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Markel (MKL) Q4 Earnings and Revenues Surpass Estimates

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Markel Corporation (MKL - Free Report) reported fourth-quarter 2020 earnings of $15.83 per share, which beat the Zacks Consensus Estimate by 75.1%. Moreover, the bottom line increased 140.9% year over year.

The company witnessed higher premiums at Insurance and Reinsurance Segments and increased profit at Markel Ventures, which were partially offset by higher expenses and lower net investment income.

Markel Corporation Price, Consensus and EPS Surprise

Markel Corporation Price, Consensus and EPS Surprise

Full-Year Highlights

For 2020, Markel reported net income of $55.63 per share, which decreased 56.9% year over year.

Total operating revenues of $9.1 billion trumped the consensus mark by 1.8% and also improved nearly 15% year over year.

Combined ratio deteriorated 400 basis points (bps) on a year-over-year basis to 98% in the quarter under review.

Quarterly Operational Update      

Total operating revenues of $2.5 billion beat the Zacks Consensus Estimate by 3.6%. The top line rose 22.2% year over year on higher premiums, services and other revenues, partly offset by lower net investment income.

Net written premiums increased 13.7% year over year to $1.4 billion, primarily driven by higher premiums at Insurance segment and Reinsurance segment.

Net investment income declined 13.2% year over year to $97.6 million in the fourth quarter.

Total operating expenses of Markel increased 20.9% year over year to $2.21 billion primarily due to higher losses and loss adjustment expenses, underwriting, acquisition and insurance expenses, services and other expenses, amortization of intangible assets.

Markel’s combined ratio improved 400 basis points (bps) year over year to 89% in the reported quarter.

Segment Update

Insurance: Net written premiums were up 13.7% year over year to $1.29 billion in the quarter under review.

Underwriting profit came in at $165.3 million, which increased 28.3% year over year.

Combined ratio improved 200 bps year over year to 87% in the quarter under discussion.

Reinsurance: Net written premiums increased 16.3% year over year to $139 million.

Underwriting loss was $31.4 million, narrower than $45.7 million incurred in the year-ago quarter.

Combined ratio improved 2400 bps year over year to 96% in the fourth quarter.

Markel Ventures: Profit of $53.3 million increased 149.6% year over year.

Financial Update

Markel exited the fourth quarter with investments, cash and cash equivalents and restricted cash and cash equivalents (invested assets) of $24.9 billion as of Dec 31, 2020, up 12.1% year over year.

Debt balance decreased 1.4% year over year to $3.48 billion as of Dec 31, 2020.

Book value per share increased 10.3% from year-end 2019 to $885.13 as of Dec 31, 2020.

Net cash from operating activities was $1.7 billion in 2020, up 30.8% year over year.

Zacks Rank & Performance of Other Insurers

Markel currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fourth-quarter earnings of Chubb Limited (CB - Free Report) , W.R. Berkley Corporation (WRB - Free Report) , and Brown & Brown (BRO - Free Report) beat the respective Zacks Consensus Estimate.

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