MARKEL GROUP INC

Previous wording

In June 2024, we acquired 98% of Valor Environmental (Valor), an environmental services company providing erosion control and related services to commercial development sites and homebuilders throughout the United States. Results attributable to Valor will be included in our Markel Ventures segment beginning in the third quarter of 2024. See note 3 of the notes to consolidated financial statements for additional details related to this acquisition. Additionally, our Markel Ventures businesses make strategic acquisitions from time to time that impact the results of the Markel Ventures segment but are not material to Markel Group.

Current wording

In June 2024, we acquired 98% of Valor Environmental (Valor), an environmental services company providing erosion control and related services to commercial development sites and homebuilders throughout the United States. Results attributable to Valor are included in our Markel Ventures segment. See note 3 of the notes to consolidated financial statements for additional details related to this acquisition. Additionally, our Markel Ventures businesses make strategic acquisitions from time to time that impact the results of the Markel Ventures segment but are not material to Markel Group.

Previous wording

The following table presents the components of operating income and comprehensive income to shareholders.

Current wording

The following table presents the components of operating income and comprehensive income (loss) to shareholders.

Previous wording

The decrease in operating income and comprehensive income to shareholders for the quarter ended June 30, 2024 compared to the quarter ended June 30, 2023 was primarily due to pre-tax net investment losses of $116.0 million on our equity securities during the quarter compared to pre-tax net investment gains of $483.4 million in the same period of 2023.

Current wording

The increase in operating income and comprehensive income (loss) to shareholders for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to pre-tax net investment gains of $1.7 billion on our equity securities during the quarter compared to $629.3 million in the same period of 2023.

Previous wording

The components of comprehensive income to shareholders are discussed in further detail under "Insurance Results," "Investing Results," "Markel Ventures Results," "Other" and "Comprehensive Income to Shareholders."

Current wording

The components of comprehensive income (loss) to shareholders are discussed in further detail under "Insurance Results," "Investing Results," "Markel Ventures Results," "Other" and "Comprehensive Income (Loss) to Shareholders."

Previous wording

(1) Substantially all gross premiums from our program services and other fronting operations were ceded to third parties for the quarter and six months ended June 30, 2024 and 2023.

Current wording

(1) Substantially all gross premiums from our program services and other fronting operations were ceded to third parties for the quarter and nine months ended September 30, 2024 and 2023.

Previous wording

In addition to the U.S. GAAP combined ratio, loss ratio and expense ratio, we also evaluate our underwriting performance using measures that exclude the impacts of certain items, such as catastrophes and other significant, infrequent loss events, on these ratios. During the six months ended June 30, 2024 and 2023, our results were not materially impacted by any such events. When analyzing our loss ratio, we evaluate losses and loss adjustment expenses attributable to the current accident year separate from losses and loss adjustment expenses attributable to prior accident years. Prior accident year reserve development, which can either be 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 discussion 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.

Current wording

When analyzing our loss ratio, we typically evaluate losses and loss adjustment expenses attributable to the current accident year separate from losses and loss adjustment expenses attributable to prior accident years. Prior accident year reserve development, which can either be 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 discussion of current accident year loss ratios, which exclude prior accident year reserve development, is helpful in most cases since it provides more insight into estimates of current underwriting performance and excludes changes in estimates related to prior year loss reserves. We also analyze our current accident year loss ratio excluding losses and loss adjustment expenses attributable to catastrophes. The current accident year loss ratio excluding the impact of catastrophes and other significant, infrequent loss events is also commonly referred to as an attritional loss ratio within the property and casualty insurance industry.

Previous wording

In the first half of 2024, we continued to achieve modest rate increases across our diversified product portfolio. Similar to 2023, the primary exceptions where we are seeing modest rate decreases are within our workers' compensation, public directors and officers and cyber portfolios, which is consistent with the broader market trends in these product classes. We examine each of our product classes regularly by evaluating pricing and exposure, underwriting terms and conditions, deal structure, including limits and attachment points, and our expectations around loss cost trends, among other things. We target premium growth only in product lines where we are confident in the levels of rate adequacy.

Current wording

Through the first three quarters of 2024, we continued to achieve modest rate increases across our diversified product portfolio. Similar to 2023, the primary exceptions where we are seeing modest rate decreases are within our workers' compensation, risk-managed professional liability and cyber portfolios, which is consistent with the broader market trends in these product classes. We examine each of our product classes regularly by evaluating pricing and exposure, underwriting terms and conditions, deal structure, including limits and attachment points, and our expectations around loss cost trends, among other things. We target premium growth only in product lines where we are confident in the levels of rate adequacy.

Previous wording

We continued to achieve rate increases within our personal lines, property and select marine and energy product lines, with property rate increases softening in the second quarter. Each of these product lines continues to be priced at a level that we believe will earn appropriate returns on capital, and, as a result, we are continuing to increase our premium writings in these lines. Additionally, we achieved notable rate increases within many of our general liability product lines with U.S. exposures, and these rate increases are generally in line with, or better than, our assumptions on loss cost trends. We are being cautious in selecting which risks to pursue and how much limit to deploy within certain subclasses of our general liability portfolio as we rebalance our general liability portfolio and focus on growth in areas of the portfolio that we project will meet our profitability requirements.

Current wording

We continued to achieve rate increases within our personal lines and select marine and energy product lines, and we believe these product lines continue to be priced at a level that will earn appropriate returns on capital. As a result, we are continuing to increase our premium writings in these lines. Our property product lines achieved rate increases at the beginning of 2024 before softening during the year and turning slightly negative in the third quarter. Additionally, we achieved high single digit rate increases within many of our general liability product lines with U.S. exposures, and these rate increases are generally in line with, or better than, our assumptions on loss cost trends. We are being cautious in selecting which risks to pursue and how much limit to deploy within certain subclasses of our general liability portfolio as we rebalance our general liability portfolio and focus on growth in areas of the portfolio that we project will meet our profitability requirements.

Previous wording

Within our global insurance and reinsurance professional liability product lines, overall, we saw modest rate decreases driven by the continued rate decreases within our public directors and officers product line. Within this product line, we are contracting our new premium writings when we believe rates are inadequate and are also allowing business to lapse. In other professional liability product lines, particularly within our international portfolio and our U.S. commercial book, we are generally seeing small rate decreases; however, these pockets of the portfolio have performed well overall, and we are continuing to pursue growth opportunities where we find the business to be adequately priced.

Current wording

Within our professional liability product lines, we saw modest rate decreases driven by the continued rate decreases within our risk-managed professional liability product lines. Within these lines, we are contracting our new premium writings and reducing limits deployed and are also allowing business to lapse when we believe rates are inadequate. In other professional liability product lines, particularly within our international portfolio and our U.S. commercial products, we are generally seeing small rate decreases; however, these pockets of the portfolio are adequately priced overall, and we are continuing to pursue growth opportunities.

Previous wording

The increase in gross premium volume in our underwriting operations for the quarter and six months ended June 30, 2024 was driven by growth within both of our underwriting segments. Net retention of gross premium volume in our underwriting operations was 78% for the quarter ended June 30, 2024 compared to 81% for the same period of 2023. The decrease in net retention for the quarter ended June 30, 2024 was driven by lower retention within our Insurance segment. Net retention of gross premium volume in our underwriting operations was 79% for the six months ended June 30, 2024 compared to 82% for the same period of 2023. The decrease in net retention for the six months ended June 30, 2024 was driven by lower retention across both of our underwriting segments. Within our underwriting operations, we purchase reinsurance and retrocessional reinsurance to manage our net retention on individual risks and overall exposure to losses and to enable us to write policies with sufficient limits to meet policyholder needs. The increase in earned premiums in our underwriting operations for the quarter and six months ended June 30, 2024 was primarily attributable to higher gross premium volume within our Insurance segment in recent periods.

