Markel to invest as it eyes $10bn-premium insurance arm by 2025: Noble

admin 21/12/2022 Business 11 Views

RICHMOND, Va.,
Feb. 2, 2022
/PRNewswire/ —Markel Corporation
(NYSE: MKL) today reported its financial results for the yr concluded
December 31, 2021.

The following tables present summary financial data for 2021 and 2020.

Years Ended
December 31,



(in thousands, except per share amounts)


2021

2020

Earned premiums


$


half dozen,503,029

$

5,612,205


Markel Ventures
operating revenues


$


iii,643,827

$

2,794,959

Net investment gains


$


1,978,534

$

617,979

Comprehensive income to shareholders


$


2,078,244

$

1,191,634

Diluted net income per common share


$


176.51

$

55.63

Combined Ratio


ninety %

98 %



(in thousands, except per share amounts)



December 31, 2021


December 31, 2020

Volume value per common share outstanding


$


1,034.56

$

885.72

Mutual shares outstanding


13,632

xiii,783

Highlights of our 2021 results include:

  • Earned premiums grew 16% in 2021, reflecting continued growth in gross premium volume from new business and more favorable rates.
  • The lower combined ratio in 2021 compared to 2020 was primarily due to significant losses attributed to COVID-19 in 2020 and a lower attritional loss ratio due in part to the do good of a favorable pricing surroundings.
  • Internet investment gains in 2021 reflected a substantial increase in the fair value of our equity portfolio driven by favorable market value movements during the year.
  • Operating revenues, operating income and EBITDA from our
    Markel Ventures
    operations in 2021 connected to expand through both acquisitions and organic growth.
  • Comprehensive income to shareholders in 2021 reflected the contribution of cyberspace income, partially offset past decreases in net unrealized gains on our fixed maturity portfolio.

“Our 2021 results prove what we can achieve when all three of our operating engines – insurance, investments and
Markel Ventures
– power united states of america forward. Each contributed in meaningful ways to a record-setting 2021 across many financial metrics, including operating revenues and operating income, among others,” said Thomas South. Gayner and Richard R. Whitt, Co-Chief Executive Officers. “Our underwriting operations delivered a ninety% combined ratio, which reflected the impact of recent underwriting actions we’ve taken to enhance our profitability while growing gross premium volume to
$8.5 billion.”

“We added 2 tremendous companies,
Buckner
and
Metromont, to our
Markel Ventures
family unit of companies during a yr in which revenues and EBITDA far surpassed previous record levels,” Gayner and Whitt continued. “Our investment portfolio provided potent returns on the dorsum of the terrific performance of our equity portfolio.”

“We thank our employees, trading partners and customers, all of whom take played a tremendous role in our record-setting year as nosotros continue our efforts to build shareholder value. We are especially grateful for our employees, who performed admirably in 2021 and continue to bear witness their dedication to building Markel into one of the world’s corking companies.”

We believe our fiscal performance is well-nigh meaningfully measured over longer periods of time, which tends to mitigate the furnishings of short-term volatility and as well aligns with the longer-term perspective we apply to operating our businesses. We by and large use five-year periods to measure our performance. Over the five-yr period ended
December 31, 2021, the compound almanac growth in volume value per mutual share outstanding was xi%. Over the five-year menstruation ended
Dec 31, 2021, our share price increased at a chemical compound almanac rate of half-dozen%.

Underwriting Results

Consolidated

Years Concluded
December 31,



(dollars in thousands)


2021

2020

% Alter

Gross premium volume
(i)


$


8,480,494

$

7,154,628

19 %

Net written premiums


$


seven,119,731

$

5,932,238

20 %

Earned premiums


$


6,503,029

$

5,612,205

16 %

Underwriting profit


$


628,085

$

127,617

392 %


Underwriting Ratios
(two)

Point Change

Loss ratio

Current blow year loss ratio


62.4 %

72.6 %

(ten.ii)

Prior accident years loss ratio


(7.4)%

(10.viii)%

iii.4

Loss ratio


55.one %

61.8 %

(6.7)

Expense ratio


35.3 %

36.0 %

(0.7)

Combined ratio


ninety.iii %

97.7 %

(vii.4)

Current accident year loss ratio ending touch on
(iii)


three.0 %

three.1 %

(0.1)

Current accident twelvemonth loss ratio COVID-19 impact
(iii)


—  %

6.four %

(six.4)

Prior blow years loss ratio COVID-19 touch
(iii)


0.two  %

—  %

0.2

Current accident year loss ratio, excluding COVID-19 and catastrophes


59.4 %

63.1 %

(3.vii)

Combined ratio, excluding COVID-xix and current year catastrophes


87.1 %

88.iii %

(1.2)


(1)     Gross premium volume excludes
$3.0 billion and
$2.one billion for the years concluded
December 31, 2021
and 2020, respectively,
         of written premiums attributable to our program services business organisation and other fronting arrangements that were ceded.


(ii)     Amounts may not reconcile due to rounding.


(3)     The betoken impact of catastrophes and COVID-xix is calculated equally the associated internet losses and loss adjustment expenses
         divided by total earned premiums.

Premiums

The increase in gross premium volume in our underwriting operations in 2021 was driven by new business concern and more than favorable rates within our professional person liability and full general liability product lines across both of our underwriting segments. Internet retentiveness of gross premium volume for our underwriting operations was 84% in 2021 compared to 83% in 2020. The increase in earned premiums in our underwriting operations in 2021 was primarily attributable to higher gross premium volume within our professional liability and general liability product lines.

Combined Ratio

In 2021, underwriting results included
$195.0 meg of net losses and loss aligning expenses attributed to natural catastrophes, including Wintertime Storm Uri, the floods in
Europe
and Hurricane Ida (2021 Catastrophes) as well equally
$fifteen.7 one thousand thousand
of net losses and loss adjustment expenses resulting from an increase in our net approximate of ultimate losses and loss adjustment expenses attributed to COVID-19. In 2020, underwriting results included
$358.three one thousand thousand
of cyberspace losses and loss adjustment expenses attributed to COVID-xix and
$172.ii million
of net losses and loss adjustment expenses from natural catastrophes, including Hurricanes Laura, Sally and Isaias, as well equally the derecho in
Iowa
and wildfires in the western
U.S.
(2020 Catastrophes). Excluding losses attributed to catastrophes and COVID-xix, the subtract in our consolidated combined ratio in 2021 compared to 2020 was driven past a lower current blow twelvemonth loss ratio inside our Insurance segment, partially starting time past the impact of less favorable development on prior accident years loss reserves in 2021 compared to 2020. Higher earned premiums in 2021 compared to 2020 had a favorable impact on our expense ratio and an unfavorable bear upon on the prior accident years loss ratio.

