|
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Virginia
|
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54-1959284
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of exchange on which registered
|
Common Stock, no par value
|
|
MKL
|
|
New York Stock Exchange
|
Large accelerated filer
|
x
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
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Page Number
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June 30,
2019 |
|
December 31,
2018 |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Investments, at estimated fair value:
|
|
|
|
||||
Fixed maturities, available-for-sale (amortized cost of $9,751,683 in 2019 and $9,950,773 in 2018)
|
$
|
10,258,640
|
|
|
$
|
10,043,188
|
|
Equity securities (cost of $3,115,609 in 2019 and $2,971,856 in 2018)
|
6,875,933
|
|
|
5,720,945
|
|
||
Short-term investments, available-for-sale (estimated fair value approximates cost)
|
1,383,572
|
|
|
1,077,696
|
|
||
Total Investments
|
18,518,145
|
|
|
16,841,829
|
|
||
Cash and cash equivalents
|
2,220,793
|
|
|
2,014,168
|
|
||
Restricted cash and cash equivalents
|
420,673
|
|
|
382,264
|
|
||
Receivables
|
2,191,947
|
|
|
1,692,526
|
|
||
Reinsurance recoverables
|
5,372,769
|
|
|
5,221,947
|
|
||
Deferred policy acquisition costs
|
554,233
|
|
|
474,513
|
|
||
Prepaid reinsurance premiums
|
1,459,272
|
|
|
1,331,022
|
|
||
Goodwill
|
2,189,367
|
|
|
2,237,975
|
|
||
Intangible assets
|
1,695,588
|
|
|
1,726,196
|
|
||
Other assets
|
1,798,797
|
|
|
1,383,823
|
|
||
Total Assets
|
$
|
36,421,584
|
|
|
$
|
33,306,263
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Unpaid losses and loss adjustment expenses
|
$
|
14,335,783
|
|
|
$
|
14,276,479
|
|
Life and annuity benefits
|
1,032,715
|
|
|
1,001,453
|
|
||
Unearned premiums
|
4,116,051
|
|
|
3,611,028
|
|
||
Payables to insurance and reinsurance companies
|
485,570
|
|
|
337,326
|
|
||
Senior long-term debt and other debt (estimated fair value of $3,845,000 in 2019 and $3,030,000 in 2018)
|
3,625,744
|
|
|
3,009,577
|
|
||
Other liabilities
|
2,261,343
|
|
|
1,796,036
|
|
||
Total Liabilities
|
25,857,206
|
|
|
24,031,899
|
|
||
Redeemable noncontrolling interests
|
151,297
|
|
|
174,062
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Common stock
|
3,400,964
|
|
|
3,392,993
|
|
||
Retained earnings
|
6,808,201
|
|
|
5,782,310
|
|
||
Accumulated other comprehensive income (loss)
|
187,200
|
|
|
(94,650
|
)
|
||
Total Shareholders' Equity
|
10,396,365
|
|
|
9,080,653
|
|
||
Noncontrolling interests
|
16,716
|
|
|
19,649
|
|
||
Total Equity
|
10,413,081
|
|
|
9,100,302
|
|
||
Total Liabilities and Equity
|
$
|
36,421,584
|
|
|
$
|
33,306,263
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(dollars in thousands, except per share data)
|
||||||||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Earned premiums
|
$
|
1,199,461
|
|
|
$
|
1,148,184
|
|
|
$
|
2,403,438
|
|
|
$
|
2,299,205
|
|
Net investment income
|
111,831
|
|
|
105,387
|
|
|
226,013
|
|
|
213,403
|
|
||||
Net investment gains (losses):
|
|
|
|
|
|
|
|
||||||||
Net realized investment gains (losses)
|
(67
|
)
|
|
(7,642
|
)
|
|
614
|
|
|
(8,588
|
)
|
||||
Change in fair value of equity securities
|
425,720
|
|
|
112,891
|
|
|
1,037,230
|
|
|
(9,161
|
)
|
||||
Net investment gains (losses)
|
425,653
|
|
|
105,249
|
|
|
1,037,844
|
|
|
(17,749
|
)
|
||||
Products revenues
|
501,676
|
|
|
472,323
|
|
|
850,470
|
|
|
766,459
|
|
||||
Services and other revenues
|
200,495
|
|
|
155,870
|
|
|
393,839
|
|
|
301,166
|
|
||||
Total Operating Revenues
|
2,439,116
|
|
|
1,987,013
|
|
|
4,911,604
|
|
|
3,562,484
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Losses and loss adjustment expenses
|
678,120
|
|
|
599,178
|
|
|
1,365,866
|
|
|
1,214,296
|
|
||||
Underwriting, acquisition and insurance expenses
|
462,316
|
|
|
451,570
|
|
|
917,528
|
|
|
875,960
|
|
||||
Products expenses
|
425,138
|
|
|
450,585
|
|
|
744,564
|
|
|
720,282
|
|
||||
Services and other expenses
|
170,796
|
|
|
129,854
|
|
|
345,402
|
|
|
262,287
|
|
||||
Amortization of intangible assets
|
36,300
|
|
|
29,641
|
|
|
76,968
|
|
|
58,464
|
|
||||
Impairment of goodwill and intangible assets
|
—
|
|
|
14,904
|
|
|
—
|
|
|
14,904
|
|
||||
Total Operating Expenses
|
1,772,670
|
|
|
1,675,732
|
|
|
3,450,328
|
|
|
3,146,193
|
|
||||
Operating Income
|
666,446
|
|
|
311,281
|
|
|
1,461,276
|
|
|
416,291
|
|
||||
Interest expense
|
41,267
|
|
|
36,702
|
|
|
81,557
|
|
|
76,761
|
|
||||
Net foreign exchange gains
|
(25,015
|
)
|
|
(86,158
|
)
|
|
(3,151
|
)
|
|
(64,044
|
)
|
||||
Income Before Income Taxes
|
650,194
|
|
|
360,737
|
|
|
1,382,870
|
|
|
403,574
|
|
||||
Income tax expense
|
143,711
|
|
|
81,150
|
|
|
298,874
|
|
|
189,581
|
|
||||
Net Income
|
506,483
|
|
|
279,587
|
|
|
1,083,996
|
|
|
213,993
|
|
||||
Net income attributable to noncontrolling interests
|
9,185
|
|
|
1,356
|
|
|
10,271
|
|
|
68
|
|
||||
Net Income to Shareholders
|
$
|
497,298
|
|
|
$
|
278,231
|
|
|
$
|
1,073,725
|
|
|
$
|
213,925
|
|
|
|
|
|
|
|
|
|
||||||||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized gains on available-for-sale investments, net of taxes:
|
|
|
|
|
|
|
|
||||||||
Net holding gains (losses) arising during the period
|
$
|
128,467
|
|
|
$
|
(98,145
|
)
|
|
$
|
280,798
|
|
|
$
|
(215,067
|
)
|
Reclassification adjustments for net gains (losses) included in net income
|
803
|
|
|
(5,891
|
)
|
|
557
|
|
|
(5,077
|
)
|
||||
Change in net unrealized gains on available-for-sale investments, net of taxes
|
129,270
|
|
|
(104,036
|
)
|
|
281,355
|
|
|
(220,144
|
)
|
||||
Change in foreign currency translation adjustments, net of taxes
|
(3,749
|
)
|
|
(10,450
|
)
|
|
(1,372
|
)
|
|
(5,497
|
)
|
||||
Change in net actuarial pension loss, net of taxes
|
515
|
|
|
568
|
|
|
1,876
|
|
|
1,232
|
|
||||
Total Other Comprehensive Income (Loss)
|
126,036
|
|
|
(113,918
|
)
|
|
281,859
|
|
|
(224,409
|
)
|
||||
Comprehensive Income (Loss)
|
632,519
|
|
|
165,669
|
|
|
1,365,855
|
|
|
(10,416
|
)
|
||||
Comprehensive income attributable to noncontrolling interests
|
9,189
|
|
|
1,333
|
|
|
10,280
|
|
|
87
|
|
||||
Comprehensive Income (Loss) to Shareholders
|
$
|
623,330
|
|
|
$
|
164,336
|
|
|
$
|
1,355,575
|
|
|
$
|
(10,503
|
)
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME PER SHARE
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
36.10
|
|
|
$
|
20.01
|
|
|
$
|
78.91
|
|
|
$
|
15.75
|
|
Diluted
|
$
|
36.07
|
|
|
$
|
19.97
|
|
|
$
|
78.85
|
|
|
$
|
15.72
|
|
Quarter Ended June 30, 2019
|
Common Shares
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
Shareholders'
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|
Redeemable
Noncontrolling
Interests
|
|||||||||||||||
(in thousands)
|
|
|||||||||||||||||||||||||||||
March 31, 2019
|
13,856
|
|
|
$
|
3,395,940
|
|
|
$
|
6,338,874
|
|
|
$
|
61,168
|
|
|
$
|
9,795,982
|
|
|
$
|
22,364
|
|
|
$
|
9,818,346
|
|
|
$
|
148,002
|
|
Net income
|
|
|
|
|
497,298
|
|
|
—
|
|
|
497,298
|
|
|
647
|
|
|
497,945
|
|
|
8,538
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
—
|
|
|
126,032
|
|
|
126,032
|
|
|
—
|
|
|
126,032
|
|
|
4
|
|
|||||||||
Comprehensive Income
|
|
|
|
|
|
|
|
|
623,330
|
|
|
647
|
|
|
623,977
|
|
|
8,542
|
|
|||||||||||
Issuance of common stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(31
|
)
|
|
—
|
|
|
(31,617
|
)
|
|
—
|
|
|
(31,617
|
)
|
|
—
|
|
|
(31,617
|
)
|
|
—
|
|
|||||||
Restricted stock units expensed
|
—
|
|
|
5,024
|
|
|
—
|
|
|
—
|
|
|
5,024
|
|
|
—
|
|
|
5,024
|
|
|
—
|
|
|||||||
Adjustment to Nephila purchase price allocation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,250
|
)
|
|
(8,250
|
)
|
|
51
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
3,324
|
|
|
—
|
|
|
3,324
|
|
|
—
|
|
|
3,324
|
|
|
(3,324
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
322
|
|
|
—
|
|
|
322
|
|
|
1,955
|
|
|
2,277
|
|
|
(1,974
|
)
|
|||||||
June 30, 2019
|
13,826
|
|
|
$
|
3,400,964
|
|
|
$
|
6,808,201
|
|
|
$
|
187,200
|
|
|
$
|
10,396,365
|
|
|
$
|
16,716
|
|
|
$
|
10,413,081
|
|
|
$
|
151,297
|
|
Six Months Ended June 30, 2019
|
Common Shares
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders'
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|
Redeemable
Noncontrolling
Interests
|
|||||||||||||||
(in thousands)
|
|
|||||||||||||||||||||||||||||
December 31, 2018
|
13,888
|
|
|
$
|
3,392,993
|
|
|
$
|
5,782,310
|
|
|
$
|
(94,650
|
)
|
|
$
|
