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Markel (MKL) Q2 Earnings & Revenues Top Estimates, Up Y/Y

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Markel Corporation (MKL - Free Report) delivered second-quarter 2018 income of $19.97 per share, surpassing the Zacks Consensus Estimate of $8.49. Moreover, the bottom line more than doubled year over year.

Markel Corporation Price, Consensus and EPS Surprise

The company witnessed higher revenues and improved premiums at the Insurance segment. However, increase in expenses was a dampener.

Operational Update

Total operating revenues of $1.8 billion exceeded the Zacks Consensus Estimate by 11.7%. Also, the top line improved 28.6% year over year on higher premiums, investment income and other revenues.

Total operating expenses of Markel escalated about 35% year over year to $1.7 billion.

Markel’s combined ratio deteriorated 300 basis points (bps) year over year to 92% in the reported quarter.

Segment Update

Insurance: Net written premiums were up 9.1% year over year to $1 billion in the quarter under review.

Underwriting profit was nearly $74.3 million, down 0.2% year over year.

Combined ratio improved 100 bps year over year to 92% in the quarter under discussion.

Reinsurance: Net written premiums declined about 18.9% year over year to $208.8 million.

Underwriting profit was nearly $23.6 million, down 31% year over year.

Combined ratio deteriorated 500 bps year over year to 90% in the second quarter.    

Financial Update

Markel exited the second quarter with investments, cash and cash equivalents plus restricted cash and cash equivalents of $20.4 billion, down 0.8% from the level at year-end 2017.

Debt balance decreased 2.4% to $3 billion as of Jun 30, 2018 from $3.1 billion at 2017 end.

Book value per share slipped 1.8% from the tally at year-end 2017 to $682.76 as of Jun 30, 2018.

Net cash from operating activities for the first half was $307.5 million, up 29.2% year over year.

Zacks Rank

Markel carries a Zacks Rank #4 (Sell).

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

Performance of Other Insurers

Among other players from the insurance industry having already reported second-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) , MGIC Investment Corporation (MTG - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate.

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