Markel Group Inc. (Markel Group), through its wholly owned subsidiary, Markel Ventures, Inc. (Markel Ventures), owns controlling interests in businesses that operate in a variety of industries.
The company’s specialty insurance business is Markel, Through decades of sound underwriting, Markel has provided the capital base from which it builds a system of businesses and investments that collectively increase Markel Group's durability and adaptability.
Insurance - markets and underwrites special...
Markel Group Inc. (Markel Group), through its wholly owned subsidiary, Markel Ventures, Inc. (Markel Ventures), owns controlling interests in businesses that operate in a variety of industries.
The company’s specialty insurance business is Markel, Through decades of sound underwriting, Markel has provided the capital base from which it builds a system of businesses and investments that collectively increase Markel Group's durability and adaptability.
Insurance - markets and underwrites specialty insurance products using the company’s underwriting, program services and insurance-linked securities platforms, which provide alternatives that enable it to best match risk and capital.
Investments - invests capital held within the company’s underwriting operations, as well as capital allocated by Markel Group, in fixed maturity and equity securities.
Markel Ventures - owns controlling interests in a diverse portfolio of businesses that operate in a variety of industries
The company's three interdependent engines form a system that provides diverse income streams, access to a wide range of investment opportunities, and the ability to efficiently move capital to the best ideas across its three engines in a tax-efficient manner.
Insurance
The company's insurance operations consists of the following businesses:
Underwriting - risk-bearing global specialty insurance and reinsurance operations.
Program services - fronting platform that provides other insurance entities and capacity providers access to the property and casualty insurance market.
Insurance-linked securities (ILS) - investment management platform for third-party capital providers to invest in a variety of insurance-related investment products.
The company holds significant capital within its insurance operations to support the capital requirements of its underwriting subsidiaries, which is available for investment and generates both recurring streams of net investment income and investment returns. The investments held by its insurance subsidiaries are managed by, and reported through, its Investments engine, separate from its insurance operations.
Through its underwriting, program services, and ILS operations, the company has a suite of capabilities through which it can access capital to support its customers' risks, which includes its own capital through its underwriting operations, as well as third-party capital through its program services and ILS operations. The company seeks to differentiate itself from competitors by its specialized product expertise, exceptional customer service, continuity, and other value-based considerations, including the multiple platforms through which it can manage risk and deploy capital. For example, within its ILS platform, the company leverages the capabilities of its highly rated underwriting subsidiaries to front reinsurance contracts in support of its ILS business plans. Additionally, in 2024, its program services platform partnered with its international underwriting operations to expand its program services offerings internationally. The company's ability to access multiple insurance platforms allows it to achieve income streams from its insurance operations beyond the traditional underwriting model.
Underwriting
Specialty Insurance and Reinsurance
Within its global underwriting operations, the company underwrites specialty insurance products on a risk-bearing basis. The company seeks to utilize its extensive knowledge and expertise to manage the unique risks in the specialty market and achieve higher financial returns. Examples of specialty insurance markets that it has targeted include liability coverage for highly specialized professionals, transaction-related risks, and marine, energy, and environmental-related activities. The company's market strategy in each of these areas of specialization is tailored to the unique nature of the loss exposure, as well as coverage and services required by insureds. In each of the markets it serves, the company assigns teams of experienced underwriters and claims specialists who provide a full range of insurance services.
The company also participates in the specialty reinsurance market, primarily in certain classes of casualty reinsurance product offerings. In the reinsurance market, its clients are other insurance companies, or cedents. The company typically writes its reinsurance products in the form of treaty reinsurance contracts, which are contractual arrangements that provide for automatic reinsuring of a type or category of risk underwritten by cedents. Treaty reinsurance products are written globally on both a quota share and excess of loss basis. With treaty reinsurance contracts, the company does not separately evaluate each of the individual risks assumed under the contracts and is largely dependent on the underwriting decisions made by the cedent. Accordingly, it reviews and analyzes the cedent's risk management and underwriting practices in deciding whether to provide treaty reinsurance and in pricing treaty reinsurance contracts.
The Insurance segment includes all of the company's direct business. The Reinsurance segment includes all treaty reinsurance.
The company offers a diverse portfolio of over 175 individually managed products, each with its own distinct competitive environment, which requires it to be responsive to changes in market conditions for individual product lines. With each of its products, the company seeks to write business that produces consistent underwriting profits by maintaining adequate rates for its premium writings in relation to expected loss cost trends. For example, in early 2024, the company decreased writings within select classes of its United States (U.S.) general liability and risk-managed professional liability products following heightened trends and concerns around rate adequacy.
Within its underwriting operations, the company seeks to earn an underwriting profit every year. It believes that the ability to achieve consistent underwriting profits demonstrates knowledge and expertise, commitment to superior customer service, and the ability to manage insurance risk. In 2024, the company earned an underwriting profit for a seventh consecutive year and delivered a combined ratio of 95%.
Through these U.S. insurance and reinsurance subsidiaries, the company is licensed, authorized, or accredited to write business in all 50 states and the District of Columbia.
Markets and Distribution
The company's underwriting operations write business on a global basis and utilize multiple distribution channels to access its targeted markets.
In the U.S., the company writes business in the excess and surplus lines (E&S) and admitted insurance markets, as well as the reinsurance market. The primary distribution channels through which its U.S. business is placed are wholesale insurance and reinsurance brokers, managing general agents, retail insurance agents, and alternative channels.
The E&S, or non-admitted, market focuses on hard-to-place risks and loss exposures that generally are not written in the standard market. E&S eligibility allows the company's insurance subsidiaries to underwrite unique loss exposures with more flexible policy forms and unregulated premium rates. The E&S market is accessed primarily through wholesale insurance and reinsurance brokers, which have limited quoting and binding authority. In 2023, the E&S market represented $116 billion, or 12%, of the $967 billion U.S. property and casualty industry. In 2023, the company was the fourth largest E&S writer in the U.S. as measured by direct premium writings.
The company's U.S. business written in the admitted market focuses on unique and hard-to-place risks in the standard market, some of which must remain with an admitted insurance company for marketing and regulatory reasons. Hard-to-place risks written in the admitted market cover insureds engaged in similar, but highly specialized, activities that require a total insurance program not otherwise available from standard insurers. The admitted market is subject to more state regulation than the E&S market, particularly with regard to rate and form filing requirements, premium tax payment requirements, and membership in various state associations, such as state guaranty funds and assigned risk plans. Business written in the admitted market is placed primarily by retail insurance agents, as well as managing general agents. In addition, certain products and programs written on an admitted basis are marketed directly to consumers.
Managing general agents have broader underwriting authority than retail agents and brokers. The managing general agents the company utilizes are carefully selected based on a track record of proficiency with their selected products, and the business written is controlled through regular audits and pre-approvals.
The company's U.S. reinsurance operations are conducted through MGRC. Reinsurance business is placed primarily through wholesale reinsurance brokers.
In Bermuda, the company participates in the worldwide insurance and reinsurance markets. The Bermuda property and casualty market is a significant source of capital for the U.S. market and the leading location for cessions by U.S. insurers. Business written in the Bermuda market is typically placed by a Bermuda-based wholesale broker. The company conducts its Bermuda underwriting operations through MBL, which is registered as a Class 4 insurer and Class C long-term insurer under the insurance laws of Bermuda.