9,080,653
|
|
|
$
|
19,649
|
|
|
$
|
9,100,302
|
|
|
$
|
174,062
|
|
Net income
|
|
|
|
|
1,073,725
|
|
|
—
|
|
|
1,073,725
|
|
|
1,405
|
|
|
1,075,130
|
|
|
8,866
|
|
|||||||||
Other comprehensive income
|
|
|
|
|
—
|
|
|
281,850
|
|
|
281,850
|
|
|
—
|
|
|
281,850
|
|
|
9
|
|
|||||||||
Comprehensive Income
|
|
|
|
|
|
|
|
|
1,355,575
|
|
|
1,405
|
|
|
1,356,980
|
|
|
8,875
|
|
|||||||||||
Issuance of common stock
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(68
|
)
|
|
—
|
|
|
(69,266
|
)
|
|
—
|
|
|
(69,266
|
)
|
|
—
|
|
|
(69,266
|
)
|
|
—
|
|
|||||||
Restricted stock units expensed
|
—
|
|
|
11,872
|
|
|
—
|
|
|
—
|
|
|
11,872
|
|
|
—
|
|
|
11,872
|
|
|
—
|
|
|||||||
Adjustment to Nephila purchase price allocation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,250
|
)
|
|
(8,250
|
)
|
|
51
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
21,685
|
|
|
—
|
|
|
21,685
|
|
|
—
|
|
|
21,685
|
|
|
(21,685
|
)
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
(3,736
|
)
|
|
—
|
|
|
—
|
|
|
(3,736
|
)
|
|
—
|
|
|
(3,736
|
)
|
|
(5,025
|
)
|
|||||||
Other
|
—
|
|
|
(165
|
)
|
|
(253
|
)
|
|
—
|
|
|
(418
|
)
|
|
3,912
|
|
|
3,494
|
|
|
(4,981
|
)
|
|||||||
June 30, 2019
|
13,826
|
|
|
$
|
3,400,964
|
|
|
$
|
6,808,201
|
|
|
$
|
187,200
|
|
|
$
|
10,396,365
|
|
|
$
|
16,716
|
|
|
$
|
10,413,081
|
|
|
$
|
151,297
|
|
Quarter Ended June 30, 2018
|
Common Shares
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders'
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|
Redeemable
Noncontrolling
Interests
|
|||||||||||||||
(in thousands)
|
|
|||||||||||||||||||||||||||||
March 31, 2018
|
13,895
|
|
|
$
|
3,383,668
|
|
|
$
|
5,927,739
|
|
|
$
|
12,804
|
|
|
$
|
9,324,211
|
|
|
$
|
(3,061
|
)
|
|
$
|
9,321,150
|
|
|
$
|
155,720
|
|
Cumulative effect of adoption of ASU No. 2016-01, net of taxes
|
|
|
|
|
(10,531
|
)
|
|
10,531
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Net income (loss)
|
|
|
|
|
278,231
|
|
|
—
|
|
|
278,231
|
|
|
(417
|
)
|
|
277,814
|
|
|
1,773
|
|
|||||||||
Other comprehensive loss
|
|
|
|
|
—
|
|
|
(113,895
|
)
|
|
(113,895
|
)
|
|
—
|
|
|
(113,895
|
)
|
|
(23
|
)
|
|||||||||
Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
164,336
|
|
|
(417
|
)
|
|
163,919
|
|
|
1,750
|
|
|||||||||||
Issuance of common stock
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(11
|
)
|
|
—
|
|
|
(11,968
|
)
|
|
—
|
|
|
(11,968
|
)
|
|
—
|
|
|
(11,968
|
)
|
|
—
|
|
|||||||
Restricted stock units expensed
|
—
|
|
|
5,017
|
|
|
—
|
|
|
—
|
|
|
5,017
|
|
|
—
|
|
|
5,017
|
|
|
—
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
363
|
|
|
—
|
|
|
363
|
|
|
—
|
|
|
363
|
|
|
(363
|
)
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
(195
|
)
|
|
—
|
|
|
—
|
|
|
(195
|
)
|
|
—
|
|
|
(195
|
)
|
|
—
|
|
|||||||
Other
|
—
|
|
|
(1,369
|
)
|
|
465
|
|
|
—
|
|
|
(904
|
)
|
|
32
|
|
|
(872
|
)
|
|
(1,109
|
)
|
|||||||
June 30, 2018
|
13,886
|
|
|
$
|
3,387,121
|
|
|
$
|
6,184,299
|
|
|
$
|
(90,560
|
)
|
|
$
|
9,480,860
|
|
|
$
|
(3,446
|
)
|
|
$
|
9,477,414
|
|
|
$
|
155,998
|
|
Six Months Ended June 30, 2018
|
Common Shares
|
|
Common
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Shareholders'
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
|
Redeemable
Noncontrolling
Interests
|
|||||||||||||||
(in thousands)
|
|
|||||||||||||||||||||||||||||
December 31, 2017
|
13,904
|
|
|
$
|
3,381,834
|
|
|
$
|
3,776,743
|
|
|
$
|
2,345,571
|
|
|
$
|
9,504,148
|
|
|
$
|
(2,567
|
)
|
|
$
|
9,501,581
|
|
|
$
|
166,269
|
|
Cumulative effect of adoption of ASU No. 2014-09, net of taxes
|
|
|
|
|
325
|
|
|
—
|
|
|
325
|
|
|
—
|
|
|
325
|
|
|
—
|
|
|||||||||
Cumulative effect of adoption of ASU No. 2016-01, net of taxes
|
|
|
|
|
2,613,242
|
|
|
(2,613,242
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Cumulative effect of adoption of ASU No. 2018-02
|
|
|
|
|
(401,539
|
)
|
|
401,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
January 1, 2018
|
13,904
|
|
|
3,381,834
|
|
|
5,988,771
|
|
|
133,868
|
|
|
9,504,473
|
|
|
(2,567
|
)
|
|
9,501,906
|
|
|
166,269
|
|
|||||||
Net income (loss)
|
|
|
|
|
213,925
|
|
|
—
|
|
|
213,925
|
|
|
(910
|
)
|
|
213,015
|
|
|
978
|
|
|||||||||
Other comprehensive income (loss)
|
|
|
|
|
—
|
|
|
(224,428
|
)
|
|
(224,428
|
)
|
|
—
|
|
|
(224,428
|
)
|
|
19
|
|
|||||||||
Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
(10,503
|
)
|
|
(910
|
)
|
|
(11,413
|
)
|
|
997
|
|
|||||||||||
Issuance of common stock
|
4
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
(22
|
)
|
|
—
|
|
|
(24,257
|
)
|
|
—
|
|
|
(24,257
|
)
|
|
—
|
|
|
(24,257
|
)
|
|
—
|
|
|||||||
Restricted stock units expensed
|
—
|
|
|
12,229
|
|
|
—
|
|
|
—
|
|
|
12,229
|
|
|
—
|
|
|
12,229
|
|
|
—
|
|
|||||||
Adjustment of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
5,414
|
|
|
—
|
|
|
5,414
|
|
|
—
|
|
|
5,414
|
|
|
(5,414
|
)
|
|||||||
Purchase of noncontrolling interest
|
—
|
|
|
(5,586
|
)
|
|
—
|
|
|
—
|
|
|
(5,586
|
)
|
|
—
|
|
|
(5,586
|
)
|
|
(39
|
)
|
|||||||
Other
|
—
|
|
|
(1,358
|
)
|
|
446
|
|
|
—
|
|
|
(912
|
)
|
|
31
|
|
|
(881
|
)
|
|
(5,815
|
)
|
|||||||
June 30, 2018
|
13,886
|
|
|
$
|
3,387,121
|
|
|
$
|
6,184,299
|
|
|
$
|
(90,560
|
)
|
|
$
|
9,480,860
|
|
|
$
|
(3,446
|
)
|
|
$
|
9,477,414
|
|
|
$
|
155,998
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(dollars in thousands)
|
||||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
1,083,996
|
|
|
$
|
213,993
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
(834,838
|
)
|
|
93,541
|
|
||
Net Cash Provided By Operating Activities
|
249,158
|
|
|
307,534
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Proceeds from sales of fixed maturities and equity securities
|
232,376
|
|
|
234,442
|
|
||
Proceeds from maturities, calls and prepayments of fixed maturities
|
306,095
|
|
|
374,719
|
|
||
Cost of fixed maturities and equity securities purchased
|
(487,671
|
)
|
|
(1,185,375
|
)
|
||
Net change in short-term investments
|
(293,832
|
)
|
|
220,428
|
|
||
Cost of equity method investments
|
(215,442
|
)
|
|
(2,645
|
)
|
||
Additions to property and equipment
|
(49,232
|
)
|
|
(52,388
|
)
|
||
Proceeds from disposals of fixed assets
|
13,781
|
|
|
291
|
|
||
Acquisitions, net of cash acquired
|
(25,230
|
)
|
|
(7,804
|
)
|
||
Other
|
(2,491
|
)
|
|
(27,307
|
)
|
||
Net Cash Used By Investing Activities
|
(521,646
|
)
|
|
(445,639
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Additions to senior long-term debt and other debt
|
734,729
|
|
|
109,113
|
|
||
Repayment of senior long-term debt and other debt
|
(113,719
|
)
|
|
(180,158
|
)
|
||
Repurchases of common stock
|
(69,266
|
)
|
|
(24,257
|
)
|
||
Payment of contingent consideration
|
(14,113
|
)
|
|
(727
|
)
|
||
Purchase of noncontrolling interests
|
(9,754
|
)
|
|
(7,058
|
)
|
||
Distributions to noncontrolling interests
|
(4,901
|
)
|
|
(5,815
|
)
|
||
Other
|
(2,820
|
)
|
|
(2,561
|
)
|
||
Net Cash Provided (Used) By Financing Activities
|
520,156
|
|
|
(111,463
|
)
|
||
Effect of foreign currency rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
|
(2,634
|
)
|
|
(6,882
|
)
|
||
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
|
245,034
|
|
|
(256,450
|
)
|
||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
|
2,396,432
|
|
|
2,500,846
|
|
||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD
|
$
|
2,641,466
|
|
|
$
|
2,244,396
|
|
•
|
ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities
|
•
|
ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement
|
•
|
ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans
|
•
|
ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest
|
|
June 30, 2019
|
||||||||||||||
(dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Holding
Gains
|
|
Gross
Unrealized
Holding
Losses
|
|
Estimated
Fair
Value
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
295,201
|
|
|
$
|
2,894
|
|
|
$
|
(422
|
)
|
|
$
|
297,673
|
|
U.S. government-sponsored enterprises
|
337,100
|
|
|
19,863
|
|
|
(104
|
)
|
|
356,859
|
|
||||
Obligations of states, municipalities and political subdivisions
|
4,140,140
|
|
|
222,904
|
|
|
(847
|
)
|
|
4,362,197
|
|
||||
Foreign governments
|
1,478,894
|
|
|
160,709
|
|
|
(7,028
|
)
|
|
1,632,575
|
|
||||
Commercial mortgage-backed securities
|
1,709,453
|
|
|
52,568
|
|
|
(3,999
|
)
|
|
1,758,022
|
|
||||
Residential mortgage-backed securities
|
877,279
|
|
|
34,118
|
|
|
(1,428
|
)
|
|
909,969
|
|
||||
Asset-backed securities
|
