Markel CorporationGroup Inc. (Markel Group) is a diverse financial holding company servingcomprised of a varietydiverse family of niche markets.businesses and investments. The leadership teams of our businesses operate with a high degree of independence, while at the same time living the values that we call the Markel Style. Our specialty insurance business, Markel, sits at the core of our company. Through decades of sound underwriting, Markel has provided the capital base from which we built a system of businesses and investments that collectively increase Markel Group's durability and adaptability. We aspire to build one of the world's great companies by creating win-win-win outcomes for our customers, associates and shareholders. We deploy three financial engines in pursuit of this goal.

Our financial goals arethree interdependent engines form a system that provides diverse income streams, access to earn consistent underwritinga wide range of investment opportunities and the ability to efficiently move capital to the best ideas across our three engines. We allocate capital using a process that we have consistently followed for years. We first look to invest in our existing businesses for organic growth opportunities. After funding internal growth opportunities, we look to acquire controlling interests in businesses, build our portfolio of equity securities, or repurchase shares of our common stock. We believe our system is uniquely equipped for long-term growth. To mitigate the effects of short-term volatility and align with the long-term perspective that we apply to operating profitsour businesses and superior investment returnsmaking investments, we generally use five-year time periods to build shareholder value.measure our performance. We measure financial success by our ability to grow book value per common share and the market price per common share of our stock, or total shareholder return, at high rates of return over a long period of time. To mitigate effectsOver the past five years, our common share price increased at a compound annual rate of short-term volatility and align with6%. We also have considered the longer-term perspective we apply to operating our businesses, we generally use five-year time periods to measure our performance. Growth inperformance of book value per common share is an importantover the long-term, although we believe that as our business has evolved, this measure has become less reflective of shareholder value because a significant portion of our success because it includes all underwriting, operating and investing results.operations is not recorded at fair value. Over the past five years, the compound annual growth in book value per common share was 6%11%. Growth in total shareholder value is also an important measure of our success, as a significant portion of our operations are not recorded at fair value or otherwise captured in book value. Over the past five years, our common share price increased at a compound annual rate of 3%. While these measures, considered independently of other factors, fall below our internal targets, we remain confident in the strong operating performance of our businesses.

The following graph presents book valuestock price per common share and stock pricebook value per common share for the past five years as of December 31.

The following table presents summary financial data over the last five years, including book valuestock price per common share, market pricebook value per common share and other important financial measures and metrics.

Our insurance engine is comprised of the following types of operations:

Through our underwriting, ILSprogram services and program servicesother fronting and ILS operations, we have a suite of capabilities through which we can access capital to support our customers' risks, which includes our own capital through our underwriting operations, as well as third-party capital through our ILSprogram services and program servicesother fronting and ILS operations. Within each of these insurance platforms, we believe that our specialty product focus and niche market strategy enableenables us to develop expertise and specialized market knowledge. We seek to differentiate ourselves from competitors by our expertise, service, continuity and other value-based considerations, including the multiple platforms through which we can manage risk and deploy capital. For example, through our program services and other fronting platform, we have programs through which we write insurance policies on behalf of our ILS operations that are supported by third-party capital. Additionally, we cede certain risks historically written through our underwriting operations to our ILS operations to the extent those risks are more aligned with the risk profile of our ILS investors than our own corporate tolerance. Our ability to access multiple insurance platforms allows us to achieve income

streams from our insurance operations beyond the traditional underwriting model. We believe this multi-platform approach provides us with a unique

Within our underwriting operations, we underwrite specialty insurance products on a risk-bearing basis. The specialty insurance market differs significantly from the standard market. In the standard market, insurance rates and forms are highly regulated, products and coverages are largely uniform with relatively predictable exposures, and companies tend to compete for customers on the basis of price. In contrast, the specialty market provides coverage for hard-to-place risks that generally do not fit the underwriting criteria of standard carriers.

Competition in the specialty insurance market tends to focus less on price than in the standard insurance market and more on other value-based considerations, such as availability, service and expertise. While specialty market exposures may have higher perceived insurance risks than their standard market counterparts, we seek to manage these risks and achieve higher financial returns. To reach our financial and operational goals, we must have extensive knowledge and expertise in our chosen markets. Many of our larger accounts are considered on an individual basis where customized forms and tailored solutions are employed.

We also participate in the reinsurance market in certain classes of reinsurance product offerings, primarily casualty lines and certain other specialty lines. In the reinsurance market, our clients are other insurance companies, or cedents. We typically write our 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. Generally, we participate inTreaty reinsurance treaties withproducts are written globally on both a numberquota share and excess of other reinsurers, each with an allocated portion of the treaty, with the terms and conditions of the treaty being substantially the same for each participating reinsurer.loss basis. With treaty reinsurance contracts, we do not separately evaluate each of the individual risks assumed under the contracts and are largely dependent on the individual underwriting decisions made by the cedent. Accordingly, we review and analyze the cedent's risk management and underwriting practices in deciding whether to provide treaty reinsurance and in pricing of treaty reinsurance contracts. Additionally, we write casualty reinsurance on a facultative basis, which is distinct from treaty reinsurance in that we evaluate each risk individually to determine whether to assume the risk.

The following chart presents the composition of our underwriting operations between insuranceour Insurance segment and reinsuranceReinsurance segment based on 20222023 underwriting gross premium volume of $9.8 billion, which also aligns with our two reportable underwriting segments.

The following table summarizes our U.S. insurance and reinsurance underwriting subsidiaries.

Through these U.S. insurance and reinsurance subsidiaries, we are licensed, authorized, or accredited to write business in all 50 states and the District of Columbia.

The following table summarizes our international insurance and reinsurance underwriting subsidiaries.

Our underwriting operations write business on a global basis and utilize multiple distribution channels to access our targeted risks.

In the U.S., we write 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 our U.S. business is placed are wholesale insurance and reinsurance brokers, retail insurance agents and alternative channels, that includeincluding third-party managing general agents.

Our 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 or insurance products that are overlooked by large admitted carriers.insurers. The admitted market is subject to more state regulation than the E&S market, particularly with regard to rate and form filing requirements, restrictions on the ability to exit lines of business, premium tax paymentspayment 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. We are looking for opportunities to expand our business placed through retail insurance agents in order to capture additional business in the admitted market that fits our risk profile. Our admitted business is also placed through managing general agents, which have broader underwriting authority than retail agents. These agents 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. In addition, certain products and programs written on an admitted basis are marketed directly to consumers. The majority of our admitted insurance operations are conducted through MIC, MAIC, FCIC and Essentia. Our admitted operations also include SIC, SNIC and NSIC.

We also participate in the London insurance and reinsurance market, which is known for its ability to provide innovative, tailored coverage and capacity for unique and hard-to-place risks. Hard-to-place risks, inmany of which have significantly higher limits than risks placed through the London market are generally distinguishable from standard risks due to the complexity or significant size of the risk. It is primarily a broker market, which means that insurancemarket. Insurance brokers bringplace most of the business toin 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. When we write business in the subscription market, we prefer to participate as lead underwriter in order to control underwriting terms, policy conditions and claims handling. We participate 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 our Lloyd's operations are conducted. Syndicate 3000 is managed by Markel Syndicate Management Limited. In addition to their headquarters in London, Markel Capital and MIICL havemaintain branch offices across the United Kingdom (U.K.), Europe, Canada, Asia, Australia and the Middle East through which we are able to offer insurance and reinsurance. The London insurance market produced approximately $94 billion of gross written premium in 2021, of which $53 billion was produced by Lloyd's syndicates.3,4 In 2021, our share of the London market was approximately 2% as measured by gross written premiums.

