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~~March 31, 2023

☐ 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

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~~April 19, 2023: 13,346,714

Table of Contents

Markel Corporation

Form 10-Q

Index


		Page Number
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets—~~September~~March 31, 2023 ~~30, 2022~~ and December 31, ~~2021~~20 2 2	3

	Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)—~~Quarters and~~ ~~Nine~~Three Months Ended ~~September~~March 31 , 202 3 ~~30, 2022~~ and ~~2021~~202 2	4

	Consolidated Statements of Changes in Equity—~~Quarters and~~ ~~Nine~~Three Months Ended ~~September~~March 31, 2023 ~~30, 2022~~ and ~~2021~~202 2	5

	Condensed Consolidated Statements of Cash Flows—~~Nine~~Three Months Ended ~~September~~March 31 , 202 3 ~~30, 2022~~ and ~~2021~~20 22	76

	Notes to Consolidated Financial Statements	87

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3126

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5444

Item 4.	Controls and Procedures	5444

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	55

~~Item 1A.~~	~~Risk Factors~~	5545

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5645

Item 6.	Exhibits	5746

Signatures		5948

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MARKEL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
(dollars in thousands)	(dollars in thousands)	(unaudited)				(dollars in thousands)	(unaudited)
ASSETS	ASSETS					ASSETS
Investments, at estimated fair value:	Investments, at estimated fair value:					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
Fixed maturity securities, available-for-sale (amortized cost of $13,142,991 in 2023 and $12,805,887 in 2022)						Fixed maturity securities, available-for-sale (amortized cost of $13,142,991 in 2023 and $12,805,887 in 2022)	$	12,403,118	$	11,856,835
Equity securities (cost of $3,169,913 in 2023 and $3,100,040 in 2022)						Equity securities (cost of $3,169,913 in 2023 and $3,100,040 in 2022)	8,113,476		7,671,912
Short-term investments, available-for-sale (estimated fair value approximates cost)	Short-term investments, available-for-sale (estimated fair value approximates cost)	2,424,844		1,799,988		Short-term investments, available-for-sale (estimated fair value approximates cost)	2,487,501		2,669,262
Total Investments	Total Investments	21,101,558		23,411,220		Total Investments	23,004,095		22,198,009
Cash and cash equivalents	Cash and cash equivalents	3,540,690		3,978,490		Cash and cash equivalents	4,031,952		4,137,432
Restricted cash and cash equivalents	Restricted cash and cash equivalents	1,255,178		902,457		Restricted cash and cash equivalents	972,901		1,084,081
Receivables	Receivables	2,956,686		2,413,938		Receivables	3,192,078		2,961,056
Reinsurance recoverables	Reinsurance recoverables	8,258,499		7,293,555		Reinsurance recoverables	8,585,580		8,446,745
Deferred policy acquisition costs	Deferred policy acquisition costs	946,064		794,145		Deferred policy acquisition costs	994,365		925,483
Prepaid reinsurance premiums	Prepaid reinsurance premiums	2,285,959		1,798,571		Prepaid reinsurance premiums	2,162,117		2,066,114
Goodwill	Goodwill	2,797,426		2,899,140		Goodwill	2,642,877		2,638,838
Intangible assets	Intangible assets	1,686,212		1,822,486		Intangible assets	1,706,206		1,747,464
Other assets	Other assets	3,593,083		3,163,094		Other assets	3,650,090		3,586,037
Total Assets	Total Assets	$	48,421,355	$	48,477,096	Total Assets	$	50,942,261	$	49,791,259
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Unpaid losses and loss adjustment expenses	Unpaid losses and loss adjustment expenses	$	20,194,374	$	18,178,894	Unpaid losses and loss adjustment expenses	$	21,306,793	$	20,947,898
Life and annuity benefits	Life and annuity benefits	733,489		902,980		Life and annuity benefits	668,848		650,721
Unearned premiums	Unearned premiums	6,514,980		5,383,619		Unearned premiums	6,570,373		6,220,748
Payables to insurance and reinsurance companies	Payables to insurance and reinsurance companies	685,294		616,665		Payables to insurance and reinsurance companies	800,371		669,742
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
Senior long-term debt and other debt (estimated fair value of $3,450,000 in 2023 and $3,541,000 in 2022)						Senior long-term debt and other debt (estimated fair value of $3,450,000 in 2023 and $3,541,000 in 2022)	3,896,766		4,103,629
Other liabilities	Other liabilities	3,290,291		3,832,084		Other liabilities	3,417,906		3,461,482
Total Liabilities	Total Liabilities	35,549,593		33,275,508		Total Liabilities	36,661,057		36,054,220
Redeemable noncontrolling interests	Redeemable noncontrolling interests	513,043		461,378		Redeemable noncontrolling interests	491,883		523,154
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
Preferred stock	Preferred stock	591,891		591,891		Preferred stock	591,891		591,891
Common stock	Common stock	3,482,828		3,441,079		Common stock	3,506,972		3,493,893
Retained earnings	Retained earnings	9,255,658		10,446,763		Retained earnings	10,255,401		9,832,804
Accumulated other comprehensive income (loss)		(1,036,454)		237,617
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(609,781)		(767,494)
Total Shareholders' Equity	Total Shareholders' Equity	12,293,923		14,717,350		Total Shareholders' Equity	13,744,483		13,151,094
Noncontrolling interests	Noncontrolling interests	64,796		22,860		Noncontrolling interests	44,838		62,791
Total Equity	Total Equity	12,358,719		14,740,210		Total Equity	13,789,321		13,213,885
Total Liabilities and Equity	Total Liabilities and Equity	$	48,421,355	$	48,477,096	Total Liabilities and Equity	$	50,942,261	$	49,791,259

See accompanying notes to consolidated financial statements.

Table of Contents

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


	Three Months Ended March 31,
		2023		2022
(dollars in thousands, except per share data)
OPERATING REVENUES
Earned premiums		$	1,967,704	$	1,759,770
Net investment income		159,335		92,304
Net investment gains (losses)		372,563		(358,399)
Products revenues		577,926		481,621
Services and other revenues		565,861		630,940
Total Operating Revenues		3,643,389		2,606,236
OPERATING EXPENSES
Losses and loss adjustment expenses		1,173,014		972,372
Underwriting, acquisition and insurance expenses		675,705		590,365
Products expenses		515,756		447,819
Services and other expenses		480,619		589,891
Amortization of intangible assets		44,399		46,049

Total Operating Expenses		2,889,493		2,646,496
Operating Income (Loss)		753,896		(40,260)
Interest expense		(49,438)		(49,692)
Net foreign exchange gains (losses)		(32,928)		23,004

Income (Loss) Before Income Taxes		671,530		(66,948)
Income tax (expense) benefit		(133,731)		18,136
Net Income (Loss)		537,799		(48,812)
Net income attributable to noncontrolling interests		(49,147)		(2,929)
Net Income (Loss) to Shareholders		488,652		(51,741)
Preferred stock dividends		—		—

Net Income (Loss) to Common Shareholders		$	488,652	$	(51,741)

OTHER COMPREHENSIVE INCOME (LOSS)
Change in net unrealized gains (losses) on available-for-sale investments, net of taxes:
Net holding gains (losses) arising during the period		$	161,206	$	(521,200)

Reclassification adjustments for net losses included in net income (loss)		2,994		437
Change in net unrealized gains (losses) on available-for-sale investments, net of taxes		164,200		(520,763)
Change in discount rate for life and annuity benefits, net of taxes		(9,052)		60,693
Change in foreign currency translation adjustments, net of taxes		2,579		(1,248)
Change in net actuarial pension loss, net of taxes		18		1,132
Total Other Comprehensive Income (Loss)		157,745		(460,186)
Comprehensive Income (Loss)		695,544		(508,998)
Comprehensive income attributable to noncontrolling interests		(49,179)		(2,916)
Comprehensive Income (Loss) to Shareholders		$	646,365	$	(511,914)

NET INCOME (LOSS) PER COMMON SHARE
Basic		$	37.33	$	(6.50)
Diluted		$	37.26	$	(6.50)

See accompanying notes to consolidated financial statements.

Table of Contents

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


Three Months Ended March 31, 2023	Preferred Stock		Common Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders' Equity		Noncontrolling Interests		Total Equity		Redeemable Noncontrolling Interests
(dollars in thousands)
December 31, 2022	$	591,891	$	3,493,893	$	9,832,804	$	(767,494)	$	13,151,094	$	62,791	$	13,213,885	$	523,154
Net income					488,652		—		488,652		44,693		533,345		4,454
Other comprehensive income					—		157,713		157,713		—		157,713		32
Comprehensive Income									646,365		44,693		691,058		4,486


Repurchase of common stock	—		—		(81,964)		—		(81,964)		—		(81,964)		—

Restricted stock awards expensed	—		21,698		—		—		21,698		—		21,698		—
Adjustment of redeemable noncontrolling interests	—		—		13,473		—		13,473		—		13,473		(13,473)
Purchase of noncontrolling interest	—		(8,619)		—		—		(8,619)		—		(8,619)		(13,046)


Redemption of Markel CATCo Re noncontrolling interests	—		—		—		—		—		(62,646)		(62,646)		—
Other	—		—		2,436		—		2,436		—		2,436		(9,238)
March 31, 2023	$	591,891	$	3,506,972	$	10,255,401	$	(609,781)	$	13,744,483	$	44,838	$	13,789,321	$	491,883

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


Three Months Ended March 31, 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	$	10,444,895	$	222,007	$	14,699,872	$	22,860	$	14,722,732	$	461,378
Net income (loss)					(51,741)		—		(51,741)		(573)		(52,314)		3,502
Other comprehensive loss					—		(460,173)		(460,173)		—		(460,173)		(13)
Comprehensive Income (Loss)									(511,914)		(573)		(512,487)		3,489

Repurchase of common stock	—		—		(79,296)		—		(79,296)		—		(79,296)		—

Restricted stock awards expensed	—		28,464		—		—		28,464		—		28,464		—
Adjustment of redeemable noncontrolling interests	—		—		(36,940)		—		(36,940)		—		(36,940)		36,940
Adjustment to Metromont purchase price allocation	—		—		—		—		—		—		—		(18,681)
Disposition of Velocity	—		—		—		—		—		(22,059)		(22,059)		—
Other	—		(94)		721		—		627		5,326		5,953		(2,775)
March 31, 2022	$	591,891	$	3,469,449	$	10,277,639	$	(238,166)	$	14,100,813	$	5,554	$	14,106,367	$	480,351

See accompanying notes to consolidated financial statements.