The company also participates in the London insurance and reinsurance market, which is a global market known for its ability to provide innovative, tailored coverage and capacity for unique and hard-to-place risks, many of which have significantly higher limits than risks placed through the standard market. Insurance brokers place most of the business in the London market. Risks written in this market are written on either a direct basis or a subscription basis, the latter of which means that loss exposures brought into the market are typically insured by more than one insurance company or Lloyd's of London (Lloyd's) syndicate, often due to the high limits of insurance coverage required. The company participates in the London insurance and reinsurance market primarily through Markel Capital Limited (Markel Capital) and MIICL. Markel Capital is the corporate capital provider for Syndicate 3000, through which its Lloyd's operations are conducted. In addition to their headquarters in London, Markel Capital and MIICL maintain branch offices across the United Kingdom (U.K.), Europe, Canada, Asia, Australia, and the Middle East through which the company is able to offer insurance and reinsurance.
In Europe, the company also writes business through Syndicate 3000 and MISE, a regulated insurance carrier located in Munich, Germany. From its offices in Germany, MISE transacts business in European Union (E.U.) member states and throughout the European Economic Area. MISE has established branches in Ireland, the Netherlands, Spain, Switzerland, France, and the U.K. Syndicate 3000 supplements, or serves as an alternative to, MISE for access to the E.U. markets.
While the company operates in various other markets, substantially all of its gross written premiums in 2024 were written from its platforms in the United States, the United Kingdom, Bermuda, and Germany. In 2024, 75% of gross premium writings from its global underwriting operations were attributed to risks or cedents located in the United States. A significant volume of premium for the property and casualty insurance and reinsurance industry is produced through a small number of large insurance and reinsurance brokers. In 2024, the top five independent brokers accounted for 38% of gross premiums written in the company's underwriting operations. Additionally, a significant portion of the reinsurance contracts securitized through its ILS operations, for the benefit of third-party investors, are placed through these five independent brokers.
Ceded Reinsurance
In a reinsurance transaction, an insurance company transfers, or cedes, all or part of its exposure in return for a premium. In a retrocessional reinsurance transaction, a reinsured exposure is further ceded to another reinsurer. Within its underwriting operations, the company seeks to retain as much of its profitable business as possible while managing volatility within its underwriting results and capital requirements at its insurance subsidiaries. The company purchases reinsurance and retrocessional reinsurance to manage its net retention on individual risks and overall exposure to losses, while providing it with the ability to offer policies with sufficient limits to meet policyholder needs. This includes purchasing sufficient coverage for its catastrophe-exposed policies to ensure that its net retained catastrophe risk is within its corporate tolerances.
Underwriting segments
The company monitors and assesses the performance of its ongoing underwriting operations on a global basis in the following two segments: Insurance and Reinsurance.
Insurance segment
The Markel Specialty division consists of the company's U.S. and Bermuda-based platforms and writes business globally for insureds ranging from individuals and small businesses to Fortune 1000 companies. The Markel International division writes business worldwide from the company's London and Munich-based platforms. The State National division writes collateral protection insurance for automobile and other vehicle loans in the U.S.
General liability product offerings include a variety of primary and excess liability coverages for small, middle market, and Fortune 1000 commercial accounts. The company insures business across most industry classes, including construction, life sciences, energy, medical, healthcare, pharmaceutical, professional services, social welfare, recreational, transportation, manufacturing, real estate, and hospitality industries. Specific products include primary general liability, excess and umbrella, products liability, environmental liability, and casualty facultative reinsurance written for individual casualty risks.
The company's professional liability product lines provide insurance solutions for small, middle market, and risk management accounts with coverage that is tailored to their exposures and needs. Professional liability coverages include errors and omissions for specialized professions, directors and officers for publicly traded, private, and non-profit companies, cyber, employment practices liability, professional indemnity, transaction liability, and union liability. The company's cyber insurance offerings help businesses mitigate the financial risks associated with cyberattacks, data breaches, and other digital security incidents. The company's cyber portfolio includes a broad geography of insureds ranging from small to large corporate enterprises.
Personal lines products provide first and third-party coverages in the U.S. for classic cars, motorcycles, and a variety of personal watercraft and recreational vehicles. Additionally, property coverages are offered for homeowners that do not qualify for standard homeowner's coverage, as well as personal umbrella coverage.
Marine and energy products include a portfolio of coverages for cargo, energy, hull, liability, war, and terrorism risks worldwide. The cargo product line is an international transit-based book providing coverage for many types of cargo. Energy coverage includes all aspects of oil, gas, and renewable energy activities. The company's renewable energy activities include coverages for onshore and offshore wind farms, as well as alternative energy generation and storage technology projects. Hull coverages consist of coverage for physical damage to ocean-going tonnage, yachts, and mortgagees' interests. Liability coverage provides coverage for a broad range of energy liabilities, as well as traditional marine exposures, including charterers, terminal operators, and ship repairers. Marine war coverage includes protections for the hulls of ships, and other related interests, against war and associated perils. Terrorism coverage includes coverage for property damage and business interruption related to political and civil violence and war on land.
Property coverages consist principally of fire, allied lines (including windstorm, hail, and water damage), and other specialized property coverages, including catastrophe-exposed property risks such as earthquake and wind on both a primary and excess basis. Catastrophe-exposed property risks can present higher severity than more standard property risks due to the impacts from earthquakes and severe weather events such as hurricanes, convective storms, and wildfires. The company's property coverages range from small, single-location accounts to large, multi-state, multi-location, multi-national accounts on a worldwide basis. Other types of property products include inland marine products, railroad-related products, and specie coverage for fine art on exhibition and in private collections.
Specialty programs business is offered in the U.S. on a standalone or package basis and generally targets specialized commercial markets and various customer groups, such as amateur sports and fitness clubs. Certain specialty programs written in this segment use managing general agents to offer single-source admitted and non-admitted programs for a specific industry, class, or line of business.
Workers' compensation products are offered in the U.S. and provide wage replacement and medical benefits to employees injured in the course of employment and target main-street, service, and artisan contractor businesses, retail stores, and restaurants.
Credit and surety products consist primarily of trade credit and prepayment coverage and a range of bonds and guarantees that support contractual obligations, contractual performance, and judicial proceedings, as well as other coverages for specific credit risks, such as counterparty insolvency and defaults by government-owned entities.
Other product lines within the Insurance segment primarily include collateral protection insurance, which insures personal automobiles and other vehicles held as collateral for loans made by credit unions, banks, and specialty finance companies.
Reinsurance segment
The company's Reinsurance segment product offerings are underwritten primarily by its Global Reinsurance division, which operates from platforms in the U.S., Bermuda, and the U.K. The company writes quota share and excess of loss reinsurance on a local, national, and global basis.
The company's specialty treaty reinsurance products are written across a wide range of specialty product lines, primarily consisting of the following:
Credit and surety products, including structured and whole turnover credit, political risk, and contract and commercial surety reinsurance programs covering worldwide exposures;
Workers' compensation and accident and health products covering both standard and catastrophe-exposed business in the U.S. and worldwide;
Marine and energy products covering both offshore and onshore marine, energy, and renewable energy risks on a worldwide basis, including hull, cargo, and liability;
Aviation and space coverage, including major risk, general aviation, satellite launch, and orbit;
Other products, including mortgage default, agriculture, and discrete political violence coverages.
Previously, the company’s specialty reinsurance products also included public entity casualty coverages for municipalities, schools, special districts, public housing authorities and public entity affiliated non-profits. The company discontinued writing this product line in late 2024.
Professional liability reinsurance primarily consists of the following:
Transaction liability, which provides representation, warranty and indemnity coverage for mergers and acquisitions, including coverage for tax and contingent liability;
Directors and officers liability for publicly traded, private and non-profit companies;
Cyber and technology errors and omissions covering both first and third-party exposures;
Errors and omissions for lawyers, accountants, agents and brokers, services technicians and consultants; and
Healthcare liability for physicians, hospitals, long-term care and other medical facilities.
