Markel Corporation (NYSE:MKL) reported third-quarter 2017 loss of $18.82 per share, wider than the Zacks Consensus Estimate of a loss of $18.03.
The company’s third-quarter results were affected by underwriting losses, owing to Hurricanes Harvey, Irma and Maria, and Mexican earthquakes.
Operational Update
Total operating revenues of $1.5 billion beat the Zacks Consensus Estimate by 3.2%. Moreover, the top line improved 10.1% year over year on higher premiums, investment income and other revenues.
Total operating expenses of Markel increased 43.5% year over year to $1.8 billion.
Markel’s combined ratio deteriorated 3600 basis points (bps) year over year to 134% in the reported quarter.
Segment Update
U.S. Insurance: Net written premiums were up 16.3% year over year to $653.9 million in the reported quarter.
Underwriting loss was $70.3 million compared with a loss of $0.06 million year over year.
Combined ratio deteriorated by 1100 bps year over year to 112% in the quarter.
International Insurance: Net written premiums increased 21.3% year over year to $254.3 million.
Underwriting loss was $87.6 million in the quarter against an underwriting profit of $19 million in the year-ago quarter.
Combined ratio deteriorated 4500 bps year over year to 136% in the quarter.
Reinsurance Segment: Net written premiums increased about 20.8% year over year to $189.6 million.
Underwriting loss was $214.8 million against underwriting profit of $12.8 million in the year-ago quarter.
Combined ratio deteriorated 8900 bps year over year to 183% in the quarter.
Other Insurance (Discontinued Lines) Segment: Net written premiums were ($178) million compared with $469 million in the prior-year quarter.
Underwriting profit of $1.3 million rebounded from the year-ago loss of $2.7 million.
Financial Update
Markel exited the third-quarter with total cash, cash equivalents and investments of $2.1 billion compared with $1.7 billion at year-end 2016.
Debt balance declined 4% from year-end 2016 to $2.5 billion as of Sep 30, 2017.
Book value per share rose 5.8% from year-end 2016 to $641.20 as of Sep 30, 2017.
Net cash from operating activities was $598.7 million in the first nine months of 2017, up 54.6% from the year-ago period.
Zacks Rank
Markel Corporation 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
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line at The Progressive Corp. (NYSE:PGR) , The Travelers Companies, Inc. (NYSE:TRV) and RLI Corp. (NYSE:RLI) beat their respective Zacks Consensus Estimate.
Wall Street’s Next Amazon (NASDAQ:AMZN)
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
RLI Corp. (RLI): Free Stock Analysis Report
The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
Progressive Corporation (The) (PGR): Free Stock Analysis Report
Markel Corporation (MKL): Free Stock Analysis Report
Original post
Zacks Investment Research