Markel Corp.MKL reported fourth-quarter 2016 net income of $9.11 per share, which beat the Zacks Consensus Estimate of $4.92 by 85%. Earnings, however, declined 36% year over year.
The insurer benefited from strong performance across all segments. While underwriting results were strong, favorable movements in the equity markets drove better investment results.
Operational Update
Total operating revenue of $1.4 billion came in ahead of the Zacks Consensus Estimate of $1.1 billion. Moreover, the top line improved 0.6% year over year on higher premiums, investment income as well as other revenues.
Total operating expenses of Markel Corp. increased 9% year over year to $1.2 billion.
Markel Corp.'s combined ratio deteriorated 100 basis points (bps) year over year to 89% in the reported quarter.
Segment Update
U.S. Insurance - Net written premiums were up 4.4% year over year to $543 million in the reported quarter.
Operating income was $17 million, down 17% year over year.
Combined ratio deteriorated 100 bps year over year to 88% in the quarter.
International Insurance − Net written premiums declined 2% year over year to $184 million.
Operating income plunged 54% to $17 million in the quarter.
Combined ratio deteriorated 900 bps year over year to 92% in the quarter.
Reinsurance Segment - Net written premiums increased 27% year over year to $112 million.
Operating income of $26.7 million decreased 16% year over year.
Combined ratio deteriorated 400 bps year over year to 94% in the quarter.
Other Insurance (Discontinued Lines) Segment - Net written premiums of $0.08 million were lower than $0.7 million in the year-ago quarter.
Operating loss of $7.6 million was substantially narrower than the year-ago quarter loss of $35.3 million.
Financial Updates
Markel exited 2016 with total cash, cash equivalents and investments of $19.1 billion compared with $18.1 billion at year-end 2015.
Book value per share increased 8% from year-end 2015 to $ $606.30 as of Dec 31, 2016.
Net cash from operating activities inched up 0.2% year over year to $534.6 million in 2016.
Markel Corporation Price, Consensus and EPS Surprise
Markel Corporation Price, Consensus and EPS Surprise | Markel Corporation Quote
Zacks Rank
Markel presently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among the other players from the same space that have reported their fourth-quarter earnings so far, the bottom line at The Progressive Corporation PGR , The Travelers Companies Inc. TRV and RLI Corp. RLI beat the Zacks Consensus Estimate.
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RLI Corp. (RLI): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