General liability reinsurance primarily consists of umbrella and excess casualty products, as well as environmental liability products.
Program Services
The company’s program services business, which is provided through its State National division, generates fee revenues in the form of ceding fees in exchange for fronting insurance and reinsurance business for other insurance carriers (capacity providers). In general, fronting refers to business in which the company writes insurance on behalf of a general agent or capacity provider and then cede all, or substantially all, of the risk under these policies to the capacity provider in exchange for ceding fees.
The company’s State National program services business offers issuing carrier capacity to both specialty managing general agents and other producers who sell, control and administer books of insurance business that are supported by third parties that assume the risk. The company’s State National division expanded internationally in 2024 in partnership with its Markel International division to serve managing general agents in the U.K. market.
Through its program services business, the company writes a wide variety of insurance and reinsurance products, principally including general liability, commercial liability, commercial multi-peril, property and workers' compensation. Program services business written through the company’s State National division is separately managed from its underwriting divisions, which may write similar products, in order to protect its program services customers.
Through its U.S. subsidiaries, the company is licensed or authorized to write business in all 50 states and the District of Columbia. The company's specialized business model relies on third-party producers or capacity providers to provide policy administration, claims handling, cash handling, underwriting, or other traditional insurance company services.
In its program services business, the company enters into reinsurance agreements whereby it cedes to the capacity providers 100% of the premium written and substantially all of its gross liability under all policies issued by and on behalf of it by the producer. As a result of the company's contract design, substantially all of the underwriting risk and operational risk inherent in the arrangement is borne by the capacity providers. The company's contracts with capacity providers do not legally discharge it from its primary liability for the full amount of the policies, and it will be required to pay the loss and bear collection risk if a capacity provider fails to meet its obligations under the reinsurance agreement. As a result, the company remains exposed to the credit risk of capacity providers, including the risk that one of its capacity providers becomes insolvent or is otherwise unable or unwilling to pay policyholder claims.
Although the company reinsures substantially all of the risks inherent in its program services business, it has certain programs that contain limits on its reinsurers' obligations to it that expose it to underwriting risk, including loss ratio caps, aggregate reinsurance limits, or exclusion of the credit risk of producers. Under certain programs, the company also bears underwriting risk for annual aggregate agreement year losses in excess of a limit that it believes is unlikely to be exceeded.
Insurance-Linked Securities
Nephila Holdings Ltd. (together with its subsidiaries, Nephila) provides investment and insurance management services to investors through which the company offers alternative capital to the insurance and reinsurance markets while providing the investors with investment strategies that typically are uncorrelated with traditional asset classes. The company's insurance-linked securities operations, which are provided through its Nephila division, generate fee revenues in the form of management fees for investment management services and ceding fees for business fronted by its licensed insurance subsidiaries to support the investors' underlying portfolio of risks.
Nephila serves as the investment manager to several Bermuda-based private funds (the Nephila Funds), whose investors include government entities, banks, hedge funds, pension funds, and institutional investors. Investment products offered through the Nephila Funds include insurance-linked securities, such as catastrophe bonds, insurance swaps, traditional reinsurance contracts, industry loss warranties, and other financial instruments.
To provide access for the Nephila Funds to the insurance and reinsurance markets, Nephila acts as an insurance manager to certain Bermuda-licensed reinsurers and as the managing agent to Lloyd's Syndicate 2357 and Lloyd's Syndicate 2358 (collectively, the Nephila Reinsurers). The Nephila Reinsurers subscribe to various property, climate, and specialty contracts based on their investors' risk profiles. The results of the Nephila Reinsurers are attributed to the Nephila Funds primarily through derivative transactions between these entities. Neither the Nephila Funds nor the Nephila Reinsurers are subsidiaries of Markel Group, and as such, these entities are not included in the company's consolidated financial statements.
