Markel 3Q Income Loss Hit 254%; Says It Will Increase Prices

Specialty insurance carrier Markel Corp. reported third-quarter income dropped 254 percent on lower investment returns and claims losses related to this season's hurricanes, but the company remains strong and is looking to increase prices, its chief executive said.

The Richmond, Va.-based carrier reported third-quarter net income dropped $235 million from net income of $92 million, $9.26 a share, to income loss of $142 million, or loss per share of $14.46.

Revenues fell 33 percent, or $204 million, going from $619 million to $416 million.

For the nine months of this year, net income fell 108 percent, or $338 million, from net income of $312 million last year for the period, or $31.28 a share, to income loss of $26 million, or loss per share of $2.63.

Revenues fell 19 percent, or $358 million, from $1.90 billion to $1.54 billion.

The company said it suffered an estimated $115 million in underwriting losses related to Hurricanes Gustav and Ike.

The combined ratio for the quarter rose 37 points to 124, and for the nine months rose 16 points to 104.

Markel reported net realized investment losses of $169 million for the quarter and $200 million for the nine months.

"Our third-quarter and year-to-date results have been negatively impacted by the ongoing financial market turmoil, difficult underwriting conditions and recent hurricane activity," Alan I. Kirshner, chairman and chief executive officer for Markel, said in a statement.

He added that company financial strength "provides a solid foundation for us to capitalize on growth opportunities presented by today's marketplace. We are continuing to emphasize our underwriting standards and are increasing prices for many of our products in response to market conditions."