Markel Confirms Loss, Cites Reserve Boost
NU Online News Service, Oct. 30, 11:26 a.m. EST?Markel Corporation posted a third-quarter net loss of $27.7 million, compared with a profit of $7.4 million for the period a year ago, a result that management attributed to reserve actions and poorly performing investments.
The reserve action involved an increase of $55 million to cover asbestos and environmental exposures, and raising its Investors Brokered Excess and Surplus Lines unit's prior years' loss reserves by $50 million.
For the first nine months of 2003, Markel reported $142.1 million in net income, up from $49.3 million in profit it posted one year ago for the period.
Commenting on its third-quarter numbers, the company said the loss was primarily due to lower net income as a result of the reserve hikes that were announced last week. Another factor that hurt the bottom line this third quarter was a fall in the market value of the insurer's investment portfolio, Markel said.
The company posted $7.36 million in net realized losses for the quarter, compared to the gain of $25.98 million recorded one year ago.
The reserve hike for asbestos and environmental exposures, Markel also noted, was made after the company examined its annual review of these exposures in its U.S. and international operations. This increase reflects "a higher-than-expected incidence of new claims and recent adverse appellate and bankruptcy court decisions," the insurer noted.
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.