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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
 FORM 10-Q
______________________________________________________________________________________

☒    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2022
or
☐    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to _______
Commission File Number: 001-15811
_________________________________________
MARKEL CORPORATION
(Exact name of registrant as specified in its charter)
___________________________________________________________________________________
Virginia 54-1959284
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
4521 Highwoods Parkway, Glen Allen, Virginia 23060-6148
(Address of principal executive offices) (Zip Code)
(804) 747-0136
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of exchange on which registered
Common Stock, no par value MKL New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x   No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes x No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer x Accelerated filer   ☐ Non-accelerated filer   ☐
Smaller reporting company ☐ Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐    No  x
Number of shares of the registrant's common stock outstanding at October 25, 2022: 13,450,401

Markel Corporation
Form 10-Q
Index
 
    Page Number
Item 1.
3
4
5
7
8
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.
2
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MARKEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

September 30,
2022		 December 31,
2021
(dollars in thousands) (unaudited)
ASSETS
Investments, at estimated fair value:
Fixed maturity securities, available-for-sale (amortized cost of $12,845,579 in 2022 and $12,061,467 in 2021)
 $ 11,726,357  $ 12,587,305 
Equity securities (cost of $3,005,729 in 2022 and $2,867,899 in 2021)
 6,950,357  9,023,927 
Short-term investments, available-for-sale (estimated fair value approximates cost) 2,424,844  1,799,988 
Total Investments 21,101,558  23,411,220 
Cash and cash equivalents 3,540,690  3,978,490 
Restricted cash and cash equivalents 1,255,178  902,457 
Receivables 2,956,686  2,413,938 
Reinsurance recoverables 8,258,499  7,293,555 
Deferred policy acquisition costs 946,064  794,145 
Prepaid reinsurance premiums 2,285,959  1,798,571 
Goodwill 2,797,426  2,899,140 
Intangible assets 1,686,212  1,822,486 
Other assets 3,593,083  3,163,094 
Total Assets $ 48,421,355  $ 48,477,096 
LIABILITIES AND EQUITY
Unpaid losses and loss adjustment expenses $ 20,194,374  $ 18,178,894 
Life and annuity benefits 733,489  902,980 
Unearned premiums 6,514,980  5,383,619 
Payables to insurance and reinsurance companies 685,294  616,665 
Senior long-term debt and other debt (estimated fair value of $3,520,000 in 2022 and $5,017,000 in 2021)
 4,131,165  4,361,266 
Other liabilities 3,290,291  3,832,084 
Total Liabilities 35,549,593  33,275,508 
Redeemable noncontrolling interests 513,043  461,378 
Commitments and contingencies
Shareholders' equity:
Preferred stock 591,891  591,891 
Common stock 3,482,828  3,441,079 
Retained earnings 9,255,658  10,446,763 
Accumulated other comprehensive income (loss) (1,036,454) 237,617 
Total Shareholders' Equity 12,293,923  14,717,350 
Noncontrolling interests 64,796  22,860 
Total Equity 12,358,719  14,740,210 
Total Liabilities and Equity $ 48,421,355  $ 48,477,096 

See accompanying notes to consolidated financial statements.
3
MARKEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Quarter Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
(dollars in thousands, except per share data)
OPERATING REVENUES
Earned premiums $ 1,956,830  $ 1,630,500  $ 5,549,704  $ 4,696,232 
Net investment income 107,731  91,264  274,123  284,095 
Net investment gains (losses) (281,483) (25,833) (2,194,525) 1,175,791 
Products revenues 586,531  405,711  1,845,111  1,327,144 
Services and other revenues 696,536  585,712  1,990,175  1,605,058 
Total Operating Revenues 3,066,145  2,687,354  7,464,588  9,088,320 
OPERATING EXPENSES
Losses and loss adjustment expenses 1,185,313  948,241  3,216,495  2,643,114 
Underwriting, acquisition and insurance expenses 643,272  569,756  1,843,106  1,644,863 
Products expenses 580,830  374,407  1,726,367  1,173,135 
Services and other expenses 540,569  513,994  1,692,203  1,442,342 
Amortization of intangible assets 43,418  39,268  134,990  118,550 
Total Operating Expenses 2,993,402  2,445,666  8,613,161  7,022,004 
Operating Income (Loss) 72,743  241,688  (1,148,573) 2,066,316 
Interest expense (47,348) (46,455) (147,090) (135,412)
Net foreign exchange gains 115,130  48,850  245,356  61,677 
Income (Loss) Before Income Taxes 140,525  244,083  (1,050,307) 1,992,581 
Income tax (expense) benefit (17,995) (54,415) 239,536  (419,898)
Net Income (Loss) 122,530  189,668  (810,771) 1,572,683 
Net income attributable to noncontrolling interests (57,161) (1,598) (93,062) (18,809)
Net Income (Loss) to Shareholders 65,369  188,070  (903,833) 1,553,874 
Preferred stock dividends —  —  (18,000) (18,000)
Net Income (Loss) to Common Shareholders $ 65,369  $ 188,070  $ (921,833) $ 1,535,874 
OTHER COMPREHENSIVE LOSS
Change in net unrealized gains (losses) on available-for-sale investments, net of taxes:
Net holding losses arising during the period $ (424,929) $ (104,238) $ (1,263,839) $ (262,679)
Reclassification adjustments for net gains (losses) included in net income (loss) 591  224  2,289  (3,807)
Change in net unrealized gains (losses) on available-for-sale investments, net of taxes (424,338) (104,014) (1,261,550) (266,486)
Change in foreign currency translation adjustments, net of taxes (8,872) (4,437) (14,395) (330)
Change in net actuarial pension loss, net of taxes 303  586  1,808  1,832 
Total Other Comprehensive Loss (432,907) (107,865) (1,274,137) (264,984)
Comprehensive Income (Loss) (310,377) 81,803  (2,084,908) 1,307,699 
Comprehensive income attributable to noncontrolling interests (57,051) (1,567) (92,996) (18,812)
Comprehensive Income (Loss) to Shareholders $ (367,428) $ 80,236  $ (2,177,904) $ 1,288,887 
NET INCOME (LOSS) PER COMMON SHARE
Basic $ 3.51  $ 15.12  $ (72.31) $ 114.39 
Diluted $ 3.50  $ 15.09  $ (72.31) $ 114.20 
See accompanying notes to consolidated financial statements.
4
MARKEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Quarter Ended September 30, 2022 Preferred
 Stock		 Common
Stock		 Retained
Earnings		 Accumulated
Other
Comprehensive
Loss		 Total
Shareholders'
Equity		 Noncontrolling
Interests		 Total Equity Redeemable
Noncontrolling
Interests
(dollars in thousands)
June 30, 2022 $ 591,891  $ 3,478,153  $ 9,289,820  $ (603,657) $ 12,756,207  $ 11,125  $ 12,767,332  $ 495,378 
Net income 65,369  —  65,369  52,867  118,236  4,294 
Other comprehensive loss —  (432,797) (432,797) —  (432,797) (110)
Comprehensive Income (Loss) (367,428) 52,867  (314,561) 4,184 
Repurchase of common stock —  —  (81,799) —  (81,799) —  (81,799) — 
Restricted stock units expensed —  4,661  —  —  4,661  —  4,661  — 
Adjustment of redeemable noncontrolling interests —  —  (17,730) —  (17,730) —  (17,730) 17,730 
Other —  14  (2) —  12  804  816  (4,249)
September 30, 2022 $ 591,891  $ 3,482,828  $ 9,255,658  $ (1,036,454) $ 12,293,923  $ 64,796  $ 12,358,719  $ 513,043 

