Richmond, Va.-based specialty underwriter Markel Corp. said third-quarter net income dropped 11 percent compared with last year, primarily due to lower underwriting profits.
At the same time, earnings for the first nine months of 2007 increased 15 percent, mostly because of improved underwriting and investing results, partially offset by higher income tax expense as compared with the same period of 2006.
The higher loss ratios for both the three-month and nine-month periods were attributed to the softening insurance market, "which have resulted in price deterioration across many of our product lines," the company reported to the SEC. It also noted higher losses in its reinsurance units.
But the nine-month results showed improvement because in 2006 the company had to pay out in excess and surplus lines claims due to the lingering problems of Hurricanes Katrina, Rita and Wilma, the company said in its SEC filing.
Markel reported diluted net income per share of $92.4 million, or $9.26 per share, for the quarter ended September 30, compared with $104.1 million, or $10.47 per share, for the third quarter of 2006.
Diluted net income per share was $312.2 million, or $31.28 per share, for the nine months ended September 30, 2007 compared with $271.1 million, or $27.24 for the same period of 2006.
Its international unit reported an 8 percent reduction in gross written premiums to $162 million for the third quarter from $176 million in the same period of 2006. Gross written premium for the nine months ended September 30, 2007 were $562 million compared with $581 million in the same period of 2006.
Regarding the international operations, Andy Davies, finance director for the unit, said, "Despite challenging market conditions, we recently announced the opening of new offices in Sweden and Singapore, proving our commitment to profitable growth by offering our well-established products in new markets."
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