MARKEL GROUP INC
For the period ended Dec 31, 2024. Filed Feb 24, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 24, 2025
MKL$1,939.04-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0001096343-24-000025
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-24.
0001096343-25-000027
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 269 previous paragraphs and 262 current paragraphs.
114 unchanged; 98 reworded; 42 added; 45 removed; 12 previous and 8 current paragraphs rearranged.
Tables are not compared: 21 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
10K - 38
Current report
The following table presents the components of operating income and comprehensive income to shareholders.
Current report
10K - 39
Current report
The increase in gross premium volume in our underwriting operations in 2024 was driven by growth within both of our underwriting segments. Our gross premium volume growth moderated in 2024 as a result of corrective underwriting actions taken and our focus on pursuing business that we feel is adequately priced. We remain cautious in our selection of risks and are allowing business to lapse where we believe rates are inadequate.
Current report
In 2024, we continued to achieve modest rate increases across our diversified product portfolio. The primary exceptions, where we are seeing modest rate decreases, are within our workers' compensation, risk-managed professional liability, cyber and international energy 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 most confident in the levels of rate adequacy.
Current report
We achieved rate increases within our personal lines and select marine and energy product lines throughout 2024, 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 second half of 2024. 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.
Current report
10K - 41
Current report
Excluding losses attributed to natural catastrophes, the improvement in our consolidated combined ratio was primarily attributable to more favorable development on prior accident years loss reserves in 2024 compared to 2023 within our Insurance segment.
Current report
Natural Catastrophes
Current report
In January 2025, there was a series of wildfires in southern California. Based on information currently available, we estimate our range of underwriting losses, including the impact of reinstatement premiums, from these events to be between $90 million and $130 million, before income taxes. This estimated range of losses was derived based on a review of in-force contracts and an analysis of ceded reinsurance contracts, as well as preliminary industry loss estimates. Due to the inherent uncertainty associated with the nature of these wildfire events and limited claims activity, our underwriting loss estimates are subject to a wide range of variability. We will refine our estimate of net losses, which will be recorded in the first quarter of 2025, as more details about these events and actual level of claims emerge.
Current report
Intellectual Property Collateral Protection Insurance
Current report
In 2024 and 2023, we recognized losses on our 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.
Current report
Beginning in the second half 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.
Current report
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 December 31, 2024, all losses on probable claims have been recognized, however, we believe the potential for additional claims in 2025 is reasonably possible, and such amounts could be material to our results of operations and cash flows. However, we believe the amount of such losses in 2025 is likely to be less than what we recognized in 2024.
Current report
The increase in gross premium volume in our Insurance segment in 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. Gross premium volume within our U.S. general liability and professional liability product lines decreased $317.2 million in 2024 compared to 2023, which reflects decreased writings within our brokerage contractors, brokerage excess and umbrella and risk-managed excess casualty general liability products and our risk-managed professional liability products as part of targeted underwriting actions aimed at achieving greater profitability within these product lines.
Current report
10K - 43
Current report
The Reinsurance segment's 2024 combined ratio included $12.3 million of favorable development on prior accident years loss reserves, which was primarily attributable to our property, workers' compensation and professional liability product lines, partially offset by adverse development on our public entity product line. Adverse development on our public entity product line in 2024 totaled $34.1 million, or three points on the Reinsurance segment's combined ratio.
Current report
Adverse development on our public entity product line in 2023 was due to increased frequency of large claims over several quarters on a segment of business that we discontinued writing in 2020. In 2024, we observed similar unfavorable claims trends across the remaining public entity contracts in the more recent accident years. In response to these adverse trends and the product's ultimate inability to meet our profitability targets, we discontinued writing the public entity product line in the fourth quarter of 2024.
Current report
Other Insurance Operations
Current report
The following table presents the components of operating revenues and operating income attributable to our other insurance operations, which are not included in a reportable segment. We do not allocate amortization of acquired intangible assets to our operating segments, including our other insurance operations.
Current report
The following table summarizes gross premium volume fronted through our program services and ILS operations.
Current report
Our program services operations represent the contribution to our insurance results from our State National division's fronting operations. The increase in operating revenues and gross premium volume from our program services operations in 2024 was attributable to expansion of existing programs and new business.
Current report
Our ILS operations represent the overall contribution to our insurance results from our Nephila division and are comprised of Nephila's fund management operations and its related fronting operations through which we earn ceding fees for premiums fronted by our underwriting subsidiaries on behalf of entities managed by Nephila. The increase in operating revenues from our ILS operations in 2024 was primarily attributable to the impact of a higher effective management fee rate in 2024 compared to 2023, as well as growth in premiums fronted. These increases were partially offset by $31.1 million of investment management fees recognized in 2023 upon the release of capital from side pocket reserves with no comparable activity in 2024. The increase in gross premium volume fronted through our ILS operations in 2024 was primarily due to growth of Nephila's property catastrophe and specialty programs.
Current report
The underwriting operating loss in 2024 on 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 a reportable segment.
Current report
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 U.S. In September 2024, we acquired a 68% ownership interest in Educational Partners International (EPI), a company that sponsors international teachers for placements in schools in the U.S. Through December 2024, our investment in EPI was accounted for under the equity method, as we did not have control over the business due to pending regulatory approval. We received regulatory approval in January 2025 and will consolidate EPI beginning in the first quarter of 2025. See note 3 of the notes to consolidated financial statements included under Item 8 for additional details related to these acquisitions.
Current report
Segment operating income in 2024 was consistent with 2023. The impact of higher revenues and operating margins at our consumer and building products businesses and our equipment manufacturing businesses was offset by the impact of lower revenues and operating margins at one of our transportation-related businesses and lower operating margins at our construction services businesses.
Current report
Other
Current report
The following table presents the components of consolidated net income that are not allocated to our operating segments.
Current report
The following table summarizes the components of other comprehensive income (loss) to shareholders.
Current report
In May 2024, we issued $600 million of 6.0% unsecured senior notes due May 2054 with net proceeds of $592.6 million, before expenses. We intend to use these proceeds for general corporate purposes, which may include the redemption of our outstanding preferred shares. As of December 31, 2024, we had 600,000 preferred shares issued and outstanding, which we have the option to redeem, in whole or in part, on June 1, 2025, at $1,000 per preferred share, plus accrued and unpaid dividends.
Current report
Historically, when capital at an insurance subsidiary exceeded our target levels, it was paid to Markel Group in the form of dividends, and if an insurance subsidiary required additional capital to meet our target capital levels, Markel Group contributed capital to the insurance subsidiary to restore capital to our target levels. Following our formation of an insurance operations holding company, Markel Insurance Group (MIG), a portion of the capital needed to support our insurance operations in certain stress scenarios is now held at MIG, rather than Markel Group. At least annually, if capital at an insurance subsidiary exceeds our target levels, it may be paid in the form of dividends to MIG, to the extent it is deemed necessary to support target capital levels across our insurance operations, or to Markel Group.
Current report
In 2024, our insurance subsidiaries paid dividends totaling $1.2 billion to MIG, of which $465.0 million was paid as dividends to Markel Group. In 2023, our insurance subsidiaries paid dividends totaling $310.0 million to Markel Group.