The internet losses and loss adjustment expenses attributed to the 2021 Catastrophes as of
December 31, 2021
represent our best estimates based upon information currently available. Our estimates for these losses are based on claims received to date, detailed policy and reinsurance contract level reviews, preliminary industry loss estimates and output from both industry and proprietary models, also every bit analysis of our ceded reinsurance contracts. These estimates are based on various assumptions almost coverage, liability and reinsurance and are subject to change. While we believe our reserves for the 2021 Catastrophes equally of
December 31, 2021
are adequate, we proceed to closely monitor reported claims and may adjust our estimates of gross and net losses as new data becomes available.

Insurance Segment

Years Ended
December 31,



(dollars in thousands)


2021

2020

% Alter

Gross premium volume


$


7,239,676

$

half-dozen,029,024

xx %

Cyberspace written premiums


$


5,998,890

$

iv,977,662

21 %

Earned premiums


$


5,465,284

$

four,688,448

17 %

Underwriting profit


$


696,413

$

169,001

312 %


Underwriting Ratios
(1)

Point Change

Loss ratio

Current accident twelvemonth loss ratio


60.6 %

71.nine%

(11.three)

Prior accident years loss ratio


(9.3)%

(11.eight)%

two.5

Loss ratio


51.3 %

60.1 %

(8.8)

Expense ratio


35.ix %

36.three %

(0.4)

Combined ratio


87.3 %

96.4 %

(9.i)

Current accident twelvemonth loss ratio catastrophe bear upon
(2)


i.7 %

two.vii %

(i.0)

Current blow year loss ratio COVID-19 impact
(2)


— %

6.3 %

(six.three)

Prior accident years loss ratio COVID-nineteen impact
(2)


(0.1)%

— %

(0.1)

Electric current accident yr loss ratio, excluding COVID-xix and catastrophes


58.9 %

63.0 %

(4.1)

Combined ratio, excluding COVID-19 and current year catastrophes


85.6 %

87.4 %

(1.eight)


(i)     Amounts may not reconcile due to rounding.


(ii)     The point bear upon of catastrophes and COVID-19 is calculated as the associated net losses and loss adjustment expenses divided by
         full earned premiums.

Premiums

The increase in gross premium book in our Insurance segment in 2021 was driven by growth across all of our product lines, most notably within our professional person liability and general liability product lines, which experienced higher new business concern book and benefited from more favorable rates and higher retention of renewals. Additionally, our personal lines product lines experienced significant growth in 2021 primarily attributable to the connected expansion of our archetype cars business. Net retentivity of gross premium book was 83% in both 2021 and 2020. The increase in earned premiums in 2021 was primarily due to the higher gross premium book.

Combined Ratio

The Insurance segment’due south current accident year losses and loss adjustment expenses in 2021 included
$94.seven million of net losses and loss adjustment expenses from the 2021 Catastrophes. Electric current accident year losses in 2020 included
$296.4 1000000
and
$124.4 million
of net losses and loss aligning expenses attributed to COVID-19 and the 2020 Catastrophes, respectively. Excluding losses attributed to catastrophes and COVID-19, the decrease in the current accident year loss ratio in 2021 compared to 2020 was primarily attributable to lower attritional loss ratios within our professional liability, general liability and holding production lines, primarily due to the benefit of achieving higher premium rates.

The Insurance segment’s 2021 combined ratio included
$506.three million
of favorable development on prior accident years loss reserves compared to
$554.6 meg
in 2020. The decrease in favorable development was primarily due to less favorable evolution on our professional liability product lines in 2021 compared to 2020, partially offset past more than favorable evolution on our property production lines in 2021 compared to 2020. Additionally, college earned premiums in 2021 compared to 2020 had an unfavorable bear upon on the prior accident years loss ratio. In 2021 and 2020, favorable development was most meaning on our full general liability, workers’ bounty, marine and free energy and professional liability product lines. In 2021, nosotros also had pregnant favorable evolution on our property product lines.

The modest decrease in the Insurance segment’s expense ratio in 2021 was primarily due to the favorable impact of higher earned premiums, partially offset past higher profit sharing expenses in 2021 compared to 2020 as a result of improved profitability.

Reinsurance Segment

Years Ended
Dec 31,



(dollars in thousands)


2021

2020

% Change

Gross premium volume



$ one,246,143

$   1,130,923

x %

Net written premiums



$ i,126,167

$      960,123

17 %

Earned premiums



$ 1,042,048

$      929,348

12 %

Underwriting loss


$     (55,238)

$       (34,009)

(62)%


Underwriting Ratios
(one)

Point Change

Loss ratio

Electric current accident year loss ratio


72.0 %

75.3 %

(3.3)

Prior blow years loss ratio


one.nine %

(5.vi)%

7.5

Loss ratio


73.9 %

69.8 %

4.1

Expense ratio


31.4 %

33.9 %

(ii.five)

Combined ratio


105.3 %

103.7 %

i.6

Current blow year loss ratio catastrophe impact
(2) (3)


9.6 %

5.one %

4.5

Current blow twelvemonth loss ratio COVID-nineteen touch on
(2)


— %

vi.vii %

(vi.7)

Prior accident years loss ratio COVID-19 touch
(2)


2.1 %

— %

2.i

Current blow year loss ratio, excluding COVID-nineteen and catastrophes


62.3 %

63.five %

(1.2)

Combined ratio, excluding COVID-19 and current year catastrophes


93.half-dozen %

91.9 %

1.7


(1)     Amounts may not reconcile due to rounding.


(2)     The point impact of catastrophes and COVID-19 is calculated as the associated net losses and loss aligning expenses
        divided by total earned premiums.


(3)     The signal impact of catastrophes does non include the favorable impact of assumed reinstatement premiums associated with
         the 2021 Catastrophes of
$21.7 million for the twelvemonth ended
Dec 31, 2021. Reinstatement premiums were not significant
         for the year ended
Dec 31, 2020.

Premiums

The increment in gross premium volume in our Reinsurance segment in 2021 was primarily attributable to new business organization and increases on renewals inside our professional liability and general liability production lines, including favorable premium adjustments within our professional liability product lines, partially offset past lower gross premiums within our property product lines. The increases on renewals and favorable premium adjustments were primarily due to increased exposures arising from growth in underlying portfolios and more favorable rates. Significant variability in gross premium volume tin can be expected in our Reinsurance segment due to individually significant contracts and multi-yr contracts.

Lower gross premiums inside our property production lines in 2021 were primarily attributable to not-renewals post-obit our decision to discontinue writing belongings reinsurance business on a take a chance-bearing ground effective
January 1, 2021. We continued to have holding loss exposure throughout 2021, including catastrophe exposure, on property treaties written in prior years with contract terms that extended beyond
Jan 1, 2021
and on our retrocessional reinsurance property business, which we discontinued writing constructive
January ane, 2022. With few exceptions, constructive
January 1, 2022, nosotros no longer have exposure to reinsurance and retrocessional reinsurance property risks within our Reinsurance segment.

Cyberspace retention of gross premium volume was 90% in 2021 compared to 85% in 2020. The increment in net retention was driven by changes in mix of concern. Our growing professional liability and general liability product lines are fully retained while the non-renewed belongings business had a lower retention rate than the rest of the segment.

