Major insurer Markel reported that net profit for the first quarter of 2016 fell by 8%, as underwriting expenses rose by 7%.
The company made a net profit of US$160m for the quarter, as compared to US$191m for Q1 of the previous year.
For the first quarter of 2016, Markel’s combined ratio was 88%, up by 5% from the same period of 2015. This was attributed to less favourable development of prior years’ loss reserves and an increased expense ratio. However, the lower current accident year loss ratio this year partially offset it.
Markel’s comprehensive income for Q1 showed signs of good health. It was pegged at US$397m versus US$281.8m for Q1 2015. Total operating revenues also increased to US$1.37b from US$1.3b while its earned premiums went up to US$957m from US$943m.
Executive chairman Alan Kirshner said: “2016 is off to a strong start with solid contributions from our underwriting, investing and Markel Ventures operations. Our growth in book value per share for the quarter reflects significant returns from our investment portfolio and our long-term focus on underwriting discipline. We are well-positioned to continue to build shareholder value and to take advantage of profitable growth opportunities as they arise.”
Meanwhile, William Stovin, president of London-based subsidiary Markel International, said: “Conditions in the London market, particularly in energy, are difficult and against that background we are pleased with our start to the year. We have continued to generate underwriting profits, and are seeing level, or slightly better, volumes across the majority of our classes.
“In April we simplified the organisation of our wholesale London market business. We reduced the number of divisions from seven to three, with the objective of making it easier for brokers to do business with us across a range of business lines and to maximise our flexibility to deal with our clients’ needs.”