Current report
Operating cash flows from our Markel Ventures operations was $497.0 million in 2024 and $568.1 million in 2023. Cash generated by our Markel Ventures operating subsidiaries is regularly distributed to Markel Ventures, Inc., with dividends totaling $307.7 million and $252.5 million in 2024 and 2023, respectively. After satisfying the obligations on its debt, evaluating capital expenditure needs at its subsidiaries and making contractual purchases of noncontrolling interests in our Markel Ventures businesses, excess cash is available to be allocated across the Company by Markel Group. In any given year, this excess capital may be used to fund Markel Ventures growth opportunities, make discretionary noncontrolling interest purchases, repay loans from our insurance subsidiaries, return capital to Markel Group or any combination of these options.
Current report
10K - 54
Current report
Program Services and ILS Fronting
Current report
Net favorable development in 2024 was net of $111.8 million of adverse development on our risk-managed U.S. professional liability product lines within our Insurance segment, which reflects a continuation of the unfavorable claims and loss trends on those lines in recent years, as further detailed below. In 2024, development on our U.S. general liability product lines stabilized, resulting in modest favorable development as management gave more credibility to the favorable trends observed by our actuaries.
Current report
10K - 61
Current report
(1) Amounts included in Underwriting reflect the intangible assets associated with the Company's underwriting segments, which are not allocated between the Insurance and Reinsurance segments.
Current report
10K - 62
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Removed paragraphs (45)
Previous report
(1) Amortization of intangible assets includes all amortization attributable to our insurance operations. Amortization of intangible assets attributable to our underwriting segments was $37.1 million and $38.5 million for the years ended December 31, 2023 and 2022, respectively; however, we do not allocate amortization of intangible assets between the Insurance and Reinsurance segments. Amortization of intangible assets attributable to our program services and other fronting, insurance-linked securities and other insurance operations was $61.2 million for the years ended December 31, 2023 and 2022.
Previous report
(2) Impairment of goodwill for the year ended December 31, 2022 was attributable to our Nephila ILS operations.
Previous report
(3) Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures.
Previous report
(2) The point impact of catastrophes and the Russia-Ukraine conflict is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums.
Previous report
Throughout 2023, we achieved an overall modest rate increase across the landscape of our diversified product portfolio. However, rate trends by product class were more divergent in 2023 in contrast to the past few years, where we experienced rate increases across most of our product lines. These more nuanced rate trends, coupled with increases in loss cost trends due to heightened economic and social inflation, have forced us to examine each of our product classes more closely and target premium growth only in product lines where we are most confident in the levels of rate adequacy.
Previous report
During 2023, we achieved significant rate increases on our property coverages and select marine and energy product lines, due to recent industry loss experience and the increasing cost of obtaining reinsurance protection, which led us to pursue opportunistic growth within these product lines. Additionally, within our general liability product lines, we continued to achieve modest rate increases across most product classes and saw the level of rate increases improve over the course of the year. We maintained modest growth in these product lines, while carefully selecting risks, managing limits and adjusting attachment points in response to heightened loss cost trends within general liability lines.
Previous report
Within our insurance and reinsurance professional liability product lines, overall, we saw modest rate decreases driven by notable rate decreases within our public directors and officers product, consistent with broader trends across the industry, and,
Previous report
(2) The point impact of catastrophes and the Russia-Ukraine conflict is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums.
Previous report
The increase in gross premium volume in our Insurance segment in 2023 was driven by more favorable rates and new business growth across many of our product lines, most notably within our personal lines and property product lines. The increase was partially offset by lower premium volume within select lines of our professional liability and general liability product lines, where we are adjusting our writings in response to changes in market conditions and downward pressure on rates. We continue to focus on rate adequacy, particularly within certain classes of our casualty and professional liability product lines, and will not write business that we believe will not meet our underwriting profit targets.
Previous report
A significant portion of our casualty portfolio is associated with construction business, which has grown meaningfully in recent years. Our study determined that the ultimate claim reporting tail on certain of our casualty construction lines is likely to be longer than we initially anticipated. Within our excess and umbrella general liability and risk-managed errors and omissions professional liability books, we determined that there was a greater than expected propensity for limits below our attachment point to erode, pushing more claims into our layers. Further, reporting of these claims has lagged historical loss development patterns due to the effect of court closures and claims backlogs arising from the COVID-19 pandemic, in addition to aggressive tactics by the plaintiffs' bar and delayed claims reporting trends. Although we have achieved significant rate increases since 2019 on many of these lines in response to heightened loss trends, the findings of our study led us to increase our loss development factors, and therefore our estimate of the ultimate loss ratios, on our primary casualty contractors' liability, excess and umbrella general liability and risk-managed errors and omissions professional liability product lines. This resulted in significant strengthening of reserves on the impacted lines, including on the 2020 to 2022 accident years where we determined that the incurred loss trends are following a similar loss development trend at the same stage as older accident years.
Previous report
(1) NM - Ratio is not meaningful.
Previous report
(3) The point impact of the Russia-Ukraine conflict is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums.
Previous report
The decrease in earned premiums in 2023 was primarily due to less favorable premium adjustments in 2023 compared to 2022, primarily attributable to our professional liability and credit and surety product lines, and the non-renewal of a large treaty within our workers' compensation product line.
Previous report
Adverse development on our general liability product lines was primarily attributable to large reported loss claims and adverse loss development trends across multiple accident years. Substantially all of the adverse development on our public entity product line was attributable to a segment of this business that we discontinued writing in 2020, which experienced an increased frequency of large claims over the past several quarters, most significantly on the 2014 to 2019 accident years. Adverse development on both our general liability and public entity product lines included notable strengthening as a result of actions taken in the fourth quarter in response to changes in loss trends observed in the reserve study previously discussed under "Insurance Segment" and the expectation that those loss trends will ultimately emerge within comparable reinsurance product lines.
Previous report
In 2022, the combined ratio included $26.1 million of favorable development on prior accident years loss reserves, which was primarily attributable to favorable development within our property product lines related to natural catastrophes and our credit and surety product lines. Favorable development on prior years loss reserves in 2022 was partially offset by additional exposures recognized on prior accident years related to net favorable premium adjustments on our general liability, credit and surety and professional liability product lines.
Previous report
Program Services and Other Fronting, Insurance-linked Securities and Other Insurance
Previous report
The following table presents the components of operating revenues and operating expenses attributable to our program services and other fronting, insurance-linked securities and other insurance operations, including our run-off block of life and annuity reinsurance contracts, none of which are included in a reportable segment.
Previous report
The increase in operating revenues in 2023 was due to modest increases at both our program services business and other fronting operations as a result of higher gross premium volume in 2023 compared to 2022. The following table summarizes gross premium volume in our program services and other fronting operations.
Previous report
The increase in gross premium volume within our program services operations in 2023 was attributable to expansion of existing programs and growth from new programs. The increase in gross premium volume in our other fronting operating in 2023 was driven by expansion of our property catastrophe programs with Nephila Reinsurers and achieving more favorable rates on this business, as well as growth from a new specialty program with Nephila Reinsurers.