11,150
|
|
|
56
|
|
|
(10
|
)
|
|
11,196
|
|
||||
Corporate bonds
|
902,466
|
|
|
30,372
|
|
|
(2,689
|
)
|
|
930,149
|
|
||||
Total fixed maturities
|
9,751,683
|
|
|
523,484
|
|
|
(16,527
|
)
|
|
10,258,640
|
|
||||
Short-term investments
|
1,382,042
|
|
|
1,911
|
|
|
(381
|
)
|
|
1,383,572
|
|
||||
Investments, available-for-sale
|
$
|
11,133,725
|
|
|
$
|
525,395
|
|
|
$
|
(16,908
|
)
|
|
$
|
11,642,212
|
|
|
December 31, 2018
|
||||||||||||||
(dollars in thousands)
|
Amortized
Cost
|
|
Gross
Unrealized
Holding
Gains
|
|
Gross
Unrealized
Holding
Losses
|
|
Estimated
Fair
Value
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
248,286
|
|
|
$
|
308
|
|
|
$
|
(1,952
|
)
|
|
$
|
246,642
|
|
U.S. government-sponsored enterprises
|
357,765
|
|
|
5,671
|
|
|
(4,114
|
)
|
|
359,322
|
|
||||
Obligations of states, municipalities and political subdivisions
|
4,285,068
|
|
|
96,730
|
|
|
(28,868
|
)
|
|
4,352,930
|
|
||||
Foreign governments
|
1,482,826
|
|
|
98,356
|
|
|
(21,578
|
)
|
|
1,559,604
|
|
||||
Commercial mortgage-backed securities
|
1,691,572
|
|
|
3,154
|
|
|
(44,527
|
)
|
|
1,650,199
|
|
||||
Residential mortgage-backed securities
|
886,501
|
|
|
6,170
|
|
|
(12,499
|
)
|
|
880,172
|
|
||||
Asset-backed securities
|
19,614
|
|
|
7
|
|
|
(213
|
)
|
|
19,408
|
|
||||
Corporate bonds
|
979,141
|
|
|
13,234
|
|
|
(17,464
|
)
|
|
974,911
|
|
||||
Total fixed maturities
|
9,950,773
|
|
|
223,630
|
|
|
(131,215
|
)
|
|
10,043,188
|
|
||||
Short-term investments
|
1,080,027
|
|
|
443
|
|
|
(2,774
|
)
|
|
1,077,696
|
|
||||
Investments, available-for-sale
|
$
|
11,030,800
|
|
|
$
|
224,073
|
|
|
$
|
(133,989
|
)
|
|
$
|
11,120,884
|
|
|
June 30, 2019
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
(dollars in thousands)
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding Losses
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
$
|
7,467
|
|
|
$
|
(15
|
)
|
|
$
|
100,175
|
|
|
$
|
(407
|
)
|
|
$
|
107,642
|
|
|
$
|
(422
|
)
|
U.S. government-sponsored enterprises
|
—
|
|
|
—
|
|
|
40,324
|
|
|
(104
|
)
|
|
40,324
|
|
|
(104
|
)
|
||||||
Obligations of states, municipalities and political subdivisions
|
3,250
|
|
|
(18
|
)
|
|
90,245
|
|
|
(829
|
)
|
|
93,495
|
|
|
(847
|
)
|
||||||
Foreign governments
|
79,769
|
|
|
(2,956
|
)
|
|
161,043
|
|
|
(4,072
|
)
|
|
240,812
|
|
|
(7,028
|
)
|
||||||
Commercial mortgage-backed securities
|
—
|
|
|
—
|
|
|
310,891
|
|
|
(3,999
|
)
|
|
310,891
|
|
|
(3,999
|
)
|
||||||
Residential mortgage-backed securities
|
2,423
|
|
|
(1
|
)
|
|
103,658
|
|
|
(1,427
|
)
|
|
106,081
|
|
|
(1,428
|
)
|
||||||
Asset-backed securities
|
—
|
|
|
—
|
|
|
4,052
|
|
|
(10
|
)
|
|
4,052
|
|
|
(10
|
)
|
||||||
Corporate bonds
|
45,258
|
|
|
(1,295
|
)
|
|
161,727
|
|
|
(1,394
|
)
|
|
206,985
|
|
|
(2,689
|
)
|
||||||
Total fixed maturities
|
138,167
|
|
|
(4,285
|
)
|
|
972,115
|
|
|
(12,242
|
)
|
|
1,110,282
|
|
|
(16,527
|
)
|
||||||
Short-term investments
|
17,045
|
|
|
(316
|
)
|
|
1,777
|
|
|
(65
|
)
|
|
18,822
|
|
|
(381
|
)
|
||||||
Total
|
$
|
155,212
|
|
|
$
|
(4,601
|
)
|
|
$
|
973,892
|
|
|
$
|
(12,307
|
)
|
|
$
|
1,129,104
|
|
|
$
|
(16,908
|
)
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
(dollars in thousands)
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Holding Losses
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
$
|
2,922
|
|
|
$
|
(83
|
)
|
|
$
|
156,352
|
|
|
$
|
(1,869
|
)
|
|
$
|
159,274
|
|
|
$
|
(1,952
|
)
|
U.S. government-sponsored enterprises
|
88,854
|
|
|
(1,923
|
)
|
|
96,337
|
|
|
(2,191
|
)
|
|
185,191
|
|
|
(4,114
|
)
|
||||||
Obligations of states, municipalities and political subdivisions
|
656,573
|
|
|
(12,455
|
)
|
|
453,736
|
|
|
(16,413
|
)
|
|
1,110,309
|
|
|
(28,868
|
)
|
||||||
Foreign governments
|
419,764
|
|
|
(14,461
|
)
|
|
84,776
|
|
|
(7,117
|
)
|
|
504,540
|
|
|
(21,578
|
)
|
||||||
Commercial mortgage-backed securities
|
653,410
|
|
|
(10,128
|
)
|
|
709,971
|
|
|
(34,399
|
)
|
|
1,363,381
|
|
|
(44,527
|
)
|
||||||
Residential mortgage-backed securities
|
276,777
|
|
|
(3,685
|
)
|
|
242,949
|
|
|
(8,814
|
)
|
|
519,726
|
|
|
(12,499
|
)
|
||||||
Asset-backed securities
|
1,645
|
|
|
(11
|
)
|
|
17,030
|
|
|
(202
|
)
|
|
18,675
|
|
|
(213
|
)
|
||||||
Corporate bonds
|
313,164
|
|
|
(10,965
|
)
|
|
222,761
|
|
|
(6,499
|
)
|
|
535,925
|
|
|
(17,464
|
)
|
||||||
Total fixed maturities
|
2,413,109
|
|
|
(53,711
|
)
|
|
1,983,912
|
|
|
(77,504
|
)
|
|
4,397,021
|
|
|
(131,215
|
)
|
||||||
Short-term investments
|
197,643
|
|
|
(2,774
|
)
|
|
—
|
|
|
—
|
|
|
197,643
|
|
|
(2,774
|
)
|
||||||
Total
|
$
|
2,610,752
|
|
|
$
|
(56,485
|
)
|
|
$
|
1,983,912
|
|
|
$
|
(77,504
|
)
|
|
$
|
4,594,664
|
|
|
$
|
(133,989
|
)
|
(dollars in thousands)
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
457,283
|
|
|
$
|
454,221
|
|
Due after one year through five years
|
1,348,961
|
|
|
1,380,636
|
|
||
Due after five years through ten years
|
2,078,025
|
|
|
2,188,372
|
|
||
Due after ten years
|
3,269,532
|
|
|
3,556,224
|
|
||
|
7,153,801
|
|
|
7,579,453
|
|
||
Commercial mortgage-backed securities
|
1,709,453
|
|
|
1,758,022
|
|
||
Residential mortgage-backed securities
|
877,279
|
|
|
909,969
|
|
||
Asset-backed securities
|
11,150
|
|
|
11,196
|
|
||
Total fixed maturities
|
$
|
9,751,683
|
|
|
$
|
10,258,640
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest:
|
|
|
|
|
|
|
|
||||||||
Municipal bonds (tax-exempt)
|
$
|
17,885
|
|
|
$
|
20,287
|
|
|
$
|
36,711
|
|
|
$
|
41,222
|
|
Municipal bonds (taxable)
|
18,613
|
|
|
18,220
|
|
|
37,192
|
|
|
35,853
|
|
||||
Other taxable bonds
|
41,242
|
|
|
39,548
|
|
|
82,023
|
|
|
77,017
|
|
||||
Short-term investments, including overnight deposits
|
13,753
|
|
|
11,915
|
|
|
23,965
|
|
|
22,505
|
|
||||
Dividends on equity securities
|
22,207
|
|
|
20,474
|
|
|
47,993
|
|
|
44,481
|
|
||||
Income (loss) from equity method investments
|
1,174
|
|
|
(1,490
|
)
|
|
3,070
|
|
|
288
|
|
||||
Other
|
873
|
|
|
97
|
|
|
3,174
|
|
|
(13
|
)
|
||||
|
115,747
|
|
|
109,051
|
|
|
234,128
|
|
|
221,353
|
|
||||
Investment expenses
|
(3,916
|
)
|
|
(3,664
|
)
|
|
(8,115
|
)
|
|
(7,950
|
)
|
||||
Net investment income
|
$
|
111,831
|
|
|
$
|
105,387
|
|
|
$
|
226,013
|
|
|
$
|
213,403
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Realized gains:
|
|
|
|
|
|
|
|
||||||||
Sales and maturities of fixed maturities
|
$
|
1,661
|
|
|
$
|
1,085
|
|
|
$
|
1,804
|
|
|
$
|
1,226
|
|
Sales and maturities of short-term investments
|
499
|
|
|
21
|
|
|
1,334
|
|
|
787
|
|
||||
Other
|
452
|
|
|
789
|
|
|
460
|
|
|
867
|
|
||||
Total realized gains
|
2,612
|
|
|
1,895
|
|
|
3,598
|
|
|
2,880
|
|
||||
Realized losses:
|
|
|
|
|
|
|
|
||||||||
Sales and maturities of fixed maturities
|
(630
|
)
|
|
(1,092
|
)
|
|
(911
|
)
|
|
(2,044
|
)
|
||||
Sales and maturities of short-term investments
|
(2,049
|
)
|
|
(7,609
|
)
|
|
(2,073
|
)
|
|
(6,657
|
)
|
||||
Other
|
—
|
|
|
(836
|
)
|
|
—
|
|
|
(2,767
|
)
|
||||
Total realized losses
|
(2,679
|
)
|
|
(9,537
|
)
|
|
(2,984
|
)
|
|
(11,468
|
)
|
||||
Net realized investment gains (losses)
|
(67
|
)
|
|
(7,642
|
)
|
|
614
|
|
|
(8,588
|
)
|
||||
Change in fair value of equity securities:
|
|
|
|
|
|
|
|
||||||||
Change in fair value of equity securities sold during the period
|
202
|
|
|
9,631
|
|
|
26,616
|
|
|
13,897
|
|
||||
Change in fair value of equity securities held at the end of the period
|
425,518
|
|
|
103,260
|
|
|
1,010,614
|
|
|
(23,058
|
)
|
||||
Change in fair value of equity securities
|
425,720
|
|
|
112,891
|
|
|
1,037,230
|
|
|
(9,161
|
)
|
||||
Net investment gains (losses)
|
$
|
425,653
|
|
|
$
|
105,249
|
|
|
$
|
1,037,844
|
|
|
$
|
(17,749
|
)
|
Change in net unrealized gains on available-for-sale investments included in other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
$
|
197,248
|
|
|
$
|
(143,593
|
)
|
|
$
|
414,542
|
|
|
$
|
(281,093
|
)
|
Short-term investments
|
2,506
|
|
|
5,499
|
|
|
3,861
|
|
|
(1,178
|
)
|
||||
Net increase (decrease)
|
$
|
199,754
|
|
|
$
|
(138,094
|
)
|
|
$
|
418,403
|
|
|
$
|
(282,271
|
)
|
|
June 30, 2019
|
||||||||||||||
(dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
—
|
|
|
$
|
297,673
|
|
|
$
|
—
|
|
|
$
|
297,673
|
|
U.S. government-sponsored enterprises
|
—
|
|
|
356,859
|
|
|
—
|
|
|
356,859
|
|
||||
Obligations of states, municipalities and political subdivisions
|
—
|
|
|
4,362,197
|
|
|
—
|
|
|
4,362,197
|
|
||||
Foreign governments
|
—
|
|
|
1,632,575
|
|