~~Table of Contents~~

~~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.~~

Table of Contents

MARKEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(dollars in thousands)					(dollars in thousands)
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income (loss)	Net income (loss)	$	(810,771)	$	1,572,683	Net income (loss)	$	537,799	$	(48,812)
Adjustments to reconcile net income (loss) to net cash provided by operating activities	Adjustments to reconcile net income (loss) to net cash provided by operating activities	2,691,043		49,759		Adjustments to reconcile net income (loss) to net cash provided by operating activities	(253,618)		463,685
Net Cash Provided By Operating Activities	Net Cash Provided By Operating Activities	1,880,272		1,622,442		Net Cash Provided By Operating Activities	284,181		414,873
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Proceeds from sales, maturities, calls and prepayments of fixed maturity securities	Proceeds from sales, maturities, calls and prepayments of fixed maturity securities	557,742		491,319		Proceeds from sales, maturities, calls and prepayments of fixed maturity securities	592,004		119,545
Cost of fixed maturity securities purchased	Cost of fixed maturity securities purchased	(1,433,299)		(2,201,622)		Cost of fixed maturity securities purchased	(806,704)		(517,400)
Proceeds from sales of equity securities	Proceeds from sales of equity securities	164,277		157,891		Proceeds from sales of equity securities	64,030		76,788
Cost of equity securities purchased	Cost of equity securities purchased	(293,011)		(178,368)		Cost of equity securities purchased	(129,163)		(112,783)
Net change in short-term investments	Net change in short-term investments	(625,261)		(727,366)		Net change in short-term investments	210,177		(287,027)

Additions to property and equipment	Additions to property and equipment	(209,282)		(80,758)		Additions to property and equipment	(37,179)		(51,696)

Acquisitions, net of cash acquired		(14,000)		(241,210)

Consolidation of Markel CATCo Re, net	Consolidation of Markel CATCo Re, net	629,955		—		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	Proceeds from sale of business, net	109,505		40,720		Proceeds from sale of business, net	—		106,846
Other	Other	(571)		6,903		Other	(1,696)		(14,204)
Net Cash Used By Investing Activities	Net Cash Used By Investing Activities	(1,283,325)		(2,732,491)		Net Cash Used By Investing Activities	(108,531)		(49,976)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Additions to senior long-term debt and other debt	Additions to senior long-term debt and other debt	757,941		989,067		Additions to senior long-term debt and other debt	161,151		254,285
Repayment of senior long-term debt and other debt	Repayment of senior long-term debt and other debt	(982,852)		(370,157)		Repayment of senior long-term debt and other debt	(369,227)		(189,031)

Repurchases of common stock	Repurchases of common stock	(208,090)		(122,377)		Repurchases of common stock	(81,964)		(79,296)

Dividends paid on preferred stock		(18,000)		(18,000)

Redemption of Markel CATCo Re noncontrolling interests						Redemption of Markel CATCo Re noncontrolling interests	(88,997)		—

Purchase of noncontrolling interests						Purchase of noncontrolling interests	(21,665)		—
Other	Other	(40,053)		(39,149)		Other	(11,452)		(4,808)
Net Cash Provided (Used) By Financing Activities		(491,054)		439,384
Net Cash Used By Financing Activities						Net Cash Used By Financing Activities	(412,154)		(18,850)
Effect of foreign currency rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	Effect of foreign currency rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(190,972)		(38,973)		Effect of foreign currency rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	19,844		(19,411)
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents		(85,079)		(709,638)
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents						Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	(216,660)		326,636
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period	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 beginning of period	5,221,513		4,880,947
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD	CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD	$	4,795,868	$	4,507,011	CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD	$	5,004,853	$	5,207,583

See accompanying notes to consolidated financial statements.

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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~~March 31, 2023 and the related consolidated statements of income (loss) and comprehensive income (loss) and changes in equity for ~~the quarters and nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ and the condensed consolidated statements of cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 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~~adjustments described in note ~~15,~~1 c), 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~~2022 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. The following accounting policy was updated to reflect an accounting standard that became effective January 1, 2023. See note 1 c). For a more complete description of the Company's business and accounting policies, readers are urged to review the Company's ~~2021~~2022 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~~10-K.

~~In August 2018,~~b) Life and Annuity Benefits. The Company has a run-off block of life and annuity reinsurance contracts that subject the Company to mortality, longevity and morbidity risks. Effective January 1, 2023, the Company adopted 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.~~ Contracts and restated all prior periods presented to reflect the new accounting standard. The ~~FASB subsequently issued~~primary component of the Company's liabilities for life and annuity benefits is the present value of the liability for future policyholder benefits. The cash flow assumptions used to determine the policyholder benefit reserves are reviewed and updated, as necessary, at least annually. Interest accretion for the reserves is calculated using the discount rate locked-in at contract inception. Policy benefit reserves are remeasured each period using current discount rates, based on yields for upper-medium grade fixed maturity securities, with the impact of changes in the discount rate included in other comprehensive income, net of taxes. All other results attributable to the run-off of life and annuity reinsurance contracts are included in services and other revenues and services and other expenses in the consolidated statements of income and comprehensive income. Investment income earned on the investments that support the policy benefit reserves are included in net investment income. Because of the uncertainty in the assumptions used to estimate reserves for life and annuity benefit obligations and the long-term nature of these reinsurance contracts, the ultimate liability may be greater or less than the estimates. See note 9 for further details regarding life and annuity benefits.

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c) Recent Accounting Pronouncements

Accounting Standards Adopted

Effective January 1, 2023, the Company adopted ASU No. 2018-12 and several ASUs issued as amendments to ASU No. 2018-12. ~~The~~This 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~~was applied using a modified retrospective approach that ~~requires~~required restatement of prior periods presented, including a cumulative adjustment recorded to accumulated other comprehensive income as of January 1, 2021 (the transition date)~~. The standard will, among other things, impact~~ as a result of updating the discount rate ~~used in estimating reserves for~~assumption. At 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,transition date, the adoption of ASU 2018-12 ~~is expected to result~~had no impact on retained earnings but resulted 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~~$15.3 million as of January 1, 2021, which was comprised of the ~~transition date. However, the cumulative~~following corresponding adjustments to life and annuity benefits and deferred tax liabilities.


(dollars in thousands)	January 1, 2021
Reverse reserve deficiency adjustment related to unrealized gains on underlying investment portfolio of available-for-sale securities	$	119,548
Apply updated discount rate to the liability for future policyholder benefits	(138,865)
Increase in life and annuity benefits	(19,317)
Decrease in deferred tax liability	4,057
Decrease in accumulated other comprehensive income, net of taxes	$	(15,260)

The impact of changes in the discount rate ~~assumption upon adopting ASU 2018-12~~on the liability for future policyholder benefits following the transition date are included in other comprehensive income (loss) in the ~~first quarter of 2023 will be based on~~respective periods and, combined with the transition adjustment, resulted in the following cumulative changes to the Company's previously presented consolidated balance sheets.


	December 31,
(dollars in thousands)	2022		2021
Decrease (increase) in life and annuity benefits	$	113,396	$	(19,759)
Decrease (increase) in deferred tax liability	(23,813)		4,149
Increase (decrease) in accumulated other comprehensive income (loss), net of taxes	$	89,583	$	(15,610)

Changes in the discount rate ~~assumption determined as~~on the liability for future policyholder benefits also resulted in an increase, or benefit, of $16.0 million to the previously presented other comprehensive loss for the three months ended March 31, 2022, which was comprised of the ~~January 1, 2023~~following adjustments.


(dollars in thousands)	Three Months Ended March 31, 2022
Reverse benefit included in change in net unrealized gains (losses) on available-for-sale-investments, net of taxes, related to reversal of previously recognized reserve deficiency adjustment	$	(44,682)
Change in discount rate for life and annuity benefits, net of taxes	60,693
Increase in other comprehensive loss, net of taxes	$	16,011

The adoption ~~date. Based~~of other provisions of this ASU did not have a material impact on ~~increases in interest rates subsequent to~~ the ~~transition date,~~Company's financial position, results of operations or cash flows for any of 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.

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periods presented.

~~In October 2021,~~Effective January 1, 2023, the ~~FASB issued~~Company adopted ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customer~~s, which becomes effective for the Company during the first quarter of 2023.~~s. 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~~did 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.

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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 Company's 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 income from the Company's investment portfolio, which is comprised of net investment income and net investment gains. Segment profit for the Investing segment also includes income from equity method investments, which is included within services and other revenues. 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.

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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 %


	Three Months Ended March 31, 2023
(dollars in thousands)	Insurance		Reinsurance		Investing		Markel Ventures		Other (1)		Consolidated
Gross premium volume	$	2,097,938	$	552,061	$	—	$	—	$	786,013	$	3,436,012
Net written premiums	1,702,141		516,091		—		—		(454)		2,217,778

Earned premiums	1,710,924		257,234		—		—		(454)		1,967,704
Losses and loss adjustment expenses:
Current accident year	(1,077,546)		(166,785)		—		—		—		(1,244,331)
Prior accident years	62,628		8,704		—		—		(15)		71,317
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs	(360,354)		(61,778)		—		—		—		(422,132)
Other underwriting expenses	(239,148)		(13,141)		—		—		(1,284)		(253,573)
Underwriting profit (loss)	96,504		24,234		—		—		(1,753)		118,985
Net investment income	—		—		158,594		741		—		159,335
Net investment gains	—		—		372,563		—		—		372,563
Products revenues	—		—		—		577,926		—		577,926
Services and other revenues	—		—		(2,380)		526,013		42,228		565,861
Products expenses	—		—		—		(515,756)		—		(515,756)
Services and other expenses (2)	—		—		—		(496,746)		16,127		(480,619)
Amortization of intangible assets (3)	—		—		—		(19,551)		(24,848)		(44,399)

Segment profit	$	96,504	$	24,234	$	528,777	$	72,627	$	31,754	$	753,896
Interest expense											(49,438)
Net foreign exchange losses											(32,928)

Income before income taxes											$	671,530

(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~~which is not ~~allocate amortization of intangible assets~~allocated between the Insurance and Reinsurance segments.

~~(3)~~(2) Services and other expenses for Other for the ~~quarter~~three months ended ~~September 30, 2022~~March 31, 2023 included ~~$53.4~~$44.8 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)~~(3) Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets ~~is not allocated~~attributable to the Company's ~~Insurance and Reinsurance segments.~~underwriting segments, included in Other, was $9.6 million for the three months ended March 31, 2023.

