MARKEL CORP – 10-Q – Management discussion and analysis of financial condition and results of operations – InsuranceNewsNet | Business Insurance

know about this MARKEL CORP – 10-Q – Management discussion and analysis of financial condition and results of operations – InsuranceNewsNet

in complete details.

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and related notes included under Item 1
Financial Statements and our 2021 Annual Report on Form 10-K. The accompanying
consolidated financial statements and related notes have been prepared in
accordance with United States (U.S.) generally accepted accounting principles
(GAAP) and include the accounts of Markel Corporation and its consolidated
subsidiaries, as well as any variable interest entities that meet the
requirements for consolidation. See note 1(b) of the notes to consolidated
financial statements for details of recently issued accounting pronouncements
that we have not yet adopted and the expected effects on our consolidated
financial position, results of operations and cash flows. This section is
divided into the following sections:

•Our Business

•Results of Operations

•Financial Condition

•Critical Accounting Estimates

•Safe Harbor and Declaration of Warning

Our bussines

We are a diverse financial holding company serving a variety of niche markets.
We aspire to build one of the world's great companies and deploy three financial
engines in pursuit of this goal.

Insurance: our core business markets and underwrites specialty insurance
products that use multiple platforms that allow us to better combine risk and capital.

Investments - Our investing activities are primarily related to our underwriting
operations. The majority of our investable assets come from premiums paid by
policyholders and the remainder is comprised of shareholder funds.

Markel Companies – Through our Markel Companies operations, we control ourselves
interests in a diverse portfolio of businesses operating outside the
Specialized insurance market.

Our financial goals are to earn consistent underwriting and operating profits
and superior investment returns to build shareholder value. We measure financial
success by our ability to grow book value per common share and the market price
per common share of our stock, or total shareholder return, at high rates of
return over a long period of time. To mitigate effects of short-term volatility
and align with the longer-term perspective we apply to operating our businesses,
we generally use five-year time periods to measure our performance. Growth in
book value per common share is an important measure of our success because it
includes all underwriting, operating and investing results. Over the five-year
period ended June 30, 2022, the compound annual growth in book value per common
share was 7%. Growth in total shareholder value is also an important measure of
our success, as a significant portion of our operations are not recorded at fair
value or otherwise captured in book value. Over the five-year period ended
June 30, 2022, our common share price increased at a compound annual rate of 6%.

Sure

Our insurance engine is made up of the following types of operations:

MARKEL CORP – 10-Q – Management discussion and analysis of financial condition and results of operations – InsuranceNewsNet | Business Insurance Allianz 728x90 2022 08

•Subscription – Our subscription operations are made up of our risks
insurance and reinsurance operations.

•Insurance-linked securities - Our insurance-linked securities (ILS) operations
include investment fund managers that offer a variety of investment products,
including insurance-linked securities, catastrophe bonds, insurance swaps and
weather derivatives.

•Program services - Our program services business serves as a fronting platform
that provides other insurance entities access to the U.S. property and casualty
insurance market.

                                       30
--------------------------------------------------------------------------------
  Table     of Contents
Through our underwriting, ILS and program services operations, we have a suite
of capabilities through which we can access capital to support our customers'
risks, which includes our own capital through our underwriting operations, as
well as third-party capital through our ILS and program services operations.
Within each of these platforms, we believe that our specialty product focus and
niche market strategy enable us to develop expertise and specialized market
knowledge. We seek to differentiate ourselves from competitors by our expertise,
service, continuity and other value-based considerations, including the multiple
platforms through which we can manage risk and deploy capital. For example, we
may leverage the strength of our underwriting platform to write certain risks on
behalf of our ILS operations in accordance with their desired return objectives.
We may also cede certain risks written through our underwriting operations to
our ILS operations to the extent those risks are more aligned with the risk
profile of our ILS investors than our own capital risk tolerance. Our ability to
access multiple insurance platforms allows us to achieve income streams from our
insurance operations beyond the traditional underwriting model.

subscription

Our chief operating decision maker reviews our ongoing underwriting operations
on a global basis in the following two segments: Insurance and Reinsurance. In
determining how to allocate resources and assess the performance of our
underwriting results, we consider many factors, including the nature of the
insurance product sold, the type of account written and the type of customer
served. The Insurance segment includes all direct business and facultative
placements written on a risk-bearing basis within our underwriting operations.
The Reinsurance segment includes all treaty reinsurance written on a
risk-bearing basis within our underwriting operations.

Our Insurance segment includes both hard-to-place risks written outside of the
standard market on an excess and surplus lines basis and unique and
hard-to-place risks that must be written on an admitted basis due to marketing
and regulatory reasons. Risks written in our Insurance segment are written on
either a direct basis or a subscription basis, the latter of which means that
the loss exposures brought into the market are typically insured by more than
one insurance company or Lloyd's of London (Lloyd's) syndicate. When we write
business in the subscription market, we prefer to participate as lead
underwriter in order to control underwriting terms, policy conditions and claims
handling. The following products are included in this segment: professional
liability, general liability, personal lines, marine and energy, primary and
excess of loss property, workers' compensation, credit and surety coverages,
specialty program insurance for well-defined niche markets and liability and
other coverages tailored for unique exposures. Business in this segment is
primarily written through our Markel Specialty and Markel International
divisions. The Markel Specialty division writes business on both an excess and
surplus lines and admitted basis, primarily through our platform in the United
States, as well as Bermuda, London, and Europe. The Markel International
division writes business worldwide from our London and Munich-based platforms,
which include branch offices around the world. The Insurance segment also
includes collateral protection insurance written on an admitted basis through
our State National division.

Our Reinsurance segment includes casualty and specialty treaty reinsurance
products offered to other insurance and reinsurance companies globally through
the broker market. Our treaty reinsurance offerings include both quota share and
excess of loss reinsurance and are typically written on a participation basis,
which means each reinsurer shares proportionally in the business ceded under the
reinsurance treaty written. Business in this segment is primarily written by our
Global Reinsurance division. Principal lines of business include: professional
liability, general liability, workers' compensation and credit and surety.
Previously, we also wrote property reinsurance and retrocessional reinsurance
business, however, effective January 1, 2022, we were off-risk for substantially
all property loss exposures, including catastrophe exposures, previously written
within our Reinsurance segment.

                                       31
--------------------------------------------------------------------------------
  Table     of Contents
Insurance-Linked Securities

Our insurance-linked securities operations are primarily comprised of our
Nephila operations and are not included in a reportable segment. Nephila
Holdings Ltd. (together with its subsidiaries, Nephila) serves as an insurance
and investment fund manager and managing general agent that offers a broad range
of investment products, including insurance-linked securities, catastrophe
bonds, insurance swaps and weather derivatives. Nephila serves as the investment
manager to several Bermuda, Ireland and U.S. based private funds (the Nephila
Funds). To provide access for the Nephila Funds to the insurance, reinsurance
and weather markets, Nephila acts as an insurance manager to certain Bermuda
Class 3 and 3A reinsurance companies and Lloyd's Syndicate 2357 (Syndicate 2357)
(collectively, the Nephila Reinsurers). The results of the Nephila Reinsurers
are attributed to the Nephila Funds primarily through derivative transactions
between these entities. Neither the Nephila Funds nor the Nephila Reinsurers are
subsidiaries of Markel Corporation, and as such, these entities are not included
in our consolidated financial statements. The Nephila Reinsurers subscribe to
various reinsurance contracts based on their investors' risk profiles, including
property reinsurance business fronted through our underwriting platform. Nephila
also serves as a managing general agent that underwrites and administers
property insurance policies and provides delegated underwriting services to
providers of insurance capital. In the first quarter of 2022, we completed the
sale of our Velocity managing general agent operations, and we have entered into
an agreement to sell our remaining managing general agent operations. This
transaction is expected to close in the fourth quarter of 2022. See "Results of
Operations - Other Operations" for further details regarding these transactions.
See note 12 of the notes to consolidated financial statements for further
details regarding our Nephila operations.

Our insurance-linked securities operations also include our run-off Lodgepine
and Markel CATCo operations, the results of which are reported separately from
our ongoing insurance-linked securities operations. Our Markel CATCo operations
are conducted through Markel CATCo Investment Management Ltd. (MCIM), an ILS
investment fund manager headquartered in Bermuda. MCIM serves as the insurance
manager for Markel CATCo Re Ltd. (Markel CATCo Re), a Bermuda Class 3
reinsurance company, and as the investment manager for Markel CATCo Reinsurance
Fund Ltd., a Bermuda exempted mutual fund company comprised of multiple
segregated accounts (Markel CATCo Funds). In July 2019, these operations were
placed into run-off. In March 2022, we completed a buy-out transaction that
provided for an accelerated return of all remaining capital to investors in the
Markel CATCo Funds. Following the completion of the buy-out transaction, we
consolidate Markel CATCo Re as its primary beneficiary. Results attributable to
the run-off of Markel CATCo Re are included within services and other expenses,
and for the quarter and six months ended June 30, 2022, these results were
entirely attributable to noncontrolling interest holders in Markel CATCo Re. In
connection with the buy-out transaction, we entered into a tail risk cover with
Markel CATCo Re through which we have uncollateralized exposure to adverse
development on loss reserves held by Markel CATCo Re for loss exposures in
excess of limits that we believe are unlikely to be exceeded. See note 11 of the
notes to consolidated financial statements for further details regarding our
Markel CATCo operations and the consolidation of Markel CATCo Re and note 14 for
further details about the buy-out transaction.

program services

Our program services business generates fee income in the form of ceding fees in
exchange for fronting insurance business to other insurance carriers (capacity
providers). In general, fronting refers to business in which we write insurance
on behalf of a general agent or capacity provider and then cede all, or
substantially all, of the risk under these policies to the capacity provider in
exchange for ceding fees. The results of our program services operations are not
included in a reportable segment.