|
—
|
|
|
1,632,575
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
1,758,022
|
|
|
—
|
|
|
1,758,022
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
909,969
|
|
|
—
|
|
|
909,969
|
|
||||
Asset-backed securities
|
—
|
|
|
11,196
|
|
|
—
|
|
|
11,196
|
|
||||
Corporate bonds
|
—
|
|
|
930,149
|
|
|
—
|
|
|
930,149
|
|
||||
Total fixed maturities, available-for-sale
|
—
|
|
|
10,258,640
|
|
|
—
|
|
|
10,258,640
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Insurance, banks and other financial institutions
|
2,219,767
|
|
|
—
|
|
|
37,988
|
|
|
2,257,755
|
|
||||
Industrial, consumer and all other
|
4,618,178
|
|
|
—
|
|
|
—
|
|
|
4,618,178
|
|
||||
Total equity securities
|
6,837,945
|
|
|
—
|
|
|
37,988
|
|
|
6,875,933
|
|
||||
Short-term investments, available-for-sale
|
1,279,382
|
|
|
104,190
|
|
|
—
|
|
|
1,383,572
|
|
||||
Total investments
|
$
|
8,117,327
|
|
|
$
|
10,362,830
|
|
|
$
|
37,988
|
|
|
$
|
18,518,145
|
|
|
December 31, 2018
|
||||||||||||||
(dollars in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
—
|
|
|
$
|
246,642
|
|
|
$
|
—
|
|
|
$
|
246,642
|
|
U.S. government-sponsored enterprises
|
—
|
|
|
359,322
|
|
|
—
|
|
|
359,322
|
|
||||
Obligations of states, municipalities and political subdivisions
|
—
|
|
|
4,352,930
|
|
|
—
|
|
|
4,352,930
|
|
||||
Foreign governments
|
—
|
|
|
1,559,604
|
|
|
—
|
|
|
1,559,604
|
|
||||
Commercial mortgage-backed securities
|
—
|
|
|
1,650,199
|
|
|
—
|
|
|
1,650,199
|
|
||||
Residential mortgage-backed securities
|
—
|
|
|
880,172
|
|
|
—
|
|
|
880,172
|
|
||||
Asset-backed securities
|
—
|
|
|
19,408
|
|
|
—
|
|
|
19,408
|
|
||||
Corporate bonds
|
—
|
|
|
974,911
|
|
|
—
|
|
|
974,911
|
|
||||
Total fixed maturities, available-for-sale
|
—
|
|
|
10,043,188
|
|
|
—
|
|
|
10,043,188
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Insurance, banks and other financial institutions
|
1,876,811
|
|
|
—
|
|
|
53,728
|
|
|
1,930,539
|
|
||||
Industrial, consumer and all other
|
3,790,406
|
|
|
—
|
|
|
—
|
|
|
3,790,406
|
|
||||
Total equity securities
|
5,667,217
|
|
|
—
|
|
|
53,728
|
|
|
5,720,945
|
|
||||
Short-term investments, available-for-sale
|
981,616
|
|
|
96,080
|
|
|
—
|
|
|
1,077,696
|
|
||||
Total investments
|
$
|
6,648,833
|
|
|
$
|
10,139,268
|
|
|
$
|
53,728
|
|
|
$
|
16,841,829
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Equity securities, beginning of period
|
$
|
44,812
|
|
|
$
|
151,398
|
|
|
$
|
53,728
|
|
|
$
|
168,809
|
|
Purchases
|
500
|
|
|
—
|
|
|
500
|
|
|
28,900
|
|
||||
Sales
|
—
|
|
|
(6,401
|
)
|
|
(6,869
|
)
|
|
(34,653
|
)
|
||||
Net investment losses on Level 3 investments
|
(7,324
|
)
|
|
(25,322
|
)
|
|
(9,371
|
)
|
|
(43,381
|
)
|
||||
Transfers into Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Equity securities, end of period
|
$
|
37,988
|
|
|
$
|
119,675
|
|
|
$
|
37,988
|
|
|
$
|
119,675
|
|
|
Quarter Ended June 30, 2019
|
||||||||||||||||||||||
(dollars in thousands)
|
Insurance
|
|
Reinsurance
|
|
Investing
|
|
Markel Ventures (1)
|
|
Other (2)
|
|
Consolidated
|
||||||||||||
Gross premium volume
|
$
|
1,368,348
|
|
|
$
|
223,381
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
655,418
|
|
|
$
|
2,247,147
|
|
Net written premiums
|
1,126,170
|
|
|
178,802
|
|
|
—
|
|
|
—
|
|
|
666
|
|
|
1,305,638
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earned premiums
|
991,269
|
|
|
207,728
|
|
|
—
|
|
|
—
|
|
|
464
|
|
|
1,199,461
|
|
||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current accident year
|
(657,372
|
)
|
|
(139,340
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(796,712
|
)
|
||||||
Prior accident years
|
101,721
|
|
|
18,190
|
|
|
—
|
|
|
—
|
|
|
(1,319
|
)
|
|
118,592
|
|
||||||
Amortization of policy acquisition costs
|
(208,609
|
)
|
|
(54,456
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(263,065
|
)
|
||||||
Other operating expenses
|
(179,432
|
)
|
|
(23,306
|
)
|
|
—
|
|
|
—
|
|
|
3,487
|
|
|
(199,251
|
)
|
||||||
Underwriting profit
|
47,577
|
|
|
8,816
|
|
|
—
|
|
|
—
|
|
|
2,632
|
|
|
59,025
|
|
||||||
Net investment income
|
—
|
|
|
—
|
|
|
111,633
|
|
|
198
|
|
|
—
|
|
|
111,831
|
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
425,653
|
|
|
—
|
|
|
—
|
|
|
425,653
|
|
||||||
Products revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
501,676
|
|
|
—
|
|
|
501,676
|
|
||||||
Services and other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
115,311
|
|
|
85,184
|
|
|
200,495
|
|
||||||
Products expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(425,138
|
)
|
|
—
|
|
|
(425,138
|
)
|
||||||
Services and other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(99,860
|
)
|
|
(70,936
|
)
|
|
(170,796
|
)
|
||||||
Amortization of intangible assets (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,510
|
)
|
|
(25,790
|
)
|
|
(36,300
|
)
|
||||||
Segment profit (loss)
|
$
|
47,577
|
|
|
$
|
8,816
|
|
|
$
|
537,286
|
|
|
$
|
81,677
|
|
|
$
|
(8,910
|
)
|
|
$
|
666,446
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(41,267
|
)
|
|||||||||||
Net foreign exchange gains
|
|
|
|
|
|
|
|
|
|
|
25,015
|
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
650,194
|
|
||||||||||
U.S. GAAP combined ratio (4)
|
95
|
%
|
|
96
|
%
|
|
|
|
|
|
NM
|
|
(5)
|
95
|
%
|
(1)
|
Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $13.5 million for the quarter ended June 30, 2019.
|
(2)
|
Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that are not allocated to a reportable segment.
|
(3)
|
Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to any other reportable segments.
|
(4)
|
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.
|
(5)
|
NM - Ratio is not meaningful
|
|
Quarter Ended June 30, 2018
|
||||||||||||||||||||||
(dollars in thousands)
|
Insurance
|
|
Reinsurance
|
|
Investing
|
|
Markel Ventures (1)
|
|
Other (2)
|
|
Consolidated
|
||||||||||||
Gross premium volume
|
$
|
1,233,828
|
|
|
$
|
208,805
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
554,800
|
|
|
$
|
1,997,433
|
|
Net written premiums
|
1,001,126
|
|
|
178,729
|
|
|
—
|
|
|
—
|
|
|
751
|
|
|
1,180,606
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earned premiums
|
918,194
|
|
|
229,613
|
|
|
—
|
|
|
—
|
|
|
377
|
|
|
1,148,184
|
|
||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current accident year
|
(610,634
|
)
|
|
(145,992
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
(756,674
|
)
|
||||||
Prior accident years
|
139,485
|
|
|
18,525
|
|
|
—
|
|
|
—
|
|
|
(514
|
)
|
|
157,496
|
|
||||||
Amortization of policy acquisition costs
|
(191,843
|
)
|
|
(57,407
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(249,250
|
)
|
||||||
Other operating expenses
|
(180,928
|
)
|
|
(21,178
|
)
|
|
—
|
|
|
—
|
|
|
(214
|
)
|
|
(202,320
|
)
|
||||||
Underwriting profit (loss)
|
74,274
|
|
|
23,561
|
|
|
—
|
|
|
—
|
|
|
(399
|
)
|
|
97,436
|
|
||||||
Net investment income
|
—
|
|
|
—
|
|
|
105,195
|
|
|
192
|
|
|
—
|
|
|
105,387
|
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
105,249
|
|
|
—
|
|
|
—
|
|
|
105,249
|
|
||||||
Products revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
472,323
|
|
|
—
|
|
|
472,323
|
|
||||||
Services and other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
106,433
|
|
|
49,437
|
|
|
155,870
|
|
||||||
Products expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(450,585
|
)
|
|
—
|
|
|
(450,585
|
)
|
||||||
Services and other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(90,344
|
)
|
|
(39,510
|
)
|
|
(129,854
|
)
|
||||||
Amortization of intangible assets (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,096
|
)
|
|
(19,545
|
)
|
|
(29,641
|
)
|
||||||
Impairment of goodwill and intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,904
|
)
|
|
—
|
|
|
(14,904
|
)
|
||||||
Segment profit (loss)
|
$
|
74,274
|
|
|
$
|
23,561
|
|
|
$
|
210,444
|
|
|
$
|
13,019
|
|
|
$
|
(10,017
|
)
|
|
$
|
311,281
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(36,702
|
)
|
|||||||||||
Net foreign exchange gains
|
|
|
|
|
|
|
|
|
|
|
86,158
|
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
360,737
|
|
||||||||||
U.S. GAAP combined ratio (4)
|
92
|
%
|
|
90
|
%
|
|
|
|
|
|
NM
|
|
(5)
|
92
|
%
|
(1)
|
Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $12.8 million for the quarter ended June 30, 2018.
|
(2)
|
Other represents the total loss attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that are not allocated to a reportable segment.
