RICHMOND, Va., Nov. 4 /PRNewswire-FirstCall/ -- Markel Corporation
(NYSE: MKL) reported diluted net loss per share of $14.46 for the quarter
ended September 30, 2008 compared to diluted net income per share of $9.26 for
the third quarter of 2007. Diluted net loss per share was $2.63 for the nine
months ended September 30, 2008 compared to diluted net income per share of
$31.28 for the same period of 2007. The results for both periods of 2008
reflect lower investment returns and less favorable underwriting results
compared to the same periods of 2007.
Alan I. Kirshner, Chairman and Chief Executive Officer, commented, "Our
third quarter and year-to-date results have been negatively impacted by the
ongoing financial market turmoil, difficult underwriting conditions and recent
hurricane activity. Our financial strength provides a solid foundation for us
to capitalize on growth opportunities presented by today's marketplace. We
are continuing to emphasize our underwriting standards and are increasing
prices for many of our products in response to market conditions."
The combined ratio for the third quarter of 2008 was 124% compared to 87%
for the third quarter of 2007. The combined ratio for the nine months ended
September 30, 2008 was 104% compared to 88% for the same period of 2007. The
combined ratio for the quarter and nine months ended September 30, 2008
included $115.1 million, or 22 points and 8 points, respectively, of
underwriting loss related to Hurricanes Gustav and Ike.
Net realized investment losses for the quarter and nine months ended
September 30, 2008 were $168.7 million and $200.2 million, respectively,
compared to net realized investment gains of $3.0 million and $64.7 million,
respectively, for the quarter and nine months ended September 30, 2007. Net
realized investment losses include both losses from the sale of securities and
losses classified as other-than-temporarily impaired. Net realized investment
losses for the third quarter and nine months ended September 30, 2008 included
$94.6 million and $187.1 million, respectively, of write downs for
other-than-temporary declines in the estimated fair value of investments.
During the quarter and nine months ended September 30, 2008, the Company's
pre-tax net unrealized investment gains decreased $19.8 million and $374.6
million, respectively. For the quarter and nine months ended September 30,
2008, the aggregate of net realized investment losses and the decrease in
pre-tax net unrealized investment gains totaled $188.5 million and $574.8
million, respectively. The aggregate unfavorable movement in the value of the
Company's investment portfolio during the third quarter of 2008 represented
approximately 3% of the Company's average invested assets for the quarter,
while the aggregate year-to-date unfavorable movement represented
approximately 8% of the Company's average invested assets for the year.
Book value per common share outstanding decreased 11% to $235.72 at
September 30, 2008 from $265.26 at December 31, 2007. The decline in book
value was primarily due to a decline in the market value of the Company's
investment portfolio and underwriting losses for the nine months ended
September 30, 2008.
Losses from Hurricanes Gustav and Ike and the aggregate of net realized
investment losses and pre-tax decrease in net unrealized investment gains were
in line with the Company's estimates included in its press release on October
9, 2008. However, net realized investment losses for the third quarter of
2008 increased from the Company's preliminary estimate of $116 million. The
increase in net realized investment losses was related to equity securities,
principally General Electric Company and International Game Technology, that
were deemed to have other-than-temporary declines in estimated fair value.
This determination was made in conjunction with the completion of the
Company's quarterly review of its investment portfolio for
other-than-temporary impairment and reflects a more in-depth analysis of the
financial condition and near-term prospects of these two issuers. The losses
associated with these equity securities were initially included in the
Company's preliminary estimate of the decrease in net unrealized investment
gains, net of taxes, at September 30, 2008. As a result, the Company's
preliminary estimate of aggregate net realized investment losses and decreases
in pre-tax net unrealized investment gains was unchanged.
The Company also announced today it has filed its Form 10-Q for the
quarter ended September 30, 2008 with the Securities and Exchange Commission.
A copy of the Form 10-Q is available on the Company's website at
http://www.markelcorp.com or on the SEC website at http://www.sec.gov.
Readers are urged to review the Form 10-Q for a more complete discussion of
the Company's financial performance. The Company's quarterly conference call,
which will involve discussion of the Company's financial results and business
developments and may include forward-looking information, will be held
Wednesday, November 5, 2008, beginning at 10:30 a.m. (Eastern Standard Time).
Any person interested in listening to the call, or a replay of the call, which
will be available from approximately two hours after the conclusion of the
call until Saturday, November 15, 2008, should contact Markel's Investor
Relations Department at 804-747-0136. Investors, analysts and the general
public also may listen to the call free over the Internet through the
Company's web site, http://www.markelcorp.com.
Markel Corporation markets and underwrites specialty insurance products
and programs to a variety of niche markets. In each of these markets, the
Company seeks to provide quality products and excellent customer service so
that it can be a market leader. The financial goals of the Company are to
earn consistent underwriting profits and superior investment returns to build
SOURCE Markel Corporation
Bruce Kay of Markel Corporation, 1-804-747-0136
Web site: http://www.markelcorp.com