Our program services business, which is provided through our State National
division, offers issuing carrier capacity to both specialty managing general
agents and other producers who sell, control and administer books of insurance
business that are supported by third parties that assume reinsurance risk,
including Syndicate 2357 and other Nephila Reinsurers. These reinsurers are
domestic and foreign insurers and institutional risk investors that want to
access specific lines of U.S. property and casualty insurance business but may
not have the required licenses and filings to do so.

Through our program services business, we write a wide variety of insurance
products, principally including general liability, commercial liability,
commercial multi-peril, property and workers' compensation. Program services
business written through our State National division is separately managed from
our underwriting divisions, which write similar products, in order to protect
our program services customers.

In certain instances, we also leverage the strength of our underwriting platform
to write business on behalf of our ILS operations in exchange for ceding fees to
support their business plans and assist in meeting their desired return
objectives. This fronting business is conducted separately from our program
services business and primarily consists of catastrophe-exposed property
reinsurance business, which we no longer write on a risk-bearing basis.

                                       32
--------------------------------------------------------------------------------
  Table     of Contents
Although we reinsure substantially all of the risks inherent in our program
services business and ILS fronting arrangements, we have certain programs that
contain limits on our reinsurers' obligations to us that expose us to
underwriting risk, including loss ratio caps, aggregate reinsurance limits or
exclusion of the credit risk of producers. Under certain programs, including
programs and contracts with Nephila Reinsurers, we also bear underwriting risk
for annual aggregate agreement year losses in excess of a limit that we believe
is unlikely to be exceeded. See note 12 of the notes to consolidated financial
statements for further details regarding our programs with Nephila Reinsurers.

Investments

Our business strategy recognizes the importance of both consistent underwriting
and operating profits and superior investment returns to build shareholder
value. We rely on sound underwriting practices to produce investable funds. The
majority of our investable assets come from premiums paid by policyholders.
Policyholder funds are invested predominantly in high-quality government,
municipal and corporate bonds that generally match the duration and currency of
our loss reserves. The balance, comprised of shareholder funds, is available to
be invested in equity securities, which over the long run, have produced higher
returns relative to fixed maturity investments. When purchasing equity
securities, we seek to invest in profitable companies, with honest and talented
management, that exhibit reinvestment opportunities and capital discipline, at
reasonable prices. We intend to hold these investments over the long-term.
Substantially all of our investment portfolio is managed by company employees.

Markel Companies

Through our wholly owned subsidiary, Markel Ventures, Inc. (Markel Ventures), we
own controlling interests in various high-quality businesses that operate
outside of the specialty insurance marketplace but have the shared goal of
positively contributing to the long-term financial performance of Markel
Corporation. Management views these businesses as separate and distinct from our
insurance operations. Management teams for each business operate autonomously
and are responsible for developing strategic initiatives, managing day-to-day
operations and making investment and capital allocation decisions for their
respective companies.

Our senior management team is responsible for decisions regarding allocation of
capital for acquisitions and new investments. Our strategy in making these
investments is similar to our strategy for purchasing equity securities. We seek
to invest in profitable companies, with honest and talented management, that
exhibit reinvestment opportunities and capital discipline, at reasonable prices.
We intend to own the businesses acquired for a long period of time.

Our chief operating decision maker allocates resources to and assesses the
performance of these various businesses in the aggregate as the Markel Ventures
segment. This segment includes a diverse portfolio of specialized businesses
from different industries that offer various types of products and services to
businesses and consumers across many markets. The following types of businesses
are included in this segment: construction services, consumer and building
products, transportation-related products, equipment manufacturing products and
consulting services. In December 2021, we acquired a controlling interest in
Metromont LLC (Metromont), a precast concrete manufacturer and concrete building
solutions provider for commercial projects. In August 2021, we acquired a
controlling interest in Buckner HeavyLift Cranes (Buckner), a provider of crane
rental services for large commercial contractors. See note 3 of the notes to
consolidated financial statements for additional details related to these
acquisitions.
                                       33
--------------------------------------------------------------------------------
  Table     of Contents
Results of Operations

The following table presents the components of net income (loss) at
shareholders, net income (loss) for common shareholders and comprehensive income
(loss) to shareholders.

                                                        Quarter Ended June 30,                    Six Months Ended June 30,
(dollars in thousands)                                  2022                 2021                 2022                   2021
Insurance segment profit                          $     166,414          $ 

205,337 $353,908 $322,285
Reinsurance segment profit (loss)

                         3,839             (4,903)                 17,122              (28,121)
Investing segment profit (loss) (1)                  (1,461,085)           771,012              (1,746,757)           1,394,450
Markel Ventures segment profit (2)                      107,046            108,665                 156,783              160,128
Other operations (3)                                      4,615               (840)                 (2,372)             (24,114)
Interest expense                                        (50,050)           (46,568)                (99,742)             (88,957)
Net foreign exchange gains (losses)                     106,732            (12,257)                130,226               12,827

Income tax (expense) benefit                            239,102           (217,112)                257,531             (365,483)
Net income attributable to noncontrolling
interests                                               (32,972)           (11,224)                (35,901)             (17,211)
Net income (loss) to shareholders                      (916,359)           792,110                (969,202)           1,365,804
Preferred stock dividends                               (18,000)           (18,000)                (18,000)             (18,000)
Net income (loss) to common shareholders               (934,359)           774,110                (987,202)           1,347,804
Other comprehensive income (loss) to shareholders      (365,090)            57,544                (841,274)            (157,153)

Comprehensive profit (loss) for shareholders $(1,281,449) $849,654 $(1,810,476) $1,208,651

(1) Net investment income and net investment gains (losses), if any,
attributable to Markel Companies are included in segment income for Markel
Business
. All other net investment income and net investment gains (losses) are
included in income (loss) of the investing segment.

(2) Segment profit for the Markel Companies segment includes the amortization of
intangible assets attributable to Markel Companies.

(3)  Other operations include the results attributable to our operations that
are not included in a reportable segment, as well as any amortization of
intangible assets that is not allocated to a reportable segment. Amortization of
intangible assets attributable to our underwriting segments was $9.6 million and
$19.4 million for the quarter and six months ended June 30, 2022, respectively,
and $10.4 million and $20.8 million for the quarter and six months ended
June 30, 2021, respectively; however, we do not allocate amortization of
intangible assets between the Insurance and Reinsurance segments.

Our results for the first half of 2022 were significantly impacted by decreases
in the fair value of our investment portfolio. Net investment losses on our
equity portfolio reflect the impact of significant volatility in the public
equity markets. Our fixed maturity portfolio also decreased significantly,
primarily due to increases in interest rates. Volatility in the public equity
and bond markets reflects the impact of economic uncertainty and broader market
conditions, which are impacting all three of our operating engines, including
high levels of inflation, rising interest rates and global supply chain
disruptions.

Additionally, our underwriting results were impacted by the ongoing military
conflict between Russia and Ukraine following Russia's invasion of Ukraine in
February 2022. See "Underwriting Results" for further details regarding the
impacts of the Russia-Ukraine conflict on our underwriting results. The ongoing
conflict has also contributed to certain aspects of the current economic
conditions. For further discussion regarding the Russia-Ukraine conflict and
risks related to our businesses, see Item 1A Risk Factors.

The change in comprehensive income (loss) to shareholders for the second quarter
of 2022 compared to the second quarter of 2021 was primarily due to pre-tax net
investment losses of $1.6 billion in 2022 compared to pre-tax net investment
gains of $674.8 million in 2021, as well as pre-tax net unrealized losses on our
fixed maturity securities of $449.1 million in 2022 compared to pre-tax net
unrealized gains of $62.9 million in 2021.

The change in comprehensive income (loss) to shareholders for the six months
ended June 30, 2022 compared to the six months ended June 30, 2021 was primarily
due to pre-tax net investment losses of $1.9 billion in 2022 compared to pre-tax
net investment gains of $1.2 billion in 2021, as well as pre-tax net unrealized
losses on our fixed maturity securities of $1.1 billion in 2022 compared to
$258.3 million in 2021.

The components of net income (loss) to shareholders and comprehensive income
(loss) to shareholders are discussed in further detail under "Underwriting
Results," "Investing Results," "Markel Ventures," "Other Operations," "Interest
Expense and Income Taxes" and "Comprehensive Income (Loss) to Shareholders and
Book Value per Common Share."

                                       34
--------------------------------------------------------------------------------
  Table     of Contents
Underwriting Results

Underwriting profits are a key component of our strategy to build shareholder
value. We believe that the ability to achieve consistent underwriting profits
demonstrates knowledge and expertise, commitment to superior customer service
and the ability to manage insurance risk. The property and casualty insurance
industry commonly defines underwriting profit or loss as earned premiums net of
losses and loss adjustment expenses and underwriting, acquisition and insurance
expenses. We use underwriting profit or loss and the combined ratio as a basis
for evaluating our underwriting performance. The U.S. GAAP combined ratio is a
measure of underwriting performance and represents the relationship of incurred
losses, loss adjustment expenses and underwriting, acquisition and insurance
expenses to earned premiums. The combined ratio is the sum of the loss ratio and
the expense ratio. The loss ratio represents the relationship of incurred losses
and loss adjustment expenses to earned premiums. The expense ratio represents
the relationship of underwriting, acquisition and insurance expenses to earned
premiums. A combined ratio less than 100% indicates an underwriting profit,
while a combined ratio greater than 100% reflects an underwriting loss.