When constructing its portfolio of risks, Nephila utilizes highly rated insurance carriers to front business to the Nephila Reinsurers when the Nephila Reinsurers do not have the required license to write the reinsurance risk directly. These fronting services may be provided by unrelated third-party insurance carriers, the company's program services licensed insurance subsidiaries, or its licensed underwriting subsidiaries. The premium fronted by its underwriting subsidiaries consists of catastrophe-exposed property insurance and reinsurance business, as well as specialty and climate reinsurance business, all of which is ceded to the Nephila Reinsurers, whose investors ultimately assume the risk.
Markel Ventures
Through its wholly owned subsidiary Markel Ventures, Inc. (Markel Ventures), the company owns controlling interests in high-quality, specialized businesses that operate in a variety of different industries with shared values and the goal of positively contributing to the long-term financial performance of Markel Group. The company's Markel Group management team is responsible for decisions regarding allocation of capital for acquisitions and new investments. The company's strategy in making these acquisitions is similar to its strategy for purchasing equity securities. The company intends to own the businesses acquired for a long period of time.
The company's chief operating decision maker allocates resources to and assesses the performance of these various businesses in the aggregate as the Markel Ventures segment. The Markel Ventures segment includes a diverse portfolio of specialized businesses from different industries that offer various types of products and services to businesses and consumers across many markets. All of the company's businesses in this segment are headquartered in the U.S., with subsidiaries of certain businesses located outside of the U.S.
In June 2024, the company acquired a majority interest in Valor Environmental, an environmental services company providing erosion control and related services to commercial development sites and homebuilders throughout the U.S. In September 2024, the company acquired a majority ownership interest in Educational Partners International (EPI), a company that sponsors international teachers for placements in schools in the U.S. Through December 2024, the company's investment in EPI was accounted for under the equity method, as it did not have control over the business due to pending regulatory approval. The company received regulatory approval in January 2025 and will consolidate EPI beginning in the first quarter of 2025.
The company continues to look for opportunities to invest in and grow its existing businesses that align with its investment criteria and strategic objectives around diversification and specialization.
Regulatory Environment
The company is subject to extensive U.S. state and federal, as well as international, regulation and supervision in the jurisdictions in which it does business. Regulations vary from jurisdiction to jurisdiction. Additionally, as a company with publicly traded securities, the company is also subject to certain legal and regulatory requirements applicable generally to public companies, including the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and the listing standards of the New York Stock Exchange relating to reporting and disclosure, accounting and financial reporting, corporate governance, and other matters. The Illinois Department of Insurance is the company’s global lead insurance regulator for purposes of conducting its supervisory college.
The company must submit annually to its lead insurance regulator an:
Own Risk and Solvency Assessment Summary Report (ORSA), which is a confidential internal assessment of the material and relevant risks associated with an insurer's current business plan and the sufficiency of capital resources to support those risks; and
Annual enterprise risk report, which must identify the material risks within the insurance holding company system that could pose enterprise risk to the company's U.S. insurance subsidiaries.
The company is subject to regulation by the Prudential Regulatory Authority and Financial Conduct Authority in respect of its U.K. insurance businesses. The company is also subject to regulation by the Federal Financial Supervisory Authority, better known by its abbreviation BaFin, in respect of its German insurance carrier.
The company's U.K. and German insurance businesses are subject to both the E.U.'s General Data Protection Regulation (GDPR) and the Solvency II Directive (Solvency II).
The company's Nephila insurance-linked securities operations are subject to regulation and supervision by various regulatory authorities, both in the U.S. and internationally. Certain of the company's ILS subsidiaries are organized and regulated as follows:
registered with the SEC as an investment adviser under the Investment Advisers Act of 1940;
registered with the U.S. Commodity Futures Trading Commission as a commodity pool operator or a commodity trading advisor under the Commodity Exchange Act; and
registered with the BMA as an insurance manager under the Bermuda Insurance Act 1978.
History
Markel Group Inc. was founded in 1930.
