Markel Boosts Reserves By $105 Million
NU Online News Service, Oct. 22, 2003, 4:14 p.m. EDT?Markel Corporation announced today it has boosted reserves by $55 million to cover asbestos and environmental exposures and has also increased its Investors Brokered Excess and Surplus Lines unit's prior years' loss reserves by $50 million.
These reserve charges will be reflected in the company's third-quarter results, to be announced next week, Markel said.
The insurer said the impact from the reserve charge would be partially offset by the favorable development of prior years' loss reserves and strong profitability from company's other units. Still, the company said it expects a net loss in the range of $15 million to $20 million for the third quarter.
The reserve hike for asbestos and environmental exposures was made after the company examined its annual review of these exposures in its U.S. and international operations, Markel explained. This increase reflects "a higher-than-expected incidence of new claims and recent adverse appellate and bankruptcy court decisions," the insurer noted.
Additionally, Markel also found during its latest review that the claims-reserving estimates for its Investors Brokered Excess and Surplus Lines unit did not meet the company's standards. "As a result, the company has updated its assumptions and increased reserves for loss and loss adjustment expenses, primarily for the 1997-2001 accident years," the insurer said.
Based in Glen Allen, Va., Markel markets and underwrites specialty insurance products and programs to a variety of niche markets. In 2002, it posted $75.3 million in net income, with $1.77 billion in sales.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.