The increase in earned premiums in 2021 was primarily attributable to growth in gross premium volume within our general liability and professional liability product lines in recent years, partially beginning by the impact of lower gross premiums within our belongings product lines as a result of our decision to discontinue writing property reinsurance business concern, as previously discussed.

Combined Ratio

The Reinsurance segment’s current blow year losses and loss aligning expenses in 2021 included
$100.3 million
of internet losses and loss aligning expenses attributed to the 2021 Catastrophes. Partially offsetting the bear upon of losses attributed to the 2021 Catastrophes was
$21.7 1000000 of favorable reinstatement premiums in 2021 attributed to these events. Current blow twelvemonth losses in 2020 included
$61.9 million
and
$47.8 million
of net losses and loss adjustment expenses attributed to COVID-19 and the 2020 Catastrophes, respectively. Catastrophe losses and reinstatement premiums in 2021 were primarily attributed to our retrocessional reinsurance property business, a portion of which was ceded to Lodgepine Re effective
July 1, 2021, and our property reinsurance product lines, both of which we have discontinued writing on a risk-bearing basis, as previously discussed. Catastrophe losses in 2020, and a portion of our 2020 COVID-nineteen losses, were besides attributed to our belongings reinsurance production lines. Excluding the impact of catastrophes and COVID-nineteen, the decrease in the current accident yr loss ratio was driven by our professional liability and general liability product lines. These production lines benefited from higher premium rates and an increment in the proportion of quota share contract structures inside our portfolio, which by and large have lower loss ratios than excess of loss contracts. The favorable impact of changes in these product lines on the current blow year loss ratio was partially offset past an unfavorable impact from the change in mix of business within the segment as the non-renewed property business had a lower attritional loss ratio than the rest of the segment.

The Reinsurance segment’southward 2021 combined ratio included
$19.9 meg of agin evolution on prior accident years loss reserves, which was primarily attributable to our property product lines, likewise as boosted exposures recognized on prior accident years related to net favorable premium adjustments on our professional liability product lines. Adverse development on our property production lines was primarily attributable to an increase in reserves attributed to COVID-19, reflecting changes in our net estimates resulting from updated and new loss information from cedents. We also had net agin development within our property product lines on natural catastrophes that occurred in recent years, however, this adverse development was largely offset by favorable development on natural catastrophes within other product lines in the Reinsurance segment. In 2021, the increment in prior years loss reserves on our property and professional liability product lines was also partially offset by favorable development on our full general liability and credit and surety product lines. In 2020, the combined ratio included
$51.8 million
of favorable development on prior accident years loss reserves, which reflected favorable evolution on our property product lines, partially offset past adverse development on our public entity and professional liability product lines and additional exposures recognized on prior accident years related to net favorable premium adjustments on our professional liability product lines.

The subtract in the Reinsurance segment’southward expense ratio in 2021 was primarily attributable to lower compensation and general expenses due to the discontinuation of our property reinsurance business as well as the favorable impact of higher earned premiums in 2021 compared to 2020.

Investing Results

Nosotros measure investing results by our cyberspace investment income, net investment gains and the alter in internet unrealized gains on available-for-sale investments, also equally investment yield and taxable equivalent total investment render. The post-obit tabular array summarizes our investment performance.

Years Ended
December 31,



(dollars in thousands)


2021

2020

Modify

Net investment income


$     374,601

$    371,830

1 %

Net investment gains


$  one,978,534

$    617,979

$    ane,360,555

Alter in cyberspace unrealized gains on available-for-sale investments
(i)


$    (450,096)

$    442,089

$      (892,185)

Investment yield
(2) (three)


two.0 %

2.iv %

(0.4)

Taxable equivalent full investment return
(3)


8.8 %

9.four %

(0.6)


(1)     The change in internet unrealized gains on available-for-sale investments included an increase related to an adjustment
         to our life and annuity benefit reserves of $63.0 million for the yr ended
December 31, 2021
and a subtract related
         to an aligning to our life and annuity benefit reserves of
$68.two meg
for the year ended
December 31, 2020.


(2)     Investment yield reflects net investment income as a percentage of monthly average invested avails at amortized cost.


(3)     See Supplemental Fiscal Information for a reconciliation of investment yield to taxable equivalent total investment return.

The increase in cyberspace investment income in 2021 was driven past higher dividend income in 2021 and income on our disinterestedness method investments in 2021 compared to losses in 2020. This increase was partially offset by lower interest income on our short-term investments due to lower short-term interest rates in 2021 compared to 2020.

Net investment gains in both 2021 and 2020 were primarily attributable to an increase in the off-white value of our equity securities driven by favorable market value movements. Internet investment gains in 2020 reflected significant market volatility experienced during the year. The touch of significant declines in the fair value of our equity securities in the kickoff quarter of 2020, driven by unfavorable market value movements resulting from the onset of the COVID-19 pandemic, were more than than offset by increases in the fair value of our equity securities over the subsequent 3 quarters of 2020.

The subtract in internet unrealized gains on available-for-sale investments in 2021 was owing to decreases in the off-white value of our stock-still maturity securities equally a result of an increase in involvement rates during 2021. The increase in net unrealized gains on available-for-auction investments in 2020 was attributable to increases in the fair value of our fixed maturity securities as a result of a decrease in interest rates during 2020.


Markel Ventures

Our
Markel Ventures
segment includes a various portfolio of businesses from unlike industries that offer various types of products and services to businesses and consumers. In
Baronial 2021, we acquired a decision-making interest in
Buckner HeavyLift Cranes
(Buckner), a provider of crane rental services for large commercial contractors. In
December 2021, nosotros acquired a controlling interest in
Metromont LLC
(Metromont), a precast concrete manufacturer and concrete building solutions provider for commercial projects. Due to the i-month lag in consolidating the results of
Markel Ventures, the results of
Metromont
volition be included in our consolidated results beginning in
January 2022. The following table summarizes the results from our
Markel Ventures
segment.

Years Ended December 31,



(dollars in thousands)


2021

2020

Change

Operating revenues


$   3,643,827

$   2,794,959

30 %

Operating income
(ane)


$      272,552

$      254,078

7 %

EBITDA
(1)


$      402,700

$      366,934

10 %

Net income to shareholders


$      174,407

$      145,449

20 %


(1)     Meet Supplemental Financial Information for a reconciliation of
Markel Ventures
operating income to Markel
         Ventures earnings before involvement, income taxes, depreciation and amortization (EBITDA).

The increment in operating revenues in 2021 was driven past an increase of
$638.9 million
from our construction services businesses primarily due to an increased contribution from
Lansing Edifice Products, LLC
(Lansing), which was acquired in
Apr 2020, and the contribution from
Buckner
in the fourth quarter of 2021, as well as improved pricing and increased need in 2021 compared to 2020. Additionally, operating revenues in 2021 increased beyond our transportation-related and equipment manufacturing businesses, due in part to lower sales volumes at nigh of these businesses in 2020 as a outcome of the economical and social disruption caused by the COVID-19 pandemic, and in our consumer and building products businesses, given increased need reflecting increases in consumer spending in 2021. These increases in operating revenues were partially kickoff past lower operating revenues from our healthcare businesses due to the sale of certain subsidiaries of one of these businesses in
January 2021.

