Markel Corporation announced record earnings from core operations for the year ended December 31, 1999, while net income decreased to $7.20 per diluted share from $10.17 per diluted share in 1998.
The decrease in 1999 net income was primarily the result of realized investment losses.
Chairman and chief executive officer Alan I. Kirshner said its core underwriting units produced exceptional underwriting results which exceeded 1999 business plans.
“The year presented a difficult environment for our value-oriented investment philosophy,” Kirshner said. “We have completed the integration of Gryphon into our organization, and we believe the pending Terra Nova acquisition will provide additional opportunities to enhance shareholder value.
” The Company acquired Gryphon on January 15, 1999, and the Company’s results reflect Gryphon’s operating results since that date.
Markel reported a combined ratio of 101 percent in 1999 compared to 98 percent in 1998. The 1999 underwriting loss was the result of the Gryphon acquisition. Excluding Gryphon, the Company’s combined ratio was 96 percent in 1999. The Company said it remains committed to underwriting profits as the key component of its financial strategy.
Net investment income rose 23 percent to $87.7 million from $71.0 million in 1998. The increase was primarily the result of the Gryphon acquisition. The Company recognized $0.9 million of net realized losses from investment sales in 1999 compared to $20.6 million of net realized gains in 1998.
On January 26, 2000, Markel announced revised terms for its acquisition of Terra Nova (Bermuda) Holdings Ltd. The new agreement was reached after preliminary information indicated that Terra Nova will report a loss for the fourth quarter and for the full year of 1999 and after taking into account the decline in the market price of Markel shares since the merger agreement was signed in August 1999.
Markel Corporation markets and underwrites specialty insurance products and programs to a variety of niche markets.
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