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PROFILE: Markel restructured and ready for acquisitions
11 January 2010
Markel’s approach to investments cost the firm millions in 2008. Reactions asked its vice-chairman Tony Markel whether this has heralded a change at the firm.
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US insurer Markel Corporation did not escape the turbulence of the biggest financial crisis since the Great Depression without a few scars. Its investment portfolio was hit hard by the crisis.
Historically, Markel’s approach to investments, with higher investment in equities than its peers, has served the company well. Markel recorded net investment income of $305m in 2007 and $271m in 2006, while it booked net realised gains of $59.5m and $63.6m, respectively.
“They have fared well over the years. The quality of the investments and securities Markel invested in has helped,” David Blades, analyst at AM Best, told Reactions.
However, when the bottom fell out of the market in late 2008 Markel was made to pay for its high volume of equities. The US specialty insurer slumped to a full-year loss of $58.8m in 2008 after net realised investment losses of $407.6m for the year....
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