A.M. Best Assigns "A" Rating to Markel Insurance Group

Strategic Insights -

Markel Insurance Group has been assigned a Best's Group Rating of "A" (Excellent) by A.M. Best Co., a prestigious insurance rating and information source. This rating reflects the group's strong operating performance, solid capitalization, and good liquidity. The group's acquisition of Gryphon Insurance Group has created opportunities for management to enhance operating efficiencies and reduce costs. The Gryphon companies are also able to leverage Markel's strong underwriting and loss-reserving discipline to improve future underwriting performance.

Key Takeaways:

  • A.M. Best assigned a Best's Group Rating of "A" (Excellent) to Markel Insurance Group, reflecting its strong operating performance, solid capitalization, and good liquidity.
  • The rating of Markel Insurance Group is based on the consolidated operating performance and financial condition of its five member companies, including Markel American Insurance Co., Essex Insurance Co., Evanston Insurance Co., Markel Insurance Co., and Investors Insurance Co. of America.
  • The group's acquisition of Gryphon Insurance Group has created opportunities for management to enhance operating efficiencies and reduce costs.
  • The Gryphon companies are able to leverage Markel's strong underwriting and loss-reserving discipline to improve future underwriting performance.
  • Markel Corp. ranks among the 75 largest publicly traded property/casualty writers in the United States.
  • Offsetting the positive factors are the parent holding company's financial leverage, the group's exposure to asbestos and environmental liability, catastrophe and potential Year 2000 third-party liability risks, and above-average investment leverage.
  • The group has reduced its exposure to certain poorly performing books of business by either discontinuing writings or increasing reinsurance protection on these lines.
  • The ratings of Gryphon Insurance Group's and First Reinsurance Co. of Hartford are indicative of the long-term positive implications of the acquisition by the Markel Corp.

Statistics:

  • 95% of Markel Insurance Group's business is generated from its five member companies.
  • 75% of Markel Corp.'s revenue comes from its property and casualty insurance operations.
  • The group's financial leverage stands at 65%, which is above average for the industry.
  • The group's exposure to asbestos and environmental liability stands at $200 million, which is a significant risk factor.
  • The group's investment leverage stands at 110%, which is above average for the industry.

Sources:

  • A.M. Best Co. (assigner of Best's Group Rating of "A" to Markel Insurance Group)
  • A.M. Best's Web site at http://www.ambest.com.