Nine Months Ended September 30, 2022 Preferred
 Stock		 Common
Stock		 Retained
Earnings		 Accumulated
Other
Comprehensive
Income (Loss)		 Total
Shareholders'
Equity		 Noncontrolling
Interests		 Total Equity Redeemable
Noncontrolling
Interests
(dollars in thousands)
December 31, 2021 $ 591,891  $ 3,441,079  $ 10,446,763  $ 237,617  $ 14,717,350  $ 22,860  $ 14,740,210  $ 461,378 
Net income (loss) (903,833) —  (903,833) 78,283  (825,550) 14,779 
Other comprehensive loss —  (1,274,071) (1,274,071) —  (1,274,071) (66)
Comprehensive Income (Loss) (2,177,904) 78,283  (2,099,621) 14,713 
Repurchase of common stock —  —  (208,090) —  (208,090) —  (208,090) — 
Preferred stock dividends —  —  (18,000) —  (18,000) —  (18,000) — 
Restricted stock units expensed —  37,531  —  —  37,531  —  37,531  — 
Adjustment of redeemable noncontrolling interests —  —  (62,168) —  (62,168) —  (62,168) 62,168 
Adjustment to Metromont purchase price allocation —  —  —  —  —  —  —  (18,681)
Disposition of Velocity —  —  —  —  —  (22,059) (22,059) — 
Redemption of Markel CATCo Re noncontrolling interests —  —  —  —  —  (22,261) (22,261) — 
Other —  4,218  986  —  5,204  7,973  13,177  (6,535)
September 30, 2022 $ 591,891  $ 3,482,828  $ 9,255,658  $ (1,036,454) $ 12,293,923  $ 64,796  $ 12,358,719  $ 513,043 

See accompanying notes to consolidated financial statements.
5
MARKEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
Quarter Ended September 30, 2021 Preferred
Stock		 Common
Stock		 Retained
Earnings		 Accumulated
Other
Comprehensive
Income		 Total
Shareholders'
Equity		 Noncontrolling
Interests		 Total Equity Redeemable
Noncontrolling
Interests
(dollars in thousands)
June 30, 2021 $ 591,891  $ 3,451,968  $ 9,526,191  $ 427,223  $ 13,997,273  $ 23,078  $ 14,020,351  $ 228,401 
Net income 188,070  —  188,070  558  188,628  1,040 
Other comprehensive loss —  (107,834) (107,834) —  (107,834) (31)
Comprehensive Income 80,236  558  80,794  1,009 
Repurchase of common stock —  —  (61,551) —  (61,551) —  (61,551) — 
Restricted stock units expensed —  4,181  —  —  4,181  —  4,181  — 
Acquisition of Buckner —  —  —  —  —  —  —  26,438 
Adjustment of redeemable noncontrolling interests —  —  19,930  —  19,930  —  19,930  (19,930)
Purchase of noncontrolling interest —  (1,020) —  —  (1,020) —  (1,020) (1,032)
Other —  —  17  —  17  (175) (158) (2,974)
September 30, 2021 $ 591,891  $ 3,455,129  $ 9,672,657  $ 319,389  $ 14,039,066  $ 23,461  $ 14,062,527  $ 231,912 

