Markel Corporation (NYSE:MKL) reported first-quarter 2019 earnings of $9.24 per share, missing the Zacks Consensus Estimate by 1.8%. The bottom line declined 18.9% year over year.
The quarter witnessed solid performance in its investment portfolio, largely driven by favorable movements in the equity markets. Both underwriting and Markel Ventures operations delivered organic growth. The results included contributions from acquisitions of Brahmin, within the company’s Markel Ventures operations, and Nephila, within insurance-linked securities operations.
Operational Update
Total operating revenues of $1.7 billion missed the Zacks Consensus Estimate by 0.4%. The top line however rose 9.5% year over year on higher premiums, investment income, product and services plus other revenues.
Total operating expenses of Markel increased 14.1% year over year to $1.7 billion.
Markel’s combined ratio deteriorated 500 basis points (bps) year over year to 95% in the reported quarter.
Markel Corporation Price, Consensus and EPS Surprise
Segment Update
Insurance: Net written premiums were up 9.3% year over year to $998.4 million in the quarter under review.
Underwriting profit came in at $50.1 million that dropped 49% from the year-ago quarter.
Combined ratio deteriorated 600 bps year over year to 95% in the quarter under discussion.
Reinsurance: Net written premiums rose 13.8% year over year to $497 million.
Underwriting profit dropped 53% year over year to $3.4 million.
Combined ratio deteriorated 200 bps year over year to 99% in the first quarter.
Financial Update
Markel exited the first quarter with investments, cash and cash equivalents of $2.4 billion, up 19.9% from the level at year-end 2018.
Debt balance increased 1.6% to $3.1 billion as of Mar 31, 2019 from 2018 end.
Book value per share increased 8% from year-end 2018 to $706.98 as of Mar 31, 2019.
Net cash from operating activities was $18.7 million, down 67.5% year over year.
Zacks Rank
Markel currently 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 that have reported first-quarter results so far, earnings of RLI Corp. (NYSE:RLI) , The Progressive Corporation (NYSE:PGR) and The Travelers Companies, Inc. (NYSE:TRV) topped the respective Zacks Consensus Estimate.
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The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
The Progressive Corporation (PGR): Free Stock Analysis Report
RLI Corp. (RLI): Free Stock Analysis Report
Markel Corporation (MKL): Free Stock Analysis Report
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Zacks Investment Research