Previous report
The decrease in operating revenues and operating expenses in our Nephila insurance-linked securities operations in 2023 was primarily due to the disposition of our Velocity managing general agent operations in February 2022, which resulted in a gain of $107.3 million, and our Volante managing general agent operations in October 2022, which resulted in a gain of $118.5 million. Following these sales, our Nephila ILS operations are solely comprised of our fund management operations. In 2023, the increase in operating revenues within our fund management operations was primarily due to $31.1 million of management fees recognized upon the release of capital from side pocket reserves. Nephila's net assets under management were $6.8 billion as of December 31, 2023.
Previous report
Additionally, in 2022, we recognized a goodwill impairment charge of $80.0 million attributable to our Nephila fund management operations. See note 8 of the notes to consolidated financial statements included under Item 8 for more information about this goodwill impairment.
Previous report
Markel CATCo
Previous report
In March 2022, we completed a buy-out transaction with Markel CATCo Re Ltd. (Markel CATCo Re) and Markel CATCo Reinsurance Fund Ltd. (the Markel CATCo Funds) that provided for an accelerated return of all remaining capital to investors in the Markel CATCo Funds and resulted in the consolidation of Markel CATCo Re upon completion of the transaction. In order to complete the transaction, we made $101.9 million in payments, net of insurance proceeds, to or for the benefit of investors that were recognized as an expense during the first quarter of 2022. See note 17 of the notes to consolidated financial statements for further details regarding our Markel CATCo operations, the buy-out transaction and the consolidation of Markel CATCo Re.
Previous report
The increases in operating income and EBITDA in 2023 were driven by our products businesses, particularly our consumer and building products businesses, which had higher margins in 2023 compared to 2022. In 2022, the operating margins at many of our products businesses were impacted by increased costs of materials, freight and labor, which reflected the impact of broader economic conditions. As conditions stabilized throughout 2023, particularly in regard to materials and freight costs, our operating margins for those businesses improved. The increases in operating income and EBITDA at many of our businesses were partially offset by the impact of lower revenues and operating margins at one of our construction services businesses due to decreased demand.
Previous report
Interest Expense, Net Foreign Exchange Gains (Losses) and Income Taxes
Previous report
Net Foreign Exchange Gains (Losses)
Previous report
Comprehensive Income (Loss) to Shareholders and Book Value per Common Share
Previous report
Book value per common share increased 17% from $935.65 at December 31, 2022 to $1,095.95 as of December 31, 2023.
Previous report
In 2023 and 2022, our insurance subsidiaries paid dividends totaling $310.0 million and $130.0 million, respectively, to Markel Group. Additionally, in 2022, as a result of unfavorable market value movements in the public equity markets, the portion of capital held in equity securities at our insurance subsidiaries declined significantly. Therefore, in order to maintain our target levels of excess capital within the impacted insurance subsidiaries, our holding company made capital contributions totaling $973.5 million in 2022. There were no capital contributions from our holding company to our insurance subsidiaries in 2023.
Previous report
In 2023, we continued to increase our allocation of cash and short-term investments to fixed maturity securities in response to higher interest rates and to support our growing underwriting business. Additionally, we increased our purchases of equity securities in 2023.
Previous report
The change in the composition of the investment portfolio from December 31, 2022 to December 31, 2023 reflects our increased allocation of cash and short-term investments to fixed maturity and equity securities, as well as an increase in the fair value of our equity portfolio.
Previous report
10K - 57
Previous report
Reported claims are in various stages of the settlement process, and the corresponding reserves for reported claims are based upon all information available to us. Case reserves consider our estimate of the ultimate cost to settle the claims, including investigation and defense of lawsuits resulting from the claims, and may be subject to adjustment for differences between costs originally estimated and costs subsequently re-estimated or incurred. Claims are settled based upon their merits, and some claims may take years to settle, especially if legal action is involved. As of any balance sheet date, all claims have not yet been reported, and some claims may not be reported for many years. As a result, the liability for unpaid losses and loss adjustment expenses includes significant estimates for incurred but not reported claims.
Previous report
U.S. GAAP requires that IBNR reserves be based on the estimated ultimate cost of settling claims, including the effects of inflation and other social and economic factors, using past experience adjusted for current trends and any other factors that would modify past experience. IBNR reserves are calculated by subtracting paid losses and loss adjustment expenses and case reserves from estimated ultimate losses and loss adjustment expenses. IBNR reserves were 72% of total unpaid losses and loss adjustment expenses at December 31, 2023 compared to 70% at December 31, 2022.
Previous report
Any adjustments to reserves resulting from our interim or year-end reviews, including changes in estimates, are recorded as a component of losses and loss adjustment expenses in the period of the change. Reserve changes that increase previous estimates of ultimate claims cost are referred to as unfavorable or adverse development, or reserve strengthening. Reserve changes that decrease previous estimates of ultimate claims cost are referred to as favorable development.
Previous report
The difference between management's best estimate and the actuarially calculated point estimate in both 2023 and 2022 is primarily associated with our long-tail business due to the subjective factors previously described that affect the development of losses. The decrease in 2023 resulted from significant strengthening of reserves following increases in our actuaries' best estimate of ultimate losses on certain general liability and professional liability product lines, which management believes already considers the subjective factors that may impact the development of underlying losses on the impacted product lines. Certain subjective factors, particularly the credibility and timeliness of claims information, are more pronounced within our reinsurance operations, as previously discussed, and therefore, the percentage difference between management's best estimate and the actuarially calculated point estimate is more significant in our Reinsurance segment than our Insurance segment.
Previous report
Loss frequency and loss severity are two key measures of loss activity that often result in adjustments to actuarial assumptions relative to ultimate loss reserve estimates. Loss frequency measures the number of claims per unit of insured exposure. When the number of newly reported claims is higher than anticipated, loss reserves are generally increased. Conversely, loss reserves are generally decreased when fewer claims are reported than expected. Loss severity measures the average size of a claim. When the average severity of reported claims is higher than originally estimated, loss reserves are typically increased. When the average claim size is lower than anticipated, loss reserves are typically decreased.
Previous report
Favorable development in 2023 was most notable on our property, international professional liability, marine and energy and workers' compensation product lines. Favorable development in 2022 was most significant on our property and workers' compensation product lines. Favorable development on our property product lines in 2023 and 2022 was driven by lower loss severity than previously anticipated, as well as net favorable development on our reserves for natural catastrophes that occurred in prior years. On our workers' compensation product line, the actuarial methods we used indicated a continued decline in the loss severity trend on prior accident years in 2023 and 2022, consistent with our experience in recent years. Within our international operations, our professional liability and marine and energy product lines experienced lower loss severity than initially expected. As actual losses on these product lines continued to be lower than anticipated in 2023 and 2022, it became more likely that the underwriting results would prove to be better than originally estimated. Management gave greater credibility to the favorable trends experienced on earlier accident years and upon incorporating these favorable trends
Previous report
Net favorable development in 2022 was net of $128.5 million of adverse development on our U.S. and Bermuda professional liability and general liability product lines within our Insurance segment, which was primarily attributable to unfavorable claim settlements and increased claim frequency and severity on the 2016 to 2019 accident years. The adverse development was across a number of products, including directors and officers, errors and omissions and employment practices liability within professional liability and contractors and excess and umbrella within general liability. Development on prior years loss reserves within our U.S. and Bermuda professional liability and general liability product lines in 2022 was impacted by broader market conditions. The impact of economic and social inflation, including the rising cost to adjust and settle claims and the impact of more pervasive litigation financing trends, has contributed to the loss cost trends, leading to higher than anticipated losses in older accident years for these products lines. The impacts of social inflation were most significant on our large, risk-managed excess professional liability accounts, corresponding with a notable rise in the number of class action lawsuits on these years and the recent unfavorable legal environment. The development of this claims trend was influenced by state and federal court closures following the onset of the COVID-19 pandemic in 2020, which delayed court proceedings for claims on the impacted product lines.