Current wording

Net retention of gross premium volume in our underwriting operations was 78% for the quarter ended September 30, 2024 compared to 81% for the same period of 2023, and 79% for the nine months ended September 30, 2024 compared to 82% for the same period of 2023. The decrease in net retention for the quarter and nine months ended September 30, 2024 was driven by lower retention within our Insurance segment. Within our underwriting operations, we purchase reinsurance and retrocessional reinsurance to manage our net retention on individual risks and overall exposure to losses and to enable us to write policies with sufficient limits to meet policyholder needs.

Previous wording

During the quarter and six months ended June 30, 2024, we recognized losses on our recently discontinued IP CPI product in our Insurance segment. The following table summarizes the losses recognized and their impact on our Insurance segment and consolidated combined ratios. For the quarter and six months ended June 30, 2023, losses recognized on our IP CPI product did not have a notable impact on our combined ratio.

Current wording

During the quarter and nine months ended September 30, 2024 and 2023, we recognized losses on our recently discontinued intellectual property collateral protection insurance (IP CPI) product in our Insurance segment. The following table summarizes the losses recognized and their impact on our Insurance segment and consolidated combined ratios.

Previous wording

(1)The impact on the combined ratio is calculated as associated net losses and loss adjustment expenses divided by total Insurance segment or consolidated earned premiums, as applicable. Earned premiums on our IP CPI product for the quarter and six months ended June 30, 2024 were not material.

Current wording

(1)The impact on the combined ratio is calculated as associated net losses and loss adjustment expenses divided by total Insurance segment or consolidated earned premiums, as applicable. Earned premiums on our IP CPI product for the nine months ended September 30, 2024 and 2023 were not material.

Previous wording

Beginning in late 2023, we began to observe higher than expected levels of defaults on loans collateralized by intellectual property, for which we provide coverage to the lenders through our IP CPI product line. Furthermore, for loans that are in default, the intellectual property that serves as security for the loans has proven to be less valuable than we initially anticipated.

Current wording

Beginning in the third quarter of 2023, we began to observe higher than expected levels of defaults on loans collateralized by intellectual property, for which we provide coverage to the lenders through our IP CPI product line. Furthermore, for loans that are in default, the intellectual property that serves as security for the loans has proven to be less valuable than we initially anticipated.

Previous wording

In response to these adverse developments and the product's ultimate inability to meet our profitability targets, we discontinued writing this product at the beginning of 2024. However, we continued to recognize losses on our IP CPI product line in the first half of 2024 as additional claim events occurred, which result from both a default on the loan and impairment of the underlying intellectual property. As of June 30, 2024, all losses on probable claims have been recognized, however, we believe the potential for additional claims over the next 12 to 18 months is reasonably possible, and such amounts could be material to our results of operations, financial condition and cash flows. However, we believe the impact of such losses in any future quarter is unlikely to be significantly more than what we recognized in each of the past two quarters.

Current wording

In response to these adverse developments and the product's ultimate inability to meet our profitability targets, we discontinued writing this product at the beginning of 2024. However, we have continued to recognize losses on our IP CPI product line in 2024 as additional claim events occurred, which result from both a default on the loan and impairment of the underlying intellectual property. As of September 30, 2024, all losses on probable claims have been recognized, however, we believe the potential for additional claims over the next 12 to 18 months is reasonably possible, and such amounts could be material to our results of operations, financial condition and cash flows. However, we believe the impact of such losses in any future quarter is unlikely to be significantly more than what we recognized in each of the past three quarters.

Previous wording

The increase in gross premium volume in our Insurance segment for the quarter and six months ended June 30, 2024 was driven by new business growth and more favorable rates within our personal lines, programs, marine and energy and property product lines, partially offset by lower premium volume within select lines of our U.S. general liability product lines. For the six months ended June 30, 2024, the increase in gross premium volume was also partially offset by lower premium volume within select lines of our U.S. professional liability product lines. We have decreased writings within our risk-managed directors and officers professional liability product and our brokerage contractors, brokerage excess and umbrella and risk-managed excess casualty general liability products in response to underwriting actions aimed at achieving greater profitability within these product lines.