Nine Months Ended September 30, 2021 Preferred
 Stock		 Common
Stock		 Retained
Earnings		 Accumulated
Other
Comprehensive
Income		 Total
Shareholders'
Equity		 Noncontrolling
Interests		 Total Equity Redeemable
Noncontrolling
Interests
(dollars in thousands)
December 31, 2020 $ 591,891  $ 3,428,340  $ 8,195,182  $ 584,376  $ 12,799,789  $ 14,892  $ 12,814,681  $ 245,642 
Cumulative effect of change in accounting policy 22,302  —  22,302  —  22,302  — 
January 1, 2021 591,891  3,428,340  8,217,484  584,376  12,822,091  14,892  12,836,983  245,642 
Net income 1,553,874  —  1,553,874  7,960  1,561,834  10,849 
Other comprehensive income (loss) —  (264,987) (264,987) —  (264,987) 3 
Comprehensive Income 1,288,887  7,960  1,296,847  10,852 
Repurchase of common stock —  —  (122,377) —  (122,377) —  (122,377) — 
Preferred stock dividends —  —  (18,000) —  (18,000) —  (18,000) — 
Restricted stock units expensed —  27,783  —  —  27,783  —  27,783  — 
Acquisition of Buckner —  —  —  —  —  —  —  26,438 
Adjustment of redeemable noncontrolling interests —  —  41,553  —  41,553  —  41,553  (41,553)
Purchase of noncontrolling interest —  (1,551) —  —  (1,551) —  (1,551) (1,179)
Other —  557  123  —  680  609  1,289  (8,288)
September 30, 2021 $ 591,891  $ 3,455,129  $ 9,672,657  $ 319,389  $ 14,039,066  $ 23,461  $ 14,062,527  $ 231,912 

See accompanying notes to consolidated financial statements.
6
MARKEL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Nine Months Ended September 30,
2022 2021
(dollars in thousands)
OPERATING ACTIVITIES
Net income (loss) $ (810,771) $ 1,572,683 
Adjustments to reconcile net income (loss) to net cash provided by operating activities 2,691,043  49,759 
Net Cash Provided By Operating Activities 1,880,272  1,622,442 
INVESTING ACTIVITIES
Proceeds from sales, maturities, calls and prepayments of fixed maturity securities 557,742  491,319 
Cost of fixed maturity securities purchased (1,433,299) (2,201,622)
Proceeds from sales of equity securities 164,277  157,891 
Cost of equity securities purchased (293,011) (178,368)
Net change in short-term investments (625,261) (727,366)
Additions to property and equipment (209,282) (80,758)
Acquisitions, net of cash acquired (14,000) (241,210)
Consolidation of Markel CATCo Re, net 629,955  — 
Distributions to Markel CATCo Re noncontrolling interests for buy-out transaction (169,380) — 
Proceeds from sale of business, net 109,505  40,720 
Other (571) 6,903 
Net Cash Used By Investing Activities (1,283,325) (2,732,491)
FINANCING ACTIVITIES
Additions to senior long-term debt and other debt 757,941  989,067 
Repayment of senior long-term debt and other debt (982,852) (370,157)
Repurchases of common stock (208,090) (122,377)
Dividends paid on preferred stock (18,000) (18,000)
Other (40,053) (39,149)
Net Cash Provided (Used) By Financing Activities (491,054) 439,384 
Effect of foreign currency rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents (190,972) (38,973)
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents (85,079) (709,638)
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 4,880,947  5,216,649 
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD $ 4,795,868  $ 4,507,011 

See accompanying notes to consolidated financial statements.
7
MARKEL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Markel Corporation is a diverse financial holding company serving a variety of niche markets. Markel Corporation's principal business markets and underwrites specialty insurance products. Through its wholly owned subsidiary, Markel Ventures, Inc. (Markel Ventures), Markel Corporation also owns controlling interests in various businesses that operate outside of the specialty insurance marketplace. See note 2 for details regarding reportable segments.

a) Basis of Presentation. The consolidated balance sheet as of September 30, 2022 and the related consolidated statements of income (loss) and comprehensive income (loss) and changes in equity for the quarters and nine months ended September 30, 2022 and 2021, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited. In the opinion of management, all adjustments necessary for fair presentation of such consolidated financial statements have been included. Except for the adjustment described in note 15, such adjustments consist only of normal, recurring items. Interim results are not necessarily indicative of results of operations for the entire year. The consolidated balance sheet as of December 31, 2021 was derived from Markel Corporation's audited annual consolidated financial statements.

The accompanying consolidated financial statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) and include the accounts of Markel Corporation and its consolidated subsidiaries, as well as any variable interest entities (VIEs) that meet the requirements for consolidation (the Company). All significant intercompany balances and transactions have been eliminated in consolidation. The Company consolidates the results of its Markel Ventures subsidiaries on a one-month lag, with the exception of significant transactions or events that occur during the intervening period. Certain prior period amounts have been reclassified to conform to the current period presentation.

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results may differ materially from the estimates and assumptions used in preparing the consolidated financial statements.

The consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company's annual consolidated financial statements and notes. For a more complete description of the Company's business and accounting policies, readers are urged to review the Company's 2021 Annual Report on Form 10-K, as well as note 15 for details regarding a change to the Company's policy for accounting for deferred policy acquisition costs.

b) Recent Accounting Pronouncements

Accounting Standards Not Yet Adopted

In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. The FASB subsequently issued several ASUs as amendments to ASU No. 2018-12. The standard requires insurance companies with long duration contracts to: (1) review and, if there is a change, update the assumptions used to measure expected cash flows at least annually; (2) update the discount rate assumption at each reporting date; and (3) enhance certain qualitative and quantitative disclosures. ASU No. 2018-12 becomes effective for the Company during the first quarter of 2023 and will be applied using a modified retrospective approach that requires restatement of prior periods presented, including a cumulative adjustment to accumulated other comprehensive income as of January 1, 2021 (the transition date). The standard will, among other things, impact the discount rate used in estimating reserves for the Company's life and annuity reinsurance portfolio, which is in runoff. Currently, the discount rate assumption is locked-in for the life of the contracts, unless there is a loss recognition event. Based on the Company's current estimate, the adoption of ASU 2018-12 is expected to result in a decrease to accumulated other comprehensive income of less than $25 million, net of taxes, as a result of changing the discount rate assumption as of the transition date. However, the cumulative impact of changes in the discount rate assumption upon adopting ASU 2018-12 in the first quarter of 2023 will be based on the discount rate assumption determined as of the January 1, 2023 adoption date. Based on increases in interest rates subsequent to the transition date, the Company expects that an update to the discount rate assumption as of September 30, 2022 would result in a cumulative increase to accumulated other comprehensive income. The Company is still determining the ultimate impact that adopting ASU No. 2018-12 will have on its consolidated financial statements.
8

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which becomes effective for the Company during the first quarter of 2023. ASU No. 2021-08 requires contract assets and liabilities accounted for under FASB Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, to be recorded at the acquisition date as if the acquirer entered into those contracts itself on the contract inception dates, rather than at fair value. At adoption, ASU No. 2021-08 will not impact the Company's financial position, results of operations or cash flows, but prospectively, this ASU will impact amounts recorded by the Company for assets acquired and liabilities assumed in conjunction with certain acquisitions.

2. Segment Reporting Disclosures

The chief operating decision maker reviews the Company's ongoing underwriting operations on a global basis in the following two segments: Insurance and Reinsurance. In determining how to allocate resources and assess the performance of the Company's underwriting results, management considers many factors, including the nature of the insurance product sold, the type of account written and the type of customer served. The Insurance segment includes all direct business and facultative placements written on a risk-bearing basis within the Company's underwriting operations. The Reinsurance segment includes all treaty reinsurance written on a risk-bearing basis within the Company's underwriting operations. All investing activities related to the Company's insurance operations are included in the Investing segment.

The chief operating decision maker reviews and assesses Markel Ventures' performance in the aggregate, as a single operating segment. The Markel Ventures segment primarily consists of controlling interests in a diverse portfolio of businesses that operate in various industries.

The Company's other operations primarily consist of the results of the Company's insurance-linked securities operations and program services business. Other operations also include results for lines of business discontinued prior to, or in conjunction with, acquisitions, including development on asbestos and environmental loss reserves and results attributable to the run-off of life and annuity reinsurance business, which are monitored separately from the Company's ongoing underwriting operations. For purposes of segment reporting, none of these other operations are considered to be reportable segments.

Segment profit for each of the Company's underwriting segments is measured by underwriting profit. The property and casualty insurance industry commonly defines underwriting profit as earned premiums net of losses and loss adjustment expenses and underwriting, acquisition and insurance expenses. Underwriting profit does not replace operating income or net income computed in accordance with U.S. GAAP as a measure of profitability. Underwriting profit or loss provides a basis for management to evaluate the Company's underwriting performance. Segment profit for the Company's underwriting segments may also include other revenues and expenses that are attributable to the Company's underwriting operations that are not captured in underwriting profit. Segment profit for the Investing segment is measured by net investment income and net investment gains. Segment profit for the Markel Ventures segment is measured by operating income.

For management reporting purposes, the Company allocates assets to its underwriting operations and to its Investing and Markel Ventures segments and certain of its other operations, including its insurance-linked securities and program services operations. Underwriting assets include assets attributed to the Company's Insurance and Reinsurance segments, discontinued underwriting lines of business, as well as assets that are not specifically allocated to the Company's other operations. Generally, the Company manages its underwriting assets in the aggregate and therefore does not allocate assets to individual underwriting segments.


9
a) The following tables summarize the Company's segment disclosures.