|
(3)
|
Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to any other reportable segments.
|
(4)
|
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.
|
(5)
|
NM - Ratio is not meaningful
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||
(dollars in thousands)
|
Insurance
|
|
Reinsurance
|
|
Investing
|
|
Markel Ventures (1)
|
|
Other (2)
|
|
Consolidated
|
||||||||||||
Gross premium volume
|
$
|
2,561,196
|
|
|
$
|
736,758
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,204,235
|
|
|
$
|
4,502,189
|
|
Net written premiums
|
2,124,528
|
|
|
657,769
|
|
|
—
|
|
|
—
|
|
|
434
|
|
|
2,782,731
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earned premiums
|
1,964,996
|
|
|
438,238
|
|
|
—
|
|
|
—
|
|
|
204
|
|
|
2,403,438
|
|
||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current accident year
|
(1,275,870
|
)
|
|
(278,812
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,554,682
|
)
|
||||||
Prior accident years
|
174,295
|
|
|
6,895
|
|
|
—
|
|
|
—
|
|
|
7,626
|
|
|
188,816
|
|
||||||
Amortization of policy acquisition costs
|
(408,608
|
)
|
|
(116,284
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(524,892
|
)
|
||||||
Other operating expenses
|
(355,153
|
)
|
|
(37,865
|
)
|
|
—
|
|
|
—
|
|
|
382
|
|
|
(392,636
|
)
|
||||||
Underwriting profit
|
99,660
|
|
|
12,172
|
|
|
—
|
|
|
—
|
|
|
8,212
|
|
|
120,044
|
|
||||||
Net investment income
|
—
|
|
|
—
|
|
|
225,563
|
|
|
450
|
|
|
—
|
|
|
226,013
|
|
||||||
Net investment gains
|
—
|
|
|
—
|
|
|
1,037,844
|
|
|
—
|
|
|
—
|
|
|
1,037,844
|
|
||||||
Products revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
850,470
|
|
|
—
|
|
|
850,470
|
|
||||||
Services and other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
221,280
|
|
|
172,559
|
|
|
393,839
|
|
||||||
Products expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(744,564
|
)
|
|
—
|
|
|
(744,564
|
)
|
||||||
Services and other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(194,730
|
)
|
|
(150,672
|
)
|
|
(345,402
|
)
|
||||||
Amortization of intangible assets (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,317
|
)
|
|
(55,651
|
)
|
|
(76,968
|
)
|
||||||
Segment profit (loss)
|
$
|
99,660
|
|
|
$
|
12,172
|
|
|
$
|
1,263,407
|
|
|
$
|
111,589
|
|
|
$
|
(25,552
|
)
|
|
$
|
1,461,276
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(81,557
|
)
|
|||||||||||
Net foreign exchange gains
|
|
|
|
|
|
|
|
|
|
|
3,151
|
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
1,382,870
|
|
||||||||||
U.S. GAAP combined ratio (4)
|
95
|
%
|
|
97
|
%
|
|
|
|
|
|
NM
|
|
(5)
|
95
|
%
|
(1)
|
Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $27.5 million for the six months ended June 30, 2019.
|
(2)
|
Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that are not allocated to a reportable segment.
|
(3)
|
Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to any other reportable segments.
|
(4)
|
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.
|
(5)
|
NM - Ratio is not meaningful
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||
(dollars in thousands)
|
Insurance
|
|
Reinsurance
|
|
Investing
|
|
Markel Ventures (1)
|
|
Other (2)
|
|
Consolidated
|
||||||||||||
Gross premium volume
|
$
|
2,327,190
|
|
|
$
|
701,138
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,015,989
|
|
|
$
|
4,044,317
|
|
Net written premiums
|
1,914,105
|
|
|
599,787
|
|
|
—
|
|
|
—
|
|
|
1,516
|
|
|
2,515,408
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earned premiums
|
1,821,045
|
|
|
477,577
|
|
|
—
|
|
|
—
|
|
|
583
|
|
|
2,299,205
|
|
||||||
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current accident year
|
(1,180,661
|
)
|
|
(299,173
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
(1,479,882
|
)
|
||||||
Prior accident years
|
258,658
|
|
|
5,454
|
|
|
—
|
|
|
—
|
|
|
1,474
|
|
|
265,586
|
|
||||||
Amortization of policy acquisition costs
|
(371,328
|
)
|
|
(119,827
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(491,155
|
)
|
||||||
Other operating expenses
|
(350,899
|
)
|
|
(33,308
|
)
|
|
—
|
|
|
—
|
|
|
(598
|
)
|
|
(384,805
|
)
|
||||||
Underwriting profit
|
176,815
|
|
|
30,723
|
|
|
—
|
|
|
—
|
|
|
1,411
|
|
|
208,949
|
|
||||||
Net investment income
|
—
|
|
|
—
|
|
|
213,089
|
|
|
314
|
|
|
—
|
|
|
213,403
|
|
||||||
Net investment losses
|
—
|
|
|
—
|
|
|
(17,749
|
)
|
|
—
|
|
|
—
|
|
|
(17,749
|
)
|
||||||
Products revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
766,459
|
|
|
—
|
|
|
766,459
|
|
||||||
Services and other revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
204,354
|
|
|
96,812
|
|
|
301,166
|
|
||||||
Products expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(720,282
|
)
|
|
—
|
|
|
(720,282
|
)
|
||||||
Services and other expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(178,952
|
)
|
|
(83,335
|
)
|
|
(262,287
|
)
|
||||||
Amortization of intangible assets (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,193
|
)
|
|
(38,271
|
)
|
|
(58,464
|
)
|
||||||
Impairment of goodwill and intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,904
|
)
|
|
—
|
|
|
(14,904
|
)
|
||||||
Segment profit (loss)
|
$
|
176,815
|
|
|
$
|
30,723
|
|
|
$
|
195,340
|
|
|
$
|
36,796
|
|
|
$
|
(23,383
|
)
|
|
$
|
416,291
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(76,761
|
)
|
|||||||||||
Net foreign exchange gains
|
|
|
|
|
|
|
|
|
|
|
64,044
|
|
|||||||||||
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
403,574
|
|
||||||||||
U.S. GAAP combined ratio (4)
|
90
|
%
|
|
94
|
%
|
|
|
|
|
|
NM
|
|
(5)
|
91
|
%
|
(1)
|
Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $25.5 million for the six months ended June 30, 2018.
|
(2)
|
Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that are not allocated to a reportable segment.
|
(3)
|
Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to any other reportable segments.
|
(4)
|
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.
|
(5)
|
NM - Ratio is not meaningful
|
b)
|
The following table reconciles segment assets to the Company's consolidated balance sheets.
|
(dollars in thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Segment assets:
|
|
|
|
||||
Investing
|
$
|
21,214,083
|
|
|
$
|
19,100,790
|
|
Underwriting
|
7,186,643
|
|
|
6,451,984
|
|
||
Markel Ventures
|
2,308,908
|
|
|
2,124,506
|
|
||
Total segment assets
|
30,709,634
|
|
|
27,677,280
|
|
||
Other operations
|
5,711,950
|
|
|
5,628,983
|
|
||
Total assets
|
$
|
36,421,584
|
|
|
$
|
33,306,263
|
|
|
Quarter Ended June 30,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
(dollars in thousands)
|
Markel Ventures
|
|
Other
|
|
Total
|
|
Markel Ventures
|
|
Other
|
|
Total
|
||||||||||||
Products
|
$
|
486,209
|
|
|
$
|
—
|
|
|
$
|
486,209
|
|
|
$
|
461,007
|
|
|
$
|
—
|
|
|
$
|
461,007
|
|
Services
|
101,908
|
|
|
26,881
|
|
|
128,789
|
|
|
94,035
|
|
|
8,972
|
|
|
103,007
|
|
||||||
Investment management
|
—
|
|
|
30,096
|
|
|
30,096
|
|
|
—
|
|
|
17,418
|
|
|
17,418
|
|
||||||
Total revenues from contracts with customers
|
588,117
|
|
|
56,977
|
|
|
645,094
|
|
|
555,042
|
|
|
26,390
|
|
|
581,432
|
|
||||||
Program services and other fronting arrangements
|
—
|
|
|
27,861
|
|
|
27,861
|
|
|
—
|
|
|
22,635
|
|
|
22,635
|
|
||||||
Other
|
28,870
|
|
|
346
|
|
|
29,216
|
|
|
23,714
|
|
|
412
|
|
|
24,126
|
|
||||||
Total
|
$
|
616,987
|
|
|
$
|
85,184
|
|
|
$
|
702,171
|
|
|
$
|
578,756
|
|
|
$
|
49,437
|
|
|
$
|
628,193
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||
(dollars in thousands)
|
Markel Ventures
|
|
Other
|
|
Total
|
|
Markel Ventures
|
|
Other
|
|
Total
|
||||||||||||
Products
|
$
|
819,703
|
|
|
$
|
—
|
|
|
$
|
819,703
|
|
|
$
|
744,480
|
|
|
$
|
—
|
|
|
$
|
744,480
|
|
Services
|
194,555
|
|
|
46,626
|
|
|
241,181
|
|
|
181,477
|
|
|
17,896
|
|
|
199,373
|
|
||||||
Investment management
|
—
|
|
|
70,988
|
|
|
70,988
|
|
|
—
|
|
|
34,707
|
|
|
34,707
|
|
||||||
Total revenues from contracts with customers
|
1,014,258
|
|
|
117,614
|
|
|
1,131,872
|
|
|
925,957
|
|
|
52,603
|
|
|
978,560
|
|
||||||
Program services and other fronting arrangements
|
—
|
|
|
54,178
|
|
|
54,178
|
|
|
—
|
|
|
43,332
|
|
|
43,332
|
|
||||||
Other
|
57,492
|
|
|
767
|
|
|
58,259
|
|
|
44,856
|
|
|
877
|
|
|
45,733
|
|
||||||
Total
|
$
|
1,071,750
|
|
|
$
|
172,559
|
|
|
$
|
1,244,309
|
|
|
$
|
970,813
|
|
|
$
|
96,812
|
|
|
$
|
1,067,625
|
|
(dollars in thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Receivables
|
$
|
375,038
|
|
|
$
|
247,532
|
|
Customer deposits
|
$
|
70,785
|
|
|
$
|
48,238
|
|
|
Six Months Ended June 30,
|
||||||
(dollars in thousands)
|
2019
|
|
2018
|
||||
Net reserves for losses and loss adjustment expenses, beginning of year
|
$
|
9,214,443
|
|
|
$
|
8,964,945
|
|
Foreign currency movements
|
(2,866
|
)
|
|
(20,554
|
)
|
||
Adjusted net reserves for losses and loss adjustment expenses, beginning of year
|
9,211,577
|
|
|
8,944,391
|
|
||
Incurred losses and loss adjustment expenses:
|
|
|
|
||||
Current accident year
|
1,554,682
|
|
|
1,479,882
|
|
||
Prior accident years
|
(188,949
|
)
|
|
(265,613
|
)
|
||
Total incurred losses and loss adjustment expenses
|
1,365,733
|
|
|
1,214,269
|
|
||
Payments:
|
|
|
|
||||
Current accident year
|
206,461
|
|
|
195,873
|
|
||
Prior accident years
|
1,173,743
|
|
|
1,073,004
|
|
||
Total payments
|
1,380,204
|
|
|
1,268,877
|
|
||
Effect of foreign currency rate changes
|
760
|
|
|
(101
|
)
|
||
Net reserves for losses and loss adjustment expenses, end of period
|
9,197,866
|
|
|
8,889,682
|
|
||
Reinsurance recoverables on unpaid losses
|
5,137,917