In Europe, we also write 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 (EEA).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 we operate in various other markets, substantially all of our gross written premiums in 20222023 were written from our platforms in the United States, the United Kingdom, Bermuda and Germany. In 2022,2023, 80% of gross premium writings from our global underwriting operations were attributed to risks or cedents located in the United States. In each of the markets in which we operate, we seek to develop and capitalize on relationships with insurance and reinsurance brokers, insurance and reinsurance companies, large global corporations and financial intermediaries to develop and underwrite business. 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 2022,2023, the top threefive independent brokers accounted for 28%37% of gross premiums written in our underwriting segments.operations. Additionally, a significant portion of the reinsurance contracts securitized through our ILS operations, for the benefit of third-party investors, are placed through these threefive independent brokers.

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 our underwriting operations, we seek to retain as much of our profitable business as possible while managing volatility within our underwriting results.results and capital requirements at our insurance subsidiaries. We purchase reinsurance and retrocessional reinsurance to manage our net retention on individual risks and overall exposure to losses, while providing us with the ability to offer policies with sufficient limits to meet policyholder needs. This includes purchasing sufficient coverage for our catastrophe-exposed policies to ensure that our net retained catastrophe risk is within our corporate tolerances. Our exposure to catastrophe risk has been significantly reduced over the past two years with the discontinuation of our retrocessional reinsurance business and the transition of our property reinsurance business from our underwriting operations to our Nephila ILS operations, where it is placed with third-party capital. See "Program Services and Other Fronting" for further discussion of this business. We continue to have exposure to property risks within our insurance operations.

See note 12 of the notes to consolidated financial statements included under Item 8 and Item 7A Quantitative and Qualitative Disclosures About Market Risk for additional information about our ceded reinsurance programs and exposures.

We compete with numerous domestic and international insurance companies and reinsurers, Lloyd's syndicates, risk retention groups, insurance buying groups, risk securitization programs, alternative capital sources, such as that provided through ILS, and alternative self-insurance mechanisms. We also compete with new companies that continue to be formed to enter the insurance and reinsurance markets, particularly companies with new or "disruptive" technologies or business models. Competition may take the form of lower prices, broader coverages, greater product flexibility, enhanced digital capabilities for distribution of insurance products, higher coverage limits, higher quality services or higher ratings by independent rating agencies. In all of our markets, we compete on the basis of overall financial strength, ratings assigned by independent rating agencies, development of specialty products to satisfy well-defined market needs and by maintaining relationships with agents, brokers and insureds who rely on our expertise. This expertise is our principal means of competing. We offer a diverse portfolio of products, each with its own distinct competitive environment, which requires us to be responsive to changes in market conditions for individual product lines. With each of our products, we seek to write business that produces consistent underwriting profits by competing with innovative ideas, appropriate pricing, expense control and quality servicemaintaining adequate rates for our premium writings in relation to policyholders, agents and brokers. We also leverage our underwriting capacity and expertise through relationships with start-ups and digital distribution partners through which we can develop ideas that leverage emerging technologies and modern customer acquisition strategies to create the service and experience that consumers have grown to expect and demand.expected loss cost trends.

Few barriers exist to prevent insurers and reinsurerscompetition from entering our markets within the property and casualty industry. Market conditions, risk tolerance and capital capacity influence the degree of competition at any point in time. During periods of excess underwriting capacity, as defined by availability of capital, competition can result in lower pricing and less favorable policy terms and conditions for insurers. During periods of reduced underwriting capacity, pricing and policy terms and conditions are generally more favorable for insurers. Historically, the performance of the property and casualty insurance and reinsurance industries has tended to fluctuate in cyclical periods of price competition and excess underwriting capacity, followed by periods of high premium rates and shortages of underwriting capacity. At any given time, our portfolio of insurance products could be experiencing varying combinations of these characteristics. This cyclical market pattern can be more pronounced in the specialty insurance and reinsurance markets in which we compete than the standard insurance market.

Following several years of price decreases and the high level of natural catastrophes that occurred in 2017, we began seeing more favorable rates in 2018, particularly onWithin our catastrophe-exposed and loss-affected business. Since 2018, we have continued to see rate strengthening across most product lines following the continued high level of natural catastrophes and significant losses attributed to the COVID-19 pandemic, as well as general market conditions. However, we began to see rate increases moderate on many of our product lines in 2022. In some product lines, such as directors and officers, we even began to see single digit rate decreases in the latter part of 2022. The overall strengthening of rates in recent years has been most prominent within our professional liability and general liability product lines, reflecting the impacts of both economic and social inflation on loss costs. Recent increases in economic and social inflation have created more uncertainty around the ultimate losses that will be incurred to settle claims on these longer-tail product lines. These factors, as well as the impacts of the low interest rate environment on interest income in recent years, have contributed to the strong rate environment. The primary exception to the favorable rate environment is workers' compensation, where we continue to see low single digit rate decreases given generally favorable loss experience in recent years.

We routinely review the pricing for all of our major product lines. When we believe the prevailing market price will not support our underwriting profit targets, the business is not written. As a result of our underwriting discipline, gross premium volume may vary when we alter our product offerings to maintain or improve underwriting profitability.

We monitor and assess the performance of our ongoing underwriting operations on a global basis in the following two segments: Insurance and Reinsurance. See note 2 of the notes to consolidated financial statements included under Item 8 for additional segment reporting disclosures.

Our Insurance segment reported gross premium volume of $8.6$9.2 billion, earned premiums of $6.5$7.3 billion and an underwriting profit of $549.9$162.2 million in 2022.2023. The following chart presents the composition of our Insurance segment by division based on 20222023 gross premium volume.

The Markel Specialty division is comprised of our U.S. and Bermuda based insurance underwriting operations and writes business for insureds ranging from individuals and small businesses to Fortune 1000 companies in the U.S., Bermuda, the U.K., the E.U., Asia and the E.U.Australia. The Markel Specialty division is a unified platform that provides easy access to our diverse portfolio of products and capabilities. The Markel International division writes business worldwide from our London and Munich-based platforms, which include branch offices aroundin Canada, Asia, Australia and across the world.E.U. The State National division writes collateral protection insurance for automobile and other vehicle loans in the U.S., which insures personal automobiles and other vehicles held as collateral for loans made by credit unions, banks and specialty finance companies through its lender services product line on both an admitted and non-admitted basis.

The following chart displays the types of products written in our Insurance segment based on 20222023 gross premium volume.