Previous report
A significant portion of our casualty portfolio is associated with construction business, which has grown meaningfully in recent years. Our study determined that the ultimate claim reporting tail on certain of our casualty construction lines is likely to be longer than we initially anticipated. Within our excess and umbrella general liability and risk-managed errors and omissions professional liability books, we determined that there was a greater than expected propensity for limits below our attachment point to erode, pushing more claims into our layers. Further, reporting of these claims has lagged historical loss development patterns due to the effect of court closures and claims backlogs arising from the COVID-19 pandemic, in addition to aggressive tactics by the plaintiffs' bar and delayed claims reporting trends. Although we have achieved significant rate increases since 2019 on many of these lines in response to heightened loss trends, the findings of our study led us to increase our loss development factors, and therefore our estimate of the ultimate loss ratios, on our primary casualty contractors' liability, excess and umbrella general liability and risk-managed errors and omissions professional liability product lines. This resulted in significant strengthening of reserves on the impacted lines, including on the 2020 to 2022 accident years, where we determined that the incurred loss trends are following a similar loss development trend at the same stage as older accident years.
Showing the first 40 of 45 passages. Open the source sections for the rest.
Reworded paragraphs (98)
Previous wording
For a discussion of our significant accounting policies, as well as recently issued accounting pronouncements that we have not yet adopted and their expected effects on our consolidated financial position, results of operations and cash flows, see note 1 of the notes to consolidated financial statements included under Item 8.
Current wording
For a discussion of our significant accounting policies, see note 1 of the notes to consolidated financial statements included under Item 8.
Previous wording
The change in comprehensive income (loss) to shareholders in 2023 compared to 2022 was primarily due to pre-tax net investment gains of $1.5 billion in 2023 compared to pre-tax net investment losses of $1.6 billion in 2022, as well as pre-tax net unrealized gains on our fixed maturity securities of $389.5 million in 2023 compared to pre-tax net unrealized losses of $1.5 billion in 2022.
Current wording
The increase in comprehensive income to shareholders in 2024 compared to 2023 was primarily due to pre-tax net investment gains of $1.8 billion on our equity securities in 2024 compared to $1.6 billion in 2023.
Previous wording
The components of net income (loss) to shareholders and comprehensive income (loss) to shareholders are discussed in further detail under "Insurance Results," "Investing Results," "Markel Ventures Results," "Interest Expense, Net Foreign Exchange Gains (Losses) and Income Taxes" and "Comprehensive Income (Loss) to Shareholders and Book Value per Common Share."
Current wording
The components of comprehensive income to shareholders are discussed in further detail under "Insurance Results," "Investing Results," "Markel Ventures Results," "Other" and "Other Comprehensive Income (Loss) to Shareholders."
Previous wording
Our Insurance engine includes our underwriting, program services and other fronting and insurance-linked securities (ILS) operations. We have a suite of capabilities through which we can access capital to support our customers' risks, which includes our own capital through our underwriting operations and third-party capital through our program services and other fronting and ILS operations. Our underwriting operations, which are primarily comprised of our Insurance and Reinsurance segments, produce revenues primarily by underwriting insurance contracts and earning premiums in the specialty insurance market. Our program services and other fronting and insurance-linked securities operations produce revenues primarily through fees earned for fronting services and investment management services, respectively. Our insurance operations also include the underwriting results of run-off lines of business that were discontinued prior to, or in conjunction with, insurance acquisitions,
Current wording
Our Insurance operations include our underwriting, program services and insurance-linked securities (ILS) operations. We have a suite of capabilities through which we can access capital to support our customers' risks, which includes our own capital through our underwriting operations and third-party capital through our program services and ILS operations. Our underwriting operations, which are primarily comprised of our Insurance and Reinsurance segments, produce revenues primarily by underwriting insurance contracts and earning premiums in the specialty insurance market. Our program services and ILS operations produce revenues primarily through fees earned for fronting services and investment management services. Our insurance operations also include the underwriting results of run-off lines of business that were discontinued prior to, or in conjunction with, insurance acquisitions, and the results of our run-off life and annuity reinsurance business.
Previous wording
10K - 41 and the results of our run-off life and annuity reinsurance business. The following table presents the components of our Insurance engine gross premium volume and operating revenues.
Current wording
The following table presents the components of our Insurance operations gross premium volume and operating revenues.
Previous wording
(1) Substantially all gross premiums from our program services and other fronting operations were ceded to third parties for the years ended December 31, 2023 and 2022.
Current wording
(1) Substantially all gross premiums from our fronting operations were ceded to third parties for the years ended December 31, 2024 and 2023.
Previous wording
When analyzing our combined ratio, we exclude current accident year losses and loss adjustment expenses attributed to natural catastrophes and certain other significant, infrequent loss events, for example, the on-going military conflict between Russia and Ukraine that began following Russia's invasion of Ukraine in February 2022. Due to the unique characteristics of these events, there is inherent variability as to the timing or loss amount, which cannot be predicted in advance. We believe measures that exclude the effects of such events are meaningful to understand the underlying trends and variability in our underwriting results that may be obscured by these items.
Current wording
When analyzing our combined ratio, we exclude current accident year losses and loss adjustment expenses attributed to natural catastrophes and certain other significant, infrequent loss events. Due to the unique characteristics of these events, there is inherent variability as to the timing or amount of the loss, which cannot be predicted in advance. We believe measures that exclude the effects of such events are meaningful to understand the underlying trends and variability in our underwriting results that may be obscured by these items.
Previous wording
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. We also analyze our current accident year loss ratio excluding losses and loss adjustment expenses attributable to catastrophes and, in 2022, the Russia-Ukraine conflict. 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.
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
The following table presents summary data for our consolidated underwriting operations, which are comprised predominantly of our Insurance and Reinsurance segments. Our consolidated underwriting results also include results from discontinued lines of business and the retained portion of our program services and other fronting operations.
Current wording
The following table presents summary data for our consolidated underwriting operations, which are comprised predominantly of our Insurance and Reinsurance segments. Our consolidated underwriting results also include results from discontinued lines of business and the retained portion of our fronting operations.