The benefit of increases in operating revenues to operating income, EBITDA and internet income to shareholders in 2021 was reduced past increased costs of goods sold beyond many of our businesses, which are cogitating of current economical conditions where supply constraints are contributing to increasing wholesale prices, particularly for raw materials, across a diversity of industries.

The increase in operating income, EBITDA and net income to shareholders in 2021 was driven by higher revenues at our construction services businesses, equally previously discussed. The increase was besides attributable to a pre-tax transaction gain of
$22.0 million, which was included in services and other expenses and recognized in connection with the sale of sure subsidiaries at one of our healthcare businesses, as previously discussed, also as other associated changes in this business organisation. These increases were partially get-go by the impact of lower revenues and operating margins at one of our consulting services businesses in 2021 too as a
$17.2 million
pre-revenue enhancement increase in our estimate of the contingent consideration obligations related to better than expected financial performance of sure of our recent acquisitions.

Other Operations

The following table presents the components of operating revenues and operating expenses that are not included in a reportable segment.

Years Ended
Dec 31,


2021

2020



(dollars in thousands)

Services and

other revenues

Services and

other expenses

Amortization of

intangible assets

Services and

other revenues

Services and

other expenses

Amortization of

intangible assets

Other operations:

Insurance-linked securities


$       202,019


$       186,510


$         38,448

$       200,928

$       168,118

$         38,447

Programme services and other fronting


125,716


20,132


20,938

104,171

20,427

20,937

Life and annuity


1,515


xvi,667


—

ane,233

17,713

—

Other
(1)


17,195


thirty,534


2,403

32,006

81,251

five,453


346,445


253,843


61,789

338,338

287,509

64,837

Underwriting operations
(2)


41,182

41,906

Total


$       346,445


$       253,843


$       102,971

$       338,338

$       287,509

$       106,743


(1)     Other includes the results of our run-off Lodgepine and Markel CATCo operations for both periods presented. For the year ended
December 31, 2020, services and
         other expenses included a legal settlement at our Markel CATCo operations.


(2)     Amortization of intangible assets attributable to our underwriting operations is non allocated betwixt the Insurance and Reinsurance segments.


Insurance-Linked Securities

The increment in operating revenues in our
Nephila
insurance-linked securities operations in 2021 was driven by growth in our managing general agent operations, partially starting time by lower investment management fees. The subtract in investment management fees was primarily due to college management fees in 2020 attributable to releases of capital from side pocket reserves, which were more significant in 2020 than 2021, also as lower average avails under direction during 2021.
Nephila’s
net assets under management were
$8.8 billion
and
$ix.6 billion
as of
December 31, 2021
and 2020, respectively.

Program Services and Other Fronting

The increase in operating revenues and operating income in our program services and other fronting operations in 2021 was primarily due to higher gross premium volume at our program services operations driven past the expansion of existing programs, likewise as growth from new programs. Gross premiums in our program services operations were
$2.7 billion
and
$ii.1 billion
for the years ended
December 31, 2021
and 2020, respectively.

Income Taxes

The effective revenue enhancement rate was 22% in 2021 compared to 17% in 2020. The effective tax rate for 2020 differs from the effective tax rate in 2021, and the statutory rate of 21%, primarily due to a tax benefit that was recognized in 2020 for accumulated losses on certain investments we sold that were non previously deductible.

Financial Condition

Investments, cash and cash equivalents and restricted cash and greenbacks equivalents (invested assets) were
$28.3 billion
at
December 31, 2021
compared to
$24.9 billion
at
December 31, 2020. The increase was primarily owing to cash provided by operating activities of
$2.3 billion, as well as an increase in the off-white value of our equity securities, driven by favorable market value movements. Net cash provided by operating activities increased from
$ane.7 billion
in 2020, primarily due to higher net premium collections, partially offset by higher claims settlement activity, as a result of continued growth in premium volume within our Insurance segment.

At
Dec 31, 2021, our holding company held
$five.3 billion
of invested assets compared to
$4.one billion
of invested assets at
December 31, 2020. The increment in belongings company invested avails was primarily due to dividends received from our subsidiaries, net proceeds from our
May 2021
debt offering and an increase in the fair value of equity securities, partially first by cash used in connection with the acquisition of
Metromont
and to repurchase outstanding shares of our common stock.

Investment in Hagerty

We hold an investment in Hagerty, Inc. (Hagerty), an automotive enthusiast brand offering integrated membership products and programs as well every bit a specialty insurance provider focused on the global automotive enthusiast marketplace. Hagerty became a publicly traded company in
Dec 2021
and in conjunction raised additional capital through a private offering, which included an additional
$30.0 million
investment past us. Post-obit these transactions, our ownership involvement in Hagerty is 23% and is comprised of Grade A common shares, which are listed for trading on the
New York Stock Exchange, equally well every bit Class V common shares, associated with our original investment in 2019, that can be converted on a one-for-one footing into Class A common shares.

For bookkeeping purposes, we are accounted to have the ability to practise significant influence over Hagerty and are therefore required to account for our investment in Hagerty under the equity method, rather than at fair value. As of
December 31, 2021, the conveying value of our investment in Hagerty was
$256.6 million, which was included within other avails on the consolidated balance sail. Every bit of
Dec 31, 2021, the estimated value of our investment, based on the closing stock cost of Hagerty’s Course A common shares, was
$1.1 billion.

Safe Harbor and Cautionary Argument

This release contains statements concerning or incorporating our expectations, assumptions, plans, objectives, futurity financial or operating operation and other statements that are not historical facts. These statements are “forrard-looking statements” inside the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may use words such as “conceptualize,” “believe,” “estimate,” “look,” “intend,” “predict,” “projection” and similar expressions every bit they relate to us or our direction.

