
|
|
Executive Chairman, Chairman of the Board
|
February 23, 2018
|
Alan I. Kirshner
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Anthony F. Markel
|
|
Director, Vice Chairman
|
February 23, 2018
|
Anthony F. Markel
|
|
|
|
|
|
|
|
/s/ Steven A. Markel
|
|
Director, Vice Chairman
|
February 23, 2018
|
Steven A. Markel
|
|
|
|
|
|
|
|
/s/ Anne G. Waleski
|
|
Executive Vice President and Chief Financial Officer
|
February 23, 2018
|
Anne G. Waleski
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ Nora N. Crouch
|
|
Chief Accounting Officer
|
February 23, 2018
|
Nora N. Crouch
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ J. Alfred Broaddus, Jr.
|
|
Director
|
February 23, 2018
|
J. Alfred Broaddus, Jr.
|
|
|
|
|
|
|
|
/s/ K. Bruce Connell
|
|
Director
|
February 23, 2018
|
K. Bruce Connell
|
|
|
|
|
|
|
|
/s/ Thomas S. Gayner
|
|
Director
|
February 23, 2018
|
Thomas S. Gayner
|
|
|
|
|
|
|
|
/s/ Stewart M. Kasen
|
|
Director
|
February 23, 2018
|
Stewart M. Kasen
|
|
|
|
|
|
|
|
/s/ Lemuel E. Lewis
|
|
Director
|
February 23, 2018
|
Lemuel E. Lewis
|
|
|
|
|
|
|
|
/s/ Darrell D. Martin
|
|
Director
|
February 23, 2018
|
Darrell D. Martin
|
|
|
|
|
|
|
|
/s/ Michael O'Reilly
|
|
Director
|
February 23, 2018
|
Michael O'Reilly
|
|
|
|
|
|
|
|
/s/ Michael J. Schewel
|
|
Director
|
February 23, 2018
|
Michael J. Schewel
|
|
|
|
|
|
|
|
/s/ Jay M. Weinberg
|
|
Director
|
February 23, 2018
|
Jay M. Weinberg
|
|
|
|
|
|
|
|
/s/ Richard R. Whitt, III
|
|
Director
|
February 23, 2018
|
Richard R. Whitt, III
|
|
|
|
|
|
|
|
/s/ Debora J. Wilson
|
|
Director
|
February 23, 2018
|
Debora J. Wilson
|
|
|
|
/s/ Steven A. Markel
|
|
MARKEL CORPORATION
|
Executive
|
|
|
|
|
|
|
|
/s/ Richard R. Whitt, III
|
|
|
Title: Co-Chief Executive Officer
|
Subsidiary
|
|
State or Other Jurisdiction of
Incorporation or Organization
|
|
|
|
Essentia Insurance Company
|
|
Missouri
|
Markel Insurance Company
|
|
Illinois
|
Markel American Insurance Company
|
|
Virginia
|
Evanston Insurance Company
|
|
Illinois
|
Markel Surety Corporation
|
|
Delaware
|
SureTec Insurance Company
|
|
Texas
|
SureTec Indemnity Company
|
|
California
|
State National Companies, Inc.
|
|
Delaware
|
SNC Financial GP, LLC
|
|
Nevada
|
SNC Financial LP, LLC
|
|
Nevada
|
T.B.A. Insurance Group, Ltd.
|
|
Texas
|
State National Intermediate Holdings, Inc.
|
|
Texas
|
State National Insurance Company, Inc.
|
|
Texas
|
National Specialty Insurance Company
|
|
Texas
|
United Specialty Insurance Company
|
|
Delaware
|
City National Insurance Company
|
|
Texas
|
Independent Specialty Insurance Company
|
|
Delaware
|
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
|
Galleon Marine Insurance Agency Limited
|
|
England
|
JanJer Limited
|
|
England
|
Abbey Protection Limited
|
|
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
|
Gabelle MTR Limited
|
|
England
|
ACCTX Consulting Limited
|
|
England
|
ACCTX UK Limited
|
|
England
|
Accountax Law Limited
|
|
England
|
LHS Solicitors LLP
|
|
England
|
EC Insurance Company Limited
|
|
England
|
MINT Canadian Specialty Underwriters Limited
|
|
Canada
|
Markel Canada Limited
|
|
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 Capital Services Limited
|
|
Ireland
|
Alterra Holdings Limited
|
|
Bermuda
|
Alterra Agency Limited
|
|
Bermuda
|
New Point Re III Limited
|
|
Bermuda
|
Alterra Capital Brazil Limited
|
|
England
|
Markel Participações Ltda.
|
|
Brazil
|
Markel Resseguradora do Brasil S.A.
|
|
Brazil
|
Markel Seguradora do Brasil SA
|
|
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
|
Precision 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 Bakery Systems, Inc.
|
|
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, LLC
|
|
New Jersey
|
Texas Trailer Corporation, LLC
|
|
Texas
|
Weldship, LLC
|
|
Pennsylvania
|
Cottrell, Inc.
|
|
Georgia
|
Cottrell Properties, L.P.
|
|
Georgia
|
Cottrell Enterprises, Inc.
|
|
Georgia
|
CapTech Ventures, Inc.
|
|
Virginia
|
P1, Inc.
|
|
Delaware
|
P2, Inc.
|
|
Delaware
|
Costa Farms Holdings, LLC
|
|
Florida
|
Gardenvision, LLC
|
|
Florida
|
Costa Carolina Operations, LLC
|
|
North Carolina
|
PM Transport of Florida, LLC
|
|
Florida
|
EIC Credit, LLC
|
|
Virginia
|
Markel Eagle Investment, LLC
|
|
Virginia
|
Markel Eagle Investment II, LLC
|
|
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
|
Markel Holdings GmbH
|
|
Germany
|
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 23, 2018
|
|
/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 23, 2018
|
|
/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 23, 2018
|
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 23, 2018
|