In addition to the U.S. GAAP combined ratio, loss ratio and expense ratio, we
also evaluate our underwriting performance using measures that exclude the
impacts of certain items on these ratios. We believe these adjusted measures,
which are non-GAAP measures, provide financial statement users with a better
understanding of the significant factors that comprise our underwriting results
and how management evaluates underwriting performance.

When analyzing our combined ratio, we exclude current accident year losses and
loss adjustment expenses attributed to natural catastrophes. We also exclude
losses and loss adjustment expenses attributed to certain significant,
infrequent loss events, for example, the COVID-19 pandemic and the
Russia-Ukraine conflict. Due to the unique characteristics of a catastrophe loss
and other significant, infrequent events, there is inherent variability as to
the timing or loss amount, which cannot be predicted in advance. We believe
measures that exclude the effects of catastrophe events, the Russia-Ukraine
conflict and COVID-19 are meaningful to understand the underlying trends and
variability in our underwriting results that may be obscured by these items.

When analyzing our loss ratio, we evaluate losses and loss adjustment expenses
attributable to the current accident year separate from losses and loss
adjustment expenses attributable to prior accident years. Prior accident year
reserve development, which can either be favorable or unfavorable, represents
changes in our estimates of losses and loss adjustment expenses related to loss
events that occurred in prior years. We believe a discussion of current accident
year loss ratios, which exclude prior accident year reserve development, is
helpful since it provides more insight into estimates of current underwriting
performance and excludes changes in estimates related to prior year loss
reserves. We also analyze our current accident year loss ratio excluding losses
and loss adjustment expenses attributable to catastrophes and, in 2022, the
Russia-Ukraine conflict. The current accident year loss ratio excluding the
impact of catastrophes and other significant, infrequent loss events is also
commonly referred to as an attritional loss ratio within the property and
casualty insurance industry.

                                       35
--------------------------------------------------------------------------------
  Table     of Contents
Consolidated

                                                        Quarter Ended June 30,                                         Six Months Ended June 30,
(dollars in thousands)                      2022                   2021              % Change                2022                  2021              % Change
Gross premium volume (1)              $       2,527,754       $    2,100,489               20  %       $      5,045,870       $    4,270,872               18  %
Net written premiums                  $       2,099,795       $    1,751,451               20  %       $      4,264,529       $    3,632,521               17  %
Earned premiums                       $       1,833,104       $    1,568,037               17  %       $      3,592,874       $    3,065,732               17  %
Underwriting profit                   $         164,825       $      204,718              (19) %       $        361,858       $      295,752               22  %

Underwriting Ratios (2)                                                            Point Change                                                    Point Change
Loss ratio
Current accident year loss ratio              59.2    %            60.6    %             (1.4)                  59.9  %            62.7    %           

(2.8)

Prior accident years loss ratio               (1.4)   %            (8.6)   %              7.2                   (3.4) %            (7.4)   %              4.0
Loss ratio                                    57.8    %            52.0    %              5.8                   56.5  %            55.3    %              1.2
Expense ratio                                 33.2    %            35.0    %             (1.8)                  33.4  %            35.1    %             (1.7)
Combined ratio                                91.0    %            86.9    %              4.1                   89.9  %            90.4    %             (0.5)

Current accident year loss ratio
catastrophe impact (3)                           -    %             0.2    %             (0.2)                     -  %             2.2    %           

(2.2)

Current accident year loss ratio
Russia-Ukraine conflict impact (3)               -    %               -    %                -                    1.0  %               -    %           

1.0

Prior accident years loss ratio
COVID-19 impact (3)                              -    %               -    %                -                      -  %             0.6    %           

(0.6)

Current accident year loss ratio,
excluding catastrophes and
Russia-Ukraine conflict                       59.2    %            60.4    %             (1.2)                  59.0  %            60.4    %           

(1.4)

Combined ratio, excluding current
year catastrophes, Russia-Ukraine
conflict and COVID-19                         91.0    %            86.7    %              4.3                   89.0  %            87.5    %              1.5


(1)  Gross premium volume excludes $752.3 million and $1.6 billion for the
quarter and six months ended June 30, 2022, respectively, and $783.5 million and
$1.4 billion for the quarter and six months ended June 30, 2021, respectively,
of written premiums attributable to our program services business and other
fronting arrangements that were ceded.

(2) Amounts may not add up due to rounding.

(3)  The point impact of catastrophes, the Russia-Ukraine conflict and COVID-19
is calculated as the associated net losses and loss adjustment expenses divided
by total earned premiums.

Premiums

The increase in gross premium volume in our underwriting operations for the
quarter and six months ended June 30, 2022 was driven by growth in several of
our product lines, particularly within our professional liability and general
liability product lines across both of our underwriting segments.

We continue to see more favorable rates across most of our product lines,
particularly within our professional liability and general liability product
lines, however, we are beginning to see rate increases moderate on many of our
product lines. Rate increases continue to be based on general market conditions
and the impacts of economic and social inflation, including increased
litigation, on loss costs. Additionally, recent increases in economic inflation,
and an expectation that this trend will continue, have created more uncertainty
around the ultimate losses that will be incurred to settle claims on these
longer-tail product lines. These factors, as well as the impacts of the low
interest rate environment on net investment income in recent years, have
resulted in higher rates. Additionally, following the high level of catastrophes
that have occurred in recent years, we are also seeing more favorable rates on
catastrophe-exposed lines of business. The primary exception to the favorable
rate environment is workers' compensation, where we continue to see low single
digit rate decreases given generally favorable loss experience in recent years.
When we believe the prevailing market price will not support our underwriting
profit targets, the business is not written. As a result of our underwriting
discipline, gross premium volume may vary when we alter our product offerings to
maintain or improve underwriting profitability.

                                       36
--------------------------------------------------------------------------------
  Table     of Contents
Net retention of gross premium volume in our underwriting operations was 83% for
the quarters ended June 30, 2022 and 2021 and 85% for the six months ended
June 30, 2022 and 2021. Within our underwriting operations, we purchase
reinsurance and retrocessional reinsurance to manage our net retention on
individual risks and overall exposure to losses and to enable us to write
policies with sufficient limits to meet policyholder needs.

The increase in earned premiums in our underwriting operations for the quarter
and six months ended June 30, 2022 was primarily attributable to continued
growth in gross premium volume within our professional liability and general
liability product lines across both our underwriting segments.

combined ratio

The increase in our consolidated combined ratio for the quarter ended June 30,
2022 compared to the same period of 2021 was driven by the impact of less
favorable development on prior accident years loss reserves within our Insurance
segment in 2022 compared to 2021, partially offset by a lower expense ratio and
lower current accident year loss ratio within our Insurance segment.

Underwriting results for the six months ended June 30, 2022 included $35.0
million of net losses and loss adjustment expenses attributed to the
Russia-Ukraine conflict. Underwriting results for the six months ended June 30,
2021 included $67.9 million of net losses and loss adjustment expenses from
Winter Storm Uri as well as $18.5 million of net losses and loss adjustment
expenses resulting from an increase in our estimate of ultimate losses and loss
adjustment expenses attributed to COVID-19. Excluding these losses from the
respective periods, the increase in our consolidated combined ratio for the six
months ended June 30, 2022 compared to the same period of 2021 was primarily
driven by the impact of less favorable development on prior accident years loss
reserves within our Insurance segment in 2022 compared to 2021, partially offset
by a lower expense ratio and lower current accident year loss ratio within our
Insurance segment.

Russia-Ukraine Conflict

Our losses and loss adjustment expenses from the Russia-Ukraine conflict are
primarily attributed to business written within our international insurance and
reinsurance operations and are primarily associated with war and terrorism
coverages within our marine and energy product lines, as well as our trade
credit and surety product lines. Although premiums written in the impacted
regions were not significant, many of our impacted policies have high exposure
limits. Additionally, our marine war and trade credit products provide coverage
for vessels and cargo that travel worldwide, including areas impacted by the
conflict. We purchase significant excess of loss reinsurance on the impacted
product lines to reduce our net exposures, resulting in significant ceded
losses.

The following table summarizes losses and loss adjustment expenses and
related reinstatement premiums attributed to the RussiaUkraine conflict.

                                              Six Months Ended June 30, 

2022

(dollars in thousands)
Gross losses and loss adjustment expenses    $                       

105,000

Ceded losses and loss adjustment expenses                            

(70,000)

Net losses and loss adjustment expenses      $                        

35,000

Net ceded reinstatement premiums             $                        12,253
Underwriting loss                            $                        47,253



                                       37
--------------------------------------------------------------------------------
  Table     of Contents
All of the underwriting loss attributed to the Russia-Ukraine conflict was
recognized in the first quarter of 2022. Both the gross and net loss estimates
for incurred losses attributed to the Russia-Ukraine conflict continue to
represent our best estimates as of June 30, 2022 based upon information
currently available. Our estimates for these losses are based on reported
claims, detailed underwriting, actuarial and claims reviews of policies and
in-force assumed reinsurance contracts for potential exposures, as well as
analysis of our ceded reinsurance contracts and analysis provided by our brokers
and claims counsel. These estimates include various assumptions about what areas
within the affected regions have incurred losses, the nature and extent of such
losses, which remain difficult to verify, as well as assumptions about coverage,
liability and reinsurance. Due to the inherent uncertainty associated with the
assumptions surrounding the Russia-Ukraine conflict, these estimates are subject
to a wide range of variability. Additionally, as the Russia-Ukraine conflict is
ongoing, we believe it is possible that additional losses could be incurred in
subsequent periods. Given the significant levels of ceded reinsurance on certain
of our impacted policies, a significant portion of any additional incurred
losses may be ceded. Additionally, increases in ceded losses may require payment
of additional reinstatement premiums. Further, if coverage under our existing
ceded reinsurance contracts is exhausted, we may need to purchase additional
reinsurance to ensure that our net retained risks on the impacted product lines
are within our corporate risk tolerances.