Current wording

The increase in gross premium volume in our Insurance segment for the quarter and nine months ended September 30, 2024 was driven by new business growth and more favorable rates within our personal lines, programs, marine and energy and credit and surety product lines, partially offset by lower premium volume within select lines of our U.S. general liability and professional liability product lines. We have decreased writings within our risk-managed professional liability products and our brokerage contractors, brokerage excess and umbrella and risk-managed excess casualty general liability products in response to underwriting actions aimed at achieving greater profitability within these product lines.

Previous wording

Net retention of gross premium volume was 75% for the quarter ended June 30, 2024 compared to 79% for the same period of 2023. Net retention of gross premium volume was 77% for the six months ended June 30, 2024 compared to 80% for the same period of 2023. The decrease in net retention for the quarter and six months ended June 30, 2024 was driven by higher cessions on our professional liability product lines in 2024 compared to 2023, as well as changes in mix of business as we grow our personal lines product lines, which have a higher cession rate than most of the segment.

Current wording

Net retention of gross premium volume was 78% for the quarter ended September 30, 2024 compared to 81% for the same period of 2023, and 77% for the nine months ended September 30, 2024 compared to 80% for the same period of 2023. The decrease in net retention for the quarter and nine months ended September 30, 2024 was driven by higher cessions on our professional liability product lines in 2024 compared to 2023, as well as changes in mix of business as we decreased writings on select lines of our U.S. general liability and professional liability product lines, which have lower cession rates than most of the segment.

Previous wording

The increase in earned premiums for the quarter and six months ended June 30, 2024 was primarily due to higher gross premium volume across most product lines in recent periods.

Current wording

The increase in earned premiums for the nine months ended September 30, 2024 was primarily due to higher gross premium volume in recent periods.

Previous wording

The increase in the Insurance segment's current accident year loss ratio for the six months ended June 30, 2024 compared to the same period of 2023 was primarily attributable to higher attritional loss ratios within our U.S. professional liability product lines, including a two point impact of losses from our IP CPI product line, and our U.S. general liability product lines.

Current wording

Excluding losses attributed to natural catastrophes, the decrease in the Insurance segment's current accident year loss ratio for the quarter ended September 30, 2024 compared to the same period of 2023 was primarily attributable to lower attritional loss ratios within our marine and energy product lines and higher ceded loss recovery assumptions on our general liability product lines, partially offset by higher attritional loss ratios within our U.S. professional liability product lines.

Previous wording

The Insurance segment's combined ratio for the quarter ended June 30, 2024 included $146.6 million of favorable development on prior accident years loss reserves compared to $61.6 million for the same period of 2023. The increase in favorable development was primarily due to net favorable development on our general liability product lines in the second quarter of 2024, driven by our international business, compared to net adverse development on our general liability product lines in the same period of 2023, driven by our U.S. business. Additionally, we had more favorable development on our credit and surety product line in the second quarter of 2024 compared to the same period of 2023. We continue to approach reductions of prior year loss reserves on our long-tail U.S. professional liability and general liability product lines with caution given recent claims trends.

Current wording

The Insurance segment's combined ratio for the quarter ended September 30, 2024 included $130.4 million of favorable development on prior accident years loss reserves compared to $55.4 million for the same period of 2023. The increase in favorable development was primarily due to more favorable development on our international product lines, most notably within our international professional liability product lines, as well as the impact of adverse development on our U.S. general liability product lines in the third quarter of 2023. These increases in favorable development were partially offset by more adverse development on our U.S. professional liability product lines in the third quarter of 2024 compared to the same period of 2023.

Previous wording

The modest increase in the Insurance segment's expense ratio for the quarter ended June 30, 2024 compared to the same period of 2023 was primarily attributable to higher personnel costs and other general and administrative expenses, which were largely offset by a lower policy acquisition cost ratio.

Current wording

The increase in the Insurance segment's expense ratio for the quarter ended September 30, 2024 compared to the same period of 2023 was primarily attributable to higher personnel costs, including profit sharing expenses, and other general and administrative expenses.