Our 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, directors and officers, cyber, employment practices liability, professional indemnity, transaction liability, intellectual property and union liability. Errors and omissions coverage provides solutions for specialized professions including lawyers, accountants, agents and brokers, service technicians and consultants, as well as other less-specialized professionals. Directors and officers coverage is provided for publicly-traded, private and non-profit companies, including financial institutions and Fortune 1000 companies. Cyber products provide coverage for, among other things, data breach and privacy liability, data breach loss to insureds and electronic media coverage. We also offer claims-made professional liability coverage for individual healthcare providers such as therapists, pharmacists, physician assistants and nurse anesthetists, and coverages for medical facilities and other allied healthcare risks, such as clinics, laboratories, pharmacies and senior living facilities.

Personal lines products provide first and third-party coverages in the U.S. for classic cars, motorcycles and a variety of personal watercraft, including vintage boats, high-performance boats and yachts and recreational vehicles, such as motorcycles, snowmobiles and ATVs. Based on the seasonal nature of much of our personal lines business, we generally will experience higher claims activity during the second and third quarters of the year. Additionally, property coverages are offered for mobile homes, dwellings and 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. Our 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. WarMarine war coverage includes protections for the hulls of ships, and other related interests, against war and associated perils. Terrorism coverage providesincludes coverage for property damage and business interruption related to political and civil violence includingand war and civil 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 are typically lower frequency andcan present higher severity in nature than more standard property risks.risks due to the impacts from earthquakes and severe weather events such as hurricanes, convective storms and wildfires. Our property coverages are exposed to windstorm losses that, based on the seasonal nature of those events, are more likely to occur in the third and fourth quarters of the year. Our property risks range from small, single-location accounts

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, including first and third-party coverages such as packaged policies for providers of leisure and recreational activities.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, as well as other coverages for specific credit risks, markets and contingencies. Key credit risks covered include those of counterparty insolvency and defaults by government-owned entities. The key coverages under surety products include contractual performance and payment risks, commercial license and permit obligations and obligations related to judicial proceedings such as court and fiduciary bonds.

Other product lines within the Insurance segment primarily include auto and collateral protection insurance.insurance, which insures personal automobiles and other vehicles held as collateral for loans made by credit unions, banks and specialty finance companies.

Our Reinsurance segment product offerings are underwritten primarily by our Global Reinsurance division, which operates from platforms in the U.S., Bermuda and the U.K. We write quota share and excess of loss reinsurance on a local, national and global basis. Our Reinsurance segment reported gross premium volume of $1.2$1.0 billion, earned premiums of $1.1$1.0 billion and an underwriting profitloss of $83.9$19.3 million in 2022.2023. The following chart displays the types of products written in our Reinsurance segment based on 20222023 gross premium volume.

General liability reinsurance primarily consists of umbrella and excess casualty products, as well as environmental liability products covering pollution legal liability and contractors' pollution exposures.

Our specialty treaty reinsurance products are also written on a quota share and excess of loss basis across a wide range of specialty product lines, primarily consisting of the following:

Previously, we also wrote propertyProfessional liability reinsurance and retrocessional reinsurance business. We discontinued writing these lines effective January 1, 2021 and 2022, respectively, and effective January 1, 2022, we were off-risk for substantially all property loss exposures, including catastrophe exposures, previously written within our Reinsurance segment. Any such business is now written on behalfprimarily consists of our Nephila ILS operations to the extent it matches the risk-profile of our third-party ILS investors, who will ultimately assume the risk.following:

Our program services and other fronting business generates fee income in the form of ceding fees in exchange for fronting insurance and reinsurance business tofor other insurance carriers (capacity providers). In general, fronting refers to business in which we write 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 results of our program services and other fronting operations are not included in a reportable segment.

Our program services business, which is provided through our State National division, 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 reinsurance risk, including the Nephila Reinsurers. These reinsurers areinclude domestic and foreign insurers and institutional risk investors that want to access specific lines of U.S. property and casualty insurance business but may not have the required licenses, and filings or financial strength ratings to do so.

Through our program services business, we write 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 our State National division is separately managed from our underwriting divisions, which may write similar products, in order to protect our program services customers.

The following table summarizes the subsidiaries through which our program services business is written.

TheseThrough these subsidiaries, areour program services business is licensed or authorized or licensed to write property and casualty insurancebusiness in all 50 states and the District of Columbia. Many of our programs are arranged with the assistance of brokers that are seeking to provide customized insurance solutions for specialty insurance business that requires a carrier rated "A" by A.M. Best Company (Best)(A.M. Best). Our specialized

Total revenues attributed to our program services business for the year ended December 31, 20222023 were $133.3$151.8 million. Our program services business generated $2.8$2.9 billion of gross written premium volume for the year ended December 31, 2022.2023.

In our program services business, we generally enter into quota share reinsurance agreements whereby we cede to the capacity providers 100% of the premium written and substantially all of our gross liability under all policies issued by and on behalf of us by the producer. The capacity providers are generally entitled to 100% of the net premiums received on policies reinsured, less the ceding fee to us, the commission paid to the producer and premium taxes on the policies. In connection with writing this business, we also enter into agency agreements with both the producer and the capacity providers whereby the producer and capacity providers are generally required to deal directly with each other to develop business structures and terms to implement and maintain the ongoing contractual relationship. In a number of cases, the producer and capacity providers for a program are part of the same organization or are otherwise affiliated. As a result of our contract design, substantially all of the underwriting risk and operational risk inherent in the arrangement is borne by the capacity providers. The capacity providers assume and are liable for substantially all losses incurred in connection with the risks under the reinsurance agreement, including judgments and settlements.

Our contracts with capacity providers do not legally discharge us from our primary liability for the full amount of the policies, and we 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, we remain exposed to the credit risk of capacity providers, orincluding the risk that one of our capacity providers becomes insolvent or is otherwise unable or unwilling to pay policyholder claims. We mitigate this credit risk generally by either selecting well capitalized, highly rated authorized capacity providers or requiring that the capacity provider post substantial collateral to secure the reinsured risks, which, in some instances, exceeds the related reinsurance recoverable.

In certain instances,our other fronting business, we also leverage the strength of our underwriting platform, including our highly rated insurance subsidiaries, to write business on behalf of our Nephila ILS operations, in exchange for ceding fees, to support theirits business plans and assist in meeting theirits desired return objectives. ThisOur other fronting business is conductedmanaged separately from our program services business. The results of our other fronting business are not included in a reportable segment. Total revenues attributed to our other fronting business for the year ended December 31, 2023 were $20.7 million. Our other fronting business generated $840.9 million of gross written premium volume for the year ended December 31, 2023.

Business written on behalf of our Nephila ILS operations within both our program services and other fronting operations primarily consists of catastrophe-exposed property insurance and reinsurance business, as well as specialty and specialtyclimate reinsurance business. The business written is ceded to the Nephila Reinsurers, whose investors ultimately assume the risk. To mitigate credit risk for this business, we require collateral up to a specified level of annual aggregate agreement year losses, which is held in a trust for which we are the beneficiary. See note 18 of the notes to consolidated financial statements included under Item 8 for further details regarding our programs with Nephila Reinsurers.

Although we reinsure substantially all of the risks inherent in our program services business and ILSother fronting arrangements,businesses, we have certain programs that contain limits on our reinsurers' obligations to us that expose us to underwriting risk, including loss ratio caps, aggregate reinsurance limits or exclusion of the credit risk of producers. Under certain programs, including programs and contracts with Nephila Reinsurers, we also bear underwriting risk for annual aggregate agreement year losses in excess of a limit that we believe is unlikely to be exceeded.