~~(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~~

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		Quarter Ended September 30, 2021																Three Months Ended March 31, 2022
(dollars in thousands)	(dollars in thousands)	Insurance			Reinsurance			Investing		Markel Ventures (1)		Other (2)		Consolidated			(dollars in thousands)	Insurance		Reinsurance		Investing		Markel Ventures		Other (1)		Consolidated
Gross premium volume	Gross premium volume	$	1,899,592		$	180,673		$	—	$	—	$	888,337	$	2,968,602		Gross premium volume	$	1,943,306	$	576,316	$	—	$	—	$	878,665	$	3,398,287
Net written premiums	Net written premiums	1,545,428			141,642			—		—		(2,260)		1,684,810			Net written premiums	1,611,020		555,220		—		—		(1,506)		2,164,734

Earned premiums	Earned premiums	1,381,235			250,962			—		—		(1,697)		1,630,500			Earned premiums	1,477,148		283,967		—		—		(1,345)		1,759,770
Losses and loss adjustment expenses:	Losses and loss adjustment expenses:																Losses and loss adjustment expenses:
Current accident year	Current accident year	(866,481)			(221,872)			—		—		—		(1,088,353)			Current accident year	(886,237)		(182,458)		—		—		—		(1,068,695)
Prior accident years	Prior accident years	124,133			16,292			—		—		(313)		140,112			Prior accident years	98,640		(2,083)		—		—		(234)		96,323
Underwriting, acquisition and insurance expenses:	Underwriting, acquisition and insurance expenses:																Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs	Amortization of policy acquisition costs	(289,201)			(63,723)			—		—		—		(352,924)			Amortization of policy acquisition costs	(310,406)		(71,754)		—		—		—		(382,160)
Other underwriting expenses	Other underwriting expenses	(202,961)			(12,101)			—		—		(1,770)		(216,832)			Other underwriting expenses	(191,651)		(14,389)		—		—		(2,165)		(208,205)
Underwriting profit (loss)	Underwriting profit (loss)	146,725			(30,442)			—		—		(3,780)		112,503			Underwriting profit (loss)	187,494		13,283		—		—		(3,744)		197,033
Net investment income	Net investment income	—			—			91,261		3		—		91,264			Net investment income	—		—		92,297		7		—		92,304
Net investment losses	Net investment losses	—			—			(25,833)		—		—		(25,833)			Net investment losses	—		—		(358,399)		—		—		(358,399)
Products revenues	Products revenues	—			—			—		405,711		—		405,711			Products revenues	—		—		—		481,621		—		481,621
Services and other revenues	Services and other revenues	—			—			—		502,471		83,241		585,712			Services and other revenues	—		—		(19,570)		468,764		181,746		630,940
Products expenses	Products expenses	—			—			—		(374,407)		—		(374,407)			Products expenses	—		—		—		(447,819)		—		(447,819)
Services and other expenses	Services and other expenses	—			—			—		(465,268)		(48,726)		(513,994)			Services and other expenses	—		—		—		(431,903)		(157,988)		(589,891)
Amortization of intangible assets (3)		—			—			—		(13,541)		(25,727)		(39,268)
Amortization of intangible assets (2)																	Amortization of intangible assets (2)	—		—		—		(20,933)		(25,116)		(46,049)

Segment profit (loss)	Segment profit (loss)	$	146,725		$	(30,442)		$	65,428	$	54,969	$	5,008	$	241,688		Segment profit (loss)	$	187,494	$	13,283	$	(285,672)	$	49,737	$	(5,102)	$	(40,260)
Interest expense	Interest expense													(46,455)			Interest expense											(49,692)
Net foreign exchange gains	Net foreign exchange gains													48,850			Net foreign exchange gains											23,004

Income before income taxes														$	244,083
U.S. GAAP combined ratio (4)		89		%	112		%					NM (5)		93		%
Loss before income taxes																	Loss before income taxes											$	(66,948)

(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~~which is not ~~allocate amortization of intangible assets~~allocated between the Insurance and Reinsurance segments.

~~(3)~~(2) Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets ~~is not allocated~~attributable to the Company's ~~Insurance and Reinsurance segments.~~underwriting segments, included in Other, was $9.8 million for the three months ended March 31, 2022.

~~(4)~~

b) The ~~U.S. GAAP combined ratio is a measure of underwriting performance and represents~~following amounts attributable to the ~~relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.~~Markel Ventures segment are also reviewed, or included in measures reviewed, by the Company's chief operating decision maker.

~~(5)~~


	Three Months Ended March 31,
(dollars in thousands)		2023		2022
Depreciation expense		$	27,363	$	25,035
Interest expense (1)		$	12,923	$	11,178
Income tax expense		$	13,186	$	8,660
Capital expenditures		$	31,498	$	46,013

(1) ~~NM - Ratio is not meaningful~~Interest expense for the three months ended March 31, 2023 and 2022 included intercompany interest expense of $6.6 million and $7.0 million, respectively, which was eliminated in consolidation.

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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)~~c) ~~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.

~~(6)~~ ~~NM - Ratio is not meaningful~~

~~Table of Contents~~

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)	(dollars in thousands)	September 30, 2022		December 31, 2021		(dollars in thousands)	March 31, 2023		December 31, 2022
Segment assets:	Segment assets:					Segment assets:
Investing	Investing	$	25,389,047	$	28,277,801	Investing	$	27,685,616	$	26,982,280
Underwriting	Underwriting	8,805,475		8,111,316		Underwriting	9,346,628		8,853,559
Markel Ventures	Markel Ventures	5,230,393		4,958,279		Markel Ventures	5,329,269		5,315,677
Total segment assets	Total segment assets	39,424,915		41,347,396		Total segment assets	42,361,513		41,151,516
Other operations	Other operations	8,996,440		7,129,700		Other operations	8,580,748		8,639,743
Total assets	Total assets	$	48,421,355	$	48,477,096	Total assets	$	50,942,261	$	49,791,259

~~Table of Contents~~

~~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.

~~Table of Contents~~

4.3. 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.~~taxes.

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									March 31, 2023
(dollars in thousands)	(dollars in thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value		(dollars in thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value
Fixed maturity securities:	Fixed maturity securities:									Fixed maturity securities:
U.S. Treasury securities	U.S. Treasury securities	$	2,489,032	$	2,633	$	(21,471)	$	2,470,194	U.S. Treasury securities	$	3,102,303	$	8,523	$	(105,755)	$	3,005,071
U.S. government-sponsored enterprises	U.S. government-sponsored enterprises	753,029		28,997		(6,439)		775,587		U.S. government-sponsored enterprises	958,321		1,141		(90,484)		868,978
Obligations of states, municipalities and political subdivisions	Obligations of states, municipalities and political subdivisions	4,007,211		266,575		(7,862)		4,265,924		Obligations of states, municipalities and political subdivisions	4,010,997		11,477		(184,648)		3,837,826
Foreign governments	Foreign governments	1,394,771		134,071		(9,488)		1,519,354		Foreign governments	1,609,973		8,323		(133,640)		1,484,656
Commercial mortgage-backed securities	Commercial mortgage-backed securities	1,928,775		69,810		(8,152)		1,990,433		Commercial mortgage-backed securities	2,125,940		777		(149,548)		1,977,169
Residential mortgage-backed securities	Residential mortgage-backed securities	699,136		27,084		(170)		726,050		Residential mortgage-backed securities	531,907		8		(22,516)		509,399
Asset-backed securities	Asset-backed securities	3,035		46		—		3,081		Asset-backed securities	1,618		—		(44)		1,574
Corporate bonds	Corporate bonds	786,478		54,475		(4,271)		836,682		Corporate bonds	801,932		1,853		(85,340)		718,445
Total fixed maturity securities	Total fixed maturity securities	12,061,467		583,691		(57,853)		12,587,305		Total fixed maturity securities	13,142,991		32,102		(771,975)		12,403,118
Short-term investments	Short-term investments	1,805,300		28		(5,340)		1,799,988		Short-term investments	2,482,609		4,978		(86)		2,487,501
Investments, available-for-sale	Investments, available-for-sale	$	13,866,767	$	583,719	$	(63,193)	$	14,387,293	Investments, available-for-sale	$	15,625,600	$	37,080	$	(772,061)	$	14,890,619

1512

Table of Contents


	December 31, 2022
(dollars in thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value
Fixed maturity securities:
U.S. Treasury securities	$	3,050,089	$	2,363	$	(138,493)	$	2,913,959
U.S. government-sponsored enterprises	871,463		154		(106,079)		765,538
Obligations of states, municipalities and political subdivisions	3,973,911		6,503		(247,231)		3,733,183
Foreign governments	1,473,658		2,843		(169,723)		1,306,778
Commercial mortgage-backed securities	2,109,721		395		(169,668)		1,940,448
Residential mortgage-backed securities	553,591		6		(26,804)		526,793
Asset-backed securities	1,693		—		(53)		1,640
Corporate bonds	771,761		836		(104,101)		668,496
Total fixed maturity securities	12,805,887		13,100		(962,152)		11,856,835
Short-term investments	2,663,560		5,760		(58)		2,669,262
Investments, available-for-sale	$	15,469,447	$	18,860	$	(962,210)	$	14,526,097

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)


	March 31, 2023
	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	$	405,092	$	(6,489)	$	2,075,779	$	(99,266)	$	2,480,871	$	(105,755)
U.S. government-sponsored enterprises	225,734		(11,622)		520,955		(78,862)		746,689		(90,484)
Obligations of states, municipalities and political subdivisions	1,547,495		(52,375)		983,268		(132,273)		2,530,763		(184,648)
Foreign governments	668,871		(61,572)		513,644		(72,068)		1,182,515		(133,640)
Commercial mortgage-backed securities	724,609		(31,249)		1,194,530		(118,299)		1,919,139		(149,548)
Residential mortgage-backed securities	351,764		(11,215)		157,162		(11,301)		508,926		(22,516)
Asset-backed securities	—		—		1,574		(44)		1,574		(44)
Corporate bonds	311,457		(29,403)		342,078		(55,937)		653,535		(85,340)
Total fixed maturity securities	4,235,022		(203,925)		5,788,990		(568,050)		10,024,012		(771,975)
Short-term investments	27,118		(86)		—		—		27,118		(86)
Total	$	4,262,140	$	(204,011)	$	5,788,990	$	(568,050)	$	10,051,130	$	(772,061)

At ~~September 30, 2022,~~March 31, 2023, the Company held ~~1,548~~1,291 available-for-sale securities in an unrealized loss position with a total estimated fair value of ~~$12.3~~$10.1 billion and gross unrealized losses of ~~$1.1 billion.~~$772.1 million. Of these ~~1,548~~1,291 securities, ~~172~~637 securities had been in a continuous unrealized loss position for one year or longer and had a total estimated fair value of ~~$2.8~~$5.8 billion and gross unrealized losses of ~~$351.0~~$568.1 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)

Table of Contents


	December 31, 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	$	735,605	$	(30,583)	$	1,907,922	$	(107,910)	$	2,643,527	$	(138,493)
U.S. government-sponsored enterprises	413,495		(40,488)		331,391		(65,591)		744,886		(106,079)
Obligations of states, municipalities and political subdivisions	2,474,289		(164,537)		348,943		(82,694)		2,823,232		(247,231)
Foreign governments	900,322		(115,324)		300,423		(54,399)		1,200,745		(169,723)
Commercial mortgage-backed securities	1,611,603		(117,482)		305,217		(52,186)		1,916,820		(169,668)
Residential mortgage-backed securities	516,423		(25,232)		9,342		(1,572)		525,765		(26,804)
Asset-backed securities	1,640		(53)		—		—		1,640		(53)
Corporate bonds	496,766		(74,542)		153,035		(29,559)		649,801		(104,101)
Total fixed maturity securities	7,150,143		(568,241)		3,356,273		(393,911)		10,506,416		(962,152)
Short-term investments	774,480		(58)		—		—		774,480		(58)
Total	$	7,924,623	$	(568,299)	$	3,356,273	$	(393,911)	$	11,280,896	$	(962,210)

At December 31, ~~2021,~~2022, the Company held ~~277~~1,400 available-for-sale securities in an unrealized loss position with a total estimated fair value of ~~$4.3~~$11.3 billion and gross unrealized losses of ~~$63.2~~$962.2 million. Of these ~~277~~1,400 securities, 13246 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~~$3.4 billion and gross unrealized losses of ~~$6.0~~$393.9 million.