Previous wording

The increase in the Insurance segment's current accident year loss ratio for the quarter ended June 30, 2024 compared to the same period of 2023 was primarily attributable to higher attritional loss ratios within our U.S. professional liability product lines, including a three point impact of losses from our IP CPI product line, and our U.S. general liability product lines. We have increased our attritional loss ratios on certain product classes within our general liability and professional liability product lines in response to unfavorable loss development trends in recent periods.

Current wording

Excluding losses attributed to natural catastrophes, the increase in the Insurance segment's current accident year loss ratio for the nine months ended September 30, 2024 compared to the same period of 2023 was primarily attributable to higher attritional loss ratios within our U.S. professional liability product lines, including a two point impact of losses from our IP CPI product line in 2024 compared to a one point impact in 2023, as well as higher attritional loss ratios within our U.S. general liability product lines. We have increased our attritional loss ratios on certain product classes within our U.S. professional liability and general liability product lines in response to unfavorable loss development trends in recent periods.

Previous wording

The Insurance segment's combined ratio for the six months ended June 30, 2024 included $243.8 million of favorable development on prior accident years loss reserves compared to $124.2 million for the same period of 2023. The increase in favorable development was primarily attributable to net favorable development on our general liability product lines during the first half of 2024, driven by our international business, compared to net adverse development on our general liability product lines in the same period of 2023, driven by our U.S. business.

Current wording

The Insurance segment's combined ratio for the nine months ended September 30, 2024 included $374.2 million of favorable development on prior accident years loss reserves compared to $179.6 million for the same period of 2023. The increase in favorable development was primarily attributable to modest favorable development on our U.S. general liability product lines in 2024 compared to significant adverse development in 2023, as well as more favorable development on our international product lines, most notably within our international professional liability product lines. These increases in favorable development were partially offset by more adverse development on our U.S. professional liability product lines in 2024 compared to 2023.

Previous wording

For the quarter ended June 30, 2024, favorable development was most significant on the more recent accident years within our international professional liability product lines, as well as on our credit and surety, property and personal lines product lines. The favorable development on prior years loss reserves in the second quarter of 2023 was most significant on our professional liability and property product lines.

Current wording

For the nine months ended September 30, 2024, favorable development was most significant on our international professional liability product lines, as well as our general liability, property and credit and surety product lines, primarily in more recent accident years. The favorable development on prior years loss reserves in 2023 was most significant on our international professional liability product lines, as well as our property, marine and energy, workers' compensation and personal lines product lines.

Previous wording

The increase in gross premium volume in our Reinsurance segment for the quarter ended June 30, 2024 was driven by the impact of favorable timing differences and increases on renewals, due to increased participation, within our professional liability product lines. The favorable timing differences within our professional liability product lines were the result of two large contracts written in the first quarter of 2023 that were renewed in the second quarter of 2024. For the six months ended June 30, 2024, the increase in gross premium volume was driven by higher gross premium volume within our marine and energy and general liability product lines, primarily attributable to new business and increases on renewals, as well as the impact of favorable timing differences and new business within our workers' compensation product line. For the six months ended June 30, 2024, these increases were partially offset by the impact of non-renewals of certain significant contracts within our professional liability product lines as a result of our continued focus on rate adequacy and only writing business that meets our underwriting profit targets. Significant variability in gross premium volume can be expected in our Reinsurance segment due to individually significant contracts and multi-year contracts.

Current wording

The decrease in gross premium volume in our Reinsurance segment for the quarter ended September 30, 2024 was driven by the impact of unfavorable premium adjustments within our credit and surety and general liability product lines in 2024 compared to favorable premium adjustments in 2023, partially offset by new business within our professional liability product lines. For the nine months ended September 30, 2024, the increase in gross premium volume was driven by increases on renewals and new business within our professional liability, marine and energy and general liability product lines. For the nine months ended September 30, 2024, these increases were partially offset by the impact of non-renewals of certain significant contracts within our professional liability product lines as a result of our continued focus on rate adequacy and only writing business that meets our underwriting profit targets. Significant variability in gross premium volume can be expected in our Reinsurance segment due to individually significant contracts and multi-year contracts.