Previous wording
10K - 43 to a lesser extent, within our errors and omissions coverages. Within these products, 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, we are generally seeing consistency in rates and are continuing to pursue growth opportunities where we find the business to be adequately priced. We also saw rate decreases globally within our cyber product line as that market matures, following several years of significant rate increases and strong industry underwriting performance. Despite these current trends, we view cyber as a long-term growth opportunity. Finally, we continued to realize low single digit rate decreases within our workers' compensation product line and are reacting accordingly on a state-by-state basis to maintain profitability.
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, we believe 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 in 2023 was driven by growth within our Insurance segment, partially offset by lower gross premium volume within our Reinsurance segment. Net retention of gross premium volume for our underwriting operations was 82% in 2023 compared to 83% in 2022. The decrease was driven by lower retention in 2023 compared to 2022 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 2023 was primarily attributable to higher gross premium volume in recent periods.
Current wording
Net retention of gross premium volume for our underwriting operations was 79% in 2024 compared to 82% in 2023. The decrease 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 2024 was primarily attributable to higher gross premium volume in recent periods.
Previous wording
In 2023, underwriting results included $40.1 million of net losses and loss adjustment expenses attributed to the Hawaiian wildfires and Hurricane Idalia (2023 Catastrophes). The net losses and loss adjustment expenses from the 2023 Catastrophes were net of ceded losses of $9.3 million. In 2022, underwriting results included $46.2 million and $35.7 million of net losses and loss adjustment expenses attributed to Hurricane Ian and the Russia-Ukraine conflict, respectively. The net losses and loss adjustment expenses from Hurricane Ian and the Russia-Ukraine conflict were net of ceded losses of $115.3 million and $44.3 million, respectively. Excluding these losses, the increase in our consolidated combined ratio in 2023 compared to 2022 was primarily driven by a higher attritional loss ratio across both of our underwriting segments.
Current wording
In 2024, underwriting results included $70.6 million of net losses and loss adjustment expenses attributed to Hurricane Helene and Hurricane Milton (2024 Catastrophes). The net losses and loss adjustment expenses from the 2024 Catastrophes were net of ceded losses of $60.4 million. In 2023, underwriting results included $40.1 million of net losses and loss adjustment expenses attributed to Hawaiian wildfires and Hurricane Idalia (2023 Catastrophes). The net losses and loss adjustment expenses from the 2023 Catastrophes were net of ceded losses of $9.3 million. The net losses and loss adjustment expenses attributed to the 2024 Catastrophes as of December 31, 2024 represent our best estimate based upon information currently available. Our estimate for these losses is based on industry loss estimates and output from industry, broker and proprietary models, as well as policy level reviews and analysis of ceded reinsurance contracts. This estimate is based on various assumptions about coverage and liability and is therefore subject to change. While we believe our net reserves for the 2024 Catastrophes as of December 31, 2024 are adequate, we continue to closely monitor reported claims and may adjust our estimate of net losses as new information becomes available.
Previous wording
(1) Amounts may not reconcile due to rounding.
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. Amounts may not reconcile due to rounding. Earned premiums on our IP CPI product for the years ended December 31, 2024 and 2023 were not material.
Previous wording
Additionally, we recognized losses on our intellectual property collateral protection insurance written within our professional liability product line in 2023 due to higher than anticipated levels of claims and loss experience. Losses on this product line also included $65.0 million of credit losses recognized in connection with fraudulent letters of credit that were provided by an affiliate of Vesttoo Ltd. as collateral for reinsurance purchased on two policies, which we believe represents our full exposure to credit losses on the related reinsurance recoverables. We are actively pursuing remedies to make recoveries on the reinsurance recoverables impacted by the fraudulent letters of credit and do not have any other ceded reinsurance contracts with Vesttoo Ltd. or its affiliates.
Current wording
(2) Current accident year losses and loss adjustment expenses for the year ended December 31, 2023 included $65.0 million of credit losses in connection with a fraudulent letter of credit that was provided by an affiliate of Vesttoo Ltd. as collateral for reinsurance purchased on one of the policies that resulted in a claim.
Previous wording
Net retention of gross premium volume was 81% in 2023 compared to 82% in 2022. The decrease was driven by higher cession rates on our personal lines product lines in 2023 compared to 2022. The increase in earned premiums in 2023 was primarily due to higher gross premium volume across most product lines in recent periods.
Current wording
Net retention of gross premium volume was 77% in 2024 compared to 81% in 2023. The decrease was driven by higher cession rates 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 product lines, which have lower cession rates than most other products within the segment. The increase in earned premiums in 2024 was primarily due to higher gross premium volume in recent periods.
Previous wording
The Insurance segment's current accident year losses and loss adjustment expenses in 2023 included $39.6 million of net losses and loss adjustment expenses attributed to the 2023 Catastrophes. Current accident year losses in 2022 included $46.2 million and $23.0 million of net losses and loss adjustment expenses attributed to Hurricane Ian and the Russia-Ukraine conflict, respectively. Excluding these losses, the increase in the current accident year loss ratio in 2023 compared to 2022 was primarily attributable to higher attritional loss ratios within our general liability and professional liability product lines in 2023 compared to 2022. Based on the adverse prior accident year loss development trends on these long-tail lines of business and the uncertainty around future loss cost trends, as discussed in further detail below, we increased our attritional loss ratios on certain product classes within our general liability and professional liability product lines in 2023. Consistent with our loss reserving philosophy and to increase the likelihood that the reserves established for our in-force portfolio will ultimately prove to be adequate, we are taking a more cautious approach in our reserving, resulting in higher attritional loss ratios on this business.
Current wording
The Insurance segment's current accident year losses and loss adjustment expenses in 2024 included $67.2 million of net losses and loss adjustment expenses attributed to the 2024 Catastrophes. Current accident year losses in 2023 included $39.6 million of net losses and loss adjustment expenses attributed to the 2023 Catastrophes. Excluding these losses, the improvement in the current accident year loss ratio in 2024 compared to 2023 was primarily attributable to lower attritional loss ratios within our international product lines, largely offset by higher attritional loss ratios across our U.S. product lines, driven largely by our professional liability product lines. In 2024, we increased our attritional loss ratios on certain product classes within our U.S. professional liability product lines in response to unfavorable loss development trends in recent years and to include an increase in the level of caution on our U.S. professional liability and general liability product lines.
Previous wording
The Insurance segment's 2023 combined ratio included $104.7 million of favorable development on prior accident years loss reserves, which was primarily attributable to favorable development on our property, marine and energy, international professional liability, personal lines and workers' compensation product lines, partially offset by adverse development on our U.S. and Bermuda general liability and professional liability product lines. In 2022, the combined ratio included $142.9 million of favorable development on prior accident years loss reserves, which was primarily attributable to favorable development on our workers' compensation, programs, property and credit and surety product lines. Favorable development in 2022 was partially offset by adverse development on our professional liability and general liability product lines, primarily on our U.S. and Bermuda business. See note 11 of the notes to consolidated financial statements included under Item 8 for more information on the Insurance segment's prior year loss reserve development.
