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Markel (MKL) Q4 Earnings and Revenues Miss Estimates, Up Y/Y

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Markel Corporation (MKL - Free Report) reported fourth-quarter 2019 earnings of $6.57 per share, which missed the Zacks Consensus Estimate by 7.1% but were up 189.4% year over year.

The company witnessed year-over-year growth owing to strong contribution from its insurance and Markel Ventures. The acquisition of VSC Fire & Security aided Markel Ventures results.

Operational Update

Total operating revenues of $2.05 billion missed the Zacks Consensus Estimate by 0.8%. The top line rose 8.9% year over year on higher premiums, product and services plus other revenues, partly offset by lower net investment income.

Total operating expenses of Markel declined 7.5% year over year to $1.83 billion.

Markel’s combined ratio improved 1500 basis points (bps) year over year to 93% in the reported quarter.

Markel Corporation Price, Consensus and EPS Surprise


Segment Update

Insurance: Net written premiums were up 17.5% year over year to $1.14 billion in the quarter under review.

Underwriting profit came in at $128.8 million, compared with $9.5 million in the year-ago quarter.

Combined ratio improved 100 bps year over year to 89% in the quarter under discussion.

Reinsurance: Net written premiums increased 37.8% year over year to $120 million.

Underwriting loss was $45.7 million, narrower than $115.3 million incurred in the year-ago quarter.

Combined ratio improved 3100 bps year over year to 120% in the fourth quarter.

Markel Ventures: Profit of $21.4 million increased 25.3% 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 $22.3 billion at Dec 31, 2019, up 16.14% year over year.

Debt balance increased 17.4% year over year to $3.53 billion as of Dec 31, 2019.

Book value per share increased 22.7% from year-end 2018 to $802.59 as of Dec 31, 2019.

Net cash from operating activities was $1.3 billion in 2019, up 45.7% year over year.

Zacks Rank & Performance of Other Insurers

Markel currently carries a Zacks Rank #1 (Strong Buy).

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

Some other insurers that have reported earnings this season are Unum Group UNM, The Progressive Corp. PGR and Chubb Ltd. CB, each beating their estimate by 2.17%, 58.8% and 8.6%, respectively.

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