In that location are risks and uncertainties that may cause actual results to differ materially from predicted results in forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Boosted factors that could cause actual results to differ from those predicted are set forth under “Concern Overview,” “Risk Factors” and “Management’south Discussion and Assay of Financial Status and Results of Operations” in our 2020 Annual Written report on Form 10-Chiliad, or our about contempo Quarterly Report on Class 10-Q, or are included in the items listed below:

  • current global economical, market place and industry conditions, as well as pregnant volatility, uncertainty and disruption caused by the COVID-19 pandemic, including governmental, legislative, judicial or regulatory actions or developments affecting our businesses;
  • our expectations almost future results of our underwriting, investing,
    Markel Ventures
    and other operations are based on current noesis and presume 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 use of engineering and innovation to simplify the customer feel, increase efficiencies, redesign products, modify models and effect other potentially confusing changes in the insurance industry, and the effect of contest on market place trends and pricing;
  • our efforts to develop new products, expand in targeted markets or improve business processes and workflows may not be successful and may increment or create new risks (e.g., insufficient need, change to risk exposures, distribution aqueduct conflicts, execution risk, increased expenditures);
  • the frequency and severity of man-made and natural catastrophes (including earthquakes, wildfires and conditions-related catastrophes) may exceed expectations, are unpredictable and, in the case of wildfires and weather condition-related catastrophes, may exist exacerbated if, as many forecast, changing conditions in the climate, oceans and atmosphere result in increased hurricane, inundation, 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, nosotros could sustain material losses;
  • emerging claim and coverage issues, irresolute industry practices and evolving legal, judicial, social and other environmental trends or conditions, can increase the scope of coverage, the frequency and severity of claims and the period over which claims may be reported; these factors, also every bit inherent uncertainties in the loss estimation process, tin can adversely touch on the adequacy of our loss reserves and our allowance for reinsurance recoverables;
  • reinsurance reserves are subject field to greater uncertainty than insurance reserves, primarily considering 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;
  • inaccuracies (whether due to data fault, homo fault or otherwise) in the diverse modeling techniques and data analytics (e.g., scenarios, predictive and stochastic modeling, and forecasting) nosotros use to analyze and judge exposures, loss trends and other risks associated with our insurance and insurance-linked securities businesses could cause us to misprice our products or fail to appropriately gauge the risks to which we are exposed;
  • 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;
  • initial estimates for ending losses are often based on express information, are dependent on broad assumptions nearly the nature and extent of losses, coverage, liability and reinsurance, and those losses may ultimately differ materially from our expectations;
  • changes in the availability, costs, quality and providers of reinsurance coverage, which may impact our power to write or continue to write certain lines of concern or to mitigate the volatility of losses on our results of operations and financial status;
  • the power or willingness of reinsurers to pay balances due may be adversely afflicted past manufacture and economic conditions, deterioration in reinsurer credit quality and coverage disputes, and collateral we concord, if any, may non be sufficient to cover a reinsurer’due south obligation to united states of america;
  • after the substitution of ceded reinsurance contracts, any subsequent adverse development in the re-causeless loss reserves will result in a accuse to earnings;
  • regulatory actions tin can impede our ability to accuse adequate rates and efficiently allocate uppercase;
  • 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 substitution rates, commodity and free energy prices and interest rates; volatility in the credit and capital markets; and other factors;
  • economic weather, actual or potential defaults in corporate bonds, municipal bonds, mortgage-backed securities or sovereign debt obligations, volatility in interest and foreign currency exchange rates and changes in market value of full-bodied investments can accept a significant affect on the fair value of our fixed maturity securities and equity securities, as well as the conveying value of our other avails and liabilities, and this impact may be heightened by market volatility and our ability to mitigate our sensitivity to these irresolute conditions;
  • economical weather condition may adversely affect our access to capital and credit markets;
  • the effects of government intervention, including material changes in the budgetary policies of primal banks, to accost 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 whatever disruptions in regional or worldwide economical conditions mostly arising from these situations may have on our businesses, industries or investments;
  • the impacts that wellness epidemics and pandemics, including the COVID-19 pandemic, equally well as actions of local, state and federal authorities in response thereto, may have on our business operations and claims activeness;
  • changes in
    U.S.
    tax laws, regulations or interpretations, or in the tax laws, regulations or interpretations of other jurisdictions in which we operate, and adjustments nosotros may make in our operations or tax strategies in response to those changes;
  • a failure or security alienation of, or cyber-assail on, enterprise information technology systems that we use or a failure to comply with data protection or privacy regulations;
  • outsourced providers may perform poorly, alienation their obligations to us or betrayal usa to enhanced risks;
  • our acquisitions may increase our operational and internal control risks for a menstruum of time;
  • we may not realize the contemplated benefits, including cost savings and synergies, of our acquisitions;
  • whatsoever decision requiring the write-off of a significant portion of our goodwill and intangible assets;
  • the failure or inadequacy of any methods we employ to manage our loss exposures;
  • the loss of services of any executive officeholder or other fundamental personnel could adversely bear on one or more of our operations;
  • the manner in which we manage our global operations through a network of concern entities could outcome in inconsistent management, governance and oversight practices and go far hard for us to implement strategic decisions and coordinate procedures;
  • our substantial international operations and investments betrayal us to increased political, civil, operational and economic risks, including foreign currency exchange charge per unit and credit take chances;
  • the political, legal, regulatory, financial, tax and general economic impacts, and other impacts we cannot anticipate, related to the
    United Kingdom’s
    withdrawal from the
    European Union
    (Brexit), which could have adverse consequences for our businesses, particularly our
    London-based international insurance operations;
  • our power to obtain additional upper-case letter 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 and our preferred shares;
  • our ability to maintain or raise third-party capital for existing or new investment vehicles and risks related to our direction 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 bear upon of economical and trade sanctions and embargo programs on our businesses, including instances in which the requirements and limitations applicable to the global operations of
    U.Due south.
    companies and their affiliates are more restrictive than, or conflict with, those applicable to not-U.S.
    companies and their affiliates;
  • regulatory changes, or challenges by regulators, regarding the utilise of certain issuing carrier or fronting arrangements;
  • our dependence on a express number of brokers for a large portion of our revenues and third-party majuscule;
  • adverse changes in our assigned financial strength, debt or preferred share ratings or outlook could adversely bear on us, including our ability to concenter and retain business organisation, the amount of majuscule our insurance subsidiaries must hold and the availability and cost of capital;
  • changes in the amount of statutory majuscule our insurance subsidiaries are required to concur, which tin vary significantly and is based on many factors, some of which are outside our command;
  • losses from litigation and regulatory investigations and actions;
  • investor litigation or disputes, likewise equally regulatory inquiries, investigations or proceedings, including the research by the
    Bermuda Monetary Authority, related to our Markel CATCo operations; delays or disruptions in the run-off of those operations; or the disability to consummate, or failure to realize the benefits of, the proposed transaction that would allow the accelerated render of capital to our Markel CATCo investors, including due to the failure to obtain requisite approvals or satisfaction of other conditions on the proposed terms and schedule; and
  • a number of additional factors may adversely touch on our
    Markel Ventures
    operations, and the markets they serve, and negatively touch on their revenues and profitability, including, among others: adverse weather condition atmospheric condition, plant affliction and other contaminants; changes in government support for education, healthcare and infrastructure projects; changes in capital spending levels; changes in the housing, commercial and industrial construction markets; liability for environmental matters; supply concatenation and aircraft problems, including increases in freight costs; volatility in the market prices for their products; and volatility in commodity, wholesale and raw materials prices and interest and foreign currency exchange rates.

Results from our underwriting, investing,
Markel Ventures
and other operations have been and will continue to exist potentially materially affected past these factors.