Current wording
The Insurance segment's 2024 combined ratio included $451.0 million of favorable development on prior accident years loss reserves compared to $104.7 million in 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. In 2024, favorable development was primarily attributable to our international professional liability product lines, as well as our general liability, property, marine and energy, programs and credit and surety product lines. Favorable development in 2023 was primarily attributable to our property, marine and energy, international professional liability, personal lines and workers' compensation product lines, partially offset by adverse development on our U.S. general liability and professional liability product lines. See note 11 of the notes to consolidated financial statements included under Item 8 for more information on the Insurance segment's prior year loss reserve development.
Previous wording
The increase in the Insurance segment's expense ratio in 2023 was primarily due to higher personnel costs, professional fees and other general and administrative expenses, which were partially offset by the impact of higher earned premiums.
Current wording
The increase in the Insurance segment's expense ratio in 2024 was primarily attributable to higher personnel costs, including profit sharing expenses and investments in underwriting talent within our international operations, as well as other general and administrative expenses, including investments in technology across our global operations to drive future growth and operational efficiencies. The increase is also partially attributable to general cost inflation trends outpacing premium growth, as a result of the underwriting actions taken on our U.S. general liability and professional liability product lines, as previously discussed.
Previous wording
The decrease in gross premium volume in our Reinsurance segment in 2023 was driven by significantly lower gross premiums within our professional liability product lines, primarily attributable to unfavorable premium adjustments in 2023 compared to favorable premium adjustments in 2022, largely driven by transaction liability business, due to lower volume of deal activity, and the deterioration in the pricing environment on directors and officers liability. Lower premium volume within professional liability also reflects decreases on renewals, due to decreased exposures and participation. The decrease in professional liability premium volume was partially offset by higher gross premiums within our marine and energy product lines due to increases on renewals, arising from increased exposures and more favorable rates, as well as new business. 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 increase in gross premium volume in our Reinsurance segment in 2024 was driven by increases on renewals and new business within our marine and energy product lines, as well as new business and favorable timing differences on our workers' compensation product line. Significant variability in gross premium volume can be expected in our Reinsurance segment due to individually significant contracts and multi-year contracts. Net retention of gross premium volume was 90% in 2024 compared to 92% in 2023. The decrease in net retention was driven by the increased premium volume in our marine and energy business, which carries a higher cession rate than the rest of the segment. The increase in earned premiums in 2024 was primarily due to the impact of higher gross premium volume within our marine and energy and general liability product lines in recent periods, partially offset by unfavorable premium adjustments in 2024 compared to favorable premium adjustments 2023.
Previous wording
The increase in the Reinsurance segment's current accident year loss ratio in 2023 compared to 2022 was primarily due to less favorable premium adjustments on prior accident years in 2023 compared to 2022, primarily on our professional liability and credit and surety product lines.
Current wording
The increase in the Reinsurance segment's current accident year loss ratio in 2024 compared to 2023 was primarily due to higher attritional loss ratios, which we increased in response to recent loss development trends within our professional liability and general liability product lines and to include an increase in the level of caution on these product lines. The increase also includes the impact of unfavorable premium adjustments on prior accident years in 2024 compared to favorable premium adjustments on prior accident years in 2023, as well as large losses on our credit and surety product line in 2024.
Previous wording
The Reinsurance segment's 2023 combined ratio included $57.1 million of adverse development on prior accident years loss reserves, which was driven by $95.5 million, or nine points, of adverse development on our general liability product lines and $53.7 million, or five points, of adverse development on our public entity product line, as well as additional exposures recognized on prior accident years related to net favorable premium adjustments on our general liability product lines. These increases in prior accident year reserves in 2023 were partially offset by favorable development across several product lines, including our property and workers' compensation product lines, as well as reduced exposures recognized on prior accident years related to net unfavorable premium adjustments on our professional liability product lines.
Current wording
In 2023, the combined ratio included $57.1 million of adverse development on prior accident years loss reserves, which was driven by $95.5 million, or nine points, of adverse development on our general liability product lines and $55.7 million, or five points, of adverse development on our public entity product line, as well as additional exposures recognized on prior accident years related to net favorable premium adjustments on our general liability product lines. These increases in prior accident year reserves in 2023 were partially offset by favorable development across several product lines, including our property and workers' compensation product lines, as well as reduced exposures recognized on prior accident years related to net unfavorable premium adjustments on our professional liability product lines.
Previous wording
(1) Investment income earned on the investments that support life and annuity policy benefit reserves are included in our Investing segment.
Current wording
(1) Investment income earned on the investments that support life and annuity policy benefit reserves is included in our Investing segment.
Previous wording
(2) Results attributable to Markel CATCo Re were entirely attributable to noncontrolling interest holders in Markel CATCo Re.
Current wording
(2) Results attributable to Markel CATCo Re Ltd. (Markel CATCo Re) for both periods were entirely attributable to noncontrolling interest holders in Markel CATCo Re.
Previous wording
(3) Underwriting results attributable to our other insurance operations include results from discontinued lines of business and the retained portion of our program services and other fronting operations.
Current wording
(3) Underwriting results attributable to our other insurance operations are comprised of results from discontinued lines of business and the retained portion of our fronting operations.
Previous wording
We measure our investment performance by analyzing net investment income earned on our investment portfolio, 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.
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 significantly from one period to the next, and therefore believe that our investment performance is best analyzed over longer periods of time.
Previous wording
(1) Yield reflects the applicable interest income as a percentage of the applicable monthly average invested assets at amortized cost.
Current wording
(1) Yield reflects the applicable interest income as a percentage of the monthly average invested assets at amortized cost.
Previous wording
(3) Other income or losses within our investing operations primarily relate to equity method investments in our investing segment, which are managed separately from the rest of our investment portfolio.
Current wording
(3) Other income or losses within our investing results primarily relate to equity method investments in our Investing segment, which are managed separately from the rest of our investment portfolio.
Previous wording
The increase in net investment income in 2023 was primarily attributable to higher interest income on cash equivalents, fixed maturity securities and short-term investments due to higher yields during 2023 compared to 2022. Throughout 2023, we increased our allocation of cash to money market funds in response to increases in short-term interest rates. Additionally, interest income on our fixed maturity securities increased in part due to higher average holdings of fixed maturity securities in 2023 compared to 2022. See note 4(d) of the notes to consolidated financial statements included under Item 8 for details regarding the components of net investment income.
Current wording
Net investment income increased in 2024, primarily driven by higher interest income on fixed maturity securities due to a higher yield and higher average holdings during 2024 compared to 2023, as well as higher yields on cash and short-term investments. In 2024, we continued to allocate cash to money market funds, short-term investments and fixed maturity securities to take advantage of higher interest rates. See note 4(d) of the notes to consolidated financial statements included under Item 8 for details regarding the components of net investment income.
Previous wording
We measure Markel Ventures' results by its operating income, as well as earnings before interest, income taxes, depreciation and amortization (EBITDA). We consolidate the results of our Markel Ventures subsidiaries on a one-month lag, with the exception of significant transactions or events that occur during the intervening period. The following table summarizes the results from our Markel Ventures segment.
Current wording
We measure the operating performance of our Markel Ventures segment by its operating income, as well as earnings before interest, income taxes, depreciation and amortization (EBITDA). We consolidate the results of our Markel Ventures subsidiaries on a one-month lag, with the exception of significant transactions or events that occur during the intervening period.