While we believe our gross and net reserves for losses and loss adjustment
expenses for the Russia-Ukraine conflict as of June 30, 2022 are adequate based
on information currently available, we continue to closely monitor reported
claims, ceded reinsurance contract attachment, government actions and areas
impacted by the conflict and may adjust our estimates of gross and net losses as
new information becomes available. Any such adjustments or additional incurred
losses may be material to our results of operations, financial condition and
cash flows.

Insurance Segment

                                                        Quarter Ended June 30,                                         Six Months Ended June 30,
(dollars in thousands)                      2022                   2021              % Change                2022                  2021              % 

Change

Gross premium volume                  $       2,237,158       $    1,821,374               23  %       $      4,180,464       $    3,459,701               21  %
Net written premiums                  $       1,828,162       $    1,494,443               22  %       $      3,439,182       $    2,881,873               19  %
Earned premiums                       $       1,570,001       $    1,303,562               20  %       $      3,047,149       $    2,547,589               20  %
Underwriting profit                   $         166,414       $      205,337              (19) %       $        353,908       $      322,285               10  %

Underwriting Ratios (1)                                                            Point Change                                                    Point Change
Loss ratio
Current accident year loss ratio              58.6    %            60.1    %             (1.5)                  59.3  %            62.1    %           

(2.8)

Prior accident years loss ratio               (2.8)   %           (11.9)   %              9.1                   (4.7) %           (10.7)   %              6.0
Loss ratio                                    55.8    %            48.2    %              7.6                   54.6  %            51.3    %              3.3
Expense ratio                                 33.6    %            36.0    %             (2.4)                  33.8  %            36.0    %             (2.2)
Combined ratio                                89.4    %            84.2    %              5.2                   88.4  %            87.3    %              1.1

Current accident year loss ratio
catastrophe impact (2)                           -    %             0.3    %             (0.3)                     -  %             1.7    %           

(1.7)

Current accident year loss ratio
Russia-Ukraine conflict impact (2)               -    %               -    %                -                    0.7  %               -    %           

0.7

Prior accident years loss ratio
COVID-19 impact (2)                              -    %            (0.3)   %              0.3                      -  %            (0.1)   %           

0.1

Current accident year loss ratio,
excluding catastrophes and
Russia-Ukraine conflict                       58.6    %            59.8    %             (1.2)                  58.6  %            60.4    %           

(1.8)

Combined ratio, excluding current
year catastrophes and Russia-Ukraine
conflict                                      89.4    %            84.2    %              5.2                   87.7  %            85.8    %              1.9

(1) Amounts may not add up due to rounding.

(2)  The point impact of catastrophes, the Russia-Ukraine conflict and COVID-19
is calculated as the associated net losses and loss adjustment expenses divided
by total earned premiums.

                                       38
--------------------------------------------------------------------------------
  Table     of Contents
Premiums

The increase in gross premium volume in our Insurance segment for the both the
quarter and six months ended June 30, 2022 was driven by new business volume,
more favorable rates and expanded product offerings, resulting in growth across
all of our product lines, most notably our professional liability and general
liability product lines. Net retention of gross premium volume was 82% for the
quarters ended June 30, 2022 and 2021. Net retention of gross premium volume was
82% for the six months ended June 30, 2022 and 83% for the six months ended
June 30, 2021. The decrease in net retention for the six months ended June 30,
2022 was primarily due to higher cession rates on certain product lines, as well
as the impact of ceded reinstatement premiums within our marine and energy
product lines associated with the Russia-Ukraine conflict, partially offset by
the impact of low cession rates on new programs business. The increase in earned
premiums for the quarter and six months ended June 30, 2022 was primarily due to
higher gross premium volume.

Combined Ratio: Quarter to Date

See also  Florida Legislature Approves Property Insurance Package | Condition

The decrease in the loss ratio for the current year due to accidents for the quarter that ended
June 30, 2022 compared to the same period in 2021 was mainly due to
Lowest wear and tear loss rates within our professional and general liability
liability product lines, primarily due to the benefit of achieving greater
premium rates.

The Insurance segment's combined ratio for the quarter ended June 30, 2022
included $43.7 million of favorable development on prior accident years loss
reserves compared to $154.5 million for the same period of 2021. The decrease in
favorable development was due in part to adverse development on our professional
liability product lines in 2022 compared to favorable development in 2021.
Adverse development on our professional liability product lines was most
significant on the 2015 to 2019 accident years and was primarily attributable to
unfavorable claim settlements and increased claim frequency on our errors and
omissions and financial institutions products. Development on prior years loss
reserves within our professional liability product lines in 2022 was impacted by
broader market conditions, including the effects of social inflation. These
factors have created more uncertainty around the ultimate losses that will be
incurred to settle claims on these longer-tail product lines, and as a result,
we are approaching reductions to prior year loss reserves cautiously. Within our
general liability product lines, we experienced modest adverse development in
2022 compared to significant favorable development in 2021. While we are not
currently experiencing increased claim frequency or loss severity within most of
our general liability product lines, similar to our professional liability
product lines, we are also approaching reductions to prior years loss reserves
cautiously due to the inherent uncertainty of the impact of economic and social
inflation on these product lines. In general, on long-tail product lines, we are
responding quickly to increase loss reserves following any indication of
increased claims frequency or severity in excess of our previous expectations,
whereas in instances where claims trends are more favorable than we previously
anticipated, we are often waiting to reduce loss reserves and will evaluate our
experience over additional periods of time.

For the quarter ended June 30, 2022, favorable development on prior accident
years loss reserves was most significant on our property, marine and energy,
workers' compensation and programs product lines, primarily on the 2020 and 2021
accident years. The favorable development on prior years loss reserves in 2021
was most significant on our general liability, professional liability, property
and workers' compensation product lines.

The decrease in the expense ratio of the Insurance segment for the quarter ended
June 30, 2022 compared to the same period in 2021 was mainly due to the
favorable impact of higher earned premiums.

Combined Relationship: Year to Date

The Insurance segment's current accident year losses and loss adjustment
expenses for the six months ended June 30, 2022 included $20.0 million of net
losses and loss adjustment expenses attributed to the Russia-Ukraine conflict.
Current accident year losses for the six months ended June 30, 2021 included
$42.9 million of net losses and loss adjustment expenses attributed to Winter
Storm Uri. Excluding these losses from the respective periods, the decrease in
the current accident year loss ratio for the six months ended June 30, 2022
compared to the same period of 2021 was primarily attributable to lower
attritional loss ratios within our professional liability and general liability
product lines, primarily due to the benefit of achieving higher premium rates.

                                       39
--------------------------------------------------------------------------------
  Table     of Contents
The Insurance segment's combined ratio for the six months ended June 30, 2022
included $142.3 million of favorable development on prior accident years loss
reserves compared to $273.6 million for the same period of 2021. The decrease in
favorable development was primarily due to less favorable development on our
general liability product lines in 2022 compared to 2021 and adverse development
on our professional liability product lines in 2022 compared to favorable
development in 2021. Development on our general liability and professional
liability product lines for the six months ended June 30, 2022 was unfavorably
impacted by the same factors impacting quarter-to-date development. For the six
months ended June 30, 2022, favorable development was most significant on our
property, marine and energy, workers' compensation and programs product lines,
primarily on the 2020 and 2021 accident years. The favorable development on
prior years loss reserves in 2021 was most significant on our general liability,
workers' compensation, marine and energy, property and professional liability
product lines.

The decrease in the expense ratio of the Insurance segment for the six months ended
June 30, 2022 compared to the same period in 2021 was mainly due to the
favorable impact of higher earned premiums.

Reinsurance Segment

                                                     Quarter Ended June 30,                                     Six Months Ended June 30,
(dollars in thousands)                    2022                2021             % Change                2022                 2021             % Change
Gross premium volume                  $  289,056          $ 279,444                   3  %       $    865,372           $ 811,962                   7  %
Net written premiums                  $  273,838          $ 257,355                   6  %       $    829,058           $ 751,440                  10  %
Earned premiums                       $  264,154          $ 264,982                   -  %       $    548,121           $ 519,069                   6  %
Underwriting profit (loss)            $    3,839          $  (5,012)                NM (1)       $     17,122           $ (28,230)                NM (1)

Underwriting Ratios (2)                                                      Point Change                                                  Point Change
Loss ratio
Current accident year loss ratio            62.8  %            63.0  %             (0.2)                 63.6   %            65.4  %             (1.8)
Prior accident years loss ratio              5.1  %             8.2  %             (3.1)                  2.9   %             9.7  %             (6.8)
Loss ratio                                  68.0  %            71.2  %             (3.2)                 66.4   %            75.1  %             (8.7)
Expense ratio                               30.6  %            30.7  %             (0.1)                 30.5   %            30.4  %              0.1
Combined ratio                              98.5  %           101.9  %             (3.4)                 96.9   %           105.4  %             (8.5)

Current accident year loss ratio
catastrophe impact (3)                         -  %               -  %                -                     -   %             4.8  %             (4.8)
Current accident year loss ratio
Russia-Ukraine conflict impact (3)             -  %               -  %                -                   2.7   %               -  %              2.7
Prior accident years loss ratio
COVID-19 impact (3)                            -  %             1.3  %             (1.3)                    -   %             4.2  %             (4.2)

Current accident year loss ratio,
excluding catastrophes and
Russia-Ukraine conflict                     62.8  %            63.0  %             (0.2)                 60.8   %            60.6  %              0.2
Combined ratio, excluding current
year catastrophes, Russia-Ukraine
conflict and COVID-19                       98.5  %           100.6  %             (2.1)                 94.1   %            96.4  %             (2.3)


(1)  NM - Ratio is not meaningful

(2)  Amounts may not reconcile due to rounding.

