NU Online News Service, May 10, 2:03 p.m. EDT

Markel Corp. indicates talk of a hard market may be premature because insurers are not exhibiting the same underwriting discipline for new business as they are for renewals.

During a conference call to discuss first-quarter earnings, F. Michael Crowley, Markel's president and co-chief operating officer, says the insurer has noticed some of its competition announcing rate increases on renewals, but Markel continues to see aggressive competition on new business.

Crowley says Markel has heard from its agents that “some carriers are raising rates substantially [at renewal], and yet they are being very competitive on new business—not following the same [underwriting] philosophy.”

The Richmond, Va.-based specialty insurer, Crowley made clear, is seeking rate on both fronts, “getting price whenever we can.”

Positive rate increases are spotty, depending on the line, and the environment at this point is far from a hard market, say Markel executives.

Markel reports first-quarter net income of $57.7 million, compared to $9.9 million during 2011's first quarter

Earned premiums increased to $529.6 million from $463.1 million a year ago, and catastrophe losses within Markel's insurance segments—primarily in the London insurance market via Markel International—during the first quarter were “immaterial.” Last year the insurer reported a $68.7 million underwriting loss due to the New Zealand earthquakes and Japan earthquake and tsunami.

The combined ratio from London fell to a profitable 97 from 152 for 2011's first quarter.

Markel posted an underwriting gain of $2.4 million for the first quarter, compared to a loss of $53.6 million last year.

But the combined ratios in Markel's other two segments—specialty admitted and excess and surplus—each worsened to 113 and 96 from 104 and 84, respectively.

The corporation says its adoption of new accounting standards added expenses to each segment. In E&S lines, the combined ratio was also affected by a reduction in favorable prior-year reserve development. Favorable development was $30.6 million in the first quarter versus $56.8 million for 2011's first quarter.

The specialty-admitted segment was affected by workers' compensation business in California, says Markel.

Special Reports /

Markel Sees Inconsistent Pricing on Renewals, New Business

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