All material subject to strictly enforced copyright laws. © 2021 Inside P&C is part of Euromoney Institutional Investor PLC.
Accessibility | Terms & Conditions | Privacy Policy | Modern Slavery Act | Cookies | Subscription Terms & Conditions

Markel’s Whitt calls market conditions ‘best since early 2000s’

Markel logo VA with Whitt v2.jpg

Markel co-CEO Richie Whitt said that the underwriting environment continues to remain attractive, telling analysts on Wednesday that the current market conditions are the best the industry has seen in almost two decades.

“The insurance market conditions are as good as we've seen since the hard market of the early 2000s,” Whitt said on the company’s third-quarter earnings call.

He was speaking a day after Markel reported surging underwriting profits, which nearly tripled in the quarter, off the back of strong underlying margin improvement, lower catastrophe losses and continued top line momentum.

Much has been said recently about factors driving the firming part of the cycle – rising inflation, elevated cat losses, and low interest rates, among others – and Whitt felt strongly that the current trends will persist.

“Given that these factors are unlikely to resolve in the near future”, he said, “I believe market conditions will remain favorable throughout 2022”. He added that Markel was developing its underwriting plans around that assumption.

“I know people have been talking about rate increases [having] sort of crested, and they were starting to come off,” Whitt said.

The executive added that he agreed with that assessment, but noted: “It felt like in the third quarter, the market gained back a little bit of momentum.”

“We are positioned to end 2021 strong and carry significant momentum into next year.”

Markel’s overall catastrophe loss figure fell to $114mn from $149mn last year, when it recorded $47mn in losses from Covid-19. But the executive was quizzed on the size of the cat loss figure, given the carrier’s move to shift its property reinsurance portfolio to ILS investment manager Nephila earlier this year.

Whitt said the company’s property reinsurance book remained in run-off, which contributed to the toll: “After next year, you wouldn't expect those losses.”

He said that the company was in position to achieve its goals of hitting a 90% combined ratio and double-digit growth for the year and that cutting its cat exposure had helped Markel hit a 93% combined ratio in the quarter, despite the industry toll of Hurricane Ida and the European foods.

Elsewhere on the call, the co-CEO noted that rate increases at the company averaged about 10% in the quarter, and were higher for casualty and professional lines.

Whitt said he believed those rates improvements were “absolutely” ahead of trend, though he acknowledged the inherent uncertainty of the loss environment.

“We know we've got a little bounce back of inflation right now.”

“My message to my underwriters is we know trend is more than it was,” the executive explained. “And so, we need to keep our foot on the gas [on] rates and terms to make sure we maintain a margin against that trend,” he added.

“And I am optimistic in 2022 that we can continue to do that.”

Editor's Note: This article has been updated to clarify that it is Markel's property reinsurance portfolio that has been transferred and is currently in run off.

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree