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    MKL
    Earnings call· Mar 2026(Q1 FY26)

    MARKEL GROUP Q1 FY26 earnings call MKL

    Apr 29, 2026 Source

    Executive summary

    Markel Group Q1 FY26 — Strong Underwriting Performance and Strategic Capital Deployment

    Markel Group delivered strong underwriting results in Q1 FY26, with improved combined ratio and double-digit adjusted premium growth in insurance, despite the strategic exits of Global Re and Hagerty. Non-insurance segments faced cyclical headwinds and one-time impacts, leading to flat overall operating revenues. The company continues its disciplined capital allocation, including significant share repurchases, while maintaining a strong balance sheet for future opportunities.

    Highlights

    6

    • Adjusted operating income increased 4% to $498 million, driven by improved underwriting.

    • Markel Insurance adjusted operating income rose to $369 million from $282 million YoY.

    • Markel Insurance combined ratio improved to 93% from 96% in Q1 2025, with a 4-point improvement in attritional loss ratio.

    • Adjusted underwriting gross written premiums (excluding Global Re exit and Hagerty transition) grew 10%.

    • International division GWP grew 28% to $861 million, driven by professional liability cyber and marine/energy.

    • Repurchased $134 million of common shares in Q1 2026, reducing total shares outstanding to 12.5 million.

    Concerns

    5

    • Operating revenues were flat at $3.6 billion YoY.

    • Operating cash flow decreased significantly to $16 million from $376 million in Q1 2025, impacted by Hagerty transition payments and lower premium collections.

    • Public equity portfolio declined 5.2% in Q1, underperforming the S&P 500's 4.4% decline.

    • Industrial segment adjusted operating income decreased 16% to $49 million due to business mix changes and softening demand in auto and residential construction.

    • Financial segment adjusted operating income decreased to $36 million from $80 million, impacted by the non-recurrence of a $31 million gain and a $14 million impairment.

    Guidance & targets

    6
    CategoryTargetConfidence
    Insurance underwriting profits
    $700-some million
    high materiality
    High
    Industrial, Commercial, Financial businesses profit
    $750 million
    medium materiality
    Medium
    Recurring interest and dividend income
    $1 billion
    medium materiality
    High
    Equity portfolio normal unrealized gain
    $700 million or $800 million
    medium materiality
    Medium
    Share count reduction pace
    less than 5 years
    high materiality
    High
    International GWP growth
    low to mid-teens
    medium materiality
    High

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Markel Insurance (Overall)
    Overall combined ratio improved significantly, driven by lower catastrophe losses and attritional loss ratio improvement, despite a drag from the runoff of Global Re. Adjusted premium growth was strong, offsetting the impact of strategic exits.
    Combined ratio: 93% (Q1 2026)Combined ratio: 96% (Q1 2025)Adjusted underwriting gross written premiums growth: 10% (YoY, excluding Global Re exit and Hagerty transition)Underwriting gross written premiums: $2.2 billion (Q1 2026)Underwriting gross written premiums decrease: 21% (YoY)Catastrophe losses: $35 million (Q1 2026, 2 points of losses from Middle East conflict)Catastrophe losses: $66 million (Q1 2025, 3 points of losses from California wildfires)Attritional loss ratio improvement: 4 pointsPrior year releases: 5 points (Q1 2026)Prior year releases: 7 points (Q1 2025)Global Re combined ratio: 114% (Q1 2026)Global Re impact on insurance segment combined ratio: 2 points (unfavorable)
    		$2 billion-2%—93%
    Markel Insurance - International
    Strong growth across the division, particularly in professional liability cyber. Combined ratio remained stable despite catastrophe losses.
    Combined ratio: 90% (Q1 2026)Combined ratio: 89% (Q1 2025)Catastrophe losses: 6 points (Q1 2026, from Middle East conflict)Catastrophe losses: 6 points (Q1 2025, from California wildfires)
    		$861 million28%—90%
    Markel Insurance - Wholesale and Specialty
    Premium decline due to softer property and marine rate environment and decreases in binding contractors and casualty. Combined ratio improved significantly due to underwriting actions and exit of risk-managed D&O book.
    Combined ratio: 93% (Q1 2026)Combined ratio: 100% (Q1 2025)
    		$673 million-9%—93%
    Markel Insurance - Programs and Solutions
    GWP reduction primarily due to the Hagerty program shift. Excluding this, the division saw strong growth. Combined ratio improved due to better loss ratios and favorable prior year development.
    Combined ratio: 91% (Q1 2026)Combined ratio: 97% (Q1 2025)Hagerty program shift impact on GWP: -$220 millionAdjusted GWP growth: 12% (excluding Hagerty impact)
    		$656 million-19%—91%
    Industrial
    Revenue growth driven by precast concrete products, but operating income declined due to lower margins from business mix changes and softening demand in auto industry.
    Adjusted operating income: $49 million (Q1 2026)Adjusted operating income: $58 million (Q1 2025)Organic growth: 4%
    		$883 million6%—$49 million
    Financial
    Revenue decrease primarily due to non-recurrence of a $31 million gain from Velocity in Q1 2025 and a $14 million impairment in Q1 2026. Organic revenue growth was strong.
    Adjusted operating income: $36 million (Q1 2026)Adjusted operating income: $80 million (Q1 2025)Organic revenue growth: 10%
    		$162 million-9%—$36 million
    Consumer and Other
    Revenue decrease driven by slower demand for new housing, partially offset by the EPI acquisition. Adjusted operating income increased due to the EPI acquisition.
    Adjusted operating income: $40 million (Q1 2026)Adjusted operating income: $32 million (Q1 2025)Organic revenue growth: -6%
    		$281 million-3%—$40 million

