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Markel (MKL) Q2 Earnings and Revenues Top Estimates, Rise Y/Y
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Markel Corporation (MKL - Free Report) reported second-quarter 2021 earnings of $19.14 per share, which beat the Zacks Consensus Estimate by 23.9%. The bottom line improved 28.5% year over year.
Results reflect double-digit premium growth in underwriting operations through both organic growth in new businesses and more favorable rates.
Markel Corporation Price, Consensus and EPS Surprise
Total operating revenues of $2.8 billion beat the Zacks Consensus Estimate by 11.1%. The top line rose 27.2% year over year on higher premiums earned, services and other revenues, product revenues, and net investment income.
Earned premiums increased 15.3% in the quarter, reflecting continued growth in gross premium volume from new businesses and more favorable rates.
Net investment income increased 0.7% year over year to $96.3 million in the second quarter.
Total operating expenses of Markel increased 28.1% year over year to $2.4 billion primarily due to higher losses and loss adjustment expenses; underwriting, acquisition and insurance expenses; products expenses; services and other expenses; and amortization of intangible assets.
Markel’s combined ratio improved 100 basis points (bps) year over year to 87 in the reported quarter, benefiting from a lower current accident year loss ratio, given the benefit of more favorable premium rates.
Segmental Updates
Insurance: Gross premium increased 17% year over year to $1.8 billion, driven by growth across several product lines, mostly in professional liability and general liability product lines, which experienced higher new business volume and benefited from a more favorable rate.
Underwriting profit was $205.3 million, up 52% year over year. Combined ratio improved 370 bps year over year to 84.2.
Reinsurance: Gross premiums increased 25% year over year to $279.4 million, driven by higher gross premiums in general liability, professional liability, and credit and surety product lines, partially offset by lower gross premiums in property product lines.
Underwriting loss of $5 million compared unfavorably with the year-ago income of $24.8 million. Combined ratio deteriorated 1220 bps year over year to 101.9 in the second quarter.
Markel Ventures: Operating revenues of $1.1 billion improved 59% year over year, primarily driven by increased contribution from Lansing.
Operating income of $108.7 million increased 37% year over year.
Financial Update
Markel exited the second quarter with cash and cash equivalents, and restricted cash and cash equivalents of $4.3 billion as of Jun 30, 2020, down 16.6% from 2020 end.
The debt balance increased 19.4% year over year to $4.2 billion as of Jun 20, 2021.
Book value per share increased 10% from the end of 2020 to $974.45 as of Jun 30, 2021.
Net cash from operating activities was $813.2 million in the first half of 2021, up 66.9% year over year.
Of the insurance industry players that have reported second-quarter results so far, The Travelers Companies (TRV - Free Report) , The Progressive Corporation (PGR - Free Report) and RLI Corporation’s (RLI - Free Report) earnings beat the Zacks Consensus Estimate.
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Markel (MKL) Q2 Earnings and Revenues Top Estimates, Rise Y/Y
Markel Corporation (MKL - Free Report) reported second-quarter 2021 earnings of $19.14 per share, which beat the Zacks Consensus Estimate by 23.9%. The bottom line improved 28.5% year over year.
Results reflect double-digit premium growth in underwriting operations through both organic growth in new businesses and more favorable rates.
Markel Corporation Price, Consensus and EPS Surprise
Markel Corporation price-consensus-eps-surprise-chart | Markel Corporation Quote
Quarterly Operational Update
Total operating revenues of $2.8 billion beat the Zacks Consensus Estimate by 11.1%. The top line rose 27.2% year over year on higher premiums earned, services and other revenues, product revenues, and net investment income.
Earned premiums increased 15.3% in the quarter, reflecting continued growth in gross premium volume from new businesses and more favorable rates.
Net investment income increased 0.7% year over year to $96.3 million in the second quarter.
Total operating expenses of Markel increased 28.1% year over year to $2.4 billion primarily due to higher losses and loss adjustment expenses; underwriting, acquisition and insurance expenses; products expenses; services and other expenses; and amortization of intangible assets.
Markel’s combined ratio improved 100 basis points (bps) year over year to 87 in the reported quarter, benefiting from a lower current accident year loss ratio, given the benefit of more favorable premium rates.
Segmental Updates
Insurance: Gross premium increased 17% year over year to $1.8 billion, driven by growth across several product lines, mostly in professional liability and general liability product lines, which experienced higher new business volume and benefited from a more favorable rate.
Underwriting profit was $205.3 million, up 52% year over year. Combined ratio improved 370 bps year over year to 84.2.
Reinsurance: Gross premiums increased 25% year over year to $279.4 million, driven by higher gross premiums in general liability, professional liability, and credit and surety product lines, partially offset by lower gross premiums in property product lines.
Underwriting loss of $5 million compared unfavorably with the year-ago income of $24.8 million. Combined ratio deteriorated 1220 bps year over year to 101.9 in the second quarter.
Markel Ventures: Operating revenues of $1.1 billion improved 59% year over year, primarily driven by increased contribution from Lansing.
Operating income of $108.7 million increased 37% year over year.
Financial Update
Markel exited the second quarter with cash and cash equivalents, and restricted cash and cash equivalents of $4.3 billion as of Jun 30, 2020, down 16.6% from 2020 end.
The debt balance increased 19.4% year over year to $4.2 billion as of Jun 20, 2021.
Book value per share increased 10% from the end of 2020 to $974.45 as of Jun 30, 2021.
Net cash from operating activities was $813.2 million in the first half of 2021, up 66.9% year over year.
Zacks Rank & Performance of Other Insurers
Markel currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Of the insurance industry players that have reported second-quarter results so far, The Travelers Companies (TRV - Free Report) , The Progressive Corporation (PGR - Free Report) and RLI Corporation’s (RLI - Free Report) earnings beat the Zacks Consensus Estimate.