The Nephila Reinsurers subscribe to various property, climate and specialty reinsurance contracts based on their investors' risk profiles, which include business ceded by our underwriting and program services and other fronting platforms. We write this business on behalf of our Nephila ILS operations to the extent it fits Nephila investors' risk profile and cede substantially all of the risk to Nephila Reinsurers. See note 18 of the notes to consolidated financial statements included under Item 8 for further details regarding transactions with entities managed through our programs with Nephila Reinsurers.operations.

Financial stability and strength are important purchase considerations of policyholders, cedents and insurance agents and brokers. Because an insurance premium paid today purchases coverage for losses that might not be paid for many years, the financial viability of the insurer is of critical concern. Various independent rating agencies provide information and assign ratings to assist buyers in their search for financially sound insurers. Rating agencies periodically re-evaluate assigned ratings based upon changes in the insurer's operating results, financial condition or other significant factors influencing the insurer's business. ChangesDowngrades in assigned ratings and other negative actions could have an adverse impact on an insurer's ability to write new business.

Rating agencies assign financial strength ratings (FSRs) to property and casualty insurance companies, or group of companies, based on quantitative criteria such as profitability, leverage and liquidity, as well as qualitative assessments such as the spread of risk, themarket placement, business profile, adequacy and soundness of ceded reinsurance, the quality and estimated market value of assets, the adequacy of loss reserves and surplus and the competence, experience and integrity of management.

SeventeenSixteen of our eighteenseventeen insurance subsidiaries are rated by Best. All seventeen ofA.M. Best, while our insurance subsidiaries rated by Best have been assigned an FSR of "A" (excellent). Our Lloyd's syndicate is part of a group rating for the Lloyd's overall market, whichmarket. All sixteen of our insurance subsidiaries rated by A.M. Best have been assigned an FSR of "A" (excellent). The Lloyd's group has been assigned an FSR of "A" (excellent) by A.M. Best.

Five of our eighteenseventeen insurance subsidiaries are rated by Moody's Corporation (Moody's). All five insurance subsidiaries rated by Moody's have been assigned an FSR of "A2" (good).

Our business strategy recognizesinvestment operations manage the importancecapital held within our underwriting operations, as well as capital allocated by Markel Group. Invested assets managed through our investment operations includes our portfolio of both consistentpublicly traded fixed maturity and equity securities, as well as cash and short-term investments.

Our underwriting and operating profits and superioroperations provide our investment returns to build shareholder value. The majorityoperations with steady inflows of our investable assets come from premiums paid by policyholders. We rely on sound underwriting practices to produce investable funds. Policyholderpremiums. These funds are invested predominantly in high-quality government and municipal bonds and mortgage-backed securities that generally match the duration and currency of our loss reserves. We typically hold these fixed maturity investments until maturity. As a result, unrealized holding gains and losses on these securities are generally expected to reverse as the securities mature. Premiums collected through our underwriting operations may also be held as short-term investments or cash and cash equivalents to provide short-term liquidity for projected claims payments, reinsurance costs and operating expenses. The balance of

Our investments in equity securities are predominantly held within our investable assets, comprised of shareholder funds,regulated insurance subsidiaries to support capital requirements. Capital held by our insurance subsidiaries beyond that which we anticipate will be needed to cover claims payments and operating expenses is available to be invested in equity securities, which overalong with additional capital allocated for investment purposes by Markel Group. We allocate a higher percentage of capital to equity securities than most other insurance companies. Over the long run, equity securities have produced higher returns relative to fixed maturity securities and short-term investments.

When purchasing equity securities, we seek to invest in profitable companies with high returns on capital and low debt, with honest and talented management that exhibitand significant reinvestment opportunities and capital discipline, atall while paying reasonable prices.prices for those securities. We intend to hold these equity investments over the long-term. We believe our long-term time horizon and internal sourcing of capital for investment provides us with a distinct competitive advantage compared to other companies. Substantially all of our investment portfolio is managed by company employees.employees, which helps minimize costs in our investment operations. The breadth of our operating businesses, and the experience we garner from supporting them, also informs and enhances the efficacy of our investment activities.

Invested assets, comprised of fixed maturity securities, equity securities, short-term investments, cash and cash equivalents and restricted cash and cash equivalents, were $27.4$30.9 billion at December 31, 2022.2023. The following chart displays the composition of our invested assets as of December 31, 2022.2023.

We measure our investment performance by analyzing net investment income earned on our investment portfolio, as well as throughwhich reflects the recurring interest and dividend earnings on our investment portfolio. In 2023, our net investment income was $734.5 million. We also analyze net investment gains, which includesinclude unrealized gains and losses on our equity portfolio, andportfolio. Based on the changepotential for volatility in net unrealized investment gains on available-for-sale investments. Our performance measures also include investment yield and taxable equivalent total investment return, which is a non-GAAPthe financial measure. We focus on long-term investment performance, understandingmarkets, we understand that the level of investment gains or losses and unrealized gains or losses may vary from one period to the next.next, and therefore believe that our investment performance is best analyzed over longer periods of time. Our annual return on equity securities for the five-year period ended December 31, 2023 was 14.6%.

Through our wholly owned subsidiary Markel Ventures, Inc. (Markel Ventures), we own controlling interests in various high-quality businesses that operate in a variety of different industries with shared values and the shared goal of positively contributing to the long-term financial performance of Markel Corporation.Group. Management teams for each business operate autonomously and are responsible for developing strategic initiatives, managing day-to-day operations and making investment and capital allocation decisions for their respective companies.

Our chief operating decision maker allocates resources to and assesses the performance of these various businesses in the aggregate as the Markel Ventures segment. See note 2 of the notes to consolidated financial statements included under Item 8 for additional segment reporting disclosures.

In 2022,2023, our Markel Ventures operations reported revenues of $4.8$5.0 billion, operating income of $325.2 million, net income to shareholders of $192.6$437.5 million and earnings before interest, income taxes, depreciation and amortization (EBITDA) of $506.3$628.5 million. We use Markel Ventures EBITDA, which is a non-GAAP financial measure, as an operating performance measure in conjunction with revenues, operating income and net income. See "Markel Ventures" under Item 7 Management's Discussion & Analysis of Financial Condition and Results of Operations for more information on our Markel Ventures results, including EBITDA.

The following chart displays the types of businesses within our Markel Ventures segment based on 20222023 operating revenues. Our seniorMarkel Ventures management team does not manage the Markel Ventures portfolio of businesses at this level of aggregation due to the distinct characteristics of each business and the autonomy with which local management operates each business.

Markel Ventures businesses encounter a variety of competitors that vary by industry, end market and geographic area. Each Markel Ventures business has several main competitors and numerous smaller ones in most of its respective end markets and geographic areas.

Many of the businesses in this segment experience revenue fluctuations over time due to the cyclical nature of supply and demand in their particular industry. For example, the construction industry is cyclical based on certain larger economic trends and factors, including the inflationary and interest rate environment and, for some businesses, the level of government investment. Additionally, many of our businesses experience fluctuation in demand throughout the year based on the seasonality of the products they sell or services they provide. For example, the demand for ornamental plants is particularly high during the spring and summer seasons as compared to the rest of the year.