(3)  The point impact of catastrophes, the Russia-Ukraine conflict and COVID-19
is calculated as the associated net losses and loss adjustment expenses divided
by total earned premiums.

                                       40
--------------------------------------------------------------------------------
  Table     of Contents
Premiums

The increase in gross premium volume in our Reinsurance segment for the quarter
ended June 30, 2022 was driven by increases on renewals within our professional
liability product lines, due to increased exposure arising from growth in
underlying portfolios and more favorable rates, as well as new business,
primarily on our professional liability and general liability product lines.
These increases were partially offset by the impact of non-renewals within our
property product lines, as we have discontinued writing property reinsurance and
retrocessional reinsurance business on a risk-bearing basis, and less favorable
premium adjustments in the second quarter of 2022 compared to the same period of
2021, primarily within our professional liability product lines.

The increase in gross premium volume in our Reinsurance segment for the six
months ended June 30, 2022 was driven by increases on renewals within our
professional liability product lines, due to increased exposure arising from
growth in underlying portfolios and more favorable rates, as well as new
business, primarily on our professional liability and general liability product
lines. Additionally, we had more favorable premium adjustments compared to the
same period of 2021, primarily on our general liability and credit and surety
product lines. These increases were partially offset by the impact of
non-renewals within our property product lines, as previously discussed and the
non-renewal of a large treaty within our workers' compensation product line.
Significant variability in gross premium volume can be expected in our
Reinsurance segment due to individually significant contracts and multi-year
contracts.

Net retention of gross premium volume for the quarter ended June 30, 2022 was
95% compared to 92% for the same period of 2021. Net retention of gross premium
volume for the six months ended June 30, 2022 was 96% compared to 93% for the
same period of 2021. The increase in net retention for both the quarter and the
six months ended June 30, 2022 was driven by changes in mix of business. Our
growing professional liability and general liability product lines are fully
retained, while the non-renewed property business had a lower retention rate
than the rest of the segment.

The increase in premiums earned for the six months ended June 30, 2022 I was
primarily attributable to changes in gross premium volume, as previously
discussed

See also  New car insurance plan: premium based on usage, driving behavior | Business Insurance

Combined Ratio: Quarter to Date

The Reinsurance segment's current accident year loss ratio for the quarter ended
June 30, 2022 was consistent with the same period of 2021. The benefit of higher
premium rates on our general liability and professional liability product lines
was offset by the impact of less favorable premium adjustments in 2022 compared
to 2021, primarily on our professional liability product lines, and changes in
the mix of business within the segment. The change in mix of business had an
unfavorable impact as the non-renewed property business had a lower attritional
loss ratio than the rest of the segment.

The Reinsurance segment's combined ratio for the quarter ended June 30, 2022
included a $13.6 million increase in prior accident years loss reserves, which
was attributable to additional exposures recognized on prior accident years
related to net favorable premium adjustments on our general liability product
lines and modest adverse development on certain of our other product lines. For
the quarter ended June 30, 2021, the combined ratio included a $21.7 million
increase in prior accident years loss reserves, which was primarily attributable
to adverse development on our property product lines, as well as additional
exposures recognized on prior accident years related to net favorable premium
adjustments on our professional liability product lines.

Combined Relationship: Year to Date

The Reinsurance segment's current accident year losses and loss adjustment
expenses for the six months ended June 30, 2022 included $15.0 million of net
losses and loss adjustment expenses attributed to the Russia-Ukraine conflict.
Current accident year losses for the six months ended June 30, 2021 included
$25.0 million of net losses and loss adjustment expenses attributed to Winter
Storm Uri. Excluding these losses from the respective periods, the current
accident year loss ratio was consistent with the same period of 2021. The
unfavorable impact of changes in the mix of business within the segment, as
previously discussed, and assumed reinstatement premiums on catastrophes in 2021
that did not repeat in 2022 were largely offset by more favorable premium
adjustments in 2022 compared to 2021, primarily on our general liability and
credit and surety product lines, and the benefit of higher premium rates on our
general liability and professional liability product lines.

                                       41
--------------------------------------------------------------------------------
  Table     of Contents
The Reinsurance segment's combined ratio for the six months ended June 30, 2022
included a $15.7 million increase in prior accident years loss reserves, which
was attributable to additional exposures recognized on prior accident years
related to net favorable premium adjustments on our general liability,
professional liability and credit and surety product lines, partially offset by
favorable development on our credit and surety and property product lines. For
the six months ended June 30, 2021, the combined ratio included a $50.4 million
increase in prior accident years loss reserves, which was primarily attributable
to adverse development on our property product lines, as well as additional
exposures recognized on prior accident years related to net favorable premium
adjustments on our professional liability product lines.

Investment results

Our business strategy recognizes the importance of both consistent underwriting
and operating profits and superior investment returns to build shareholder
value. We rely on sound underwriting practices to produce investable funds. We
measure investing results by our net investment income, net investment gains and
the change in net unrealized gains on available-for-sale investments, as well as
investment yield and taxable equivalent total investment return.

The following table summarizes the performance of our investments.

                                                    Quarter Ended June 30,                                              Six Months Ended June 30,
(dollars in thousands)                  2022                   2021                Change                   2022                    2021                 Change
Net investment income            $           93,658       $       96,261                 (3) %       $           166,392       $       192,831                (14) %
Net investment gains (losses)    $      (1,554,643)       $      674,753       $ (2,229,396)         $       (1,913,042)       $     1,201,624       $ (3,114,666)
Change in net unrealized gains
(losses) on available-for-sale
investments (1)                  $        (458,328)       $       64,972       $   (523,300)         $       (1,061,716)       $     (206,243)       $   (855,473)

Investment Ratios
Investment yield (2)                      0.5     %              0.5   %                  -                   0.8      %              1.1    %               (0.3)
Taxable equivalent total
investment return                                                                                           (10.7)     %              5.3    %              (16.0)


(1)  The change in net unrealized gains (losses) on available-for-sale
investments included an increase related to an adjustment to our life and
annuity benefit reserves of $56.6 million for six months ended June 30, 2022,
and increases of $0.9 million and $50.3 million for the quarter and six months
ended June 30, 2021, respectively. There was no adjustment to our life and
annuity benefit reserves for the quarter ended June 30, 2022. See note 9 of the
notes to consolidated financial statements for details on our life and annuity
benefit reserve adjustments.

(2) The return on investment reflects the net investment income as a percentage of
average invested assets at amortized cost.

The decrease in net investment income for the quarter and six months ended
June 30, 2022 compared to the same periods of 2021 was driven by losses on our
equity method investments in 2022 compared to income in 2021, partially offset
by higher interest income on our short-term investments and higher dividend
income in 2022 compared to 2021. Net investment income on our fixed maturity
securities for the quarter and six months ended June 30, 2022 was consistent
with the same periods of 2021, as the impact of higher average holdings of fixed
maturity securities during both the quarter and six months ended June 30, 2022
compared to the same periods of 2021 was largely offset by a lower yield in 2022
compared to 2021. See note 4(d) of the notes to consolidated financial
statements for details regarding the components of net investment income.

Net investment losses for both the quarter and six months ended June 30, 2022
were primarily attributable to decreases in the fair value of our equity
portfolio driven by unfavorable market value movements in 2022. Net investment
gains for both the quarter and six months ended June 30, 2021 were primarily
attributable to increases in the fair value of our equity portfolio driven by
favorable market value movements. See note 4(e) of the notes to consolidated
financial statements for further details on the components of net investment
gains (losses).

The decrease in net unrealized gains (losses) on available-for-sale investments
for both the quarter and six months ended June 30, 2022 was primarily
attributable to decreases in the fair value of our fixed maturity investment
portfolio as a result of increases in interest rates during the first half of
2022. The increase in net unrealized gains on available-for-sale investments for
the quarter ended June 30, 2021 was primarily attributable to an increase in the
fair value of our fixed maturity investment portfolio as a result of a decrease
in interest rates during the period. This followed an increase in interest rates
during the first quarter of 2021, resulting in an overall net decrease in the
fair value of our fixed maturity investment portfolio for the six months ended
June 30, 2021.

                                       42
--------------------------------------------------------------------------------
  Table     of Contents
Taxable equivalent total investment return is a non-GAAP financial measure.
Taxable equivalent total investment return includes items that impact net
income, such as coupon interest on fixed maturity securities, changes in fair
value of equity securities, dividends on equity securities and realized
investment gains or losses on available-for-sale securities, as well as changes
in unrealized gains or losses on available-for-sale securities, which do not
impact net income. Certain items that are included in net investment income have
been excluded from the calculation of taxable equivalent total investment
return, such as amortization and accretion of premiums and discounts on our
fixed maturity portfolio, to provide a comparable basis for measuring our
investment return against industry investment returns. The calculation of
taxable equivalent total investment return also includes the current tax benefit
associated with income on certain investments that is either taxed at a lower
rate than the statutory income tax rate or is not fully included in U.S. taxable
income. We believe the taxable equivalent total investment return is a better
reflection of the economics of our decision to invest in certain asset classes.
We focus on our long-term investment return, understanding that the level of
investment gains or losses may vary from one period to the next.