Previous wording
The increase in operating revenues in 2023 was driven by higher revenues at our construction services businesses and transportation-related businesses, due to a combination of increased demand, higher prices, and growth, as well as increased production at one of our equipment manufacturing businesses compared to 2022. The increase also reflected a full-year contribution from Metromont, compared to an 11-month contribution in 2022 following its acquisition. These increases in operating revenues were partially offset by the impact of decreased demand at our consumer and building products businesses, consulting services businesses and one of our construction services businesses.
Current wording
The increase in operating revenues in 2024 was 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 by one of these businesses in the first quarter of 2024. The increase in operating revenues also reflects the contribution from Valor and increased demand at our equipment manufacturing businesses. 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
Markel Ventures EBITDA is a non-GAAP financial measure. We use Markel Ventures EBITDA as an operating performance measure in conjunction with U.S. GAAP measures, including operating income, to monitor and evaluate the performance of our Markel Ventures segment. Because EBITDA excludes interest, income taxes, depreciation and amortization, it provides an indicator of economic performance that is useful to both management and investors in evaluating our Markel Ventures businesses as it is not affected by levels of debt, interest rates, effective tax rates or levels of depreciation or amortization resulting from purchase accounting. The following table reconciles Markel Ventures operating income to Markel Ventures EBITDA.
Current wording
Markel Ventures segment EBITDA is a non-GAAP financial measure. We use Markel Ventures segment EBITDA as an operating performance measure in conjunction with U.S. GAAP measures, including operating income, to monitor and evaluate the performance of our Markel Ventures segment. Because EBITDA excludes interest, income taxes, depreciation and amortization, it provides an indicator of economic performance that is useful to both management and investors in evaluating our Markel Ventures businesses as it is not affected by levels of debt, interest rates, effective tax rates or levels of depreciation or amortization resulting from purchase accounting. The following table reconciles Markel Ventures segment operating income to EBITDA.
Previous wording
The following tables present condensed financial information reflecting the financial position, results of operations and cash flows of Markel Ventures, Inc., and also summarizing the amounts recognized in the consolidated financial statements included under Item 8 for the Markel Ventures segment, unless otherwise noted.
Current wording
The following tables present condensed financial information reflecting the financial position, results of operations and cash flows of Markel Ventures, Inc. and its consolidated subsidiaries, and also summarizing the amounts recognized in the consolidated financial statements included under Item 8, unless otherwise noted.
Previous wording
(1)Debt as of December 31, 2023 and 2022 included $738.0 million and $808.1 million, respectively, of debt due to other subsidiaries of Markel Group, which was eliminated in consolidation and is guaranteed by Markel Group.
Current wording
(1)Debt as of December 31, 2024 and 2023 included $788.0 million and $738.0 million, respectively, of debt due to other subsidiaries of Markel Group, which was eliminated in consolidation and is guaranteed by Markel Group.
Previous wording
(2)Shareholders' equity as of both December 31, 2023 and 2022 included $1.4 billion of common stock, which represents Markel Group's investment in Markel Ventures, Inc. and which was eliminated in consolidation.
Current wording
(2)Shareholders' equity as of December 31, 2024 and 2023 included $1.6 billion and $1.4 billion of common stock, which represents Markel Group's investment in Markel Ventures, Inc. and which was eliminated in consolidation.
Previous wording
(1)Interest expense for the years ended December 31, 2023 and 2022 included intercompany interest expense of $26.5 million and $27.4 million, respectively, which was eliminated in consolidation.
Current wording
(1)Interest expense for the years ended December 31, 2024 and 2023 included intercompany interest expense of $27.7 million and $26.5 million, respectively, which was eliminated in consolidation.
Previous wording
(1)Net cash provided (used) by financing activities for the years ended December 31, 2023 and 2022 included net repayments of intercompany debt of $70.0 million and $44.9 million, respectively, which were eliminated in consolidation.
Current wording
(1) Net cash used by financing activities for the year ended December 31, 2024 included net additions to intercompany debt of $50.0 million, which were eliminated in consolidation. Net cash used by financing activities for the year ended December 31, 2023 included net repayments of intercompany debt of $70.0 million, which were eliminated in consolidation.
Previous wording
Interest expense was $185.1 million in 2023 compared to $196.1 million in 2022. The decrease in interest expense was attributable to the impact of the retirement of our 3.625% unsecured senior notes in March 2023 and our 4.9% unsecured senior notes in July 2022. See note 14 of the notes to consolidated financial statements included under Item 8 for further details regarding the retirement of our senior long-term debt.
Current wording
The increase in interest expense for the year ended 2024 was primarily attributable to the issuance of our 6.0% unsecured senior notes in May 2024. See note 14 of the notes to consolidated financial statements included under Item 8 for further details regarding our senior long-term debt.
Previous wording
Net foreign exchange gains (losses) included in net income (loss) were losses of $90.0 million in 2023 compared to gains of $137.8 million in 2022. Net foreign exchange gains (losses) are primarily due to the remeasurement of our foreign currency denominated insurance reserves to the U.S. Dollar. The U.S. Dollar moderately weakened against the Euro and British Pound, the predominant foreign currencies within our insurance operations, during 2023, while it strengthened against the Euro and British Pound in 2022. 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 gains (losses) on available-for-sale investments in other comprehensive income (loss), were gains of $74.0 million in 2023 compared to losses of $79.5 million in 2022.
Current wording
Net foreign exchange gains and losses are primarily due to the remeasurement of our foreign currency denominated insurance loss reserves to the U.S. Dollar. The predominant foreign currencies of these loss reserves are the Euro and the British Pound. The U.S. Dollar strengthened against the Euro and British Pound during 2024, while it weakened against these currencies during 2023. Our exposure to foreign currency exchange rates is largely hedged through our available-for-sale investment portfolio, where we hold securities that generally match the currencies of our loss reserves. We also purchase foreign currency forward contracts to further manage unmatched foreign currency exposures. 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 gains (losses) on available-for-sale investments in other comprehensive income (loss), were losses of $93.2 million in 2024 compared to gains of $74.0 million in 2023. See "Foreign Currency Exchange Rate Risk" under Item 7A Quantitative and Qualitative Disclosures About Market Risk for additional information about how we manage foreign currency exchange rate risk.
Previous wording
The effective tax rate was 21% in 2023 compared to 32% in 2022. The effective tax rate for 2022 differs from the effective tax rate for 2023, and the statutory rate of 21%, due to the impact of various immaterial items resulting in a net tax benefit that was magnified due to the small pre-tax loss in 2022. See note 15 of the notes to consolidated financial statements included under Item 8 for further discussion of our income taxes.
Current wording
See note 15 of the notes to consolidated financial statements included under Item 8 for further details on our income taxes.
Previous wording
The Organization for Economic Co-operation and Development (OECD) recently introduced rules, commonly referred to as Pillar Two, to establish a 15% global corporate minimum tax on large, multi-national enterprises. Certain countries in which we have operations, including the United Kingdom, have enacted legislation consistent with Pillar Two, which generally became effective on January 1, 2024. Additionally, in response to Pillar Two, in December 2023, Bermuda enacted the Corporate Income Tax Act of 2023 (the Bermuda CIT Act) effective January 1, 2025, which imposes a 15% corporate income tax on certain Bermuda businesses of large, multi-national enterprises. We do not expect Pillar Two or the Bermuda CIT Act to have a material impact on our results of operations, financial condition or cash flows, however, we will continue to evaluate these tax law changes as additional guidance is issued by the OECD and relevant tax authorities.
Current wording
The Organization for Economic Co-operation and Development (OECD) introduced rules, commonly referred to as Pillar Two, that, if adopted, would establish a 15% global corporate minimum tax on certain large, multi-national enterprises. Certain countries in which we have operations, including the United Kingdom, have enacted legislation to adopt Pillar Two, which generally became effective on January 1, 2024. Additionally, in response to Pillar Two, Bermuda enacted the Corporate Income Tax Act of 2023 (the Bermuda CIT Act) effective January 1, 2025, which imposes a 15% corporate income tax on certain Bermuda businesses of large, multi-national enterprises. Pillar Two and the Bermuda CIT Act did not have a material impact on our results of operations, financial condition or cash flows in 2024, and we do not expect either to have a material impact on our results of operations, financial condition or cash flows in future periods, however, we will continue to evaluate these tax law changes as additional guidance is issued by the OECD and relevant tax authorities.
Showing the first 40 of 98 pairs. Open the source sections for the rest.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
The following table summarizes the results from our Markel Ventures segment.
Current report — wording carried from elsewhere
Net Foreign Exchange Gains and Losses
Current report — wording carried from elsewhere
Other Comprehensive Income (Loss) to Shareholders
Current report — wording carried from elsewhere
10K - 57 and thus require a significant degree of judgment in the reserving process, include the effects of unanticipated levels of economic inflation, the impact of social inflation, the inherent uncertainty as to the length of reporting and payment development patterns and the possibility of judicial interpretations or legislative changes that might impact future loss experience relative to prior loss experience.
Current report — wording carried from elsewhere
In developing its best estimate of loss reserves, management's philosophy is to establish loss reserves that are more likely to be redundant rather than deficient, and therefore, will ultimately prove to be adequate. Management's approach to establishing loss reserves results in loss reserves that exceed the calculated actuarial point estimate.
Current report — wording carried from elsewhere
Our ultimate liability may be greater or less than current reserves. Changes in our estimated ultimate liability for loss reserves generally occur as a result of the emergence of unanticipated loss activity, the completion of specific actuarial or claims studies or changes in internal or external factors. We closely monitor new information on reported claims and use statistical analyses prepared by our actuaries to evaluate the adequacy of our recorded reserves. We are required to exercise considerable judgment when assessing the relative credibility of loss development trends. Loss frequency and loss severity are two key measures of loss activity that often result in adjustments to actuarial assumptions relative to ultimate loss reserve estimates.
Current report — wording carried from elsewhere
In 2024, the magnitude of our favorable development on prior years loss reserves increased, however, it still lagged our historical trend due to continued adverse trends in our U.S. professional liability product lines, as previously discussed. It is difficult for management to predict the duration and magnitude of a trend and, on a relative basis, it is even more difficult to predict the emergence of factors or trends that are unknown today but may have a material impact on loss reserve development.
Current report — wording carried from elsewhere
In assessing the likelihood of whether the trends previously discussed will continue and whether other trends may develop, we believe that a reasonably likely movement in prior years loss reserves during 2025 would be a range of favorable development of up to 5%, or $750 million, of December 31, 2024 net loss reserves.
Rearranged previous paragraphs (12)
Previous report — wording carried elsewhere
The following table presents the components of comprehensive income (loss) to shareholders.
Previous report — wording carried elsewhere
(1) Amounts may not reconcile due to rounding.
Previous report — wording carried elsewhere
In 2023, we continued to see an increased frequency of large claims and unfavorable loss cost trends on our U.S. and Bermuda general liability and professional liability product lines. In response to consecutive quarters of adverse loss development, in the fourth quarter of 2023, we conducted an extensive reserve study on selected general liability and professional liability product lines, which resulted in further increases to our prior accident year loss reserves. Adverse development in 2023 on our U.S. and Bermuda general liability and professional liability product lines totaled $330.7 million, or five points. This adverse development was most substantial on our primary casualty contractors' liability and excess and umbrella general liability product lines.
Previous report — wording carried elsewhere
(2) Amounts may not reconcile due to rounding.
Previous report — wording carried elsewhere
Net retention of gross premium volume was 92% in 2023 compared to 95% in 2022. The decrease in net retention was driven by changes in mix of gross premium volume, as our professional liability business is fully retained and our marine and energy business carries a higher cession rate than the rest of the segment.
Previous report — wording carried elsewhere
The Inflation Reduction Act of 2022 (the IRA), which implemented a 15% corporate minimum tax based on adjusted financial statement income, became effective in 2023. The IRA did not have a material impact on our results of operations, financial conditions or cash flows in 2023, and is not expected to have a material impact on our results of operations, financial condition or cash flows in future periods. However, we will continue to evaluate the impacts of the IRA as additional guidance is issued by the U.S. Treasury.
Previous report — wording carried elsewhere
The following table summarizes the components of comprehensive income (loss) to shareholders.
Previous report — wording carried elsewhere
10K - 54 covenants, access to the revolving credit facility could be restricted. While we believe this to be unlikely, the inability to access the revolving credit facility could adversely affect our liquidity. See note 14 of the notes to consolidated financial statements included under Item 8 for further discussion of our revolving credit facility.
Previous report — wording carried elsewhere
For our insurance operations, we are generally notified of insured losses by our insureds, their brokers or the primary insurer in instances in which we participate in excess layers of insured losses on a contract. Based on this information, we establish case reserves by estimating the expected ultimate losses from the claim, including any administrative or legal costs associated with settling the claim. Our claims personnel use their knowledge of the policy provisions and details specific to the claim, along with information provided by internal and external experts, including underwriters, actuaries and legal counsel, to estimate the expected ultimate losses.
Previous report — wording carried elsewhere
The favorable development in 2023 and 2022 was largely offset by adverse development on certain long-tail general liability and professional liability product lines. Beginning in the latter half of 2022, select lines within our U.S. and Bermuda general liability and professional liability portfolio were impacted by consecutive quarters of unfavorable loss cost trends and increased claim frequency and severity, resulting in adverse development on these lines in both 2023 and 2022.
Previous report — wording carried elsewhere
The loss trends observed over the past two years have created more uncertainty around the ultimate losses that will be incurred to settle claims on these longer-tail product lines. Consistent with our reserving philosophy, we are responding quickly to increase loss reserves following any indication of increased claims frequency or severity in excess of our previous expectations, whereas in instances where claims trends are more favorable than we previously anticipated, we are often
Previous report — wording carried elsewhere
10K - 63 waiting to reduce loss reserves and will evaluate our experience over additional periods of time. For those lines in which we strengthened reserves, although we believe the gross and net reserves are adequate based on information available at this time, we continue to closely monitor reported claims, claim settlements, ceded reinsurance contract attachments and judicial decisions, among other things, and may adjust our estimates as new information becomes available.