Businesses in this segment are reliant on inputs, such as raw materials and labor, to manufacture products and deliver services, and the operating results of these businesses could be impacted by the ability or inability to source these inputs and obtain price increases from customers in response to increases in the price of these inputs, including the cost of shipping. For example, shipping costs at some of our businesses increased significantly in 2021 and 2022 before reverting to more typical levels in 2023, which has resulted in smallerhigher margins as we have been unablein 2023 compared to pass all of these cost increases through to our customers in certain instances. 2022 at the impacted businesses.

Management teams for each of our businesses proactively manage the risks and challenges posed by cyclicality, seasonality and inflation, among other things, in a variety of ways as appropriate and as needed for their business.

We are subject to extensive U.S. state and federal, andas well as international, regulation and supervision in the jurisdictions in which we do business. Regulations vary from jurisdiction to jurisdiction. Additionally, as a company with publicly-tradedpublicly traded securities, we are 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 New York Stock Exchange relating to reporting and disclosure, accounting and financial reporting, corporate governance and other matters.

The following is a summary of significant regulations that apply to our businesses, but it is not intended to be a comprehensive review of every regulation to which we are subject. For information regarding certain risks associated with regulations applicable to us,our businesses, see Item 1A Risk Factors.

The U.S. federal government and its regulatory agencies generally do not directly regulate the business of insurance. However, two federal government bodies, the Federal Insurance Office (FIO) and the Financial Stability Oversight Council (FSOC), each created under The Dodd Frank Wall Street Reform and Consumer Protection Act, may impact the regulation of insurance. Although the FIO is prohibited from directly regulating the business of insurance, it has authority to represent the U.S. in international insurance matters and has limited powers to preempt certain types of state insurance laws. The FIO also can recommend to the FSOC that it designate an insurer as an entity posing risks to the U.S. financial stability in the event of the insurer's material financial distress or failure. We have not been so designated. The U.S. federal laws that most affect our day-to-day insurance operations are: the Gramm-Leach-Bliley Act; the Fair Credit Reporting Act; the Health Insurance Portability and Accountability Act of 1996, as amended;1996; the Terrorism Risk Insurance Act of 2002, as amended;2002; anti-money laundering laws and regulations; the Nonadmitted and Reinsurance Reform Act of 2010, as amended;2010; the Foreign Corrupt Practices Act, and the rules and regulations of the Office of Foreign Assets Control.

Our 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).

GDPR requires businesses operating in the E.U., and businesses transacting with E.U. citizens, to comply with conditions for processing personal data. Following the U.K.'s exit from the E.U., GDPR was transposed into U.K. law. The E.U. has granted adequacy status to the U.K.'s data protection laws, valid until June 2025 with the possibility of renewal, meaning that they are deemed essentially equivalent to E.U. data protection laws.

Solvency II requires our U.K. and German businesses to maintain certain capital standards and publish risk-related information in the form of a Solvency and Financial Condition Report. Following the U.K.'s exit from the E.U., Solvency II also was transposed into U.K. law as retained law. The U.K. government, under the Financial Services and Markets Bill, plansAct 2023, has opted to repeal certain portions of retained law with an approach to regulationE.U. law. This repeal will occur in stages and, where necessary, after replacement regulations designed for the U.K., including are in place. This repeal of retained E.U. law includes reforms to Solvency II. The Prudential Regulation Authority has consulted on the reforms, to be known as Solvency UK, which are expected to be implemented in 2024.

Our Nephila insurance-linked securities operations are subject to regulation and supervision by various regulatory authorities, both in the U.S. and internationally. Certain of our ILS subsidiaries are organized and regulated as follows:

Certain other ILS subsidiaries serve as the investment manager to one or more private funds that are registered with the BMA under the Investment Funds Act 2006, as amended, or the Segregated Accounts Companies Act 2000, as amended. In addition, these operations include business relationships with certain U.S., U.K. and Bermuda insurance companies that are subject to U.S. and international insurance regulation as previously described in this "Regulatory Environment" section.

As a result, subsidiaries involved in our ILS operations are subject to regulations that may impose substantive and material restrictions and requirements on their operations, including, among other things: a broader fiduciary duty to act in the best interests of their clients; disclosure of information about our businesses and conflicts of interests to clients; maintenance of written policies and procedures; maintenance of extensive books and records; restrictions on the types of fees we may charge, including performance fees; restrictions on solicitation arrangements; requirements regarding engaging in transactions with clients; maintenance of an effective compliance program; and other restrictions and requirements applicable to custody of client assets, client privacy, advertising, pay-to-play prohibitions and cybersecurity; as well as possible sanctions, disciplinary actions or other penalties for non-compliance.

Our Markel Ventures businesses are subject to a wide variety of U.S. federal, state, and local laws and regulations, as well as international laws and regulations applicable to their international operations. Specifically, the most significant of these laws and regulations cover the following areas: safety, health, employment, the environment, transportation, U.S. and international trade, anti-corruption, data privacy and security and government contracts.

Our culture is our greatest asset and is defined by the Markel Style. Written in 1986, in preparation for our initial public offering, the Markel Style memorialized how we seek to operate our businesses and treat one another. It continues to provide our guiding principles across our diverse group of businesses. Key within the Markel Style is the encouragement to look for a better way to do things, to challenge management. We also seek spontaneity and flexibility and have a respect for authority, but disdain for bureaucracy. Our diverse financial holding company and each of our businesses is managed in a way to accomplish these principles. Each of our businesses operates with a high degree of autonomy so long as they operate within the principles of the Markel Style. This allows our managers to make decisions that are best for their employees and customers, as well as our shareholders. We believe this high degree of empowerment leads to the satisfaction that comes from being trusted in the responsibilities one has been given.

Further outlined in the Markel Style is our creed of honesty and fairness in all our dealings; holding the individual's right to self-determination in the highest light; putting aside individual concerns in the spirit of teamwork; and providing an atmosphere in which people can reach their full potential. We greatly value our employees, encourage their career development and reward their pursuit of excellence, while also celebrating a diverse workforce.

At December 31, 2022,2023, we had approximately 20,90021,600 employees, of whom approximately 5,0005,400 were employed within our insurance operations and approximately 15,90016,200 were employed within our Markel Ventures operations.

Our principalspecialty insurance business, Markel, markets and underwrites specialty insurance products and within that business existsproducts. Markel has a well-developed process to ensure effective performance management, including an embedded annual and mid-year review process that enables goal setting, development planning and performance assessment. Within our insurance operations, weMarkel has also have undertaken significant work over recent years to establishestablished global leadership development programs for different levels of leadership at Markel, including partnering with various renowned business schools to create leading-edge curriculumcurricula in this area.