The following table reconciles investment yield to taxable equivalent total
investment return.

                                                                             Six Months Ended June 30,
                                                                            2022                    2021
Investment yield (1)                                                             0.8  %                 1.1  %
Adjustment of investment yield from amortized cost to fair value                (0.2) %                (0.3) %
Net amortization of net premium on fixed maturity securities                     0.2  %                 0.2  %

Net investment gains (losses) and change in net unrealized investment
gains (losses) on available-for-sale securities

                                (12.1) %                 3.9  %
Taxable equivalent effect for interest and dividends (2)                           -  %                   -  %
Other (3)                                                                        0.6  %                 0.4  %
Taxable equivalent total investment return                                     (10.7) %                 5.3  %


(1) The return on investment reflects the net investment income as a percentage of
average invested assets at amortized cost.

(2) Adjustment to tax-exempt interest and dividend income to reflect a
equivalent basis.

(3) Adjustment to reflect the impact of the time weighting of entries to the
calculation of the total return on the taxable equivalent investment.

Markel Companies

Our Markel Ventures segment includes a diverse portfolio of businesses from
different industries that offer various types of products and services to
businesses and consumers, predominantly in the United States. We measure Markel
Ventures' results by its operating income and net income, as well as earnings
before interest, income taxes, depreciation and amortization (EBITDA). We
consolidate the results of our Markel Ventures subsidiaries on a one-month lag,
with the exception of significant transactions or events that occur during the
intervening period.

The following table summarizes operating income, operating income, EBITDA
and the net income for the shareholders of our Markel Companies segment.

                                                         Quarter Ended June 30,                                          Six Months Ended June 30,
(dollars in thousands)                       2022                 2021               % Change                 2022                  2021               % Change
Operating revenues                      $ 1,361,398          $ 1,075,506                    27  %       $   2,311,790          $ 1,782,108                    30  %
Operating income                        $   107,046          $   108,665                    (1) %       $     156,783          $   160,128                    (2) %
EBITDA                                  $   154,154          $   138,357                    11  %       $     249,859          $   219,535                    14  %
Net income to shareholders              $    68,205          $    68,551                    (1) %       $      93,985          $   101,234                    (7) %



The increase in operating revenues for the quarter and six months ended June 30,
2022 compared to the same periods of 2021 was driven by contributions from
Metromont and Buckner, which were acquired in December 2021 and August 2021,
respectively. Operating revenues for the quarter and six months ended June 30,
2022 included $156.9 million and $265.7 million, respectively, attributable to
these acquisitions. Additionally, operating revenues for the quarter and six
months ended June 30, 2022 increased as a result of the impact of increased
demand and higher prices at many of our other businesses, most notably at our
construction services businesses.

                                       43
--------------------------------------------------------------------------------
  Table     of Contents
The benefit of increases in operating revenues to operating income, EBITDA and
net income to shareholders was reduced by increased costs of materials and labor
across many of our businesses, which are reflective of current economic
conditions. The higher cost of materials is due in part to a shortage in the
availability of certain products, the higher cost of shipping and inflation. We
try to mitigate the impact of these cost increases through a variety of actions,
such as increasing the prices of our products and services, pre-purchasing
materials, locking in prices in advance or utilizing alternative sources of
materials. Our businesses have had varying levels of success with these efforts
and even when we are successful, there can be a time lag before the impacts of
these changes are reflected in our margins.

The increase in EBITDA for the quarter and six months ended June 30, 2022
compared to the same period of 2021 was primarily due to the impact of higher
revenues and improved operating results at our construction services businesses
and consulting services businesses, the contribution of Metromont and lower
expense in 2022 compared to 2021 attributable to increases in our estimate of
contingent consideration obligations related to certain recent acquisitions.
These increases were partially offset by the impact of lower operating margins
at one of our consumer and building products businesses in 2022 compared to
2021. For the six months ended June 30, 2022, the increases in EBITDA were also
partially offset by the impact of a pre-tax disposition gain of $22.0 million in
the first quarter of 2021, which was included in services and other expenses.

The decrease in operating income and net income to shareholders was primarily
attributable to depreciation and amortization related to our recent
acquisitions, which more than offset the impact of higher revenues and improved
operating results at our construction services businesses and consulting
services businesses, as previously discussed.

Markel Ventures EBITDA is a non-GAAP financial measure. We use Markel Ventures
EBITDA as an operating performance measure in conjunction with U.S. GAAP
measures, including operating revenues, operating income and net income to
shareholders, to monitor and evaluate the performance of our Markel Ventures
segment. Because EBITDA excludes interest, income taxes, depreciation and
amortization, it provides an indicator of economic performance that is useful to
both management and investors in evaluating our Markel Ventures businesses as it
is not affected by levels of debt, interest rates, effective tax rates or levels
of depreciation or amortization resulting from purchase accounting. The
following table reconciles Markel Ventures operating income to Markel Ventures
EBITDA.

                                                  Quarter Ended June 30,                    Six Months Ended June 30,
(dollars in thousands)                            2022                  2021                 2022                  2021
Markel Ventures operating income           $    107,046             $ 

108,665 $156,783 $160,128
depreciation expense

                             26,531                15,834                  51,566             31,844
Amortization of intangible assets                20,577                13,858                  41,510             27,563
Markel Ventures EBITDA                     $    154,154             $ 138,357          $      249,859          $ 219,535



                                       44
--------------------------------------------------------------------------------
  Table     of Contents
Other Operations

The following tables present the components of operating income and
expenses that are not included in a reportable segment.

                                                                                 Quarter Ended June 30,
                                                        2022                                                                2021
                             Services and         Services and          Amortization of          Services and         Services and          Amortization of
(dollars in thousands)      other revenues       other expenses        intangible assets        other revenues       other expenses        intangible assets
Other operations:
Insurance-linked securities $    23,201          $    34,849          $     

9,512 $55,755 $43,916 $9,612

Program services and other
fronting                         29,762                6,731                     5,234               28,027                6,182                     5,234
Life and annuity                    281                5,204                         -                  131                5,978                         -

Markel CATCo Re                       -              (28,199)                        -                    -                    -                         -
Other (1)                         5,546                5,216                       556                2,304                9,503                       608
                                 58,790               23,801                    15,302               86,217               65,579                    15,454
Underwriting operations (2)                                                      9,644                                                              10,417
Total                       $    58,790          $    23,801          $         24,946          $    86,217          $    65,579          $         25,871

(1) Others includes the results of our second round Lodgepine and Markel CATCo
investment management operations for the two periods presented.

(2) Amortization of intangible assets attributable to our subscription
operations is not distributed between the Insurance and Reinsurance segments.

                                                                                 Six Months Ended June 30,
                                                         2022                                                                2021
                              Services and         Services and          Amortization of          Services and         Services and          Amortization of
(dollars in thousands)       other revenues       other expenses        intangible assets        other revenues       other expenses        intangible assets
Other operations:
Insurance-linked securities  $    60,210          $    72,595          $         19,057          $    92,742          $    88,543          $         19,224
Insurance-linked securities
- disposition gain               107,293                    -                         -                    -                    -                         -
Program services and other
fronting                          63,833               14,114                    10,468               56,190               12,510                    10,468
Life and annuity                     606               10,485                         -                  657               12,392                         -
Markel CATCo buy-out                   -              101,904                         -                    -                    -                         -
Markel CATCo Re                        -              (28,199)                        -                    -                    -                         -
Other (1)                          8,594               12,775                     1,142                9,087               19,323                     1,207
                                 240,536              183,674                    30,667              158,676              132,768                    30,899
Underwriting operations (2)                                                      19,395                                                              20,820
Total                        $   240,536          $   183,674          $         50,062          $   158,676          $   132,768          $         51,719

(1) Others includes the results of our second round Lodgepine and Markel CATCo
investment management operations for the two periods presented.

(2) Amortization of intangible assets attributable to our subscription
operations is not distributed between the Insurance and Reinsurance segments.

Insurance-linked securities

For both the quarter and six months ended June 30, 2022, the decrease in
operating revenues and operating expenses in our Nephila ILS operations was
primarily due to the disposition of our Velocity managing general agent
operations during the first quarter of 2022. In February 2022, we sold the
majority of our controlling interest in our Velocity managing general agent
operations for total cash consideration of $181.3 million, which resulted in a
gain of $107.3 million. Velocity provides risk origination services for our
Nephila fund management operations, as well as for third parties, and was a
source of growth within our ILS operations since we acquired Nephila in 2018. We
continue to have a minority interest in Velocity after the sale, and Velocity
will continue to be a source for risk origination for our Nephila fund
management operations.

                                       45
--------------------------------------------------------------------------------
  Table     of Contents
In March 2022, we entered into a definitive agreement to sell our controlling
interest in our Volante managing general agent operations, which underwrite and
administer specialty insurance and reinsurance policies and provide delegated
underwriting services to third-party providers of insurance capital. Volante has
also been a source of growth within our ILS operations since we acquired Nephila
in 2018. Estimated consideration from the sale is expected to be $155 million.
The transaction is expected to close in the fourth quarter of 2022 and is
subject to regulatory approvals and customary closing conditions.