Previous wording

Net retention of gross premium volume for the quarter ended June 30, 2024 was 95% compared to 93% for the same period of 2023. The increase of net retention for the quarter ended June 30, 2024 was driven by changes in mix of business, as our professional liability business is fully retained. Net retention of gross premium volume for the six months ended June 30, 2024 was 90% compared to 93% for the same period of 2023. The decrease in net retention for the six months ended June 30, 2024 was driven by the increased premium volume in our marine and energy business, which carries a higher cession rate than the segment.

Current wording

Net retention of gross premium volume for the quarter ended September 30, 2024 was 91% compared to 90% for the same period of 2023. The increase of net retention for the quarter ended September 30, 2024 was driven by changes in mix of business, as our professional liability business is fully retained. Net retention of gross premium volume for the nine months ended September 30, 2024 was 90% compared to 93% for the same period of 2023. The decrease in net retention for the nine months ended September 30, 2024 was driven by the increased premium volume in our marine and energy business, which carries a higher cession rate than the segment.

Previous wording

The modest increase in the Insurance segment's expense ratio for the six months ended June 30, 2024 compared to the same period of 2023 was primarily attributable to higher personnel costs and other general and administrative expenses, which were largely offset by a lower policy acquisition cost ratio and the favorable impact of higher earned premiums.

Current wording

The increase in the Reinsurance segment's expense ratio for the quarter ended September 30, 2024 compared to the same period of 2023 was primarily attributable to higher general and administrative expenses.

Previous wording

The increase in operating revenues and operating income within our program services and other fronting operations for the quarter and six months ended June 30, 2024 was due to higher gross premium volume in 2024 compared to the same period of 2023. The following table summarizes gross premium volume in our program services and other fronting operations.

Current wording

The increase in operating revenues and operating income within our program services and other fronting operations for the quarter and nine months ended September 30, 2024 was due to higher gross premium volume in recent periods. The following table summarizes gross premium volume in our program services and other fronting operations.

Previous wording

The increase in gross premium volume within our program services operations for the quarter and six months ended June 30, 2024 was primarily attributable to expansion of existing programs. For the quarter and six months ended June 30, 2024, the increase in gross premium volume in our other fronting operations, which represents business written on behalf of our Nephila ILS operations, was driven by favorable timing differences, as well as increases on renewals. For the six months ended June 30, 2024, the increase in gross premium volume was also driven by growth of our property catastrophe and specialty programs with the Nephila Reinsurers.

Current wording

For the quarter ended September 30, 2024, the decrease in gross premium volume in our other fronting operations, which represents business written by one of our licensed insurance subsidiaries on behalf of the Nephila Reinsurers, was driven by timing differences. For the nine months ended September 30, 2024, the increase in gross premium volume in our other fronting operations was primarily due to growth of our property catastrophe and specialty programs with the Nephila Reinsurers.

Previous wording

The increase in operating revenues in our Nephila insurance-linked securities operations for the quarter and six months ended June 30, 2024 was primarily due to changes in the mix of investment products within the funds. Nephila's net assets under management were $6.6 billion as of June 30, 2024.

Current wording

The decrease in operating revenues in our Nephila insurance-linked securities operations for the quarter and nine months ended September 30, 2024 was primarily due to $29.5 million of investment management fees recognized in the third quarter of 2023 upon the release of capital from side pocket reserves with no comparable activity in 2024, partially offset by the favorable impact of changes in the mix of investment products within the funds managed. Nephila's net assets under management were $7.0 billion as of September 30, 2024.

Previous wording

For the six months ended June 30, 2024, the underwriting operating loss in our other insurance operations was primarily attributable to loss adjustment expenses related to asbestos and environmental exposures. Development on asbestos and environmental loss reserves is monitored separately from our ongoing underwriting operations and is not included in the Insurance or Reinsurance segments.

Current wording

For the nine months ended September 30, 2024, the underwriting operating loss in our other insurance operations was primarily attributable to loss adjustment expenses related to asbestos and environmental exposures. Development on asbestos and environmental loss reserves is monitored separately from our ongoing underwriting operations and is not included in the Insurance or Reinsurance segments.