With the Markel Style as ourthe foundation, we haveMarkel has identified five pillars of focus that relate to today's challenges and opportunities—diversity and inclusion, community, innovation, well-being, and recognition. This program is both company and employee led—collectively, we want to bring the values of the Markel Style to life with our actions, not just our words. OurThe intent is to create an environment where employees are able to authentically bring their true selves to work, a place where

Employee health and overall well-being is a key priority, and we provide a range of employee and eligible partner plans and programs, including health and voluntary benefits. These offerings include a variety of financial protection programs to help our employees meet their unique investment and savings needs including life insurance, retirement savings with company contributions in most situations and an employee stock purchase plan. Comprehensive employee assistance programs are available in all of our major markets along with other well-being and fitness resources.

We rely on our employees' ideas and input to help make Markel a great place to work. For example, senior leadership conducts regular employee communication meetings, inclusive of question and answer sessions, across our insurance operations providingand provides opportunities for employees to share their ideas on how we can improve employee engagement. In addition, every two years we conduct a major, global employee engagement survey, which in early 2022 garnered 88% participation, and which enables us to identify, focus on and track progress against key engagement drivers and external norms for high performing companies. This survey has generated additional ideas for employee engagement;engagement, and we have made meaningful changes and improvements in our human capital practices based on this feedback. Plans are underway to conduct an employee engagement survey in early 2024. Additionally, Markel conducts regular pulse and employee net promoter score surveys on a departmental level across the organization throughout the year.

We are committed to embracing all aspects of diversity, including diversity of perspective, which we believe is crucial to sustainable success. Markel accordingly supports and encourages focused efforts to continue to build the diversity of our employee population and the inclusiveness of our culture. Our diversity and inclusion efforts seek to cultivate an inclusive environment in which every employee feels valued, respected and accepted. We believe this environment helps us increase creativity and innovation, foster business connections, serve our customers and maintain our market leadership.

Within our insurance business, ourMarkel's global Diversity and Inclusion (D&I) Steering Committee comprises more than 15 senior managers who are charged with advising on D&I strategy and providing leadership support and advocacy for our D&I efforts. Our Human Resources leadership team works to further shape the D&I strategy for our global workforce, and to ensure the integration of our D&I efforts with our global talent acquisition and development processes. We have various early career programs open to a diverse range of applicants and a regional scholarship program that is focused on underrepresented groups.

Our insurance operations supportMarkel supports a range of employee-led D&I networks and resource groups, including our Markel Women's Network, BEAM (Black Engagement at Markel), PRISM (LGBTQ+), Jitneys (Young Professionals), Markel Asian Professionals Network, Markel Veterans Network, UN1DOS (Latin and Hispanic Network), and across our international operations, an Inclusion Network with connections to a number of the London market partner networks. All of these networks and organizations have put in place goals and programming that are focused on education and development, community engagement, talent acquisition and networking/support. Additionally, we continue our global sponsorship of Dive-In, the insurance industry's annual diversity and inclusion festival.

Our Markel Ventures operations are comprised of a diverse portfolio of businesses from different industries through which we own controlling interests. The Markel Ventures operations are viewed by management as separate and distinct from our insurance operations with local management teams that direct the strategy and day-to-day operations of their respective companies, including human capital matters. When making these acquisitions, we seek, among other things, businesses whose leadership teams demonstrate equal measures of both integrity and talent. As a result, each Markel Ventures business fosters a culture within their operations, and with their employees, that aligns with the principles of the Markel Style.

A wide range of factors could materially affect our future prospects and performance. The matters addressed in Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations, including under "Safe Harbor and Cautionary Statement" and "Critical Accounting Estimates", and Item 7A Quantitative and Qualitative Disclosures About Market Risk, as well as other information included or incorporated in this report, describe many of the significant risks that could affect our businesses, results of operations and financial condition. We are also subject to the risks discussed below.

One or more of the risks discussed in this Item 1A. Risk Factors, and others we cannot anticipate, could have material adverse effects on our results of operations and financial condition; and the extent of these effects will depend, at least in part, on the scope, severity, frequency or duration of the specific event or circumstance. In addition, we may take steps to prevent, mitigate or manage potential risks or liabilities, and related developments, and some of those steps may have a material adverse effect on our results of operations and financial condition. Even if an unfavorable outcome does not materialize, these factors, and actions we may take in response, may have a material adverse impact on our reputation or result in substantial expense and disruption.

Headings and sub-headings for the Risk Factors below are for reference purposes only and are not intended to limit or affect in any way the meaning or scope of each Risk Factor.

Our program services and other fronting business generates fee income 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 we write insurance on behalf of a general agent or disruptions from catastrophes. Ascapacity provider and then cede all, or substantially all, of the risk under these policies to the capacity provider in exchange for ceding fees. The results of our program services and other fronting operations are not included in a company with significantreportable segment.

Our program services business, which is provided through our State National division, 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 reinsurance risk, including the Nephila Reinsurers. These reinsurers include domestic and foreign insurers and institutional risk investors that want to access specific lines of U.S. property and casualty insurance business but may not have the required licenses, filings or financial strength ratings to do so.

Through our program services business, we write 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 our State National division is separately managed from our underwriting divisions, which may write similar products, in order to protect our program services customers.

In our other fronting business, we leverage the strength of our underwriting platform, including our highly rated insurance subsidiaries, to write business on behalf of our Nephila ILS operations, we may experience lossesin exchange for ceding fees, to support its business plans and assist in meeting its desired return objectives. Our other fronting business is managed separately from man-made or natural catastrophes. Catastrophes include, butour program services business. The results of our other fronting business are not limitedincluded in a reportable segment. Total revenues attributed to windstorms, hurricanes, earthquakes, tornadoes, derechos, hail, severe winter weatherour other fronting business for the year ended December 31, 2023 were $20.7 million. Our other fronting business generated $840.9 million of gross written premium volume for the year ended December 31, 2023.

Business written on behalf of our Nephila ILS operations within both our program services and wildfiresother fronting operations primarily consists of catastrophe-exposed property insurance and may include pandemicsreinsurance business, as well as specialty and events relatedclimate reinsurance business. The business written is ceded to terrorism, broad reaching cyberattacks, riots and political and civil unrest. Whilethe Nephila Reinsurers, whose investors ultimately assume the risk. To mitigate credit risk for this business, we employ catastrophe modeling toolsrequire collateral up to a specified level of annual aggregate agreement year losses, which is held in a trust for which we are the beneficiary. See note 18 of the notes to consolidated financial statements included under Item 8 for further details regarding our programs with Nephila Reinsurers.

Although we reinsure substantially all of the risks inherent in our program services and other fronting businesses, we have certain programs that contain limits on our reinsurers' obligations to us that expose us to underwriting process, we cannot predict how severe a potential catastrophe will be before it occurs. The extent of losses from catastrophes is a functionrisk, including loss ratio caps, aggregate reinsurance limits or exclusion of the total amountcredit risk of producers. Under certain programs, including programs and contracts with Nephila Reinsurers, we also bear underwriting risk for annual aggregate agreement year losses incurred,in excess of a limit that we believe is unlikely to be exceeded.