    Operational metrics

    33
    Adjusted operating income
    $498 million4% increase vs Q1 FY25
    Q1 FY26

    Driven primarily by improved underwriting performance in Markel Insurance, offset by nonrecurrence of a gain from Velocity in Q1 FY25 and lower margins in Industrial segment.

    Adjusted operating income
    $369 millionvs $282 million in Q1 FY25
    Q1 FY26
    Underwriting gross written premiums impact from strategic changes
    $23 millionvs $797 million in Q1 FY25
    Q1 FY26

    These changes are expected to decrease full-year 2026 GWP by approximately $2 billion.

    Underwriting gross written premiums growth (adjusted)
    10%YoY
    Q1 FY26

    Driven by International division (professional liability, marine and energy) and Programs and Solutions (personal lines, programs), partially offset by Wholesale and Specialty.

    Earned premium
    $2 billion2% decrease
    Q1 FY26
    Fixed income portfolio yield
    3.7%
    Q1 FY26
    Fixed income reinvestment yields
    4.1%
    Q1 FY26
    Public equity portfolio performance
    5.2%vs 4.4% decline in S&P 500
    Q1 FY26
    Public equity portfolio market value
    $12.3 billion
    Q1 FY26
    Public equity portfolio pretax unrealized gains
    $8.2 billion
    Q1 FY26
    Public equity portfolio net purchases
    $28 million
    Q1 FY26
    Organic growth
    4%
    Q1 FY26

    Driven by increases in sales in precast concrete products, partially offset by lower revenues from car hauling equipment.

    Organic revenue growth
    10%
    Q1 FY26
    Impairment of equity method investment
    $14 million
    Q1 FY26

    Related to an asset management firm.

    Organic revenue growth
    -6%
    Q1 FY26
    Share buyback
    $445 million
    FY23
    Share buyback
    $573 million
    FY24
    Share buyback
    $430 million
    FY25

    Also redeemed $600 million of preferred stock.

    Preferred stock redemption
    $600 million
    FY25
    Share buyback
    $134 million
    Q1 FY26
    Share count reduction
    10%from peak of nearly 14 million
    N/A
    General Liability average limits reduction
    north of 20%
    N/A

    Part of re-underwriting efforts to protect against frequency of severity problems, e.g., reducing $15 million lines to $10 million or $7.5 million or $5 million.

    General Liability construction-related business proportion
    around 20%down from 40% to 45%
    N/A

    Part of re-underwriting efforts to reduce exposure to issues that caused reserve strengthening.

    U.S. Casualty claims trend
    low double digits
    current

    Industry-wide trend.

    U.S. Casualty rate increases
    lower double digitsweakening from low teens a year ago
    current

    Rates are under pressure due to increased competition, including from new entrant MGAs.

    Peer share count
    260 millionbought in 10% in 5 years
    current

    Used for comparison to Markel's share repurchase program.

    Peer share count
    82 milliontook until 2011 to take out 10%
    current

    Used for comparison to Markel's share repurchase program.

    Peer share count
    359 millionbought in 10% in 5 years
    current

    Used for comparison to Markel's share repurchase program.

    Peer share count
    380 milliontook until 2014 to have 10% more shares
    current

    Used for comparison to Markel's share repurchase program.

    Peer share count
    391 millionabout 5 years since 10% increase
    current

    Used for comparison to Markel's share repurchase program.

    Peer share count
    586 milliontook until 2010 to have 10% more shares
    current

    Used for comparison to Markel's share repurchase program.

    Peer share count
    91.8 millionnever bought back meaningful amount of stock in 17 years
    current

    Used for comparison to Markel's share repurchase program.