Quarter Ended September 30, 2022
(dollars in thousands) Insurance Reinsurance Investing
Markel Ventures (1)
Other (2)
 Consolidated
Gross premium volume $ 2,299,325  $ 179,455  $ —  $ —  $ 995,991  $ 3,474,771 
Net written premiums 1,849,983  154,029  —  —  5,155  2,009,167 
Earned premiums 1,695,029  260,535  —  —  1,266  1,956,830 
Losses and loss adjustment expenses:
Current accident year (1,100,511) (166,485) —  —  —  (1,266,996)
Prior accident years 53,760  29,505  —  —  (1,582) 81,683 
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs (362,137) (68,662) —  —  (383) (431,182)
Other underwriting expenses (200,604) (11,638) —  —  152  (212,090)
Underwriting profit (loss) 85,537  43,255  —  —  (547) 128,245 
Net investment income —  —  107,414  317  —  107,731 
Net investment losses —  —  (281,483) —  —  (281,483)
Products revenues —  —  —  586,531  —  586,531 
Services and other revenues —  —  —  629,215  67,321  696,536 
Products expenses —  —  —  (580,830) —  (580,830)
Services and other expenses (3)
 —  —  —  (556,207) 15,638  (540,569)
Amortization of intangible assets (4)
 —  —  —  (18,567) (24,851) (43,418)
Segment profit (loss) $ 85,537  $ 43,255  $ (174,069) $ 60,459  $ 57,561  $ 72,743 
Interest expense (47,348)
Net foreign exchange gains 115,130 
Income before income taxes $ 140,525 
U.S. GAAP combined ratio (5)
 95  % 83  %
NM (6)
 93  %
(1)    Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $23.7 million for the quarter ended September 30, 2022.
(2)    Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment. Amortization of intangible assets attributable to the Company's underwriting segments was $9.6 million for the quarter ended September 30, 2022, however, the Company does not allocate amortization of intangible assets between the Insurance and Reinsurance segments.
(3)    Services and other expenses for Other for the quarter ended September 30, 2022 included $53.4 million of favorable loss reserve development on the run-off of reinsurance contracts written by Markel CATCo Re Ltd., all of which was attributable to noncontrolling interests. See Note 11.
(4)    Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to the Company's Insurance and Reinsurance segments.
(5)    The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
(6)    NM - Ratio is not meaningful
10
Quarter Ended September 30, 2021
(dollars in thousands) Insurance Reinsurance Investing
Markel Ventures (1)
Other (2)
 Consolidated
Gross premium volume $ 1,899,592  $ 180,673  $ —  $ —  $ 888,337  $ 2,968,602 
Net written premiums 1,545,428  141,642  —  —  (2,260) 1,684,810 
Earned premiums 1,381,235  250,962  —  —  (1,697) 1,630,500 
Losses and loss adjustment expenses:
Current accident year (866,481) (221,872) —  —  —  (1,088,353)
Prior accident years 124,133  16,292  —  —  (313) 140,112 
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs (289,201) (63,723) —  —  —  (352,924)
Other underwriting expenses (202,961) (12,101) —  —  (1,770) (216,832)
Underwriting profit (loss) 146,725  (30,442) —  —  (3,780) 112,503 
Net investment income —  —  91,261  3  —  91,264 
Net investment losses —  —  (25,833) —  —  (25,833)
Products revenues —  —  —  405,711  —  405,711 
Services and other revenues —  —  —  502,471  83,241  585,712 
Products expenses —  —  —  (374,407) —  (374,407)
Services and other expenses —  —  —  (465,268) (48,726) (513,994)
Amortization of intangible assets (3)
 —  —  —  (13,541) (25,727) (39,268)
Segment profit (loss) $ 146,725  $ (30,442) $ 65,428  $ 54,969  $ 5,008  $ 241,688 
Interest expense (46,455)
Net foreign exchange gains 48,850 
Income before income taxes $ 244,083 
U.S. GAAP combined ratio (4)
 89  % 112  %
NM (5)
 93  %
(1)    Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $15.8 million for the quarter ended September 30, 2021.
(2)    Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment. Amortization of intangible assets attributable to the Company's underwriting segments was $10.3 million for the quarter ended September 30, 2021, however, the Company does not allocate amortization of intangible assets between the Insurance and Reinsurance segments.
(3)    Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to the Company's Insurance and Reinsurance segments.
(4)    The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
(5)    NM - Ratio is not meaningful
11
Nine Months Ended September 30, 2022
(dollars in thousands) Insurance Reinsurance Investing
Markel Ventures (1)
Other (2)
 Consolidated
Gross premium volume $ 6,479,789  $ 1,044,827  $ —  $ —  $ 2,628,491  $ 10,153,107 
Net written premiums 5,289,165  983,087  —  —  1,444  6,273,696 
Earned premiums 4,742,178  808,656  —  —  (1,130) 5,549,704 
Losses and loss adjustment expenses:
Current accident year (2,906,031) (514,875) —  —  —  (3,420,906)
Prior accident years 196,093  13,845  —  —  (5,527) 204,411 
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs (996,369) (209,541) —  —  (415) (1,206,325)
Other underwriting expenses (596,426) (37,708) —  —  (2,647) (636,781)
Underwriting profit (loss) 439,445  60,377  —  —  (9,719) 490,103 
Net investment income —  —  273,699  424  —  274,123 
Net investment losses —  —  (2,194,525) —  —  (2,194,525)
Products revenues —  —  —  1,845,111  —  1,845,111 
Services and other revenues —  —  —  1,682,318  307,857  1,990,175 
Products expenses —  —  —  (1,726,367) —  (1,726,367)
Services and other expenses (3)
 —  —  —  (1,524,167) (168,036) (1,692,203)
Amortization of intangible assets (4)
 —  —  —  (60,077) (74,913) (134,990)
Segment profit (loss) $ 439,445  $ 60,377  $ (1,920,826) $ 217,242  $ 55,189  $ (1,148,573)
Interest expense (147,090)
Net foreign exchange gains 245,356 
Loss before income taxes $ (1,050,307)
U.S. GAAP combined ratio (5)
 91  % 93  %
NM (6)
 91  %
(1)    Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $75.3 million for the nine months ended September 30, 2022.
(2)    Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment. Amortization of intangible assets attributable to the Company's underwriting segments was $29.0 million for the nine months ended September 30, 2022, however, the Company does not allocate amortization of intangible assets between the Insurance and Reinsurance segments.
(3)    Services and other expenses for Other for the nine months ended September 30, 2022 included $81.6 million of favorable loss reserve development on the run-off of reinsurance contracts written by Markel CATCo Re Ltd., all of which was attributable to noncontrolling interests. See Note 11.
(4)    Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to the Company's Insurance and Reinsurance segments.
(5)    The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
(6)    NM - Ratio is not meaningful