Following the disposition of our Volante managing general agent operations, our
Nephila ILS operations will be solely comprised of its fund management
operations. As of June 30, 2022, Nephila's net assets under management were $8.5
billion.

Program services and other facades

For the six months ended June 30, 2022, the increase in operating revenues was
primarily due to higher gross premium volume at our program services operations
in recent periods driven by the expansion of existing programs. Gross written
premiums in our program services operations were $709.8 million and $1.4 billion
for the quarter and six months ended June 30, 2022, respectively, compared to
$761.2 million and $1.4 billion for the quarter and six months ended June 30,
2021, respectively. Additionally, gross written premiums from our other fronting
operations, which consist of business written by our underwriting platform on
behalf of our ILS operations, were $41.4 million and $214.5 million for the
quarter and six months ended June 30, 2022, respectively, compared to $21.8
million and $44.0 million for the quarter and six months ended June 30, 2021,
respectively.

Markel CATCo

In March 2022, we completed a buy-out transaction with Markel CATCo Re and the
Markel CATCo Funds that provided for an accelerated return of all remaining
capital to investors in the Markel CATCo Funds and resulted in the consolidation
of Markel CATCo Re upon completion of the transaction. In order to complete the
transaction, we made $101.9 million in payments, net of insurance proceeds, to
or for the benefit of investors that were recognized as an expense during the
first quarter of 2022. For the quarter ended June 30, 2022, results attributable
to Markel CATCo Re were primarily related to favorable loss reserve development
on the run-off of reinsurance contracts, all of which were attributable to
noncontrolling interest holders in Markel CATCo Re. See note 11 of the notes to
consolidated financial statements for further details regarding our Markel CATCo
operations and the consolidation of Markel CATCo Re and note 14 for further
details about the buy-out transaction.

Interest expense and income taxes

See also  Auto insurance reform stalls, lawmakers debate legislation to cut gas prices: The Week in Michigan Politics

Interest expenses

Interest expense was $50.1 million and $99.7 million for the quarter and six
months ended June 30, 2022, respectively, compared to $46.6 million and $89.0
million for the same periods of 2021. The increase in interest expense for the
quarter and six months ended June 30, 2022 was primarily attributable to
interest expense associated with our 3.45% unsecured senior notes issued in May
2021.

Income Taxes

The effective tax rate was 22% and 21% for the six months ended June 30, 2022
and 2021, respectively.

                                       46
--------------------------------------------------------------------------------
  Table     of Contents
Comprehensive Income (Loss) to Shareholders and Book Value per Common Share

The following table summarizes the components of comprehensive income (loss) to
shareholders.

                                                      Quarter Ended June 30,                    Six Months Ended June 30,
(dollars in thousands)                                2022                 2021                 2022                   2021
Net income (loss) to shareholders               $    (916,359)         $ 792,110          $     (969,202)         $ 1,365,804
Other comprehensive income (loss):
Change in net unrealized gains (losses) on
available-for-sale investments, net of taxes         (361,131)            51,992                (837,212)            (162,472)
Other, net of taxes                                    (3,902)             5,569                  (4,018)               5,353
Other comprehensive income attributable to
noncontrolling interest                                   (57)               (17)                    (44)                 (34)
Other comprehensive income (loss) to
shareholders                                         (365,090)            57,544                (841,274)            (157,153)

Comprehensive profit (loss) for shareholders $(1,281,449) $849,654 $(1,810,476) $1,208,651


Book value per common share decreased 13% from $1,036.20 at December 31, 2021 to
$898.53 as of June 30, 2022, primarily due to comprehensive loss to shareholders
for the six months ended June 30, 2022.

financial condition

Liquidity and Capital Resources

We seek to maintain prudent levels of liquidity and financial leverage for the
protection of our policyholders, creditors and shareholders. Our consolidated
debt to capital ratio was 26% at June 30, 2022 and 23% at December 31, 2021. The
increase reflects a decrease in shareholders' equity, primarily attributable to
decreases in the fair value of our investment portfolio, driven by unfavorable
movements in the public equity markets and increases in interest rates in 2022.

Investments, cash and cash equivalents and restricted cash and cash equivalents
(invested assets) were $26.1 billion and $28.3 billion at June 30, 2022 and
December 31, 2021, respectively. The following table presents the composition of
our invested assets.

                                                                            June 30,                 December 31,
                                                                              2022                       2021
Fixed maturity securities                                                           46  %                        44  %
Equity securities                                                                   27  %                        32  %
Short-term investments, cash and cash equivalents and restricted cash
and cash equivalents                                                                27  %                        24  %
Total                                                                              100  %                       100  %



Our holding company had $4.3 billion and $5.3 billion of invested assets at
June 30, 2022 and December 31, 2021, respectively. The decrease was primarily
due to declines in the fair value of our equity and fixed maturity securities,
as well as the cash paid to pre-fund the retirement of our 4.90% unsecured
senior notes due July 1, 2022. The following table presents the composition of
our holding company's invested assets.

                                                                            June 30,                 December 31,
                                                                              2022                       2021
Fixed maturity securities                                                            5  %                         4  %
Equity securities                                                                   51  %                        53  %
Short-term investments, cash and cash equivalents and restricted cash
and cash equivalents                                                                44  %                        43  %
Total                                                                              100  %                       100  %



In February 2022, our Board of Directors approved a new share repurchase program
that provides for the repurchase of up to $750 million of common stock. As of
June 30, 2022, $668.2 million remained available for repurchases under the
program. This share repurchase program has no expiration date but may be
terminated by the Board of Directors at any time.
                                       47

————————————————– ——————————

Table of Contents

We may from time to time seek to prepay, retire or repurchase our outstanding
senior notes or preferred shares, through open market purchases, privately
negotiated transactions or otherwise. Those prepayments, retirements or
repurchases, if any, will depend on prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors.

We have access to various capital sources, including dividends from certain of
our subsidiaries, holding company invested assets, undrawn capacity under our
revolving credit facility and access to the debt and equity capital markets. We
believe we have adequate liquidity to meet our capital and operating needs,
including that which may be required to support the operating needs of our
subsidiaries. However, the availability of these sources of capital and the
availability and terms of future financings will depend on a variety of factors.

Cash flow

Net cash provided by operating activities was $921.0 million for the six months
ended June 30, 2022 compared to $813.2 million for the same period of 2021. The
increase in net cash flows from operating activities for the six months ended
June 30, 2022 was primarily driven by higher net premium volumes within our
Insurance segment, partially offset by $101.9 million of payments made in
connection with the Markel CATCo buy-out transaction.

Net cash used by investing activities was $403.4 million for the six months
ended June 30, 2022 compared to $2.2 billion for the same period of 2021. During
the six months ended June 30, 2022, net cash used by investing activities
included purchases of fixed maturity securities, net of maturities and sales, of
$519.9 million and net purchases of short-term investments of $256.7 million.
Net cash used by investing activities was net of $630.0 million of net cash and
restricted cash acquired as part of our consolidation of Markel CATCo Re, of
which $169.4 million was subsequently distributed to Markel CATCo investors for
shares that were redeemed in conjunction with the buy-out transaction. During
the six months ended June 30, 2021, net cash used by investing activities
included net purchases of short-term investments of $1.2 billion and purchases
of fixed maturity securities, net of maturities and sales, of $1.0 billion. Cash
flow from investing activities is affected by various factors such as
anticipated payment of claims, financing activity, acquisition opportunities and
individual buy and sell decisions made in the normal course of our investment
portfolio management.

Net cash used by financing activities was $386.7 million for the six months
ended June 30, 2022 compared to net cash provided by financing activities of
$564.3 million for the same period of 2021. In June 2022, we made a cash payment
of $350.0 million to a third-party trust account to pre-fund the retirement our
4.90% unsecured senior notes, which were retired on July 1, 2022. During the six
months ended June 30, 2022, we had net increases in borrowings, primarily on
revolving lines of credit at two of our Markel Ventures businesses. During the
six months ended June 30, 2021, we received net proceeds of $591.4 million from
our May 2021 debt offering. Cash of $126.3 million and $60.8 million was used to
repurchase shares of our common stock during the first six months of 2022 and
2021, respectively.

Critical accounting estimates

Critical accounting estimates are those estimates that both are important to the
portrayal of our financial condition and results of operations and require us to
exercise significant judgment. The preparation of financial statements in
accordance with U.S. GAAP requires us to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses and
the disclosure of material contingent assets and liabilities. These estimates,
by necessity, are based on assumptions about numerous factors.

Our critical accounting estimates consist of estimates and assumptions used in
determining the reserves for unpaid losses and loss adjustment expenses as well
as estimates and assumptions used in the valuation of goodwill and intangible
assets. We review the adequacy of reserves for unpaid losses and loss adjustment
expenses quarterly. Estimates and assumptions for goodwill and intangible assets
are reviewed in conjunction with acquisitions and impairment assessments.
Goodwill and indefinite-lived intangible assets are reassessed for impairment at
least annually. All intangible assets, including goodwill, are also reviewed for
impairment when events or circumstances indicate that their carrying value may
not be recoverable. Actual results may differ materially from the estimates and
assumptions used in preparing the consolidated financial statements.

Readers are urged to review our 2021 Annual Report on Form 10-K for more
full description of our critical accounting estimates.

