Markel Corporation Q1 FY2026 earnings call

• Tom Gaynor started by stating they continue to do more of what's working and less of what's not, and introduced the team. - Brian Costanzo reviewed financial results, mentioned reporting and disclosure enhancements. - Simon Wilson discussed Markel Insurance's performance, outlining strategy to be the preeminent specialty insurer with focus on customer focus, market leading expertise, speed, and doing the right thing; structure with 14 distinct business units grouped under three divisions and resource shift to business units; oversight with empowered P&L leaders and aligned financial reporting; operations with each business unit having strategic plan for tech and AI investment; culture encouraging leaders to build enduring businesses with clear structure and accountability

Markel Group's consolidated operating revenues were $3.6 billion, flat compared to Q1 2025. Adjusted operating income was $498 million, a 4% increase versus Q1 2025. Markel Insurance's adjusted operating income in Q1 2026 was $369 million, up from $282 million in Q1 2025. Markel Insurance underwriting gross written premiums were $2.2 billion, a 21% decrease for the quarter due to exit of global REIT and transition of Hagerty program. Excluding those impacts, adjusted underwriting gross written premiums grew 10%. Earned premium decreased 2% to just under $2 billion. Combined ratio for Markel Insurance was 93% vs 96% in Q1 2025. Industrial segment revenues were $883 million, a 6% increase, but adjusted operating income was $49 million, down 16% due to business mix change. Financial segment revenues were $162 million, a 9% decrease, with adjusted operating income $36 million vs $80 million in Q1 2025. Consumer and other segment revenues were $281 million, a 3% decrease, with adjusted operating income $40 million vs $32 million in Q1 2025

• Looking out over the next five years, expect insurance operations to grow and earn healthy returns on equity, same for industrial consumer and financial operations, public equity portfolio to compound at healthy rates, and fixed income operations to provide appropriate interest income while protecting capital. - In 2023, 2024, 2025, repurchased shares, and so far in 2026, repurchased $134 million of own shares, reduced share count by roughly 10% from peak, and expect to continue repurchasing shares

• Externally, cyclical pressures and softness in some end markets like property-related insurance coverages and certain industrial end markets. - Recent story regarding state nationals fronting operations and potential credit exposure to a capacity provider, but management is actively pursuing all available recourse options and doesn't believe it will have a material impact on Markel Group's earnings or capital position

• Q: Strong growth in international insurance business, how sustainable?

A: New initiatives like buying MGA, opening in Italy, structured portfolio solutions, with decent growth expected in low to mid teens. - Q: Collateral issue, any numbers?

A: Acknowledge shortfall, engaged outside actuarial firm, not sharing specific number now but not material to operations and capital position. - Q: Book value per share decline, where would it be now?

A: Higher due to equity market volatility as unrealized gains and losses are mark-to-market. - Q: Impairment of asset manager and industrial business mix change?

A: Impairment was normal GAAP accounting procedure for an equity investment, industrial business mix change due to soft GDP environment and cyclical nature of businesses. - Q: Non-insurance business profitability?

A: Varies with some businesses doing well, some softer, but overall flat-ish