~~Table of Contents~~

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~~March 31, 2023 or December 31, ~~2021.~~2022.

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,~~March 31, 2023, 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.

Table of Contents

c) The amortized cost and estimated fair value of fixed maturity securities at ~~September 30, 2022~~March 31, 2023 are shown below by contractual maturity.


(dollars in thousands)	(dollars in thousands)	Amortized Cost		Estimated Fair Value		(dollars in thousands)	Amortized Cost		Estimated Fair Value
Due in one year or less	Due in one year or less	$	1,392,651	$	1,357,060	Due in one year or less	$	1,215,062	$	1,195,653
Due after one year through five years	Due after one year through five years	3,943,834		3,649,795		Due after one year through five years	4,294,690		4,132,513
Due after five years through ten years	Due after five years through ten years	2,993,861		2,618,759		Due after five years through ten years	3,211,335		2,960,029
Due after ten years	Due after ten years	1,826,427		1,608,733		Due after ten years	1,762,439		1,626,781
		10,156,773		9,234,347			10,483,526		9,914,976
Commercial mortgage-backed securities	Commercial mortgage-backed securities	2,103,907		1,932,665		Commercial mortgage-backed securities	2,125,940		1,977,169
Residential mortgage-backed securities	Residential mortgage-backed securities	582,833		557,333		Residential mortgage-backed securities	531,907		509,399
Asset-backed securities	Asset-backed securities	2,066		2,012		Asset-backed securities	1,618		1,574
Total fixed maturity securities	Total fixed maturity securities	$	12,845,579	$	11,726,357	Total fixed maturity securities	$	13,142,991	$	12,403,118

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


	Three Months Ended March 31,
(dollars in thousands)		2023		2022
Interest:
Fixed maturity securities		$	82,128	$	71,144
Short-term investments		26,619		974
Cash and cash equivalents		27,601		(198)
Dividends on equity securities		27,482		24,737
		163,830		96,657
Investment expenses		(4,495)		(4,353)
Net investment income		$	159,335	$	92,304

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e) The following table presents the components of net investment gains (losses) included in net income (loss) and the change in net unrealized gains (losses) included in other comprehensive ~~loss.~~income (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.

Quarter Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2022 2021 2022 2021
Fixed maturity securities, short-term investments and other investments:
Net realized investment gains (losses) $ 2,032 $ (2,578) $ 6,001 $ 5,233
Equity securities:
Change in fair value of securities sold during the period 2,553 (400) (29,015) 22,254
Change in fair value of securities held at the end of the period (286,068) (22,855) (2,171,511) 1,148,304
Total change in fair value (283,515) (23,255) (2,200,526) 1,170,558
Net investment gains (losses) $ (281,483) $ (25,833) $ (2,194,525) $ 1,175,791
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive loss:
Fixed maturity securities $ (530,161) $ (133,244) $ (1,645,060) $ (391,528)
Short-term investments (8,186) (4,855) (11,563) (3,076)
Reserve deficiency adjustment for life and annuity benefit reserves (see note 9) — 6,428 56,560 56,690
Net decrease $ (538,347) $ (131,671) $ (1,600,063) $ (337,914)

f) The Company's equity method investments, which totaled $483.1 million and $459.7 million as of September 30, 2022 and December 31, 2021, respectively, are included in other assets on the consolidated balance sheets.

The Company's most significant equity method investment is an investment in Hagerty, Inc. (Hagerty), which is accounted for on a quarter lag. Hagerty is an automotive enthusiast brand offering integrated membership products and programs as well as a specialty insurance provider focused on the global automobile enthusiast market. The Company's ownership interest in Hagerty was 23% as of September 30, 2022 and December 31, 2021. The Company's investment is comprised of Class A common shares, which are listed for trading on the New York Stock Exchange, as well as Class V common shares, associated with the Company's original investment in 2019, that have special voting rights and can be converted on a one-for-one basis into Class A common shares. The Company accounts for its investment under the equity method as it is deemed to have the ability to exercise significant influence over Hagerty's operating and financial policies through a combination of its voting interest, its right to designate a board member and business it conducts with Hagerty. As of September 30, 2022 and December 31, 2021, the carrying value of the Company's investment in Hagerty was $239.0 million and $256.6 million, respectively.

As of September 30, 2022 and December 31, 2021, the estimated value of the Company's investment, based on the closing stock price of Hagerty's Class A common shares, was $701.2 million and $1.1 billion, respectively. See note 12 for further details regarding related party transactions with Hagerty.


	Three Months Ended March 31,
(dollars in thousands)		2023		2022
Fixed maturity securities, short-term investments and other investments:
Net realized investment gains (losses)		$	(3,221)	$	6,228
Equity securities:
Change in fair value of securities sold during the period		5,637		(12,329)
Change in fair value of securities held at the end of the period		370,147		(352,298)
Total change in fair value		375,784		(364,627)
Net investment gains (losses)		$	372,563	$	(358,399)
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income (loss):
Fixed maturity securities		$	209,179	$	(665,810)
Short-term investments		(810)		5,862
Net increase (decrease)		$	208,369	$	(659,948)

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5.4. Fair Value Measurements

FASB ASC 820, Fair Value Measurements and Disclosures, establishes a three-level hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets or liabilities fall within different levels of the hierarchy, the classification is based on the lowest level input that is significant to the fair value measurement of the asset or liability.

Classification of assets and liabilities within the hierarchy considers the markets in which the assets and liabilities are traded and the reliability and transparency of the assumptions used to determine fair value. The hierarchy requires the use of observable market data when available. The levels of the hierarchy are defined as follows:

•Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets.

•Level 2 – Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs.

•Level 3 – Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement.

In accordance with ASC 820, the Company determines fair value based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods, including the market, income and cost approaches. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The following section describes the valuation methodologies used by the Company to measure assets and liabilities at fair value, including an indication of the level within the fair value hierarchy in which each asset or liability is generally classified.

Available-for-sale investments and equity securities. Available-for-sale investments and equity securities are recorded at fair value on a recurring basis. Available-for-sale investments include fixed maturity securities and short-term investments. ~~Short-term investments include certificates of deposit, commercial paper, discount notes and treasury bills with original maturities of one year or less.~~ Fair value is determined by the Company after considering various sources of information, including information provided by a third-party pricing service. The pricing service provides prices for substantially all of the Company's fixed maturity securities and equity securities. In determining fair value, the Company generally does not adjust the prices obtained from the pricing service. The Company obtains an understanding of the pricing service's valuation methodologies and related inputs, which include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, duration, credit ratings, estimated cash flows and prepayment speeds. The Company validates prices provided by the pricing service by reviewing prices from other pricing sources and analyzing pricing data in certain instances.

The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Level 1 investments include those traded on an active exchange, such as the New York Stock Exchange. Level 2 investments include U.S. Treasury securities, U.S. government-sponsored enterprises, municipal bonds, foreign government bonds, commercial mortgage-backed securities, residential mortgage-backed securities, asset-backed securities and corporate debt securities. Level 3 investments include the Company's investments in insurance-linked securities funds that are in run-off, which are not traded on an active exchange and are valued using unobservable inputs.

Fair value for available-for-sale investments and equity securities is measured based upon quoted prices in active markets, if available. Due to variations in trading volumes and the lack of quoted market prices, fixed maturity securities are classified as Level 2 investments. The fair value of fixed maturity securities is normally derived through recent reported trades for identical or similar securities, making adjustments through the reporting date based upon available market observable data previously described. If there are no recent reported trades, the fair value of fixed maturity securities may be derived through the use of matrix pricing or model processes, where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Significant inputs used to determine the fair value of obligations of states, municipalities and political subdivisions, corporate bonds and obligations of foreign governments include reported trades, benchmark yields, issuer spreads, bids, offers, credit information and estimated cash flows. Significant inputs used to determine the fair value of commercial mortgage-backed securities, residential mortgage-backed securities and asset-backed securities include the type of underlying assets, benchmark yields, prepayment speeds, collateral information, tranche type and volatility, estimated cash flows, credit information, default rates, recovery rates, issuer spreads and the year of issue.

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Due to the significance of unobservable inputs required in measuring the fair value of the Company's investments in certain insurance-linked securities funds, these investments are classified as Level 3 within the fair value hierarchy. The fair value of the securities is derived using their reported net asset value (NAV) as the primary input, as well as other observable and unobservable inputs as deemed necessary by management. Management has obtained an understanding of the inputs, assumptions, process and controls used to determine NAV, which is calculated by an independent third party. Unobservable inputs to the NAV calculations include assumptions around premium earnings patterns and loss reserve estimates for the underlying securitized reinsurance contracts. The Company's valuation policies and procedures for Level 3 investments are determined by management. Fair value measurements are analyzed quarterly to ensure the change in fair value from prior periods is reasonable relative to management's understanding of the underlying investments, recent market trends and external market data.

Senior long-term debt and other debt. Senior long-term debt and other debt is carried at amortized cost with the estimated fair value disclosed on the consolidated balance sheets. Senior long-term debt and other debt is classified as Level 2 within the fair value hierarchy due to variations in trading volumes and the lack of quoted market prices. Fair value is generally derived through recent reported trades, ~~for identical securities,~~ making adjustments through the reporting date, if necessary, based upon available market observable data including U.S. Treasury securities and implied credit spreads. Significant inputs used to determine the fair value of senior long-term debt and other debt include reported trades, benchmark yields, issuer spreads, bids and offers.

The following tables present the balances of assets measured at fair value on a recurring basis by level within the fair value hierarchy.


		September 30, 2022									March 31, 2023
(dollars in thousands)	(dollars in thousands)	Level 1		Level 2		Level 3		Total		(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Investments:	Investments:									Investments:
Fixed maturity securities, available-for-sale:	Fixed maturity securities, available-for-sale:									Fixed maturity securities, available-for-sale:
U.S. Treasury securities	U.S. Treasury securities	$	—	$	2,958,421	$	—	$	2,958,421	U.S. Treasury securities	$	—	$	3,005,071	$	—	$	3,005,071
U.S. government-sponsored enterprises	U.S. government-sponsored enterprises	—		725,182		—		725,182		U.S. government-sponsored enterprises	—		868,978		—		868,978
Obligations of states, municipalities and political subdivisions	Obligations of states, municipalities and political subdivisions	—		3,713,343		—		3,713,343		Obligations of states, municipalities and political subdivisions	—		3,837,826		—		3,837,826
Foreign governments	Foreign governments	—		1,172,889		—		1,172,889		Foreign governments	—		1,484,656		—		1,484,656
Commercial mortgage-backed securities	Commercial mortgage-backed securities	—		1,932,665		—		1,932,665		Commercial mortgage-backed securities	—		1,977,169		—		1,977,169
Residential mortgage-backed securities	Residential mortgage-backed securities	—		557,333		—		557,333		Residential mortgage-backed securities	—		509,399		—		509,399
Asset-backed securities	Asset-backed securities	—		2,012		—		2,012		Asset-backed securities	—		1,574		—		1,574
Corporate bonds	Corporate bonds	—		664,512		—		664,512		Corporate bonds	—		718,445		—		718,445
Total fixed maturity securities, available-for-sale	Total fixed maturity securities, available-for-sale	—		11,726,357		—		11,726,357		Total fixed maturity securities, available-for-sale	—		12,403,118		—		12,403,118
Equity securities:	Equity securities:									Equity securities:
Insurance, banks and other financial institutions	Insurance, banks and other financial institutions	2,614,609		—		921		2,615,530		Insurance, banks and other financial institutions	3,005,272		—		853		3,006,125
Industrial, consumer and all other	Industrial, consumer and all other	4,334,827		—		—		4,334,827		Industrial, consumer and all other	5,107,351		—		—		5,107,351
Total equity securities	Total equity securities	6,949,436		—		921		6,950,357		Total equity securities	8,112,623		—		853		8,113,476
Short-term investments, available-for-sale	Short-term investments, available-for-sale	2,277,172		147,672		—		2,424,844		Short-term investments, available-for-sale	2,316,909		170,592		—		2,487,501
Total investments	Total investments	$	9,226,608	$	11,874,029	$	921	$	21,101,558	Total investments	$	10,429,532	$	12,573,710	$	853	$	23,004,095

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		December 31, 2021									December 31, 2022
(dollars in thousands)	(dollars in thousands)	Level 1		Level 2		Level 3		Total		(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Investments:	Investments:									Investments:
Fixed maturity securities, available-for-sale:	Fixed maturity securities, available-for-sale:									Fixed maturity securities, available-for-sale:
U.S. Treasury securities	U.S. Treasury securities	$	—	$	2,470,194	$	—	$	2,470,194	U.S. Treasury securities	$	—	$	2,913,959	$	—	$	2,913,959
U.S. government-sponsored enterprises	U.S. government-sponsored enterprises	—		775,587		—		775,587		U.S. government-sponsored enterprises	—		765,538		—		765,538
Obligations of states, municipalities and political subdivisions	Obligations of states, municipalities and political subdivisions	—		4,265,924		—		4,265,924		Obligations of states, municipalities and political subdivisions	—		3,733,183		—		3,733,183
Foreign governments	Foreign governments	—		1,519,354		—		1,519,354		Foreign governments	—		1,306,778		—		1,306,778
Commercial mortgage-backed securities	Commercial mortgage-backed securities	—		1,990,433		—		1,990,433		Commercial mortgage-backed securities	—		1,940,448		—		1,940,448
Residential mortgage-backed securities	Residential mortgage-backed securities	—		726,050		—		726,050		Residential mortgage-backed securities	—		526,793		—		526,793
Asset-backed securities	Asset-backed securities	—		3,081		—		3,081		Asset-backed securities	—		1,640		—		1,640
Corporate bonds	Corporate bonds	—		836,682		—		836,682		Corporate bonds	—		668,496		—		668,496
Total fixed maturity securities, available-for-sale	Total fixed maturity securities, available-for-sale	—		12,587,305		—		12,587,305		Total fixed maturity securities, available-for-sale	—		11,856,835		—		11,856,835
Equity securities:	Equity securities:									Equity securities:
Insurance, banks and other financial institutions	Insurance, banks and other financial institutions	3,307,755		—		56,472		3,364,227		Insurance, banks and other financial institutions	2,952,689		—		899		2,953,588
Industrial, consumer and all other	Industrial, consumer and all other	5,659,700		—		—		5,659,700		Industrial, consumer and all other	4,718,324		—		—		4,718,324
Total equity securities	Total equity securities	8,967,455		—		56,472		9,023,927		Total equity securities	7,671,013		—		899		7,671,912
Short-term investments, available-for-sale	Short-term investments, available-for-sale	1,619,496		180,492		—		1,799,988		Short-term investments, available-for-sale	2,510,164		159,098		—		2,669,262
Total investments	Total investments	$	10,586,951	$	12,767,797	$	56,472	$	23,411,220	Total investments	$	10,181,177	$	12,015,933	$	899	$	22,198,009

The following table summarizes changes in Level 3 investments measured at fair value on a recurring basis.

Quarter Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2022 2021 2022 2021
Equity securities, beginning of period $ 4,380 $ 41,066 $ 56,472 $ 58,493
Purchases — 18,900 — 18,900
Sales (3,528) — (56,335) (15,015)
Net investment gains (losses) 69 (3,341) 784 (5,753)
Equity securities, end of period $ 921 $ 56,625 $ 921 $ 56,625

As of September 30, 2022, the Company's remaining Level 3 investment relates to its investment in Lodgepine Fund Limited, an insurance-linked securities fund managed through the Company's Lodgepine operations, which are currently in run-off.


	Three Months Ended March 31,
(dollars in thousands)		2023		2022
Equity securities, beginning of period		$	899	$	56,472
Purchases		—		—
Sales		—		(48,780)
Net investment gains (losses)		(46)		776


Equity securities, end of period		$	853	$	8,468

Previously, Level 3 investments ~~also~~ included the Company's investment in an insurance-linked securities fund managed by Markel CATCo Investment Management Ltd. (MCIM). During the first quarter of 2022, the Company's remaining investment was redeemed ($41.3 million) in conjunction with a buy-out transaction that provided for an accelerated return of all remaining capital to investors. See note 11 for further details about the Company's Markel CATCo operations and the buy-out transaction.

~~Except as disclosed in note 3, the~~The Company did not have any assets or liabilities measured at fair value on a non-recurring basis during the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022.

5. Equity Method Investments

The Company holds certain investments that are accounted for under the equity method of accounting. The Company's equity method investments, which are included in other assets on the consolidated balance sheets, totaled $491.8 million and $494.0 million as of March 31, 2023 and December 31, 2022, respectively. The Company's proportionate share of earnings in its equity method investments were losses of $1.5 million and ~~2021.~~$23.2 million for three months ended March 31, 2023 and 2022, respectively.

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The Company's most significant equity method investment is an investment in Hagerty, Inc. (Hagerty), which is accounted for on a quarter lag. Hagerty is an automotive enthusiast brand offering integrated membership products and programs as well as a specialty insurance provider focused on the global automobile enthusiast market. The Company's ownership interest in Hagerty was 23% as of March 31, 2023 and December 31, 2022. The Company's investment is comprised of Class A common shares, which are listed for trading on the New York Stock Exchange, as well as Class V common shares, associated with the Company's original investment, that have special voting rights and can be converted on a one-for-one basis into Class A common shares. The Company accounts for its investment under the equity method as it is deemed to have the ability to exercise significant influence over Hagerty's operating and financial policies through a combination of its voting interest, its right to designate a board member and business it conducts with Hagerty. As of March 31, 2023 and December 31, 2022, the carrying value of the Company's investment in Hagerty was $236.6 million and $245.1 million, respectively.

As of March 31, 2023 and December 31, 2022, the estimated value of the Company's investment, based on the closing stock price of Hagerty's Class A common shares, was $681.7 million and $656.0 million, respectively. See note 12 for further details regarding related party transactions with Hagerty.

6. Products, Services, and Other Revenues

The amount of revenues from contracts with customers was $1.2 billion and $933.0 million for the quarters ended September 30, 2022 and 2021, respectively, and $3.5 billion and $2.8 billion for the nine months ended September 30, 2022 and 2021, respectively.

The following tables present revenues from contracts with customers by ~~segment and~~ type, all of which are included in products revenues and services and other revenues in the consolidated statements of income (loss) and comprehensive income (loss), along with a reconciliation to total products revenues and services and other revenues.


		Quarter Ended September 30,													Three Months Ended March 31,
		2022						2021							2023						2022
(dollars in thousands)	(dollars in thousands)	Markel Ventures		Other		Total		Markel Ventures		Other		Total		(dollars in thousands)	Markel Ventures		Other		Total		Markel Ventures		Other		Total
Products	Products	$	575,277	$	—	$	575,277	$	394,444	$	—	$	394,444	Products	$	565,895	$	—	$	565,895	$	469,456	$	—	$	469,456
Services	Services	614,519		11,529		626,048		487,942		30,027		517,969		Services	485,662		2,854		488,516		449,449		21,568		471,017
Investment management	Investment management	—		15,641		15,641		—		20,571		20,571		Investment management	—		10,459		10,459		—		19,228		19,228
Total revenues from contracts with customers	Total revenues from contracts with customers	1,189,796		27,170		1,216,966		882,386		50,598		932,984		Total revenues from contracts with customers	1,051,557		13,313		1,064,870		918,905		40,796		959,701
Program services and other fronting	Program services and other fronting	—		40,033		40,033		—		32,298		32,298		Program services and other fronting	—		28,890		28,890		—		33,332		33,332

Disposition gain														Disposition gain	—		—		—		—		107,293		107,293
Equity method investments income (loss)														Equity method investments income (loss)	1,495		(3,013)		(1,518)		3,058		(26,246)		(23,188)
Other	Other	25,950		118		26,068		25,796		345		26,141		Other	50,887		658		51,545		28,422		7,001		35,423
Total	Total	$	1,215,746	$	67,321	$	1,283,067	$	908,182	$	83,241	$	991,423	Total	$	1,103,939	$	39,848	$	1,143,787	$	950,385	$	162,176	$	1,112,561

Nine Months Ended September 30,
2022 2021
(dollars in thousands) Markel Ventures Other Total Markel Ventures Other Total
Products $ 1,809,276 $ — $ 1,809,276 $ 1,294,407 $ — $ 1,294,407
Services 1,633,353 41,547 1,674,900 1,313,054 95,908 1,408,962
Investment management — 55,197 55,197 — 57,693 57,693
Total revenues from contracts with customers 3,442,629 96,744 3,539,373 2,607,461 153,601 2,761,062
Program services and other fronting — 103,096 103,096 — 87,314 87,314
Disposition gain — 107,293 107,293 — — —
Other 84,800 724 85,524 82,824 1,002 83,826
Total $ 3,527,429 $ 307,857 $ 3,835,286 $ 2,690,285 $ 241,917 $ 2,932,202
In February 2022, the Company sold the majority of its controlling interest in its Velocity managing general agent companies, which resulted in a gain of $107.3 million that was included in services and other revenues.

Receivables from contracts with customers were ~~$649.6~~$514.9 million and ~~$626.1~~$624.1 million as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

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7. Unpaid Losses and Loss Adjustment Expenses

The following table presents a reconciliation of consolidated beginning and ending reserves for losses and loss adjustment expenses.


		Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		(dollars in thousands)	2023		2022
Gross reserves for losses and loss adjustment expenses, beginning of year						Gross reserves for losses and loss adjustment expenses, beginning of year	$	20,947,898	$	18,178,894
Reinsurance recoverables on unpaid losses, beginning of year						Reinsurance recoverables on unpaid losses, beginning of year	7,994,884		6,876,317
Net reserves for losses and loss adjustment expenses, beginning of year	Net reserves for losses and loss adjustment expenses, beginning of year	$	11,302,577	$	10,485,717	Net reserves for losses and loss adjustment expenses, beginning of year	12,953,014		11,302,577
Effect of foreign currency rate changes on beginning of year balance	Effect of foreign currency rate changes on beginning of year balance	(275,364)		(52,117)		Effect of foreign currency rate changes on beginning of year balance	36,637		(27,505)
Adjusted net reserves for losses and loss adjustment expenses, beginning of year	Adjusted net reserves for losses and loss adjustment expenses, beginning of year	11,027,213		10,433,600		Adjusted net reserves for losses and loss adjustment expenses, beginning of year	12,989,651		11,275,072
Incurred losses and loss adjustment expenses:	Incurred losses and loss adjustment expenses:					Incurred losses and loss adjustment expenses:
Current accident year	Current accident year	3,420,906		3,009,260		Current accident year	1,244,331		1,068,695
Prior accident years	Prior accident years	(204,411)		(366,171)		Prior accident years	(71,317)		(96,323)
Total incurred losses and loss adjustment expenses	Total incurred losses and loss adjustment expenses	3,216,495		2,643,089		Total incurred losses and loss adjustment expenses	1,173,014		972,372
Payments:	Payments:					Payments:
Current accident year	Current accident year	350,684		365,640		Current accident year	72,167		40,852
Prior accident years	Prior accident years	1,880,471		1,678,164		Prior accident years	708,115		697,192
Total payments	Total payments	2,231,155		2,043,804		Total payments	780,282		738,044
Effect of foreign currency rate changes on current year activity	Effect of foreign currency rate changes on current year activity	(7,499)		(1,339)		Effect of foreign currency rate changes on current year activity	(3,649)		(267)
Net reserves for losses and loss adjustment expenses of Markel CATCo Re (see note 11)		375,222		—
Net reserves for losses and loss adjustment expenses of insurance companies sold		—		(2,762)
Change in net reserves for losses and loss adjustment expenses of Markel CATCo Re (see note 11)						Change in net reserves for losses and loss adjustment expenses of Markel CATCo Re (see note 11)	(115,141)		546,760
Reinsurance recoverable for retroactive reinsurance transaction						Reinsurance recoverable for retroactive reinsurance transaction	(125,067)		—

Net reserves for losses and loss adjustment expenses, end of period	Net reserves for losses and loss adjustment expenses, end of period	12,380,276		11,028,784		Net reserves for losses and loss adjustment expenses, end of period	13,138,526		12,055,893
Reinsurance recoverables on unpaid losses	Reinsurance recoverables on unpaid losses	7,814,098		6,582,415		Reinsurance recoverables on unpaid losses	8,168,267		6,787,237
Gross reserves for losses and loss adjustment expenses, end of period	Gross reserves for losses and loss adjustment expenses, end of period	$	20,194,374	$	17,611,199	Gross reserves for losses and loss adjustment expenses, end of period	$	21,306,793	$	18,843,130

For the ~~nine~~three months ended September 30, 2022, current accident year losses and loss adjustment expenses included $70.0 million of net losses and loss adjustment expenses attributed to Hurricane Ian, all of which were within the Company's Insurance segment. These losses and loss adjustment expenses were net of ceded losses of $100.0 million. The Company also had gross losses and loss adjustment expenses of $850.0 million within its program services and other fronting operations attributed to Hurricane Ian, all of which were ceded to third-party reinsurers managed through the Company's insurance-linked securities operations, which hold sufficient investor collateral to support the Company's related reinsurance recoverables. See note 12 for further details regarding related party transactions with third parties managed through the Company's insurance-linked securities operations.

The gross and net losses and loss adjustment expenses attributed to Hurricane Ian as of September 30, 2022 represent the Company's best estimates based upon information currently available. The estimates for these losses are based on preliminary industry loss estimates and output from industry, broker and proprietary models, as well as policy and reinsurance contract level reviews and analysis of the Company's ceded reinsurance contracts. Due to limited claims activity, these estimates are based on various assumptions about coverage, liability and reinsurance and are therefore subject to change. While the Company believes its net reserves for Hurricane Ian as of September 30, 2022 are adequate, it continues to closely monitor reported claims and will adjust the estimates of gross and net losses as new information becomes available.

For the nine months ended September 30, 2022, current accident year losses and loss adjustment expenses also included $35.0 million of net losses and loss adjustment expenses attributed to the Russia-Ukraine conflict. These losses and loss adjustment expenses were net of ceded losses of $70.0 million. All of the gross and net losses and loss adjustment expenses attributed to the Russia-Ukraine conflict were recognized in the first quarter of 2022. There were no additional losses recognized or adjustments to the Company's initial loss estimates in the second or third quarters of 2022.

~~Table of Contents~~

Both the gross and net loss estimates for incurred losses attributed to the Russia-Ukraine conflict continue to represent the Company's best estimates as of September 30, 2022 based upon information currently available. The Company's estimates for these losses are based on reported claims, detailed underwriting, actuarial and claims reviews of policies and in-force assumed reinsurance contracts for potential exposures, as well as analysis of ceded reinsurance contracts and analysis provided by the Company's brokers and claims counsel. These estimates include various assumptions about what areas within the affected regions have incurred losses, the nature and extent of such losses, which remain difficult to verify, as well as assumptions about coverage, liability and reinsurance. Due to the inherent uncertainty associated with the assumptions surrounding the Russia-Ukraine conflict, these estimates may be subject to a wide range of variability. Additionally, as the Russia-Ukraine conflict is ongoing, the Company believes it is possible that additional losses could be incurred in subsequent periods. Given the significant levels of ceded reinsurance on certain of the Company's impacted policies, a significant portion of any additional incurred losses may be ceded. Additionally, increases in ceded losses may require payment of additional reinstatement premiums. Further, if coverage under the Company's existing ceded reinsurance contracts is exhausted, the Company may need to purchase additional reinsurance to ensure that its net retained risks on the impacted product lines are within the Company's corporate risk tolerances.

While the Company believes the gross and net reserves for losses and loss adjustment expenses for the Russia-Ukraine conflict as of September 30, 2022 are adequate based on information currently available, the Company continues to closely monitor reported claims, ceded reinsurance contract attachment, government actions and areas impacted by the conflict and may adjust the estimates of gross and net losses as new information becomes available. Any such adjustments or additional incurred losses may be material to the Company's results of operations, financial condition and cash flows.

For the nine months ended September 30, 2021, current accident year losses and loss adjustment expenses included $182.3 million of net losses and loss adjustment expenses from Winter Storm Uri, the floods in Europe and Hurricane Ida (2021 Catastrophes).

~~For the nine months ended September 30, 2022,~~March 31, 2023, prior accident years losses and loss adjustment expenses included ~~$204.4~~$71.3 million of favorable development on prior years loss reserves, which included ~~$155.0~~$63.8 million of favorable development on the Company's ~~workers' compensation, property,~~ marine and energy, property, workers' compensation and programs product lines within its Insurance ~~segment and $41.7 million of favorable development on the Company's property and credit and surety product lines within its Reinsurance~~ segment.

For the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, prior accident years losses and loss adjustment expenses included ~~$366.2~~$96.3 million of favorable development on prior years loss reserves, which included ~~$324.8~~$69.4 million of favorable development on the Company's general liability, ~~property,~~marine and energy, workers' compensation ~~professional liability~~ and ~~marine and energy~~property product lines within the Insurance segment. Favorable development on prior years loss reserves for the nine months ended September 30, 2021 was partially offset by $30.6 million of adverse development on the Company's property product lines within the Reinsurance segment, due in part to losses related to COVID-19.

~~The Company's loss estimates~~In March 2023, the Company completed a retroactive reinsurance transaction to cede its portfolio of policies comprised of liabilities for ~~COVID-19 continue to represent~~its run-off book of United Kingdom motor casualty business in exchange for payments totaling $125.1 million, which approximated the carrying value of the Company's best estimate as of September 30, 2022 based on information currently available, however, the assumptions on which these estimates are based are subject to a wide range of variability. The Company is closely monitoring reported claims, ceded reinsurance contract attachment, government actionsreserves for losses and judicial decisions and may adjust the estimates of gross and net losses as new information becomes available. Such adjustments may be material to the Company's results of operations, financial condition and cash flows. For additional detailsloss adjustment expenses on the ~~Company's COVID-19 loss estimates, readers are urged to review the Company's 2021 Annual Report on Form 10-K.~~ceded policies.

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8. Reinsurance

The following tables summarize the effect of reinsurance and retrocessional reinsurance on premiums written and earned.

Quarter Ended September 30,
2022 2021
(dollars in thousands) Direct Assumed Ceded Net Premiums Direct Assumed Ceded Net Premiums
Underwriting:
Written $ 2,133,822 $ 349,650 $ (473,885) $ 2,009,587 $ 1,776,716 $ 303,551 $ (393,195) $ 1,687,072
Earned 1,899,816 408,561 (351,118) 1,957,259 1,599,931 363,665 (331,397) 1,632,199
Program services and other fronting:
Written 663,631 327,668 (991,719) (420) 711,182 177,153 (890,597) (2,262)
Earned 729,312 218,439 (948,180) (429) 634,520 103,008 (739,227) (1,699)
Consolidated:
Written 2,797,453 677,318 (1,465,604) 2,009,167 2,487,898 480,704 (1,283,792) 1,684,810
Earned $ 2,629,128 $ 627,000 $ (1,299,298) $ 1,956,830 $ 2,234,451 $ 466,673 $ (1,070,624) $ 1,630,500


		Nine Months Ended September 30,																	Three Months Ended March 31,
		2022								2021									2023								2022
(dollars in thousands)	(dollars in thousands)	Direct		Assumed		Ceded		Net Premiums		Direct		Assumed		Ceded		Net Premiums		(dollars in thousands)	Direct		Assumed		Ceded		Net Premiums		Direct		Assumed		Ceded		Net Premiums
Underwriting:	Underwriting:																	Underwriting:
Written	Written	$	6,065,936	$	1,466,036	$	(1,255,226)	$	6,276,746	$	5,082,494	$	1,269,578	$	(1,031,546)	$	5,320,526	Written	$	1,969,363	$	688,895	$	(440,029)	$	2,218,229	$	1,823,255	$	696,360	$	(353,382)	$	2,166,233
Earned	Earned	5,370,481		1,194,504		(1,012,485)		5,552,500		4,542,680		1,081,494		(925,176)		4,698,998		Earned	1,971,876		398,719		(402,440)		1,968,155		1,697,970		403,067		(339,929)		1,761,108
Program services and other fronting:	Program services and other fronting:																	Program services and other fronting:
Written	Written	2,025,195		595,940		(2,624,185)		(3,050)		2,056,328		249,067		(2,308,590)		(3,195)		Written	573,211		204,543		(778,205)		(451)		696,974		181,698		(880,171)		(1,499)
Earned	Earned	2,036,016		332,415		(2,371,227)		(2,796)		1,800,489		141,676		(1,944,931)		(2,766)		Earned	641,113		74,717		(716,281)		(451)		699,605		48,860		(749,803)		(1,338)
Consolidated:	Consolidated:																	Consolidated:
Written	Written	8,091,131		2,061,976		(3,879,411)		6,273,696		7,138,822		1,518,645		(3,340,136)		5,317,331		Written	2,542,574		893,438		(1,218,234)		2,217,778		2,520,229		878,058		(1,233,553)		2,164,734
Earned	Earned	$	7,406,497	$	1,526,919	$	(3,383,712)	$	5,549,704	$	6,343,169	$	1,223,170	$	(2,870,107)	$	4,696,232	Earned	$	2,612,989	$	473,436	$	(1,118,721)	$	1,967,704	$	2,397,575	$	451,927	$	(1,089,732)	$	1,759,770

Substantially all of the premiums written and earned in the Company's program services and other fronting operations for the ~~quarters and nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ were ceded. The percentage of consolidated ceded earned premiums to gross earned premiums was ~~40% for the quarters ended September 30, 2022 and 2021~~36% and 38% for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021.~~respectively. The percentage of consolidated assumed earned premiums to net earned premiums was ~~32% and 28% for the quarter and nine months ended September 30, 2022, respectively, and 29%~~24% and 26% for the ~~quarter and nine~~three months ended ~~September 30, 2021,~~March 31, 2023 and 2022, respectively.

Substantially all of the incurred losses and loss adjustment expenses in the Company's program services and other fronting operations were ceded. These gross losses totaled ~~$1.3 billion~~$496.6 million and ~~$2.3 billion~~$415.7 million for the ~~quarter and nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~respectively, and $620.1 million and $1.7 billion for the quarter and nine months ended September 30, 2021,~~ respectively.

The following table summarizes the effect of reinsurance and retrocessional reinsurance on losses and loss adjustment expenses in the Company's underwriting operations.


		Quarter Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		2022		2021		(dollars in thousands)		2023		2022
Gross losses and loss adjustment expenses	Gross losses and loss adjustment expenses	$	1,423,526	$	1,238,974	$	3,760,566	$	3,306,035	Gross losses and loss adjustment expenses		$	1,392,348	$	1,150,349
Ceded losses and loss adjustment expenses	Ceded losses and loss adjustment expenses	(238,220)		(290,834)		(544,109)		(660,479)		Ceded losses and loss adjustment expenses		(219,255)		(177,994)
Net losses and loss adjustment expenses	Net losses and loss adjustment expenses	$	1,185,306	$	948,140	$	3,216,457	$	2,645,556	Net losses and loss adjustment expenses		$	1,173,093	$	972,355

9. Life and Annuity Benefits

The Company's run-off block of life and annuity reinsurance contracts consists primarily of Euro and U.S. Dollar denominated life-contingent payout annuities and traditional and universal life contracts. The following table presents the components of the Company's liabilities for life and annuity benefits.


(dollars in thousands)	March 31, 2023		December 31, 2022
Liability for future policyholder benefits	$	566,751	$	554,366
Deferred profit liability	48,342		48,569
Other	53,755		47,786
Total	$	668,848	$	650,721

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9.~~Life~~The primary component of the Company's liabilities for life and ~~Annuity Benefits~~

annuity benefits is the liability for future policyholder benefits. Life and annuity ~~benefits~~benefit reserves are ~~compiled~~calculated for aggregated cohorts of contracts, which are determined based on ~~a reinsurance contract-by-contract basis~~the attributes of the underlying contracts, and are discounted using standard actuarial techniques and cash flow models. Since the development of the life and annuity reinsurance reserves is based upon cash flow projection models, the Company ~~must make~~makes estimates and assumptions based on cedent experience and industry mortality ~~tables, and expense and investment experience, including a provision for adverse deviation.~~tables. The cash flow assumptions used to determine ~~policy~~the Company's life and annuity benefit reserves are ~~generally locked-in for the life~~updated at least annually. The discount rate assumptions are updated at each reporting date. The following table presents a rollforward of ~~the contract unless an unlocking event occurs. Loss recognition testing is performed to determine if existing policy benefit reserves, together with~~ the present value of the liability for future gross premiums and expected investment income earned thereon, are adequate to cover the present value of future benefits, settlement and maintenance costs. If the existing policy benefit reserves are not sufficient, the locked-in assumptions are revised to current best estimate assumptions and a charge to earnings for life and annuity benefits is recognized at that time.policyholder benefits.

~~Life and annuity~~


	Three Months Ended March 31,
(dollars in thousands)	2023		2022
Liability for future policyholder benefits, beginning of year	$	554,366	$	821,632
Liability for future policyholder benefits at original discount rate, beginning of year	667,761		745,313
Effect of changes in cash flow assumptions	—		—
Effect of actual variances from expected experience	—		—
Adjusted liability for future policyholder benefits, beginning of year	667,761		745,313
Interest accretion	3,815		4,186
Benefit payments	(13,283)		(14,349)
Effect of foreign currency rate changes	10,396		(11,900)
Liability for future policyholder benefits at original discount rate, end of period	668,689		723,250
Cumulative effect of changes in discount rate assumptions	(101,938)		(508)
Liability for future policyholder benefits, end of period (1)	$	566,751	$	722,742

(1) The undiscounted liability for future policyholder benefits are also adjusted to the extent unrealized gains on the investments supporting the policy benefit reserves would result in a reserve deficiency if those gains were realized. As of December 31, 2021, the cumulative increase to life and annuity benefits attributable to unrealized gains on the underlying investment portfolio totaled $56.6 million, all of which reversed during the first quarter of 2022 as a result of an increase in the market yield on the investment securities supporting the policy benefit reserves. As the market yield continued to increase through September 30, 2022, there was ~~no adjustment to life and annuity benefits in the third quarter of 2022. During the quarter and nine months ended September 30, 2021, the Company decreased life and annuity benefits by $6.4~~$862.7 million and ~~$56.7~~$933.6 million ~~respectively~~as of March 31, 2023 and ~~increased~~2022, respectively.

The following table summarizes additional details for the ~~change in net unrealized holding gains included in other comprehensive loss by a corresponding amount.~~Company's liability for future policyholder benefits.


	March 31, 2023		December 31, 2022
Weighted-average interest rate:
Interest accretion rate	2.3	%	2.3	%
Current discount rate	4.1	%	4.3	%
Weighted-average liability duration	9 years		9 years

10. Senior Long-Term Debt and Other Debt

In ~~July 2022,~~March 2023, the Company retired its ~~4.90%~~3.625% unsecured senior notes due ~~July 1, 2022~~March 30, 2023 ($~~350.0~~250.0 million aggregate principal outstanding at December 31, ~~2021)~~2022).

The Company maintains a corporate revolving credit facility which provides up to $300 million of capacity for future acquisitions, investments and stock repurchases, and for other working capital and general corporate purposes. At the Company's discretion, up to $200 million of the total capacity may be used for letters of credit. The Company may increase the capacity of the facility by up to $200 million subject to obtaining commitments for the increase and certain other terms and conditions. At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had no borrowings outstanding under this revolving credit facility. This facility expires in April 2024. As of March 31, 2023, the Company was in compliance with all covenants contained in its corporate revolving credit facility.

Various of the Company's Markel Ventures subsidiaries maintain revolving credit facilities or lines of credit, which provide up to ~~$550~~$650 million of aggregate capacity for working capital and other general operational purposes. A portion of the capacity on certain of these credit facilities may be used as security for letters of credit and other obligations. At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had ~~$253.2~~$288.9 million and ~~$94.3~~$238.1 million, respectively, of borrowings outstanding under these credit facilities.

~~To the extent that the Company or any~~ As of ~~its subsidiaries are not in compliance with the covenants under their respective credit facilities, access to such credit facilities could be restricted. At September 30, 2022, the Company and~~March 31, 2023, all of the Company's subsidiaries were in compliance with all covenants contained in their respective credit facilities.

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11. Variable Interest Entities

MCIM, a wholly-owned consolidated subsidiary of the Company, is an insurance-linked securities investment fund manager and reinsurance manager headquartered in Bermuda. Results attributable to MCIM are not included in a reportable segment.

MCIM serves as the insurance manager for Markel CATCo Re Ltd. (Markel CATCo Re), a Bermuda Class 3 reinsurance company, and as the investment manager for Markel CATCo Reinsurance Fund Ltd., a Bermuda exempted mutual fund company comprised of multiple segregated accounts (Markel CATCo Funds). Voting shares in Markel CATCo Reinsurance Fund Ltd. and Markel CATCo Re are held by MCIM, which has the power to direct the activities that most significantly impact the economic performance of these entities. The Markel CATCo Funds issued multiple classes of nonvoting, redeemable preference shares to investors, and the Markel CATCo Funds are primarily invested in nonvoting preference shares of Markel CATCo Re. The underwriting results of Markel CATCo Re are attributed to investors through its nonvoting preference shares. Both Markel CATCo Re and the Markel CATCo Funds were placed into run-off in July 2019.

