Date: 09/11/2012
By: Susy Chandler

Markel reports third quarter and nine month results

Markel reports third quarter and nine month results London, November 9, 2012 --- Markel Corporation (NYSE – MKL) reported diluted net income per share of $5.32 for the quarter ended September 30, 2012 compared to $5.48 for the third quarter of 2011. Diluted net income per share was $19.67 for the nine months ended September 30, 2012 compared to $9.42 for the same period of 2011. The combined ratio was 101% for the third quarter of 2012 compared to 100% for the third quarter of 2011. The combined ratio was 96% for the nine months ended September 30, 2012 compared to 105% for the same period of 2011. The combined ratio for the quarter and nine months ended September 30, 2012 included $31 million, or six points and two points, respectively, of unfavorable prior year loss reserve development on asbestos and environmental exposures. The combined ratio for the quarter and nine months ended September 30, 2012 also included $7 million, or one point, and $41 million, or three points, respectively, of underwriting, acquisition and insurance expenses related to the Company’s prospective adoption of Financial Accounting Standards Board Accounting Standard Update No. 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. The combined ratio for the quarter and nine months ended September 30, 2011 included $34 million, or seven points, and $133 million, or nine points, respectively, of underwriting loss related to natural catastrophes. Book value per common share outstanding increased 12% to $395.48 at September 30, 2012 from $352.10 at December 31, 2011.

Alan I. Kirshner, Chairman and Chief Executive Officer, commented, “While our results for the third quarter were negatively impacted by loss development on our asbestos and environmental reserves, our continuing underwriting operations produced an underwriting profit. Additionally, our total operating revenues have grown by 13% on both a quarter and year to date basis. We continue to seek growth opportunities. In the non-insurance area, we have added Tromp Bakery Equipment and Reading Bakery Systems to our portfolio of industrial and service companies owned by Markel Ventures. We believe continued underwriting discipline, solid investment performance and capitalizing on new business opportunities will help us achieve our goal to build long-term value for our shareholders.”

Markel International reported gross written premiums of $705 million for the nine months ended September 30, 2012 compared to $677 million for the same period of 2011. The increase of 4% was primarily due to an increase in premiums at the Marine and Energy and Specialty divisions which have benefited from an improved pricing environment and organic growth. The combined ratio for Markel International was 86% for the nine months ended September 30, 2012 compared to 119% for the same period of 2011. The 2012 combined ratio excludes $12 million, or 2 points of underwriting, acquisition and insurance expenses related to the Company’s prospective adoption of Financial Accounting Standards Board Accounting Standard Update No. 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. The improvement in the combined ratio was a consequence of a lower current accident year attritional loss ratio, an increase in favourable development on prior year loss reserves and a benign catastrophe environment compared to the first nine months of 2011.

Andy Davies, Finance Director at Markel International, commented, “We have experienced an excellent first nine months of 2012 with good premium growth, a return to underwriting profitability and excellent investment returns. During the first nine months we continued to expand our retail operations in the UK and internationally through the acquisition of Quay Underwriting in the UK, a joint venture with Anglo Underwriting in Germany and the establishment of a Marine underwriting unit at our Canadian operation, Elliott Special Risks. We have also expanded our Marine and Trade Credit operations in Asia Pacific during the third quarter. Markel International produced underwriting profits and investment returns of $238 million for the first nine months of 2012 which contributed to Markel Corporation’s increase in book value of 12% during the same period.”

For more information:

Markel International 020 7953 6000
Andy Davies, Finance Director
andy.davies@markelintl.com

Sean Martin, Marketing Director
sean.martin@markelintl.com

Cubitt Consulting
020 7367 5100
Michael Henman
michael.henman@cubitt.com

Notes to editors: Markel International is a subsidiary of Markel Corporation. Based in London and comprising the international operations of Markel Corporation, Markel International wrote gross premiums of $825 million in 2011. It has seven operating divisions and nine overseas offices writing business either through Markel Syndicate 3000 or Markel International Insurance Company Limited. Markel Corporation is a US listed business, capitalised at around $4.0 billion. In 2011, it wrote gross premiums of $2.3 billion. See www.markelintl.com