    Peer share count
    216 millionabout 4 years for 10% buyback
    current

    Used for comparison to Markel's share repurchase program.

    Industry KPIs

    7
    MetricValueDetails
    Combined ratio92.8%%
    Capital returns$134 millionUSD
    Catastrophe losses$35 millionUSD
    Net investment income$256 millionUSD
    Net premiums written earned$2.2 billionUSD
    Renewal rate change pricinghigh single digits%
    Prior year reserve development5 pointspoints

    Product announcements

    2
    ProductTypeDetails
    Harvey AIexpansion
    Cytura data ingestion systemlaunch

    Risks & headwinds

    3
    Cyclical Pressures in End MarketsCurrent

    Industrial segment adjusted operating income down 16% to $49 million; Consumer and Other organic revenue growth down 6%.

    Mitigation: Diversified business model, long-term view, disciplined capital allocation, re-underwriting actions in insurance.

    U.S. Casualty Market CompetitionCurrent, with potential for future losses.

    Rate increases weakening from low teens to lower double digits; claims trend running in low double digits.

    Mitigation: Markel "will not follow a casualty market down" and will maintain underwriting discipline, focusing on profitable areas.

    Collateral Shortfall in State National Fronting OperationsCurrent

    Not quantified, but stated as "not material" to earnings or capital.

    Mitigation: Actively pursuing all available recourse options under contracts to obtain additional collateral; engaged outside actuarial firm for review.

    What to watch in Q2 FY26

    5

    International GWP Growth Rate

    duration of the year
    Current28% (Q1 FY26)
    Targetlow to mid-teens

    Why it matters

    Indicates the sustainability of growth initiatives and market expansion in the International division.

    I think, to be honest, 28%, which we struck this year will be at very much a high point. But I'm pretty confident that we'll see💬 for the duration of the year, you should expect decent growth from international probably in low to mid-teens of the -- sort of from a GWP perspective.

    Q&A highlights

    6

    Inquired about the sustainability of the 28% GWP growth in International Insurance and the longevity of market opportunities, given new initiatives.

    Simon Wilson explained that while 28% was a high point due to specific initiatives (MECO MGA, Italy expansion, structured portfolio solutions) and building momentum from prior investments, he expects sustainable "low to mid-teens" GWP growth for the remainder of the year, driven by profitable expansion in new areas.

    “I think, to be honest, 28%, which we struck this year will be at very much a high point. But I'm pretty confident that we'll see for the duration of the year, you should expect decent growth from international probably in low to mid-teens of the -- sort of from a GWP perspective.”

    asked by Mark Hughes · answered by Simon Wilson

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Focus and Operational Excellence

    Markel emphasizes a "business of businesses" model, empowering 14 distinct P&L leaders within Markel Insurance to drive market-leading expertise, speed, and customer focus. This structure facilitates clear accountability and aligns resources with business needs, supporting the goal of becoming the preeminent specialty insurer. The company aims for continuous improvement and adaptation, including leveraging new technologies like AI.

    02

    Technology and AI Integration

    The company is actively integrating technology and AI across its diverse operations, with each business unit developing tailored strategic plans. AI is being deployed to enhance underwriting analysis, accelerate quoting, and improve claims adjudication, with examples like Harvey AI in London Market warranties and Cytura for data ingestion in U.S. Wholesale and Specialty. This decentralized approach allows individual units to deploy AI quickly and locally.

    03

    Capital Allocation Strategy

    Markel maintains a 360-degree approach to capital deployment, prioritizing reinvestment in existing businesses, public equity, new acquisitions, and share repurchases. The company highlights its strong balance sheet and liquidity, enabling flexibility to "play offense" in various market environments. Share repurchases have significantly reduced the share count over the past five years, with expectations for continued efficiency.

    04

    Market Cyclicality and Underwriting Discipline

    Management acknowledges cyclical pressures in property-related insurance and certain industrial markets (transportation, residential construction). Despite these, the company remains committed to underwriting profitability, particularly in U.S. General Liability, where re-underwriting actions have reduced limits by "north of 20%" and construction exposure from "40% to 45%" down to "around 20%" to mitigate social inflation risks. The company will not compromise discipline for market share.

    05

    Investment Portfolio Performance

    The public equity portfolio experienced a 5.2% decline in Q1, slightly underperforming the S&P 500's 4.4% decline. However, the fixed income portfolio saw no credit losses, and net investment income increased 8% YoY to $256 million, reflecting higher interest and dividend income from increased yields and holdings. The company maintains a high-quality fixed income portfolio matched in currency and duration to insurance liabilities.

    AI-generated summary of the company’s earnings call. Not investment advice.