By making forward-looking statements, we do not intend to become obligated to publicly update or revise any such statements whether equally a result of new data, future events or other changes. Readers are cautioned not to identify undue reliance on any forward-looking statements, which speak merely as at their dates.

Our previously announced conference phone call, which will involve discussion of our quarterly and twelvemonth-end financial results and business developments and may include forwards-looking data, will be held
Thursday, February 3, 2022, beginning at
9:30 a.1000. (Eastern Fourth dimension). Investors, analysts and the general public may listen to the call free over the Internet through
Markel Corporation’south
website at www.markel.com in the “For investors” section. Any person needing additional information tin contact Markel’s Investor Relations Section at
[email protected]. A replay of the call also will exist bachelor on our website from approximately one hr afterwards the conclusion of the telephone call until
Monday, Feb 14, 2022.

* * * * * * * *

About
Markel Corporation

Markel Corporation
is a diverse financial holding company serving a multifariousness of niche markets. The Company’s principal business markets and underwrites specialty insurance products. In each of the Company’s businesses, information technology seeks to provide quality products and excellent customer service and then that it can be a market leader. The financial goals of the Company are to earn consistent underwriting and operating profits and superior investment returns to build shareholder value. Visit
Markel Corporation
on the web at
www.markel.com.



Markel Corporation
and Subsidiaries


Consolidated Statements of Income and Comprehensive Income

Quarters Ended
December 31,

Years Ended
December 31,



(dollars in thousands, except per share data)


2021

2020


2021

2020

OPERATING REVENUES

Earned premiums


$   1,806,797

$   1,526,894


$   6,503,029

$   five,612,205

Cyberspace investment income


ninety,506

97,588


374,601

371,830

Net investment gains


802,743

848,875


1,978,534

617,979

Products revenues


384,976

321,734


1,712,120

one,439,515

Services and other revenues


673,083

560,559


ii,278,141

1,693,537

Full Operating Revenues


3,758,105

3,355,650


12,846,425

9,735,066

OPERATING EXPENSES

Losses and loss adjustment expenses


938,091

814,150


3,581,205

3,466,961

Underwriting, acquisition and insurance expenses


648,876

540,278


2,293,739

2,017,627

Products expenses


371,371

281,234


one,544,506

1,256,159

Services and other expenses


580,593

536,387


2,022,935

1,561,120

Acquittal of intangible assets


41,989

39,039


160,539

159,315

Full Operating Expenses


2,580,920

two,211,088


9,602,924

8,461,182

Operating Income


i,177,185

1,144,562


3,243,501

1,273,884

Interest expense


(48,167)

(44,381)


(183,579)

(177,582)

Net foreign exchange gains (losses)


10,594

(87,117)


72,271

(95,853)

Income Before Income Taxes


one,139,612

1,013,064


3,132,193

1,000,449

Income taxation expense


(264,560)

(165,635)


(684,458)

(168,682)

Net Income


875,052

847,429


ii,447,735

831,767

Net income attributable to noncontrolling interests


(3,923)

(130)


(22,732)

(fifteen,737)

Net Income to Shareholders


871,129

847,299


2,425,003

816,030

Preferred stock dividends


(18,000)

(18,400)


(36,000)

(eighteen,400)

Net Income to Common Shareholders


$      853,129

$      828,899


$   2,389,003

$      797,630

OTHER COMPREHENSIVE INCOME (LOSS)

Change in cyberspace unrealized gains on available-for-sale investments, net of taxes:

Cyberspace belongings gains (losses) arising during the menses


$       (85,636)

$        54,672


$    (348,315)

$      356,159

Reclassification adjustments for net gains (losses) included in net income


(2,816)

174


(6,623)

(three,386)

Change in cyberspace unrealized gains on available-for-auction investments, net of taxes


(88,452)

54,846


(354,938)

352,773

Modify in strange currency translation adjustments, net of taxes


117

38,230


(213)

29,847

Change in net actuarial pension loss, internet of taxes


6,558

(eight,420)


8,390

(half dozen,998)

Total Other Comprehensive Income (Loss)


(81,777)

84,656


(346,761)

375,622

Comprehensive Income


793,275

932,085


2,100,974

1,207,389

Comprehensive income attributable to noncontrolling interests


(3,918)

(124)


(22,730)

(fifteen,755)

Comprehensive Income to Shareholders


$      789,357

$      931,961


$   2,078,244

$   1,191,634

NET INCOME PER COMMON SHARE

Basic


$          62.65

$          59.44


$        176.92

$          55.67

Diluted


$          62.44

$          59.33


$        176.51

$          55.63



Markel Corporation
and Subsidiaries


Selected Data


December 31,



(in thousands, except per share information)


2021

2020

Full investments, cash and cash equivalents and restricted cash and cash equivalents


$  28,292,167

$  24,926,592

Reinsurance recoverables


7,293,555

five,989,337


Goodwill
and intangible assets


iv,271,626

four,387,342

Full avails


48,448,866

41,710,054

Unpaid losses and loss adjustment expenses


18,178,894

xvi,222,376

Unearned premiums


5,383,619

four,433,245

Senior long-term debt and other debt


4,361,266

3,484,023

Total shareholders’ equity


fourteen,695,048

12,799,789

Book value per common share outstanding


$      ane,034.56

$         885.72

Common shares outstanding


13,632

13,783



Markel Corporation
and Subsidiaries


Supplemental Financial Information


Components of Consolidated Operating Income


Segment Results

Quarter Ended
Dec 31, 2021



(dollars in thousands)

Insurance

Reinsurance

Investing


Markel Ventures

Other
(ane)

Consolidated

Gross premium volume


$   1,880,383


$    253,508


$                —


$                —


$       647,324


$  2,781,215

Net written premiums


1,571,589


233,085


—


—


(2,274)


1,802,400

Earned premiums


one,536,460


272,017


—


—


(i,680)


i,806,797

Losses and loss adjustment expenses:

Current accident year


(863,151)


(188,589)


—


—


—


(1,051,740)

Prior accident years


108,569


14,176


—


—


(9,096)


113,649

Underwriting, acquisition and insurance expenses


(554,475)


(94,170)


—


—


(231)


(648,876)

Underwriting profit (loss)


227,403


3,434


—


—


(11,007)


219,830

Net investment income


—


—


90,503


3


—


ninety,506

Net investment gains


—


—


802,743


—


—


802,743

Products revenues


—


—


—


384,976


—


384,976

Services and other revenues


—


—


—


568,555


104,528


673,083

Products expenses


—


—


—


(371,371)


—


(371,371)

Services and other expenses


—


—


—


(508,244)


(72,349)


(580,593)

Amortization of intangible assets
(2)


—


—


—


(16,464)


(25,525)


(41,989)

Operating income (loss)


$    227,403


$       three,434


$       893,246


$         57,455


$         (4,353)


$  1,177,185

Combined ratio


85 %


99 %


NM
(3)


88 %

Quarter Concluded
December 31, 2020



(dollars in thousands)