Our insurance-linked securities operations are primarily comprised of our Nephila operations and are not included in a reportable segment. Nephila Holdings Ltd. (together with its subsidiaries, Nephila) provides investment and insurance management services through which we offer alternative capital to the number of insureds affected,insurance and reinsurance markets while providing investors with investment strategies that typically are uncorrelated with traditional asset classes. We receive management fees for investment and insurance management services provided through these operations, and for certain funds, incentive fees based on their annual performance. Our management fees are based on the frequency and severitynet asset value of the events, the effectivenessaccounts managed for most of our catastrophe risk management programfunds and gross premium volume for the adequacy of our reinsurance coverage. Most catastrophes occur over a small geographic area; however, some catastrophes may produce significant damage in large, heavily populated areas. In addition, catastrophes may have a material adverse effect on the investment management and incentive fees earned byremaining funds. Total revenues from our insurance-linked securities (ILS) operations for the year ended December 31, 2023 were $99.5 million. As of December 31, 2023, Nephila's net assets under management were $6.8 billion.

Our fund management operations provide insurance and returns on our investmentsinvestment management services for a broad range of investment products for insurance and reinsurance companies, government entities, banks, hedge funds, pension funds and institutional investors, including insurance-linked securities such as catastrophe bonds, insurance swaps, traditional reinsurance contracts, industry loss warranties and other financial instruments. Nephila serves as the investment manager to several Bermuda based private funds (the Nephila Funds). To provide access for the Nephila Funds to a variety of insurance-linked securities in ILS funds. Catastrophes also may result in significant disruptionsthe property catastrophe, climate and specialty markets, Nephila acts as an insurance manager to certain Bermuda Class 3, collateralized and special purpose reinsurance companies, Lloyd's Syndicate 2357 and Lloyd's Syndicate 2358 (collectively, the Nephila Reinsurers). 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 our insuranceconsolidated financial statements.

The Nephila Reinsurers subscribe to various property, climate and specialty reinsurance contracts based on their investors' risk profiles, which include business ceded by our underwriting and program services and other fronting platforms. We write this business on behalf of our Nephila ILS operations to the extent it fits Nephila investors' risk profile and cede substantially all of the risk to Nephila Reinsurers. See note 18 of the notes to consolidated financial statements included under Item 8 for further details regarding transactions with entities managed through our Nephila operations.

Our investment operations manage the capital held within our underwriting operations, as well as capital allocated by Markel Group. Invested assets managed through our investment operations includes our portfolio of publicly traded fixed maturity and equity securities, as well as cash and short-term investments.

Our underwriting operations provide our investment operations with steady inflows of premiums. These funds are invested predominantly in high-quality government and municipal bonds and mortgage-backed securities that generally match the duration and currency of our loss reserves. We typically hold these investments until maturity. As a result, unrealized holding gains and losses on these securities are generally expected to reverse as the securities mature. Premiums collected through our underwriting operations may also be held as short-term investments or cash and cash equivalents to provide short-term liquidity for projected claims payments, reinsurance costs and operating expenses.

Our investments in equity securities are predominantly held within our regulated insurance subsidiaries to support capital requirements. Capital held by our insurance subsidiaries beyond that which we anticipate will be needed to cover claims payments and operating expenses is available to be invested in equity securities, along with additional capital allocated for investment purposes by Markel Group. We allocate a higher percentage of capital to equity securities than most other insurance companies. Over the long run, equity securities have produced higher returns relative to fixed maturity securities and short-term investments.

We measure our investment performance by analyzing net investment income earned on our investment portfolio, which reflects the recurring interest and assets. If climate change results in an increasedividend earnings on our investment portfolio. In 2023, our net investment income was $734.5 million. We also analyze net investment gains, which include unrealized gains and losses on our equity portfolio. Based on the potential for volatility in the frequency and/financial markets, we understand that the level of gains or severitylosses may vary from one period to the next, and therefore believe that our investment performance is best analyzed over longer periods of weather-related catastrophes,time. Our annual return on equity securities for the five-year period ended December 31, 2023 was 14.6%.

Through our wholly owned subsidiary Markel Ventures, Inc. (Markel Ventures), we may experienceown controlling interests in high-quality businesses that operate in a variety of different industries with shared values and the shared goal of positively contributing to the long-term financial performance of Markel Group. Management teams for each business operate autonomously and are responsible for developing strategic initiatives, managing day-to-day operations and making investment and capital allocation decisions for their respective companies. Our Markel Ventures management team is responsible for decisions regarding allocation of capital for acquisitions and new investments. Our strategy in making these acquisitions is similar to our strategy for purchasing equity securities. We seek to invest in profitable companies, with honest and talented management, that exhibit reinvestment opportunities and capital discipline, at reasonable prices. We intend to own the businesses acquired for a long period of time.

Our chief operating decision maker allocates resources to and assesses the performance of these various businesses in the aggregate as the Markel Ventures segment. See note 2 of the notes to consolidated financial statements included under Item 8 for additional or elevated catastrophe-related losses or disruptions,segment reporting disclosures. 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 our businesses in this segment are headquartered in the U.S., with subsidiaries of certain businesses located outside of the U.S. In 2021, our Markel Ventures operations expanded through acquisitions of majority interests in Metromont LLC and Buckner HeavyLift Cranes. See note 3 of the notes to consolidated financial statements included under Item 8 for additional details related to these acquisitions. This follows the acquisition of Lansing Building Products, LLC in 2020 and VSC Fire & Security, Inc. in 2019. We continue to look for acquisition opportunities that align with our investment criteria and strategic objectives around diversification and specialization.

In 2023, our Markel Ventures operations reported revenues of $5.0 billion, operating income of $437.5 million and earnings before interest, income taxes, depreciation and amortization (EBITDA) of $628.5 million. We use Markel Ventures EBITDA, which may be material.is a non-GAAP financial measure, as an operating performance measure in conjunction with operating income. See "Markel Ventures" under Item 7 Management's Discussion & Analysis of Financial Condition and Results of Operations for more information on our Markel Ventures results, including EBITDA.

The failurefollowing table provides summary information about our portfolio of anyMarkel Ventures companies by type of business.

Many of the methods we employbusinesses in this segment experience revenue fluctuations over time due to managethe cyclical nature of supply and demand in their particular industry. For example, the construction industry is cyclical based on certain larger economic trends and factors, including the inflationary and interest rate environment and, for some businesses, the level of government investment. Additionally, many of our loss exposures could have a material adverse effectbusinesses experience fluctuation in demand throughout the year based on us.the seasonality of the products they sell or services they provide. For example, the demand for ornamental plants is particularly high during the spring and summer seasons as compared to the rest of the year.

Businesses in this segment are reliant on inputs, such as raw materials and labor, to manufacture products and deliver services, and the operating results of these businesses could be impacted by the ability or inability to source these inputs and obtain price increases from customers in response to increases in the price of these inputs, including the cost of shipping. For example, shipping costs at some of our businesses increased significantly in 2022 before reverting to more typical levels in 2023, which has resulted in higher margins in 2023 compared to 2022 at the impacted businesses.

Management teams for each of our businesses proactively manage our loss exposuresthe risks and challenges posed by cyclicality, seasonality and inflation, among other things, in a variety of ways as appropriate and as needed for their business.

We are subject to extensive U.S. state and federal, as well as international, regulation and supervision in the jurisdictions in which we do business. Regulations vary from jurisdiction to jurisdiction. Additionally, as a company with publicly traded securities, we are also subject to certain legal and regulatory requirements applicable generally to public companies, including adheringthe rules and regulations of the U.S. Securities and Exchange Commission (SEC) and the New York Stock Exchange relating to maximumreporting and disclosure, accounting and financial reporting, corporate governance and other matters.