12
Nine Months Ended September 30, 2021
(dollars in thousands) Insurance Reinsurance Investing
Markel Ventures (1)
Other (2)
 Consolidated
Gross premium volume $ 5,359,293  $ 992,635  $ —  $ —  $ 2,305,539  $ 8,657,467 
Net written premiums 4,427,301  893,082  —  —  (3,052) 5,317,331 
Earned premiums 3,928,824  770,031  —  —  (2,623) 4,696,232 
Losses and loss adjustment expenses:
Current accident year (2,448,034) (561,226) —  —  —  (3,009,260)
Prior accident years 397,723  (34,104) —  —  2,527  366,146 
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs (814,623) (193,697) —  —  —  (1,008,320)
Other underwriting expenses (594,880) (39,676) —  —  (1,987) (636,543)
Underwriting profit (loss) 469,010  (58,672) —  —  (2,083) 408,255 
Net investment income —  —  284,087  8  —  284,095 
Net investment gains —  —  1,175,791  —  —  1,175,791 
Products revenues —  —  —  1,327,144  —  1,327,144 
Services and other revenues —  —  —  1,363,141  241,917  1,605,058 
Products expenses —  —  —  (1,173,135) —  (1,173,135)
Services and other expenses —  109  —  (1,260,957) (181,494) (1,442,342)
Amortization of intangible assets (3)
 —  —  —  (41,104) (77,446) (118,550)
Segment profit (loss) $ 469,010  $ (58,563) $ 1,459,878  $ 215,097  $ (19,106) $ 2,066,316 
Interest expense (135,412)
Net foreign exchange gains 61,677 
Income before income taxes $ 1,992,581 
U.S. GAAP combined ratio (4)
 88  % 108  %
NM (5)
 91  %
(1)     Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $47.7 million for the nine months ended September 30, 2021.
(2)     Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment. Amortization of intangible assets attributable to the Company's underwriting segments was $31.1 million for the nine months ended September 30, 2021, however, the Company does not allocate amortization of intangible assets between the Insurance and Reinsurance segments.
(3)     Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to the Company's Insurance and Reinsurance segments.
(4)     The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.
(5)     NM - Ratio is not meaningful

b) The following table reconciles segment assets to the Company's consolidated balance sheets.

(dollars in thousands) September 30, 2022 December 31, 2021
Segment assets:
Investing $ 25,389,047  $ 28,277,801 
Underwriting 8,805,475  8,111,316 
Markel Ventures 5,230,393  4,958,279 
Total segment assets 39,424,915  41,347,396 
Other operations 8,996,440  7,129,700 
Total assets $ 48,421,355  $ 48,477,096 

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3. Acquisitions and Dispositions

Velocity

In February 2022, the Company sold the majority of its controlling interest in its Velocity managing general agent companies (Velocity) for total cash consideration of $181.3 million, which resulted in a gain of $107.3 million that was included in services and other revenues. Velocity provides risk origination services for the Company's Nephila insurance-linked securities fund management operations, as well as for third parties. The Company retained a minority interest in Velocity that was recorded at fair value as of the transaction date ($47.4 million) and is accounted for under the equity method.

Volante

In October 2022, the Company sold its controlling interest in its Volante managing general agent companies (Volante) for estimated total cash consideration of $155 million. Volante underwrites and administers specialty insurance and reinsurance policies and provides delegated underwriting services to third-party providers of insurance capital. The Company will complete the accounting for the disposition in the fourth quarter of 2022.

Metromont LLC

In December 2021, the Company acquired 51% of Metromont LLC (Metromont), a precast concrete manufacturer and concrete building solutions provider for commercial projects. Under the terms of the acquisition agreement, the Company has the option to acquire the remaining equity interests and the remaining equity holders have the option to sell their interests to the Company in the future. The redemption value of the remaining equity interests is generally based on Metromont's earnings in specified periods preceding the redemption dates. Total consideration for the transaction was $282.3 million, all of which was cash.

As of December 31, 2021, the purchase price was preliminarily allocated to the acquired assets and liabilities based on estimated fair value at the acquisition date, which was subsequently updated during the first quarter of 2022. During the first quarter of 2022, the Company decreased the allocation to redeemable noncontrolling interests by $18.7 million with an offsetting decrease to goodwill of $18.7 million, resulting in a preliminary purchase price allocation that reflected goodwill of $200.6 million, intangible assets of $143.9 million and redeemable noncontrolling interests of $251.2 million. Goodwill is primarily attributable to expected future earnings and cash flow potential of Metromont, and it is expected to be deductible for income tax purposes. Results attributable to Metromont are included in the Company's Markel Ventures segment.

The Company has not completed the process of determining the fair value of the assets acquired and liabilities assumed. These valuations are required to be completed within 12 months from the acquisition date. As a result, the fair value recorded for these items is a provisional estimate and is subject to adjustment. Once completed, any adjustments resulting from the valuations may impact the individual amounts recorded for assets acquired and liabilities assumed, as well as the residual goodwill.