                                       48
--------------------------------------------------------------------------------
  Table     of Contents
Safe Harbor and Cautionary Statement

This report contains statements concerning or incorporating our expectations,
assumptions, plans, objectives, future financial or operating performance and
other statements that are not historical facts. These statements are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements may use words such as
"anticipate," "believe," "estimate," "expect," "intend," "predict," "project"
and similar expressions as they relate to us or our management.

There are risks and uncertainties that may cause actual results to differ
materially from predicted results in forward-looking statements. Factors that
may cause actual results to differ are often presented with the forward-looking
statements themselves. Additional factors that could cause actual results to
differ from those predicted are set forth under "Business Overview," "Risk
Factors," and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our 2021 Annual Report on Form 10-K, or are included
in the items listed below:

•our expectations about future results of our underwriting, investing, Markel
Ventures and other operations are based on current knowledge and assume no
significant man-made or natural catastrophes, no significant changes in products
or personnel and no adverse changes in market conditions;

•the effect of cyclical trends on our underwriting, investing, Markel Ventures
and other operations, including demand and pricing in the insurance, reinsurance
and other markets in which we operate;

•actions by competitors, including the use of technology and innovation to
simplify the customer experience, increase efficiencies, redesign products,
alter models and effect other potentially disruptive changes in the insurance
industry, and the effect of competition on market trends and pricing;

•our efforts to develop new products, expand into target markets, or improve
business processes and workflows may not be successful and may increase or
create new risks (eg, insufficient demand, changes in risk exposures,
conflicts in distribution channels, execution risk, increased expenses);

•the frequency and severity of man-made and natural catastrophes (including
earthquakes, wildfires and weather-related catastrophes) may exceed
expectations, are unpredictable and, in the case of wildfires and
weather-related catastrophes, may be exacerbated if, as many forecast, changing
conditions in the climate, oceans and atmosphere result in increased hurricane,
flood, drought or other adverse weather-related activity;

•we offer insurance and reinsurance coverage against terrorist acts in
connection with some of our programs, and in other cases we are legally
required to offer terrorism insurance; in both circumstances, we actively manage
our exposure, but if there is a covert terrorist attack, we could hold
material losses;

•emerging claim and coverage issues, changing industry practices and evolving
legal, judicial, social and other environmental trends or conditions, can
increase the scope of coverage, the frequency and severity of claims and the
period over which claims may be reported; these factors, as well as
uncertainties in the loss estimation process, can adversely impact the adequacy
of our loss reserves and our allowance for reinsurance recoverables;

•reinsurance reserves are subject to greater uncertainty than insurance
reserves, primarily because of reliance upon the original underwriting decisions
made by ceding companies and the longer lapse of time from the occurrence of
loss events to their reporting to the reinsurer for ultimate resolution;

•inaccuracies (whether due to data error, human error or otherwise) in the
various modeling techniques and data analytics (e.g., scenarios, predictive and
stochastic modeling, and forecasting) we use to analyze and estimate exposures,
loss trends and other risks associated with our insurance and insurance-linked
securities businesses could cause us to misprice our products or fail to
appropriately estimate the risks to which we are exposed;

•changes in the assumptions and estimates used in establishing reserves for our
life and annuity reinsurance book (which is in runoff), for example, changes in
assumptions and estimates of mortality, longevity, morbidity and interest rates,
could result in material increases in our estimated loss reserves for such
business;

•adverse developments in insurance coverage litigation or other legal issues or
administrative procedures could result in significant increases in our estimates
of reserves for losses;

•initial estimates for catastrophe losses and other significant, infrequent
events (such as the COVID-19 pandemic and the Russia-Ukraine conflict), are
often based on limited information, are dependent on broad assumptions about the
nature and extent of losses, coverage, liability and reinsurance, and those
losses may ultimately differ materially from our expectations;
                                       49

————————————————– ——————————

Table of Contents

•changes in the availability, costs, quality and providers of reinsurance
coverage, which may affect our ability to write or continue to write certain
lines of business or to mitigate the volatility of losses in our results from
operations and financial condition;

•the ability or willingness of reinsurers to pay balances due may be adversely
affected by industry and economic conditions, deterioration in reinsurer credit
quality and coverage disputes, and collateral we hold, if any, may not be
sufficient to cover a reinsurer's obligation to us;

•after the commutation of the ceded reinsurance contracts, any
development of resumed loss reserves will result in a charge to income;

•regulatory actions may impede our ability to charge adequate rates and
efficiently allocate capital;

•general economic and market conditions and industry specific conditions,
including extended economic recessions or expansions; prolonged periods of slow
economic growth; inflation or deflation; fluctuations in foreign currency
exchange rates, commodity and energy prices and interest rates; volatility in
the credit and capital markets; and other factors;

•economic conditions, actual or potential defaults in corporate bonds, municipal
bonds, mortgage-backed securities or sovereign debt obligations, volatility in
interest and foreign currency exchange rates and changes in market value of
concentrated investments can have a significant impact on the fair value of our
fixed maturity securities and equity securities, as well as the carrying value
of our other assets and liabilities, and this impact may be heightened by market
volatility and our ability to mitigate our sensitivity to these changing
conditions;

•economic conditions can negatively affect our access to capital and credit
markets;

•the effects of government intervention, including material changes in the
monetary policies of central banks, to address financial downturns (such as in
response to the COVID-19 pandemic), inflation and other economic and currency
concerns;

•the impacts that political and civil unrest and regional conflicts, such as the
conflict between Russia and Ukraine, may have on our businesses and the markets
they serve or that any disruptions in regional or worldwide economic conditions
generally arising from these situations may have on our businesses, industries
or investments;

•significant volatility, uncertainty and disruption caused by health
epidemics and pandemics, including the COVID-19 pandemic and its variants, as well
as well as governmental, legislative, judicial or regulatory actions or
developments in response to it;

•changes in U.S. tax laws, regulations or interpretations, or in the tax laws,
regulations or interpretations of other jurisdictions in which we operate, and
adjustments we may make in our operations or tax strategies in response to those
changes;

•a failure or security breach of, or cyber-attack on, enterprise information
technology systems that we use or a failure to comply with data protection or
privacy regulations;

•third-party providers may perform poorly, fail to meet their obligations to us, or
expose ourselves to greater risks;

•our acquisitions may increase our operating and internal control risks by a
time frame;

• We may not get the benefits we envision, including cost savings and
synergies, from our acquisitions;

•any determination that requires the cancellation of a significant part of our
goodwill and intangible assets;

•the failure or inadequacy of any method we employ to manage our loss
exhibitions;

•the loss of the services of any executive officer or other key personnel could
adversely affect one or more of our operations;

•how we manage our global operations through a network of
commercial entities could give rise to management, governance and
supervisory practices and make it difficult for us to implement strategies
decisions and coordinate procedures;

•our substantial international operations and investments expose us to increased
political, civil, operational and economic risks, including foreign currency
exchange rate and credit risk;

•the political, legal, regulatory, financial, tax and general economic impacts,
and other impacts we cannot anticipate, related to the United Kingdom's
withdrawal from the European Union (Brexit), which could have adverse
consequences for our businesses, particularly our London-based international
insurance operations;

•our ability to raise additional capital for our operations on favorable terms
for us;

•our compliance, or failure to comply, with covenants and other requirements
under our revolving credit facility, senior debt and other indebtedness and our
preferred shares;
                                       50

————————————————– ——————————

Table of Contents

•our ability to hold or raise capital from third parties for existing or new projects
investment vehicles and risks related to our management of third party capital;

•the effectiveness of our procedures for compliance with existing and future regulations
guidelines, policies and legal and regulatory standards, rules, laws and
regulations;

•the impact of economic and trade sanctions and embargo programs on our
businesses, including instances in which the requirements and limitations
applicable to the global operations of U.S. companies and their affiliates are
more restrictive than, or conflict with, those applicable to non-U.S. companies
and their affiliates;

• regulatory changes, or challenges by regulators, regarding the use of certain
issuing carriers or fronting arrangements;

•our reliance on a limited number of brokers for a large part of our
income and capital of third parties;

•adverse changes in our assigned financial strength, debt or preferred share
ratings or outlook could adversely impact us, including our ability to attract
and retain business, the amount of capital our insurance subsidiaries must hold
and the availability and cost of capital;

•changes in the amount of statutory capital our insurance subsidiaries are
required to hold, which can vary significantly and is based on many factors,
some of which are outside our control;

•losses from litigation and investigations and regulatory actions;

•investor litigation or disputes, as well as regulatory inquiries,
investigations or proceedings related to our Markel CATCo operations; delays or
disruptions in the run-off of those operations; or the failure to realize the
benefits of the transaction that permitted the accelerated return of capital to
our Markel CATCo investors; and

•a number of additional factors may adversely affect our Markel Ventures
operations, and the markets they serve, and negatively impact their revenues and
profitability, including, among others: adverse weather conditions, plant
disease and other contaminants; changes in government support for education,
healthcare and infrastructure projects; changes in capital spending levels;
changes in the housing, commercial and industrial construction markets;
liability for environmental matters; supply chain and shipping issues, including
increases in freight costs; volatility in the market prices for their products;
and volatility in commodity, wholesale and raw materials prices and interest and
foreign currency exchange rates.

The results of our subscription, investment, Markel Companies and other operations
have been and will continue to be potentially materially affected by these
factors

By making forward-looking statements, we do not intend to become obligated to
publicly update or revise any such statements whether as a result of new
information, future events or other changes. Readers are cautioned not to place
undue reliance on any forward-looking statements, which speak only as at their
dates.

                                       51

————————————————– ——————————

Table of Contents