|
|
|
4,739,259
|
|
||
Gross reserves for losses and loss adjustment expenses, end of period
|
$
|
14,335,783
|
|
|
$
|
13,628,941
|
|
|
Quarter Ended June 30,
|
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
Direct
|
|
Assumed
|
|
Ceded
|
|
Net Premiums
|
|
Direct
|
|
Assumed
|
|
Ceded
|
|
Net Premiums
|
||||||||||||||||
Underwriting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Written
|
$
|
1,323,128
|
|
|
$
|
268,837
|
|
|
$
|
(286,978
|
)
|
|
$
|
1,304,987
|
|
|
$
|
1,182,683
|
|
|
$
|
259,960
|
|
|
$
|
(262,781
|
)
|
|
$
|
1,179,862
|
|
Earned
|
1,159,544
|
|
|
331,842
|
|
|
(292,374
|
)
|
|
1,199,012
|
|
|
1,070,248
|
|
|
316,718
|
|
|
(239,152
|
)
|
|
1,147,814
|
|
||||||||
Program services and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Written
|
652,716
|
|
|
2,466
|
|
|
(654,531
|
)
|
|
651
|
|
|
549,630
|
|
|
5,160
|
|
|
(554,046
|
)
|
|
744
|
|
||||||||
Earned
|
538,131
|
|
|
12,878
|
|
|
(550,560
|
)
|
|
449
|
|
|
470,824
|
|
|
2,286
|
|
|
(472,740
|
)
|
|
370
|
|
||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Written
|
1,975,844
|
|
|
271,303
|
|
|
(941,509
|
)
|
|
1,305,638
|
|
|
1,732,313
|
|
|
265,120
|
|
|
(816,827
|
)
|
|
1,180,606
|
|
||||||||
Earned
|
$
|
1,697,675
|
|
|
$
|
344,720
|
|
|
$
|
(842,934
|
)
|
|
$
|
1,199,461
|
|
|
$
|
1,541,072
|
|
|
$
|
319,004
|
|
|
$
|
(711,892
|
)
|
|
$
|
1,148,184
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
Direct
|
|
Assumed
|
|
Ceded
|
|
Net Premiums
|
|
Direct
|
|
Assumed
|
|
Ceded
|
|
Net Premiums
|
||||||||||||||||
Underwriting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Written
|
$
|
2,450,516
|
|
|
$
|
846,934
|
|
|
$
|
(515,610
|
)
|
|
$
|
2,781,840
|
|
|
$
|
2,222,061
|
|
|
$
|
806,273
|
|
|
$
|
(514,338
|
)
|
|
$
|
2,513,996
|
|
Earned
|
2,291,100
|
|
|
619,217
|
|
|
(507,540
|
)
|
|
2,402,777
|
|
|
2,108,183
|
|
|
652,208
|
|
|
(461,665
|
)
|
|
2,298,726
|
|
||||||||
Program services and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Written
|
1,170,417
|
|
|
34,322
|
|
|
(1,203,848
|
)
|
|
891
|
|
|
1,007,454
|
|
|
8,529
|
|
|
(1,014,571
|
)
|
|
1,412
|
|
||||||||
Earned
|
1,053,083
|
|
|
29,273
|
|
|
(1,081,695
|
)
|
|
661
|
|
|
893,749
|
|
|
3,738
|
|
|
(897,008
|
)
|
|
479
|
|
||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Written
|
3,620,933
|
|
|
881,256
|
|
|
(1,719,458
|
)
|
|
2,782,731
|
|
|
3,229,515
|
|
|
814,802
|
|
|
(1,528,909
|
)
|
|
2,515,408
|
|
||||||||
Earned
|
$
|
3,344,183
|
|
|
$
|
648,490
|
|
|
$
|
(1,589,235
|
)
|
|
$
|
2,403,438
|
|
|
$
|
3,001,932
|
|
|
$
|
655,946
|
|
|
$
|
(1,358,673
|
)
|
|
$
|
2,299,205
|
|
Years Ending December 31,
|
(dollars in thousands)
|
||
2019
|
$
|
27,505
|
|
2020
|
46,088
|
|
|
2021
|
41,748
|
|
|
2022
|
35,556
|
|
|
2023
|
30,469
|
|
|
2024 and thereafter
|
122,095
|
|
|
Total lease payments
|
303,461
|
|
|
Less imputed interest
|
(41,741
|
)
|
|
Total operating lease liabilities
|
$
|
261,720
|
|
(dollars in thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Equity securities: Investment in unconsolidated Markel CATCo Fund
|
$
|
11,320
|
|
|
$
|
27,547
|
|
Other
|
503
|
|
|
1,082
|
|
||
Total Assets
|
$
|
11,823
|
|
|
$
|
28,629
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Note payable
|
$
|
24,875
|
|
|
$
|
24,875
|
|
Other
|
99
|
|
|
200
|
|
||
Total Liabilities
|
$
|
24,974
|
|
|
$
|
25,075
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except per share amounts)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income to shareholders
|
$
|
497,298
|
|
|
$
|
278,231
|
|
|
$
|
1,073,725
|
|
|
$
|
213,925
|
|
Adjustment of redeemable noncontrolling interests
|
3,324
|
|
|
363
|
|
|
21,685
|
|
|
5,414
|
|
||||
Adjusted net income to shareholders
|
$
|
500,622
|
|
|
$
|
278,594
|
|
|
$
|
1,095,410
|
|
|
$
|
219,339
|
|
|
|
|
|
|
|
|
|
||||||||
Basic common shares outstanding
|
13,866
|
|
|
13,925
|
|
|
13,881
|
|
|
13,929
|
|
||||
Dilutive potential common shares from restricted stock units and restricted stock
|
12
|
|
|
25
|
|
|
12
|
|
|
24
|
|
||||
Diluted shares outstanding
|
13,878
|
|
|
13,950
|
|
|
13,893
|
|
|
13,953
|
|
||||
Basic net income per share
|
$
|
36.10
|
|
|
$
|
20.01
|
|
|
$
|
78.91
|
|
|
$
|
15.75
|
|
Diluted net income per share
|
$
|
36.07
|
|
|
$
|
19.97
|
|
|
$
|
78.85
|
|
|
$
|
15.72
|
|
(dollars in thousands)
|
Unrealized Holding Gains on Available-for-Sale Securities
|
|
Foreign Currency
|
|
Net Actuarial Pension Loss
|
|
Total
|
||||||||
December 31, 2017
|
$
|
2,477,973
|
|
|
$
|
(74,003
|
)
|
|
$
|
(58,399
|
)
|
|
$
|
2,345,571
|
|
Cumulative effect of adoption of ASU No. 2016-01
|
(2,615,734
|
)
|
|
2,492
|
|
|
—
|
|
|
(2,613,242
|
)
|
||||
Cumulative effect of adoption of ASU No. 2018-02
|
401,539
|
|
|
—
|
|
|
—
|
|
|
401,539
|
|
||||
January 1, 2018
|
263,778
|
|
|
(71,511
|
)
|
|
(58,399
|
)
|
|
133,868
|
|
||||
Other comprehensive income (loss) before reclassifications
|
(215,067
|
)
|
|
(5,516
|
)
|
|
1,232
|
|
|
(219,351
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
(5,077
|
)
|
|
—
|
|
|
—
|
|
|
(5,077
|
)
|
||||
Total other comprehensive income (loss)
|
(220,144
|
)
|
|
(5,516
|
)
|
|
1,232
|
|
|
(224,428
|
)
|
||||
June 30, 2018
|
$
|
43,634
|
|
|
$
|
(77,027
|
)
|
|
$
|
(57,167
|
)
|
|
$
|
(90,560
|
)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
$
|
48,060
|
|
|
$
|
(86,652
|
)
|
|
$
|
(56,058
|
)
|
|
$
|
(94,650
|
)
|
Other comprehensive income (loss) before reclassifications
|
280,798
|
|
|
(1,381
|
)
|
|
1,876
|
|
|
281,293
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
557
|
|
|
—
|
|
|
—
|
|
|
557
|
|
||||
Total other comprehensive income (loss)
|
281,355
|
|
|
(1,381
|
)
|
|
1,876
|
|
|
281,850
|
|
||||
June 30, 2019
|
$
|
329,415
|
|
|
$
|
(88,033
|
)
|
|
$
|
(54,182
|
)
|
|
$
|
187,200
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in net unrealized gains on available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Net holding gains (losses) arising during the period
|
$
|
34,332
|
|
|
$
|
(32,548
|
)
|
|
$
|
75,150
|
|
|
$
|
(60,778
|
)
|
Reclassification adjustments for net gains (losses) included in net income
|
214
|
|
|
(1,566
|
)
|
|
148
|
|
|
(1,349
|
)
|
||||
Change in net unrealized gains on available-for-sale investments
|
34,546
|
|
|
(34,114
|
)
|
|
75,298
|
|
|
(62,127
|
)
|
||||
Change in foreign currency translation adjustments
|
—
|
|
|
(4,288
|
)
|
|
—
|
|
|
(3,522
|
)
|
||||
Change in net actuarial pension loss
|
137
|
|
|
192
|
|
|
499
|
|
|
328
|
|
||||
Total
|
$
|
34,683
|
|
|
$
|
(38,210
|
)
|
|
$
|
75,797
|
|
|
$
|
(65,321
|
)
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Unrealized holding gains on available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Net realized investment gains (losses), excluding other-than-temporary impairment losses
|
(1,017
|
)
|
|
7,457
|
|
|
(705
|
)
|
|
6,426
|
|
||||
Income taxes
|
214
|
|
|
(1,566
|
)
|
|
148
|
|
|
(1,349
|
)
|
||||
Reclassification of unrealized holding gains (losses), net of taxes
|
$
|
(803
|
)
|
|
$
|
5,891
|
|
|
$
|
(557
|
)
|
|
$
|
5,077
|
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial pension loss:
|
|
|
|
|
|
|
|
||||||||
Underwriting, acquisition and insurance expenses
|
$
|
(652
|
)
|
|
$
|
(760
|
)
|
|
$
|
(2,375
|
)
|
|
$
|
(1,560
|
)
|
Income taxes
|
137
|
|
|
192
|
|
|
499
|
|
|
328
|
|
||||
Reclassification of net actuarial pension loss, net of taxes
|
$
|
(515
|
)
|
|
$
|
(568
|
)
|
|
$
|
(1,876
|
)
|
|
$
|
(1,232
|
)
|
•
|
Underwriting - our underwriting operations are comprised of our risk-bearing insurance and reinsurance operations
|
•
|
Investing - our investing activities are primarily related to our underwriting operations
|
•
|
Markel Ventures - our Markel Ventures operations include our controlling interests in a diverse portfolio of businesses that operate outside of the specialty insurance marketplace
|
•
|
Insurance-linked securities - our insurance-linked securities operations include investment fund managers that offer a variety of investment products, including insurance-linked securities, catastrophe bonds, insurance swaps and weather derivatives
|
•
|
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
|
•
|
ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
•
|
ASU No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts
|
•
|
ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Insurance segment underwriting profit
|
$
|
47,577
|
|
|
$
|
74,274
|
|
|
$
|
99,660
|
|
|
$
|
176,815
|
|
Reinsurance segment underwriting profit
|
8,816
|
|
|
23,561
|
|
|
12,172
|
|
|
30,723
|
|
||||
Net investment income (1)
|
111,633
|
|
|
105,195
|
|
|
225,563
|
|
|
213,089
|
|
||||
Net investment gains (losses)
|
425,653
|
|
|
105,249
|
|
|
1,037,844
|
|
|
(17,749
|
)
|
||||
Markel Ventures segment profit (2)
|
81,677
|
|
|
13,019
|
|
|
111,589
|
|
|
36,796
|
|
||||
Other operations (3)
|
(8,910
|
)
|
|
(10,017
|
)
|
|
(25,552
|
)
|
|
(23,383
|
)
|
||||
Interest expense
|
(41,267
|
)
|
|
(36,702
|
)
|
|
(81,557
|
)
|
|
(76,761
|
)
|
||||
Net foreign exchange gains
|
25,015
|
|
|
86,158
|
|
|
3,151
|
|
|
64,044
|
|
||||
Income tax expense
|
(143,711
|
)
|
|
(81,150
|
)
|
|
(298,874
|
)
|
|
(189,581
|
)
|
||||
Net income attributable to noncontrolling interests
|
(9,185
|
)
|
|
(1,356
|
)
|
|
(10,271
|
)
|
|
(68
|
)
|
||||
Net income to shareholders
|
$
|
497,298
|
|
|
$
|
278,231
|
|
|
$
|
1,073,725
|
|
|
$
|
213,925
|
|
(1)
|
Net investment income attributable to Markel Ventures is included in segment profit for Markel Ventures. All other net investment income is attributable to the investing segment.
