Markel International's 2007 combined ratio falls 7%; but premiums down $36m on 2006
Markel International reported a combined ratio of 93% for the year ended December 31, 2007 compared to 100% in 2006.
The improved underwriting performance for 2007 was primarily due to $49.4 million of favorable development on prior years’ loss reserves compared to $18.5 million of adverse development on prior years’ loss reserves during 2006.
In 2007, the favorable development of prior years’ loss reserves was partially offset by a higher current accident year loss ratio due in part to softening insurance market conditions.
This favorable development on prior years’ loss reserves reflects improved risk selection and the favorable rates and terms associated with the London market in recent years. For the full year, gross written premiums stood at $693 million compared to $729 million reported in 2006.
Andy Davies, Finance Director at Markel International, said: “The excellent results reflect the benign hurricane season and strong underwriting performances across all our units. The key for us is producing these strong results through disciplined underwriting throughout the underwriting cycle.”
Markel Corporation, the parent company of Markel International, reported diluted net income per share of $40.64 for the year ended December 31, 2007 compared to diluted net income per share of $39.40 for 2006.
The 2007 combined ratio was 88% compared to 87% in 2006. Book value per common share outstanding increased to $265.26 at December 31, 2007 from $229.78 at December 31, 2006.
Over the one- and five-year periods ended December 31, 2007, compound annual growth in book value per common share outstanding was 15% and 18%, respectively.
Alan I. Kirshner, Chairman and Chief Executive Officer, said: “Our disciplined underwriting and the consistent application of our investment philosophy resulted in a second straight year of record net income and solid book value growth. This was no small task given soft insurance market conditions and turbulent financial markets. We thank our associates for their focused commitment to building shareholder value.”