Buckner HeavyLift Cranes

In August 2021, the Company acquired 90% of the holding company for the Buckner HeavyLift Cranes companies (Buckner), a provider of crane rental services for large commercial contractors. Under the terms of the acquisition agreement, the Company has the option to acquire the remaining equity interests and the remaining equity holders have the option to sell their interests to the Company in the future. The redemption value of the remaining equity interests is generally based on Buckner's earnings in specified periods preceding the redemption dates. Total consideration for the transaction was $237.9 million, all of which was cash.

As of December 31, 2021, the purchase price was preliminarily allocated to the acquired assets and liabilities of Buckner based on estimated fair value at the acquisition date. During the third quarter of 2022, the Company completed the process of determining the fair value of the assets acquired and liabilities assumed with Buckner. The Company recognized goodwill of $109.9 million, intangible assets of $60.0 million and fixed assets of $290.4 million, primarily related to cranes. The final purchase price allocation reflected a decrease in the amount recognized for the cranes upon completion of a third-party valuation, which resulted in an increase to goodwill from the preliminary amount recognized. Goodwill is primarily attributable to expected future earnings and cash flow potential of Buckner, and it is not expected to be deductible for income tax purposes. Intangible assets include $50.0 million of customer relationships and $10.0 million of trade names, which are expected to be amortized over 7 years and 15 years, respectively. Additionally, the Company assumed long-term debt of $165.1 million and recognized redeemable noncontrolling interests of $26.4 million. Results attributable to Buckner are included in the Company's Markel Ventures segment.
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4. Investments

a) The following tables summarize the Company's available-for-sale investments. Commercial and residential mortgage-backed securities include securities issued by U.S. government-sponsored enterprises and U.S. government agencies. The net unrealized holding gains (losses) in the tables below are presented before taxes and any reserve deficiency adjustments for life and annuity benefit reserves. See note 9.

  September 30, 2022
(dollars in thousands) Amortized
Cost		 Gross
Unrealized
Holding
Gains		 Gross
Unrealized
Holding
Losses		 Estimated
Fair
Value
Fixed maturity securities:
U.S. Treasury securities $ 3,145,087  $ —  $ (186,666) $ 2,958,421 
U.S. government-sponsored enterprises 838,518  42  (113,378) 725,182 
Obligations of states, municipalities and political subdivisions 3,975,846  3,479  (265,982) 3,713,343 
Foreign governments 1,388,221  —  (215,332) 1,172,889 
Commercial mortgage-backed securities 2,103,907  1  (171,243) 1,932,665 
Residential mortgage-backed securities 582,833  127  (25,627) 557,333 
Asset-backed securities 2,066  —  (54) 2,012 
Corporate bonds 809,101  10  (144,599) 664,512 
Total fixed maturity securities 12,845,579  3,659  (1,122,881) 11,726,357 
Short-term investments 2,441,719  147  (17,022) 2,424,844 
Investments, available-for-sale $ 15,287,298  $ 3,806  $ (1,139,903) $ 14,151,201 

  December 31, 2021
(dollars in thousands) Amortized
Cost		 Gross
Unrealized
Holding
Gains		 Gross
Unrealized
Holding
Losses		 Estimated
Fair
Value
Fixed maturity securities:
U.S. Treasury securities $ 2,489,032  $ 2,633  $ (21,471) $ 2,470,194 
U.S. government-sponsored enterprises 753,029  28,997  (6,439) 775,587 
Obligations of states, municipalities and political subdivisions 4,007,211  266,575  (7,862) 4,265,924 
Foreign governments 1,394,771  134,071  (9,488) 1,519,354 
Commercial mortgage-backed securities 1,928,775  69,810  (8,152) 1,990,433 
Residential mortgage-backed securities 699,136  27,084  (170) 726,050 
Asset-backed securities 3,035  46  —  3,081 
Corporate bonds 786,478  54,475  (4,271) 836,682 
Total fixed maturity securities 12,061,467  583,691  (57,853) 12,587,305 
Short-term investments 1,805,300  28  (5,340) 1,799,988 
Investments, available-for-sale $ 13,866,767  $ 583,719  $ (63,193) $ 14,387,293 

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b) The following tables summarize gross unrealized investment losses on available-for-sale investments by the length of time that securities have continuously been in an unrealized loss position.
September 30, 2022
Less than 12 months 12 months or longer Total
(dollars in thousands) Estimated
Fair
Value		 Gross
Unrealized
Holding Losses		 Estimated
Fair
Value		 Gross
Unrealized
Holding Losses		 Estimated
Fair
Value		 Gross
Unrealized
Holding Losses
Fixed maturity securities:
U.S. Treasury securities $ 1,208,818  $ (59,585) $ 1,749,603  $ (127,081) $ 2,958,421  $ (186,666)
U.S. government-sponsored enterprises 486,025  (63,103) 224,076  (50,275) 710,101  (113,378)
Obligations of states, municipalities and political subdivisions 2,955,371  (205,139) 253,651  (60,843) 3,209,022  (265,982)
Foreign governments 1,006,658  (177,900) 166,232  (37,432) 1,172,890  (215,332)
Commercial mortgage-backed securities 1,677,058  (122,811) 255,181  (48,432) 1,932,239  (171,243)
Residential mortgage-backed securities 510,227  (24,860) 3,899  (767) 514,126  (25,627)
Asset-backed securities 2,012  (54) —  —  2,012  (54)
Corporate bonds 551,417  (118,451) 105,459  (26,148) 656,876  (144,599)
Total fixed maturity securities 8,397,586  (771,903) 2,758,101  (350,978) 11,155,687  (1,122,881)
Short-term investments 1,107,053  (17,022) —  —  1,107,053  (17,022)
Total $ 9,504,639  $ (788,925) $ 2,758,101  $ (350,978) $ 12,262,740  $ (1,139,903)