|
(2)
|
Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to any other reportable segments.
|
(3)
|
Other operations represents the total loss attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment.
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Gross premium volume (1)
|
$
|
1,592,616
|
|
|
$
|
1,443,387
|
|
|
$
|
3,298,341
|
|
|
$
|
3,029,746
|
|
Net written premiums
|
1,305,638
|
|
|
1,180,606
|
|
|
2,782,731
|
|
|
2,515,408
|
|
||||
Net retention (1)
|
82
|
%
|
|
82
|
%
|
|
84
|
%
|
|
83
|
%
|
||||
Earned premiums
|
1,199,461
|
|
|
1,148,184
|
|
|
2,403,438
|
|
|
2,299,205
|
|
||||
Losses and loss adjustment expenses
|
678,120
|
|
|
599,178
|
|
|
1,365,866
|
|
|
1,214,296
|
|
||||
Underwriting, acquisition and insurance expenses
|
462,316
|
|
|
451,570
|
|
|
917,528
|
|
|
875,960
|
|
||||
Underwriting profit
|
59,025
|
|
|
97,436
|
|
|
120,044
|
|
|
208,949
|
|
||||
|
|
|
|
|
|
|
|
||||||||
U.S. GAAP Combined Ratios
|
|
|
|
|
|
|
|
||||||||
Insurance
|
95
|
%
|
|
92
|
%
|
|
95
|
%
|
|
90
|
%
|
||||
Reinsurance
|
96
|
%
|
|
90
|
%
|
|
97
|
%
|
|
94
|
%
|
||||
Markel Corporation (Consolidated)
|
95
|
%
|
|
92
|
%
|
|
95
|
%
|
|
91
|
%
|
(1)
|
Gross premium volume and net retention exclude $654.5 million and $1.2 billion for the quarter and six months ended June 30, 2019, respectively, and $554.0 million and $1.0 billion for the quarter and six months ended June 30, 2018, respectively, of written premiums attributable to our program services business and other fronting arrangements that were ceded.
|
•
|
The Insurance segment's combined ratio for the quarter ended June 30, 2019 included $101.7 million of favorable development on prior accident years' loss reserves compared to $139.5 million for the same period of 2018. The decrease in favorable development was primarily due to less favorable development on our workers' compensation product lines and more adverse development on our property product lines in 2019 compared to 2018. Adverse development on our property product lines in 2019 was attributable to modest development on catastrophes that occurred in 2018, as well as a higher than expected frequency of losses across various property lines. Additionally, the benefit of favorable development on the combined ratio was reduced in 2019 as a result of higher earned premiums in 2019 compared to 2018. For the quarter ended June 30, 2019, favorable development was most significant on our general liability and workers' compensation product lines, primarily on the 2015 to 2018 accident years, and professional liability product lines, primarily on the 2008 to 2014 accident years. The favorable development on prior years' loss reserves in the second quarter of 2018 was most significant on our workers' compensation, general liability, professional liability and marine and energy product lines.
|
•
|
The expense ratio for the quarter ended June 30, 2019 decreased compared to the same period of 2018, primarily due to the favorable impact of higher earned premiums.
|
•
|
The Insurance segment's combined ratio for the six months ended June 30, 2019 included $174.3 million of favorable development on prior years' loss reserves compared to $258.7 million for the same period in 2018. The decrease in favorable development was primarily due to less favorable development on our professional liability, marine and energy and workers' compensation product lines in 2019 compared to 2018. Additionally, the benefit of favorable development on the combined ratio was reduced in 2019 as a result of higher earned premiums in 2019 compared to 2018. For the six months ended June 30, 2019, favorable development was most significant on our general liability product lines, primarily on the 2013 to 2017 accident years, workers' compensation product lines, primarily on the 2015 to 2018 accident years, and personal lines product lines, primarily on the 2016 to 2018 accident years. The favorable development on prior years' loss reserves in 2018 was most significant on our general liability, workers' compensation, professional liability and marine and energy product lines.
|
•
|
The expense ratio for the six months ended June 30, 2019 decreased compared to the same period of 2018, primarily due to the favorable impact of higher earned premiums.
|
•
|
The current accident year loss ratio for the quarter ended June 30, 2019 increased compared to the same period in 2018 primarily due to changes in our outwards property reinsurance treaty structures. In 2019, we eliminated our proportional property reinsurance treaty and purchased additional excess of loss property and catastrophe reinsurance coverage, which resulted in a higher net attritional loss ratio. The impact of these changes was partially offset by a favorable impact from net reinstatement premiums in the second quarter of 2019, compared to an unfavorable impact in the second quarter of 2018.
|
•
|
The Reinsurance segment's combined ratio for the quarter ended June 30, 2019 included $18.2 million of favorable development on prior accident years' loss reserves compared to $18.5 million for the same period of 2018. For the quarter ended June 30, 2019, prior years' loss reserves included $4.6 million of favorable development on catastrophes, a two point benefit on the Reinsurance segment combined ratio, primarily related to catastrophe events that occurred in 2018. For the quarter ended June 30, 2018, prior years' loss reserves included $4.7 million of adverse development, or two points on the Reinsurance segment combined ratio, related to catastrophe events that occurred in 2017. The favorable impact from changes in catastrophe losses in 2019 compared to 2018 was largely offset by less favorable development on our marine and energy product lines in the second quarter of 2019 compared to 2018. For the quarter ended June 30, 2019, favorable development was most significant on our aviation product line, primarily on the 2017 and 2018 accident years, and property product lines, primarily on the 2016 to 2018 accident years. The favorable development on prior years' loss reserves in 2018 was most significant on our marine and energy product lines.
|
•
|
The expense ratio for the quarter ended June 30, 2019 increased compared to the same period of 2018 due to an unfavorable impact from higher ceded earned premiums resulting from changes in our outwards property reinsurance treaty structures, as described above, and higher compensation costs in 2019 compared to 2018.
|
•
|
The current accident year loss ratio for the six months ended June 30, 2019 increased compared to the same period in 2018 primarily due to changes in our outwards reinsurance treaties in 2019, as previously discussed, the effects of which were partially offset by net favorable premium adjustments in 2019 compared to net unfavorable premium adjustments in 2018.
|
•
|
The Reinsurance segment's combined ratio for the six months ended June 30, 2019 included $6.9 million of favorable development on prior accident years' loss reserves compared to $5.5 million for the same period in 2018. For the six months ended June 30, 2019, prior years' loss reserves included $11.2 million of adverse development on catastrophes, or three points on the Reinsurance segment combined ratio, primarily related to catastrophe events that occurred in 2018. For the six months ended June 30, 2018, prior years' loss reserves included $17.0 million of adverse development, or four points on the Reinsurance segment combined ratio, related to catastrophe events that occurred in 2017. For the six months ended June 30, 2019, favorable development was most significant on our aviation and whole account product lines across several accident years and on our auto product lines, primarily on the 2012 to 2015 accident years. The favorable development on prior years' loss reserves in 2018 was most significant on our marine and energy and surety product lines.
|
•
|
The expense ratio for the six months ended June 30, 2019 increased compared to the same period of 2018 due to an unfavorable impact from higher ceded earned premiums resulting from changes in our outwards property reinsurance treaty structures, as described above, and higher compensation costs in 2019 compared to 2018.
|
Gross Premium Volume
|
|
|
|
|
|
|
|
||||||||
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Insurance
|
$
|
1,368,348
|
|
|
$
|
1,233,828
|
|
|
$
|
2,561,196
|
|
|
$
|
2,327,190
|
|
Reinsurance
|
223,381
|
|
|
208,805
|
|
|
736,758
|
|
|
701,138
|
|
||||
Other underwriting
|
236
|
|
|
10
|
|
|
(504
|
)
|
|
6
|
|
||||
Total Underwriting
|
1,591,965
|
|
|
1,442,643
|
|
|
3,297,450
|
|
|
3,028,334
|
|
||||
Program Services and other
|
655,182
|
|
|
554,790
|
|
|
1,204,739
|
|
|
1,015,983
|
|
||||
Total
|
$
|
2,247,147
|
|
|
$
|
1,997,433
|
|
|
$
|
4,502,189
|
|
|
$
|
4,044,317
|
|
Net Written Premiums
|
|
|
|
|
|
|
|
||||||||
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Insurance
|
$
|
1,126,170
|
|
|
$
|
1,001,126
|
|
|
$
|
2,124,528
|
|
|
$
|
1,914,105
|
|
Reinsurance
|
178,802
|
|
|
178,729
|
|
|
657,769
|
|
|
599,787
|
|
||||
Other underwriting
|
15
|
|
|
7
|
|
|
(457
|
)
|
|
104
|
|
||||
Total Underwriting
|
1,304,987
|
|
|
1,179,862
|
|
|
2,781,840
|
|
|
2,513,996
|
|
||||
Program Services and other
|
651
|
|
|
744
|
|
|
891
|
|
|
1,412
|
|
||||
Total
|
$
|
1,305,638
|
|
|
$
|
1,180,606
|
|
|
$
|
2,782,731
|
|
|
$
|
2,515,408
|
|
Earned Premiums
|
|
|
|
|
|
|
|
||||||||
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Insurance
|
$
|
991,269
|
|
|
$
|
918,194
|
|
|
$
|
1,964,996
|
|
|
$
|
1,821,045
|
|
Reinsurance
|
207,728
|
|
|
229,613
|
|
|
438,238
|
|
|
477,577
|
|
||||
Other underwriting
|
15
|
|
|
7
|
|
|
(457
|
)
|
|
104
|
|
||||
Total Underwriting
|
1,199,012
|
|
|
1,147,814
|
|
|
2,402,777
|
|
|
2,298,726
|
|
||||
Program Services and other
|
449
|
|
|
370
|
|
|
661
|
|
|
479
|
|
||||
Total
|
$
|
1,199,461
|
|
|
$
|
1,148,184
|
|
|
$
|
2,403,438
|
|
|
$
|
2,299,205
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net investment income
|
$
|
111,831
|
|
|
$
|
105,387
|
|
|
$
|
226,013
|
|
|
$
|
213,403
|
|
Net investment gains (losses)
|
$
|
425,653
|
|
|
$
|
105,249
|
|
|
$
|
1,037,844
|
|
|
$
|
(17,749
|
)
|
Change in net unrealized investment gains on available-for-sale securities
|
$
|
199,754
|
|
|
$
|
(138,094
|
)
|
|
$
|
418,403
|
|
|
$
|
(282,271
|
)
|
Investment yield (1)
|
0.7
|
%
|
|
0.7
|
%
|
|
1.5
|
%
|
|
1.3
|
%
|
||||
Taxable equivalent total investment return, before foreign currency effect
|
|
|
|
|
9.7
|
%
|
|
0.0
|
%
|
||||||
Taxable equivalent total investment return
|
|
|
|
|
9.7
|
%
|
|
(0.1
|
)%
|
(1)
|
Investment yield reflects net investment income as a percentage of monthly average invested assets at cost.
|
(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.