Previous wording

We measure our investment performance by analyzing net investment income, which reflects the recurring interest and dividend earnings on our investment portfolio. We also analyze net investment gains, which include unrealized gains and losses on our equity portfolio. Based on the potential for volatility in the financial markets, we understand that the level of gains or losses may vary from one period to the next, and therefore believe that our investment performance is best analyzed over longer periods of time. As of June 30, 2024, the fair value of our equity portfolio included cumulative unrealized gains of $6.9 billion.

Current wording

We measure our investment performance by analyzing net investment income, which reflects the recurring interest and dividend earnings on our investment portfolio. We also analyze net investment gains, which include unrealized gains and losses on our equity portfolio. Based on the potential for volatility in the financial markets, we understand that the level of gains or losses may vary from one period to the next, and therefore believe that our investment performance is best analyzed over longer periods of time. As of September 30, 2024, the fair value of our equity portfolio included cumulative unrealized gains of $7.8 billion.

Previous wording

For the quarter and six months ended June 30, 2024, net investment income increased 31% and 34%, respectively, primarily driven by higher interest income on fixed maturity securities due to a higher yield and higher average holdings of fixed maturity securities in 2024 compared to 2023. During 2024, we have continued to allocate cash and short-term investments to fixed maturity securities to take advantage of high interest rates and to support our growing underwriting business. The book yield on our fixed maturity portfolio at June 30, 2024 was 3.4%. Additionally, interest income on our cash equivalents and short-term investments increased due to higher short-term interest rates and a higher portion of our cash being invested in money market funds during the quarter and six months ended June 30, 2024 compared to the same periods of 2023. See note 4(d) of the notes to consolidated financial statements for details regarding the components of net investment income.

Current wording

For the quarter and nine months ended September 30, 2024, net investment income increased 23% and 30%, respectively, primarily driven by higher interest income on fixed maturity securities due to a higher yield and higher average holdings of fixed maturity securities in 2024 compared to 2023. For the nine months ended September 30, 2024, the increase in net investment income was also driven by higher short-term interest rates. During 2024, we have continued to allocate cash to money market funds, short-term investments and fixed maturity securities to take advantage of high interest rates and to support our growing underwriting business. See note 4(d) of the notes to consolidated financial statements for details regarding the components of net investment income.

Previous wording

The increases in operating revenues for the quarter and six months ended June 30, 2024 compared to the same periods of 2023 were driven by higher revenues across many of our products businesses, due in part to increased demand. Additionally, higher revenues reflect the impact of an acquisition made by one of our consumer and building products businesses in the first quarter of 2024. For the six months ended June 30, 2024, the increase in operating revenues also reflects the impact of increased demand at one of our construction services businesses. For both the quarter and six months ended June 30, 2024, the increases in operating revenues were partially offset by the impact of decreased demand and lower prices at one of our transportation-related businesses.

Current wording

For the quarter ended September 30, 2024, the increase in operating revenues was primarily driven by the impact of higher prices at one of our consumer and building products businesses and increased demand at our equipment manufacturing businesses, as well as the contribution from Valor, which was acquired in June 2024. For the nine months ended September 30, 2024, the increase in operating revenues was primarily driven by higher revenues at our consumer building products businesses due to a combination of higher prices, increased demand and the contribution from an acquisition made at one of these businesses in the first quarter of 2024. For both the quarter and nine months ended September 30, 2024, these increases in operating revenues were largely offset by the impact of decreased demand and lower prices across a number of our other businesses, most notably at one of our transportation-related businesses.

Previous wording

The increases in segment operating income and EBITDA for the quarter and six months ended June 30, 2024 compared to the same periods of 2023 were driven by our consumer and building products businesses, due to higher revenues and higher operating margins as a result of declines in the cost of materials, freight and labor. The increases in segment operating income and EBITDA for the quarter and six months ended June 30, 2024 were partially offset by the impact of lower operating margins at our construction services businesses and lower revenues and operating margins at one of our transportation-related businesses.

