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Markel (MKL) Q3 Earnings Down Y/Y, Revenues Beat Estimates

Zacks Equity Research

Markel Corporation MKL reported third-quarter 2019 earnings of $13.95 per share that declined 51% year over year.

The company witnessed top-line growth as well as excellent results from Markel Ventures.

Operational Update

Total operating revenues of $2 billion beat the Zacks Consensus Estimate by 0.3%. The top line rose 11.1% year over year on higher premiums, investment income, product and services plus other revenues.

Total operating expenses of Markel increased 5.4% year over year to $1.8 billion.

Markel’s combined ratio improved 500 basis points (bps) year over year to 94% in the reported quarter.

Markel Corporation Price, Consensus and EPS Surprise

Markel Corporation Price, Consensus and EPS Surprise

Markel Corporation price-consensus-eps-surprise-chart | Markel Corporation Quote

Segment Update

Insurance: Net written premiums were up 15.7% year over year to $1.2 billion in the quarter under review.

Underwriting profit came in at $81.3 million, surging 91.5% from the year-ago quarter.

Combined ratio improved 400 bps year over year to 92% in the quarter under discussion.

Reinsurance: Net written premiums increased 4.2% year over year to $187.2 million.

Underwriting loss was $6.5 million, narrower than $33.7 million incurred in the year-ago quarter.

Combined ratio improved 1200 bps year over year to 103% in the third quarter.

Markel Ventures: Profit of $35.5 million increased 50% year over year.

Financial Update

Markel exited the third quarter with cash and cash equivalents of $2.7 billion, up 34.8% from the level at year-end 2018.

Debt balance increased 29.5% to $3.9 billion as of Mar 31, 2019 from 2018 end.

Book value per share increased 17.6% from year-end 2018 to $768.98 as of Jun 30, 2019.

Net cash from operating activities was $711.9 million in the first nine months of 2019, down 6.7% year over year.

Zacks Rank

Markel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported third-quarter results so far, The Progressive Corporation PGR and RLI Corp. RLI beat the respective Zacks Consensus Estimate for earnings. However, The Travelers Companies, Inc. TRV missed the same.

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