Insurance

Reinsurance

Investing


Markel Ventures

Other
(i)

Consolidated

Gross premium volume

$  one,546,875

$   172,394

$                —

$                —

$       578,646


$ two,297,915

Internet written premiums

1,293,895

139,550

—

—

(1,356)

1,432,089

Earned premiums

one,287,688

240,464

—

—

(one,258)

1,526,894

Losses and loss adjustment expenses:

Current blow year

(819,075)

(166,022)

—

—

—

(985,097)

Prior accident years

149,937

22,706

—

—

(ane,696)

170,947

Underwriting, conquering and insurance expenses

(453,208)

(87,072)

—

—

2

(540,278)

Underwriting profit (loss)

165,342

10,076

—

—

(2,952)

172,466

Cyberspace investment income

—

—

97,585

three

—

97,588

Net investment gains

—

—

848,875

—

—

848,875

Products revenues

—

—

—

321,734

—

321,734

Services and other revenues

—

—

—

459,730

100,829

560,559

Products expenses

—

—

—

(281,234)

—

(281,234)

Services and other expenses

—

(41,461)

—

(433,648)

(61,278)

(536,387)

Amortization of intangible assets
(2)

—

—

—

(13,273)

(25,766)

(39,039)

Operating income (loss)

$   165,342

$    (31,385)

$       946,460

$         53,312

$         ten,833


$ 1,144,562

Combined ratio

87 %

96 %

NM
(3)

89 %


(ane)
Other represents the full profit (loss) attributable to our operations that are not included in a reportable segment equally well as any acquittal of intangible avails that is not allocated
         to a reportable segment. Amortization of intangible assets owing to our underwriting segments is non allocated betwixt the Insurance and Reinsurance segments and is therefore
         included in Other.


(2)
Segment profit for the
Markel Ventures
segment includes amortization of intangible avails attributable to
Markel Ventures. Amortization of intangible assets attributable to our underwriting
         segments is not allocated between the Insurance and Reinsurance segments and is therefore included in Other.


(3)
NM – Ratio is not meaningful

Year Ended
December 31, 2021



(dollars in thousands)

Insurance

Reinsurance

Investing


Markel Ventures

Other
(ane)

Consolidated

Gross premium volume


$  vii,239,676


$  1,246,143


$                —


$                —


$    2,952,863


$  11,438,682

Net written premiums


5,998,890


1,126,167


—


—


(5,326)


7,119,731

Earned premiums


5,465,284


1,042,048


—


—


(iv,303)


half-dozen,503,029

Losses and loss adjustment expenses:

Current accident year


(three,311,185)


(749,815)


—


—


—


(4,061,000)

Prior accident years


506,292


(19,928)


—


—


(6,569)


479,795

Underwriting, acquisition and insurance expenses


(i,963,978)


(327,543)


—


—


(2,218)


(two,293,739)

Underwriting profit (loss)


696,413


(55,238)


—


—


(xiii,090)


628,085

Internet investment income


—


—


374,590


xi


—


374,601

Net investment gains


—


—


i,978,534


—


—


1,978,534

Products revenues


—


—


—


ane,712,120


—


1,712,120

Services and other revenues


—


—


—


1,931,696


346,445


2,278,141

Products expenses


—


—


—


(1,544,506)


—


(1,544,506)

Services and other expenses


—


109


—


(1,769,201)


(253,843)


(ii,022,935)

Amortization of intangible assets
(2)


—


—


—


(57,568)


(102,971)


(160,539)

Operating income (loss)


$   696,413


$   (55,129)


$    2,353,124


$       272,552


$       (23,459)


$                     3,243,501

Combined ratio


87 %


105 %


NM
(3)


xc %

Twelvemonth Ended
December 31, 2020



(dollars in thousands)

Insurance

Reinsurance

Investing


Markel Ventures

Other
(1)

Consolidated

Gross premium volume


$ 6,029,024


$ 1,130,923

$                —

$                —

$    two,106,718


$ 9,266,665

Net written premiums

four,977,662

960,123

—

—

(5,547)

five,932,238

Earned premiums

4,688,448

929,348

—

—

(5,591)

5,612,205

Losses and loss adjustment expenses:

Electric current accident yr

(iii,373,085)

(700,240)

—

—

—

(4,073,325)

Prior accident years

554,586

51,755

—

—

23

606,364

Underwriting, acquisition and insurance expenses

(ane,700,948)

(314,872)

—

—

(1,807)

(two,017,627)

Underwriting turn a profit (loss)

169,001

(34,009)

—

—

(7,375)

127,617

Net investment income

—

—

371,585

245

—

371,830

Net investment gains

—

—

617,979

—

—

617,979

Products revenues

—

—

—

1,439,515

—

1,439,515

Services and other revenues

—

—

—

1,355,199

338,338

i,693,537

Products expenses

—

—

—

(1,256,159)

—

(1,256,159)

Services and other expenses

—

(41,461)

—

(1,232,150)

(287,509)

(1,561,120)

Acquittal of intangible avails
(two)

—

—

—

(52,572)

(106,743)

(159,315)

Operating income (loss)

$   169,001

$    (75,470)

$       989,564

$       254,078

$       (63,289)


$ one,273,884

Combined ratio

96 %

104 %

NM
(three)

98 %


(one)
Other represents the total turn a profit (loss) owing to our operations that are not included in a reportable segment too as whatsoever amortization of intangible avails that is non allocated to a
         reportable segment. Amortization of intangible assets attributable to our underwriting segments is not allocated between the Insurance and Reinsurance segments and is therefore included in Other.


(2)
Segment profit for the
Markel Ventures
segment includes amortization of intangible assets owing to
Markel Ventures. Amortization of intangible avails attributable to our underwriting segments
         is not allocated between the Insurance and Reinsurance segments and is therefore included in Other.


(3)
NM – Ratio is non meaningful


Underwriting Results


Components of Quarter-to-Date Combined Ratio

Quarters Ended
Dec 31,


2021

2020

Insurance

Reinsurance

Consolidated

Insurance

Reinsurance

Consolidated


Underwriting Ratios
(1)

Loss ratio

Current accident yr loss ratio


56.two %


69.three %


58.ii %

63.vi %

69.0 %

64.5%

Prior accident years loss ratio


(7.1)%


(5.ii)%


(6.3)%

(11.half-dozen)%

(9.4)%

(11.2)%

Loss ratio


49.1 %


64.i %


51.9 %

52.0 %

59.half-dozen %

53.3 %

Expense ratio


36.1 %


34.6 %


35.9 %

35.2 %

36.2 %

35.four %

Combined ratio


85.2 %


98.7 %


87.8 %

87.2 %

95.8 %

88.7 %

Electric current accident yr loss ratio ending bear on
(2)


0.4 %


two.five %


0.7 %

4.5 %

5.3 %

4.half dozen %

Current accident year loss ratio COVID-19 impact
(2)


—  %


— %


— %

(0.seven)%

(1.9)%

(0.9)%

Prior blow years loss ratio COVID-19 touch
(ii)


(0.1) %


one.0 %


— %

— %

— %

— %

Current blow year loss ratio, excluding COVID-nineteen and catastrophes


55.viii %


66.8 %


57.5 %

59.8 %

65.7 %

lx.eight %

Combined ratio, excluding COVID-xix and current year catastrophes


85.0 %


95.2 %


87.i %

83.four %

92.5 %

85.0 %


(1)     Amounts may not reconcile due to rounding.