Current wording

Segment operating income and EBITDA for the nine months ended September 30, 2024 were consistent with segment operating income and EBITDA for the same period of 2023. Segment operating income and EBITDA decreased at our construction services businesses and one of our transportation-related businesses due to the impact of lower revenues and operating margins. The decreases in segment operating income and EBITDA at these businesses were offset by increases at our consumer and building products businesses due to the impact of higher revenues and operating margins.

Previous wording

The increase in interest expense for the quarter and six months ended June 30, 2024 was attributable to the impact of the issuance of 6.0% unsecured senior notes in May 2024. For the six months ended June 30, 2024, the increase in interest expense was partially offset by the impact of the retirement of our 3.625% unsecured senior notes in March 2023 and lower debt held by our Markel Ventures subsidiaries.

Current wording

The increase in interest expense for the quarter and nine months ended September 30, 2024 was attributable to the issuance of our 6.0% unsecured senior notes in May 2024.

Previous wording

Net foreign exchange gains (losses) are primarily due to the remeasurement of our foreign currency denominated insurance loss reserves to the U.S. Dollar. The predominant foreign currencies within our insurance operations are the British Pound and the Euro. The U.S. Dollar strengthened against the Euro and British Pound during the first half of 2024, while it weakened against the British Pound and Euro during the first half of 2023. Pre-tax net foreign exchange gains and losses attributed to changes in exchange rates on available-for-sale securities supporting our insurance reserves, which are included in the changes in net unrealized losses on available-for-sale investments in other comprehensive income (loss), were losses of $3.1 million and $45.5 million for the quarter and six months ended June 30, 2024, respectively, compared to gains of $1.2 million and $35.2 million for the same periods of 2023.

Current wording

Net foreign exchange gains (losses) are primarily due to the remeasurement of our foreign currency denominated insurance loss reserves to the U.S. Dollar. The predominant foreign currencies within our insurance operations are the British Pound and the Euro. The U.S. Dollar weakened against the British Pound and Euro during 2024, most notably in the third quarter, while it weakened against the British Pound and Euro during the first half of 2023 before strengthening against the British Pound and Euro during the third quarter of 2023. Pre-tax net foreign exchange gains and losses attributed to changes in exchange rates on available-for-sale securities supporting our insurance reserves, which are included in the changes in net unrealized losses on available-for-sale investments in other comprehensive income (loss), were gains of $98.8 million and $53.2 million for the quarter and nine months ended September 30, 2024, respectively, compared to losses of $27.3 million and gains of $7.9 million for the same periods of 2023.

Previous wording

The increase in the effective tax rate for the six months ended June 30, 2024 compared to the same period of 2023 was due to higher state taxes and a decrease in Markel CATCo Re income not subject to tax in 2024 compared to 2023.

Current wording

The increase in the effective tax rate for the nine months ended September 30, 2024 compared to the same period of 2023 was due to higher state taxes.

Previous wording

The following table summarizes the components of comprehensive income to shareholders.

Current wording

The following table summarizes the components of comprehensive income (loss) to shareholders.

Previous wording

We seek to maintain prudent levels of liquidity and financial leverage for the benefit and protection of our policyholders, creditors and shareholders. Our consolidated debt to capital ratio was 22% at June 30, 2024 and 20% at December 31, 2023, both of which are within the range of our target capital structure. The increase reflects the impact of an increase in senior long-term debt and other debt, primarily attributable to senior notes issued in May 2024.

Current wording

We seek to maintain prudent levels of liquidity and financial leverage for the benefit and protection of our policyholders, creditors and shareholders. Our consolidated debt to capital ratio was 20% at both September 30, 2024 and December 31, 2023, which is within the range of our target capital structure.

Previous wording

Investments, cash and cash equivalents and restricted cash and cash equivalents (invested assets) were $32.6 billion and $30.9 billion at June 30, 2024 and December 31, 2023, respectively. The following table presents the composition of our invested assets.

Current wording

Investments, cash and cash equivalents and restricted cash and cash equivalents (invested assets) were $34.6 billion and $30.9 billion at September 30, 2024 and December 31, 2023, respectively. The following table presents the composition of our invested assets.