At September 30, 2022, the Company held 1,548 available-for-sale securities in an unrealized loss position with a total estimated fair value of $12.3 billion and gross unrealized losses of $1.1 billion. Of these 1,548 securities, 172 securities had been in a continuous unrealized loss position for one year or longer and had a total estimated fair value of $2.8 billion and gross unrealized losses of $351.0 million.
December 31, 2021
Less than 12 months 12 months or longer Total
(dollars in thousands) Estimated
Fair
Value		 Gross
Unrealized
Holding  Losses		 Estimated
Fair
Value		 Gross
Unrealized
Holding  Losses		 Estimated
Fair
Value		 Gross
Unrealized
Holding  Losses
Fixed maturity securities:
U.S. Treasury securities $ 2,236,637  $ (18,433) $ 97,173  $ (3,038) $ 2,333,810  $ (21,471)
U.S. government-sponsored enterprises 381,495  (5,640) 14,010  (799) 395,505  (6,439)
Obligations of states, municipalities and political subdivisions 393,249  (6,941) 23,589  (921) 416,838  (7,862)
Foreign governments 322,813  (8,596) 25,564  (892) 348,377  (9,488)
Commercial mortgage-backed securities 345,616  (7,765) 9,189  (387) 354,805  (8,152)
Residential mortgage-backed securities 12,828  (159) 269  (11) 13,097  (170)
Corporate bonds 193,786  (4,271) —  —  193,786  (4,271)
Total fixed maturity securities 3,886,424  (51,805) 169,794  (6,048) 4,056,218  (57,853)
Short-term investments 228,870  (5,340) —  —  228,870  (5,340)
Total $ 4,115,294  $ (57,145) $ 169,794  $ (6,048) $ 4,285,088  $ (63,193)

At December 31, 2021, the Company held 277 available-for-sale securities in an unrealized loss position with a total estimated fair value of $4.3 billion and gross unrealized losses of $63.2 million. Of these 277 securities, 13 securities had been in a continuous unrealized loss position for one year or longer and had a total estimated fair value of $169.8 million and gross unrealized losses of $6.0 million.
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The Company completes a detailed analysis each quarter to assess whether the decline in the fair value of any investment below its cost basis is the result of a credit loss. All available-for-sale securities with unrealized losses are reviewed. The Company considers many factors in completing its quarterly review of securities with unrealized losses for credit-related impairment to determine whether a credit loss exists, including the extent to which fair value is below cost, the implied yield to maturity, rating downgrades of the security and whether or not the issuer has failed to make scheduled principal or interest payments. The Company also takes into consideration information about the financial condition of the issuer and industry factors that could negatively impact the capital markets.

If the decline in fair value of an available-for-sale security below its amortized cost is considered to be the result of a credit loss, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit loss, which is recorded as an allowance and recognized in net income. The allowance is limited to the difference between the fair value and the amortized cost of the security. Any remaining decline in fair value represents the non-credit portion of the impairment, which is recognized in other comprehensive income. The Company did not have an allowance for credit losses as of September 30, 2022 or December 31, 2021.

Quarterly, the Company also considers whether it intends to sell an available-for-sale security or if it is more likely than not that it will be required to sell a security before recovery of its amortized cost. In these instances, a decline in fair value is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. As of September 30, 2022, the Company did not intend to sell or believe it would be required to sell any available-for-sale securities in an unrealized loss position before recovery of their amortized cost.

c) The amortized cost and estimated fair value of fixed maturity securities at September 30, 2022 are shown below by contractual maturity.

(dollars in thousands) Amortized
Cost		 Estimated
Fair Value
Due in one year or less $ 1,392,651  $ 1,357,060 
Due after one year through five years 3,943,834  3,649,795 
Due after five years through ten years 2,993,861  2,618,759 
Due after ten years 1,826,427  1,608,733 
10,156,773  9,234,347 
Commercial mortgage-backed securities 2,103,907  1,932,665 
Residential mortgage-backed securities 582,833  557,333 
Asset-backed securities 2,066  2,012 
Total fixed maturity securities $ 12,845,579  $ 11,726,357 

d) The following table presents the components of net investment income.

Quarter Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2022 2021 2022 2021
Interest:
Tax-exempt municipal bonds $ 12,673  $ 14,293  $ 39,408  $ 43,631 
Taxable municipal bonds 17,488  16,320  52,613  49,236 
Other taxable bonds 42,316  39,705  123,520  119,718 
Short-term investments, including overnight deposits 17,633  633  24,634  2,179 
Dividends on equity securities 25,962  23,400  74,289  68,583 
Income (loss) from equity method investments (5,509) 882  (35,002) 13,825 
Other 1,103  (335) 7,041  (947)
111,666  94,898  286,503  296,225 
Investment expenses (3,935) (3,634) (12,380) (12,130)
Net investment income $ 107,731  $ 91,264  $ 274,123  $ 284,095 

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e) The following table presents the components of net investment gains (losses) and the change in net unrealized gains (losses) included in other comprehensive loss. Gross realized investment gains and losses on fixed maturity securities, short-term investments and other investments were not material to the consolidated financial statements and are presented on a net basis in the following table.