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating revenues
|
$
|
617,185
|
|
|
$
|
578,948
|
|
|
$
|
1,072,200
|
|
|
$
|
971,127
|
|
Operating income
|
$
|
81,677
|
|
|
$
|
13,019
|
|
|
$
|
111,589
|
|
|
$
|
36,796
|
|
EBITDA
|
$
|
105,671
|
|
|
$
|
35,865
|
|
|
$
|
160,415
|
|
|
$
|
82,462
|
|
Net income to shareholders
|
$
|
49,832
|
|
|
$
|
565
|
|
|
$
|
65,000
|
|
|
$
|
14,176
|
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Markel Ventures operating income
|
81,677
|
|
|
13,019
|
|
|
111,589
|
|
|
36,796
|
|
||||
Depreciation expense
|
13,484
|
|
|
12,750
|
|
|
27,509
|
|
|
25,473
|
|
||||
Amortization of intangible assets
|
10,510
|
|
|
10,096
|
|
|
21,317
|
|
|
20,193
|
|
||||
Markel Ventures EBITDA
|
$
|
105,671
|
|
|
$
|
35,865
|
|
|
$
|
160,415
|
|
|
$
|
82,462
|
|
|
Quarter Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
(dollars in thousands)
|
Operating Revenues
|
|
Operating Expenses
|
|
Operating Revenues
|
|
Operating Expenses
|
||||||||
Services and other
|
|
|
|
|
|
|
|
||||||||
Insurance-linked securities
|
$
|
50,215
|
|
|
$
|
52,299
|
|
|
$
|
17,418
|
|
|
$
|
16,804
|
|
Program services
|
25,762
|
|
|
5,326
|
|
|
23,192
|
|
|
8,148
|
|
||||
Life and annuity
|
346
|
|
|
5,943
|
|
|
412
|
|
|
7,255
|
|
||||
Other
|
8,861
|
|
|
7,368
|
|
|
8,415
|
|
|
7,303
|
|
||||
|
85,184
|
|
|
70,936
|
|
|
49,437
|
|
|
39,510
|
|
||||
Amortization of intangible assets (1)
|
|
|
25,790
|
|
|
|
|
19,545
|
|
||||||
Total
|
$
|
85,184
|
|
|
$
|
96,726
|
|
|
$
|
49,437
|
|
|
$
|
59,055
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
(dollars in thousands)
|
Operating Revenues
|
|
Operating Expenses
|
|
Operating Revenues
|
|
Operating Expenses
|
||||||||
Services and other
|
|
|
|
|
|
|
|
||||||||
Insurance-linked securities
|
$
|
103,623
|
|
|
$
|
112,883
|
|
|
$
|
34,707
|
|
|
$
|
35,247
|
|
Program services
|
50,551
|
|
|
10,878
|
|
|
44,781
|
|
|
17,658
|
|
||||
Life and annuity
|
767
|
|
|
12,495
|
|
|
877
|
|
|
14,906
|
|
||||
Other
|
17,618
|
|
|
14,416
|
|
|
16,447
|
|
|
15,524
|
|
||||
|
172,559
|
|
|
150,672
|
|
|
96,812
|
|
|
83,335
|
|
||||
Amortization of intangible assets (1)
|
|
|
55,651
|
|
|
|
|
38,271
|
|
||||||
Total
|
$
|
172,559
|
|
|
$
|
206,323
|
|
|
$
|
96,812
|
|
|
$
|
121,606
|
|
(1)
|
Excludes amortization of intangible assets attributable to Markel Ventures, which is included in the Markel Ventures segment. Amortization of intangible assets is not allocated to any of our other operations.
|
|
Six Months Ended June 30,
|
||||
|
2019
|
|
2018
|
||
Effective tax rate
|
22
|
%
|
|
47
|
%
|
Impact of election to treat U.K. subsidiaries as U.S. taxpayers on effective tax rate
|
—
|
|
|
(25
|
)
|
Impact of other discrete items on effective tax rate
|
(1
|
)
|
|
(2
|
)
|
Estimated annual effective tax rate
|
21
|
%
|
|
20
|
%
|
|
Quarter Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income to shareholders
|
$
|
497,298
|
|
|
$
|
278,231
|
|
|
$
|
1,073,725
|
|
|
$
|
213,925
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Change in net unrealized gains on available-for-sale investments, net of taxes
|
129,270
|
|
|
(104,036
|
)
|
|
281,355
|
|
|
(220,144
|
)
|
||||
Other, net of taxes
|
(3,234
|
)
|
|
(9,882
|
)
|
|
504
|
|
|
(4,265
|
)
|
||||
Other comprehensive (income) loss attributable to noncontrolling interest
|
(4
|
)
|
|
23
|
|
|
(9
|
)
|
|
(19
|
)
|
||||
Other comprehensive income (loss) to shareholders
|
126,032
|
|
|
(113,895
|
)
|
|
281,850
|
|
|
(224,428
|
)
|
||||
Comprehensive income (loss) to shareholders
|
$
|
623,330
|
|
|
$
|
164,336
|
|
|
$
|
1,355,575
|
|
|
$
|
(10,503
|
)
|
•
|
our expectations about future results of our underwriting, investing, Markel Ventures 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, Markel Ventures 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;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
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, if any, 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 in the event of a repeal, in part or in whole, or modification of U.S. health care reform legislation and regulations;
|
•
|
changes in U.S. tax laws, regulations or interpretations, including those relating to the Tax Cuts and Jobs Act, or in the tax laws, regulations or interpretations of other jurisdictions in which we operate and adjustments we may make in our operations or tax strategies in response to those changes;
|
•
|
a failure of our enterprise information technology systems and those maintained by 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 failure or inadequacy of any loss limitation methods we employ;
|
•
|
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 political, legal, regulatory, financial, tax and general economic impacts, and other impacts we cannot anticipate, related to the vote by the United Kingdom to leave the European Union (Brexit), which could have adverse consequences for our businesses, particularly our London-based international insurance operations;
|
•
|
our ability to obtain additional capital for our operations on terms favorable to us;
|
•
|
our compliance, or failure to comply, with covenants and other requirements under our revolving credit facility, senior debt and other indebtedness;
|
•
|
our ability to maintain or 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 future 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, or conflict with, 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 and third-party capital;
|
•
|
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;
|
•
|
changes in the amount of statutory capital our insurance subsidiaries are required to hold, which can vary significantly and is based on many factors outside our control;
|
•
|
losses from litigation and regulatory investigations and actions; 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.
|
•
|
the inquiries by the U.S. Department of Justice, U.S. Securities and Exchange Commission and Bermuda Monetary Authority into loss reserves recorded in late 2017 and early 2018 at Markel CATCo Re (the Markel CATCo Inquiries) may result in adverse findings, reputational damage, the imposition of sanctions, increased costs, litigation and other negative consequences; and
|
•
|
management time and resources may be diverted to address the Markel CATCo Inquiries, as well as related litigation.
|
|
(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) |
||||||
April 1, 2019 through April 30, 2019
|
12,760
|
|
|
$
|
998.39
|
|
|
12,760
|
|
|
$
|
229,306
|
|
May 1, 2019 through May 31, 2019
|
12,703
|
|
|
$
|
1,056.52
|
|
|
12,703
|
|
|
$
|
215,885
|
|
June 1, 2019 through June 30, 2019
|
5,588
|
|
|
$
|
1,073.17
|
|
|
5,588
|
|
|
$
|
209,888
|
|
Total
|
31,051
|
|
|
$
|
1,035.63
|
|
|
31,051
|
|
|
$
|
209,888
|
|
(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 May 14, 2018 (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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**
|
Filed with this report.
|
|
Markel Corporation
|
|
|
|
|
|
By:
|
/s/ Thomas S. Gayner
|
|
|
Thomas S. Gayner
|
|
|
Co-Chief Executive Officer
|
|
|
(Co-Principal Executive Officer)
|
|
|
|
|
By:
|
/s/ Richard R. Whitt, III
|
|
|
Richard R. Whitt, III
|
|
|
Co-Chief Executive Officer
|
|
|
(Co-Principal Executive Officer)
|
|
|
|
|
By:
|
/s/ Jeremy A. Noble
|
|
|
Jeremy A. Noble
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
I.
|
A new paragraph is hereby added to the end of Section 1 of ARTICLE XI to read as follows:
|
II.
|
In all respects not amended, the Plan is hereby ratified and confirmed.
|
|
Markel Corporation
|
|
|
|
|
|
/s/ Linda V. Schreiner
|
|
By: Linda V. Schreiner
|
|
Title: SVP, Strategic Management
Corporate G&A
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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.
|
July 30, 2019
|
|
/s/ Thomas S. Gayner
|
|
|
Thomas S. Gayner
|
|
|
Co-Chief Executive Officer
|
|
|
(Co-Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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.
|
July 30, 2019
|
|
/s/ Richard R. Whitt, III
|
|
|
Richard R. Whitt, III
|
|
|
Co-Chief Executive Officer
|
|
|
(Co-Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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
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5.
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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):
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a)
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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
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b)
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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.
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July 30, 2019
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/s/ Jeremy A. Noble
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Jeremy A. Noble
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Senior Vice President and Chief Financial Officer
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(Principal Financial Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Thomas S. Gayner
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|
Thomas S. Gayner
|
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Co-Chief Executive Officer
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(Co-Principal Executive Officer)
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|
July 30, 2019
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Richard R. Whitt, III
|
|
Richard R. Whitt, III
|
|
Co-Chief Executive Officer
|
|
(Co-Principal Executive Officer)
|
|
July 30, 2019
|
|
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/ Jeremy A. Noble
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|
Jeremy A. Noble
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
July 30, 2019
|
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