The U.S. federal government and its regulatory agencies generally do not directly regulate the business of insurance. However, two federal government bodies, the Federal Insurance Office (FIO) and the Financial Stability Oversight Council (FSOC), each created under The Dodd Frank Wall Street Reform and Consumer Protection Act, may impact the regulation of insurance. Although the FIO is prohibited from directly regulating the business of insurance, it has authority to represent the U.S. in international insurance matters and has limited powers to preempt certain types of state insurance laws. The FIO also can recommend to the FSOC that it designate an insurer as an entity posing risks to the U.S. financial stability in the event employing coverageof the insurer's material financial distress or failure. We have not been so designated. The U.S. federal laws that most affect our day-to-day insurance operations are: the Gramm-Leach-Bliley Act; the Fair Credit Reporting Act; the Health Insurance Portability and Accountability Act of 1996; the Terrorism Risk Insurance Act of 2002; anti-money laundering laws and regulations; the Nonadmitted and Reinsurance Reform Act of 2010; the Foreign Corrupt Practices Act, and the rules and regulations of the Office of Foreign Assets Control.

As a result, subsidiaries involved in our ILS operations are subject to regulations that may impose substantive and material restrictions and requirements on their operations, including, among other things: a broader fiduciary duty to act in the best interests of their clients; disclosure of information about our businesses and conflicts of interests to clients; maintenance of written policies and procedures; maintenance of extensive books and records; restrictions on the types of fees we may charge, including performance fees; restrictions on solicitation arrangements; requirements regarding engaging in transactions with clients; maintenance of an effective compliance program; and other restrictions and requirements applicable to custody of client assets, client privacy, advertising, pay-to-play prohibitions and cybersecurity; as well as possible sanctions, disciplinary actions or other penalties for non-compliance.

Our Markel Ventures businesses are subject to a wide variety of U.S. federal, state, and local laws and regulations, as well as international laws and regulations applicable to their international operations. Specifically, the most significant of these laws and regulations cover the following prudent underwriting guidelinesareas: safety, health, employment, the environment, transportation, U.S. and international trade, anti-corruption, data privacy and security and government contracts.

Our culture is our greatest asset and is defined by the Markel Style. Written in 1986, in preparation for each program written.our initial public offering, the Markel Style memorialized how we seek to operate our businesses and treat one another. It continues to provide our guiding principles across our diverse group of businesses. Key within the Markel Style is the encouragement to look for a better way to do things, to challenge management. We also seek spontaneity and flexibility and have a respect for authority, but disdain for bureaucracy. Our holding company and each of our businesses is managed in a way to manageaccomplish these principles. Each of our loss exposures through geographicbusinesses operates with a high degree of autonomy so long as they operate within the principles of the Markel Style. This allows our managers to make decisions that are best for their employees and industry diversification. Underwritingcustomers, as well as our shareholders. We believe this high degree of empowerment leads to the satisfaction that comes from being trusted in the responsibilities one has been given.

Employee health and overall well-being is a matterkey priority, and we provide a range of judgment, involving assumptions about mattersemployee and eligible partner plans and programs, including health and voluntary benefits. These offerings include a variety of financial protection programs to help our employees meet their unique investment and savings needs including life insurance, retirement savings with company contributions in most situations and an employee stock purchase plan. Comprehensive employee assistance programs are available in all of our major markets along with other well-being and fitness resources.

Markel supports a range of employee-led D&I networks and resource groups, including our Markel Women's Network, BEAM (Black Engagement at Markel), PRISM (LGBTQ+), Jitneys (Young Professionals), Markel Asian Professionals Network, Markel Veterans Network, UN1DOS (Latin and Hispanic Network), and across our international operations, an Inclusion Network with connections to a number of the London market partner networks. All of these networks and organizations have put in place goals and programming that are inherently unpredictablefocused on education and beyonddevelopment, community engagement, talent acquisition and networking/support. Additionally, we continue our control,global sponsorship of Dive-In, the insurance industry's annual diversity and forinclusion festival.

Our Markel Ventures operations are comprised of a diverse portfolio of businesses from different industries through which historical experiencewe own controlling interests. The Markel Ventures operations are viewed by management as separate and probability analysis may not provide sufficient guidance. distinct from our insurance operations with local management teams that direct the strategy and day-to-day operations of their respective companies, including human capital matters. When making these acquisitions, we seek, among other things, businesses whose leadership teams demonstrate equal measures of both integrity and talent. As a result, each Markel Ventures business fosters a culture within their operations, and with their employees, that aligns with the principles of the Markel Style.

One or more future eventsof the risks discussed in this Item 1A. Risk Factors, and others we cannot anticipate, could resulthave material adverse effects on our results of operations and financial condition; and the extent of these effects will depend, at least in claims that substantially exceed our expectations, which couldpart, on the scope, severity, frequency or duration of the specific event or circumstance. In addition, we may take steps to prevent, mitigate or manage potential risks or liabilities, and related developments, and some of those steps may have a material adverse effect on our results of operations and financial condition. In addition,Even if an unfavorable outcome does not materialize, these factors, and actions we seek to manage our loss exposures by policy terms, coverage exclusions and choice of legal forum. Disputes relating to coverage and choice of legal forum also arise. As a result, various provisions of our policies, such as choice of forum, or coverage limitations or exclusions, may not be enforceabletake in the manner we intend and some or all of our methods to manage loss exposures may prove ineffective.

The ceding of insurance does not legally discharge us from our primary liability for the full amount of the policies. Reliance on reinsurance recoveries may create credit risk as a result of the reinsurer's inability or unwillingness to pay reinsurance claims when due. We generally select well capitalized and highly rated reinsurers and in certain instances we require reinsurers to post substantial collateral to secure the reinsured risks. Deterioration in the credit quality of existing reinsurers or disputes over the terms of reinsurance could result in charges to earnings, which may have a material adverse effect on our results of operations and financial condition. In addition, collateral may not be sufficient to cover the reinsurer's obligation to us, and we may not be able to cause the reinsurer to deliver additional collateral.

As of December 31, 2022,2023, we were the beneficiary of letters of credit, trust accounts and funds withheld in the aggregate amount of $5.0$5.1 billion, collateralizing $8.4$9.2 billion in reinsurance recoverables. The remaining unsecured reinsurance recoverables are ceded to highly-rated, well capitalized reinsurers. Our reinsurance recoverables are based on estimates, and our actual liabilities may exceed the amount we are able to recover from our reinsurers or any collateral securing the reinsurance recoverables. The failure of a reinsurer to meet its obligations to us, whether due to insolvency, dispute or other unwillingness or inability to pay, or due to our inability to access sufficient collateral to cover our liabilities, could have a material adverse effect on our results of operations and financial condition.

The availability and cost of reinsurance are determined by market conditions beyond our control. There is no guarantee that our desired amounts of reinsurance or retrocessional reinsurance will be available in the marketplace in the future. In addition, available capacity may not be on terms we deem appropriate or acceptable or with companies with whom we want to do