(2)     The point bear on of catastrophes and COVID-19 is calculated every bit the associated cyberspace losses and loss adjustment expenses divided by total earned premiums.


Cyberspace Income per Common Share

Quarters Ended
Dec 31,

Years Ended
December 31,



(in thousands, except per share amounts)


2021

2020


2021

2020

Internet income to common shareholders


$         853,129

$         828,899


$      2,389,003

$         797,630

Adjustment of redeemable noncontrolling interests


5,321

(8,024)


46,874

(28,705)

Adjusted net income to common shareholders


$         858,450

$         820,875


$      2,435,877

$         768,925

Basic mutual shares outstanding


13,702

13,811


13,768

13,811

Dilutive potential common shares from restricted stock units and restricted stock


47

24


32

12

Diluted common shares outstanding


13,749

13,835


13,800

13,823

Basic net income per mutual share


$              62.65

$              59.44


$           176.92

$              55.67

Diluted net income per common share


$              62.44

$              59.33


$           176.51

$              55.63

Non-GAAP Financial Measures

Underwriting

In addition to the
U.S.
GAAP combined ratio, loss ratio and expense ratio, we besides evaluate our underwriting performance using measures that exclude the impacts of certain items on these ratios. We believe these adapted measures, which are non-GAAP measures, provide fiscal statement users with a better understanding of the significant factors that contain our underwriting results and how management evaluates underwriting performance.

When analyzing our combined ratio, we exclude current accident year losses and loss adjustment expenses attributed to natural catastrophes. We also exclude losses and loss aligning expenses attributed to sure significant, infrequent loss events, for example, the COVID-19 pandemic. Due to the unique characteristics of a ending loss, in that location is inherent variability as to the timing or loss amount, which cannot exist predicted in accelerate. The aforementioned is true for the COVID-xix pandemic, as there are no events in contempo history with characteristics similar to COVID-xix. We believe measures that exclude the effects of catastrophe events and COVID-nineteen are meaningful to empathize the underlying trends and variability in our underwriting results that may be obscured by these items.

When analyzing our loss ratio, nosotros evaluate losses and loss adjustment expenses attributable to the current accident year separate from losses and loss aligning expenses attributable to prior blow years. Prior accident year reserve development, which can either exist favorable or unfavorable, represents changes in our estimates of losses and loss adjustment expenses related to loss events that occurred in prior years. We believe a give-and-take of current accident year loss ratios, which exclude prior accident year reserve development, is helpful since it provides more insight into estimates of current underwriting performance and excludes changes in estimates related to prior year loss reserves. Nosotros also analyze our current accident year loss ratio excluding losses and loss adjustment expenses attributable to catastrophes, and in 2020, the COVID-19 pandemic, for the reasons previously discussed. The electric current accident year loss ratio excluding the bear upon of catastrophes and significant, infrequent loss events is besides commonly referred to every bit an attritional loss ratio within the property and casualty insurance industry.

The components of our consolidated and segment combined ratios, including the not-GAAP measures discussed above, are included in “Underwriting Results”.

Investing

Nosotros evaluate our investment performance past analyzing taxable equivalent total investment return, which is a non-GAAP fiscal mensurate. Taxable equivalent full investment return includes items that bear on cyberspace income, such as coupon interest on fixed maturity securities, changes in fair value of disinterestedness securities, dividends on equity securities and realized investment gains or losses on bachelor-for-auction securities, as well as changes in unrealized gains or losses on available-for-sale securities, which practise not affect cyberspace income. Certain items that are included in net investment income have been excluded from the calculation of taxable equivalent full investment return, such equally acquittal and accretion of premiums and discounts on our fixed maturity portfolio, to provide a comparable basis for measuring our investment render against manufacture investment returns. The calculation of taxable equivalent total investment return also includes the current tax benefit associated with income on sure investments that is either taxed at a lower rate than the statutory income tax charge per unit or is non fully included in
U.South.
taxable income. We believe the taxable equivalent full investment return is a better reflection of the economics of our decision to invest in sure asset classes. We focus on our long-term investment return, agreement that the level of investment gains or losses may vary from one flow to the adjacent.

The following table reconciles investment yield to taxable equivalent total investment return.

Years Concluded
Dec 31,


2021

2020

Investment yield
(1)


ii.0 %

2.iv %

Adjustment of investment yield from amortized cost to off-white value


(0.half-dozen)%

(0.5)%

Net amortization of cyberspace premium on fixed maturity securities


0.iv %

0.4 %

Cyberspace investment gains and change in internet unrealized investment gains on available-for-sale securities


five.9 %

five.8 %

Taxable equivalent effect for interest and dividends
(2)


0.1 %

0.1 %

Other
(iii)


1.0 %

1.ii %

Taxable equivalent total investment render


8.viii %

9.four %


(1)     Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.


(ii)     Aligning to tax-exempt interest and dividend income to reflect a taxable equivalent ground.


(3)     Adjustment to reflect the affect of fourth dimension-weighting the inputs to the calculation of taxable equivalent total investment return.


Markel Ventures

Markel Ventures EBITDA is a non-GAAP financial measure. Nosotros apply Markel Ventures EBITDA as an operating performance measure in conjunction with
U.S.
GAAP measures, including operating revenues, operating income and net income to shareholders, to monitor and evaluate the operation of our
Markel Ventures
segment. Because EBITDA excludes interest, income taxes, depreciation and amortization, it provides an indicator of economic functioning that is useful to both management and investors in evaluating our
Markel Ventures
businesses equally it is not affected past levels of debt, interest rates, effective revenue enhancement rates or levels of depreciation or amortization resulting from purchase accounting.

The following table reconciles
Markel Ventures
operating income to Markel Ventures EBITDA.

Quarters Concluded
Dec 31,

Years Ended
December 31,



(dollars in thousands)


2021

2020


2021

2020


Markel Ventures
operating income


$            57,455

$            53,312


$          272,552

$          254,078

Depreciation expense


24,898

16,813


72,580

60,284

Amortization of intangible avails


sixteen,464

13,273


57,568

52,572

Markel Ventures EBITDA


$            98,817

$            83,398


$          402,700

$          366,934

Cision
View original content to download multimedia:https://www.prnewswire.com/news-releases/markel-reports-2021-financial-results-301474341.html

SOURCE
Markel Corporation

Investor Relations, Markel Corporation, [email protected]

Source: https://www.markel.com/markel-corporation/news-and-press/markel-reports-2021-financial-results-17186

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