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In March 2022, the Company completed a buy-out transaction with Markel CATCo Re and the Markel CATCo Funds that provided for an accelerated return of all remaining capital to investors in the Markel CATCo Funds. Under the terms of the transaction, the Company provided cash funding of $45.1 million to purchase substantially all of the Markel CATCo Funds' interests in Markel CATCo ~~Re. See note 14 for further details regarding the terms of the buy-out transaction. As part of the transaction,~~Re and substantially all of the preference shares held by investors in the Markel CATCo Funds were redeemed, including preference shares previously held by the Company. See note 54 for details regarding the Company's investment in the Markel CATCo Funds. In order to complete the transaction, the Company also made $101.9 million in additional payments, net of insurance proceeds, to or for the benefit of investors, which were recognized as an expense to the Company and included in services and other expenses for the quarter ended March 31, 2022.

~~During~~In June 2022, the Company received a return of $24.9 million of the capital it provided in March 2022 and the related preference shares were redeemed. As of ~~September 30,~~March 31, 2023 and December 31, 2022, the Company's investment in the remaining preference shares of Markel CATCo Re totaled $20.1 million, which comprised ~~25%~~28% and 23% of the equity of Markel CATCo ~~Re.~~Re, respectively. Through that investment, the Company has exposure to adverse loss development on reinsurance contracts previously written by Markel CATCo Re for loss events that occurred from 2014 to 2020. If loss reserves held by Markel CATCo Re are sufficient to settle claims on the remaining open contracts, the Company will receive a full return of the remaining $20.1 million in capital provided in March 2022. Favorable development on loss reserves held by Markel CATCo Re, less operating expenses, will be distributed to the Markel CATCo Funds, and ultimately to investors in the Markel CATCo Funds.

Markel CATCo Re is considered a VIE, as the equity at risk does not have the right to receive residual returns that exceed the capital provided by the Company in the buy-out transaction. As a result of the preference shares acquired by the Company in the buy-out transaction, and the voting shares held by its consolidated subsidiary, MCIM, the Company consolidates Markel CATCo Re as its primary beneficiary. Results attributed to the run-off of Markel CATCo Re are reported with the Company's other ILS operations, within services and other revenues and expenses, and are not included in a reportable segment. For the three months ended March 31, 2023, there was $44.8 million of favorable loss reserve development on the run-off of reinsurance contracts written by Markel CATCo Re, all of which was included in services and other expenses and attributable to noncontrolling interests. During the three months ended March 31, 2023, $62.6 million of preference shares of Markel CATCo Re held by noncontrolling interests were redeemed.

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The Company's consolidated balance ~~sheet includes~~sheets include the following amounts attributable to Markel CATCo Re.


~~(dollars in thousands)~~	~~September 30, 2022~~
~~Assets~~
~~Cash and cash equivalents~~	$	~~83,103~~
~~Restricted cash and cash equivalents~~	~~355,905~~
~~Other assets and receivables due from cedents~~	~~44,102~~
~~Total Assets~~	$	~~483,110~~

~~Liabilities and Equity~~
~~Unpaid losses and loss adjustment expenses~~	$	~~375,222~~
~~Other liabilities~~	~~27,448~~
~~Total Liabilities~~	~~402,670~~
~~Shareholders' equity~~	~~21,139~~
~~Noncontrolling interests~~	~~59,301~~
~~Total Equity~~	~~80,440~~
~~Total Liabilities and Equity~~	$	~~483,110~~


(dollars in thousands)	March 31, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	62,524	$	104,443
Restricted cash and cash equivalents	210,293		317,577
Other assets and receivables due from cedents	31,225		41,357
Total Assets	$	304,042	$	463,377

Liabilities and Equity
Unpaid losses and loss adjustment expenses	$	232,780	$	347,921
Other liabilities	378		26,717
Total Liabilities	233,158		374,638
Shareholders' equity	21,139		21,139
Noncontrolling interests	49,745		67,600
Total Equity	70,884		88,739
Total Liabilities and Equity	$	304,042	$	463,377

In connection with the buy-out transaction, the Company also entered into a tail risk cover with Markel CATCo Re. Through this contract, the Company has $142.7 million of uncollateralized exposure to adverse development on loss reserves held by Markel CATCo Re for loss exposures in excess of limits that the Company believes are unlikely to be exceeded.

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12. Related Party Transactions

The Company engages in certain related party transactions in the normal course of business at arm's length.

Insurance-Linked Securities

Within the Company's insurance-linked securities operations, the Company provides investment and insurance management services through Nephila Holdings Ltd. (together with its subsidiaries, Nephila). Nephila serves as the investment manager to several Bermuda ~~Ireland and U.S.~~ based private funds (the Nephila Funds). To provide access for ~~investors in~~ the Nephila Funds to a variety of insurance-linked securities in the ~~insurance, reinsurance~~property catastrophe, climate and ~~weather~~specialty markets, Nephila also acts as an insurance manager to certain Bermuda Class 3 and 3A reinsurance companies, Lloyd's Syndicate 2357 and Lloyd's ~~of London~~ Syndicate ~~2357 (Syndicate 2357)~~2358 (collectively, the Nephila Reinsurers). Nephila receives management fees for investment and insurance management services provided through its insurance-linked securities operations primarily based on the net asset value of the accounts managed, and, for certain funds, incentive fees based on ~~the~~their annual ~~performance of the funds managed.~~performance. Prior to the disposition of Velocity in February 2022, Nephila also provided managing general agent services to the Nephila Reinsurers in exchange for commissions. For the ~~quarter and nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, total revenues attributed to unconsolidated entities managed by Nephila were ~~$17.1~~$9.8 million and ~~$57.0 million, respectively. For the quarter and nine months ended September 30, 2021, total revenues attributed to unconsolidated entities managed by Nephila were $32.8 million and $103.5~~$22.4 million, respectively.

Through the Company's program services ~~operations~~ and other fronting ~~arrangements,~~operations, as well as its underwriting operations, the Company has programs with Nephila through which the Company writes insurance policies that are either partially or fully ceded to ~~Syndicate 2357 and certain other~~ Nephila Reinsurers. Through ~~these programs,~~the Company's program services and other fronting platforms, Nephila utilizes certain of the Company's licensed insurance companies to write U.S. catastrophe-exposed property risk that is then ceded to Nephila Reinsurers. ~~Gross~~For the three months ended March 31, 2023 and 2022, gross premiums written through ~~these programs with~~the Company's program services and other fronting platforms on behalf of Nephila were ~~$398.9~~$236.9 million and ~~$889.6~~$315.6 million, ~~for the quarter and nine months ended September 30, 2022, respectively, and $283.7 million and $587.7 million for the quarter and nine months ended September 30, 2021,~~ respectively, all of which were ceded to Nephila Reinsurers. Though the Company's insurance underwriting operations, the Company has a quota share agreement with Nephila through which it cedes a portion of its property business to Nephila Reinsurers. For the three months ended March 31, 2023 and 2022, the Company's underwriting operations ceded premiums of $13.5 million and $16.1 million, respectively, to Nephila Reinsurers as part of its quota share agreement.

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As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, reinsurance recoverables on the consolidated balance sheets included $1.3 billion and ~~$751.0 million,~~$1.4 billion, respectively, due from Nephila Reinsurers. Under ~~these~~its programs with Nephila Reinsurers, the Company bears underwriting risk for annual aggregate agreement year losses in excess of a limit the Company believes is unlikely to be exceeded. To the extent losses under these programs exceed the prescribed limits, the Company is obligated to pay such losses to the cedents without recourse to the Nephila Reinsurers. While the Company believes losses under these programs are unlikely, those losses, if incurred, could be material to the Company's consolidated results of operations and financial condition.

The Company has also entered into other assumed and ceded reinsurance transactions with the Nephila Reinsurers in the normal course of business, which are not material to the Company's consolidated financial statements.

Hagerty

The Company holds a minority ownership interest in Hagerty, which operates primarily as a managing general agent and also includes Hagerty ~~Re,~~Reinsurance Limited (Hagerty Re), a Bermuda Class 3 reinsurance company. Through the Company's underwriting operations, the Company underwrites insurance for Hagerty, and a portion of this insurance is ceded to Hagerty Re. For the ~~quarter and nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, the Company's gross written premiums attributable to Hagerty were ~~$197.0~~$165.0 million and ~~$540.4~~$139.0 million, respectively, of which ~~$130.4~~$124.6 million and ~~$357.7~~$92.1 million, respectively, were ceded to Hagerty Re. ~~For~~As of March 31, 2023 and December 31, 2022, reinsurance recoverables on the ~~quarter and nine months ended September 30, 2021, the Company's gross written premiums attributable to Hagerty were $170.1~~consolidated balance sheets included $156.1 million and ~~$467.6~~$159.7 million, respectively, ~~of which $96.6 million and $265.4 million, respectively, were ceded to~~due from Hagerty Re.

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13. Shareholders' Equity

a) The Company has 50,000,000 shares of no par value common stock authorized. The following table presents a rollforward of changes in common shares issued and outstanding.


		Quarter Ended September 30,		Nine Months Ended September 30,			Three Months Ended March 31,
(in thousands)	(in thousands)	2022	2021	2022	2021	(in thousands)		2023	2022
Issued and outstanding common shares, beginning of period	Issued and outstanding common shares, beginning of period	13,538	13,734	13,632	13,783	Issued and outstanding common shares, beginning of period		13,423	13,632
Issuance of common shares	Issuance of common shares	—	1	2	4	Issuance of common shares		2	1
Repurchase of common shares	Repurchase of common shares	(67)	(50)	(163)	(102)	Repurchase of common shares		(63)	(63)
Issued and outstanding common shares, end of period	Issued and outstanding common shares, end of period	13,471	13,685	13,471	13,685	Issued and outstanding common shares, end of period		13,362	13,570

b) The Company also has 10,000,000 shares of no par value preferred stock authorized, of which 600,000 shares were issued and outstanding at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021. The Company declared and paid dividends on preferred shares of $18.0 million, or $30 per share, in the second quarter of 2022 and 2021.~~2022.

c) Net income (loss) per common share was determined by dividing adjusted net income (loss) to common shareholders by the applicable weighted average common shares outstanding. Basic common shares outstanding include restricted stock units that are no longer subject to any contingencies for issuance, but for which corresponding shares have not been issued. Diluted net income (loss) per common share is computed by dividing adjusted net income (loss) to common shareholders by the weighted average number of common shares and dilutive potential common shares outstanding during the period. The following table presents net income (loss) per common share and diluted net income (loss) per common share.


		Quarter Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2022		2021		2022		2021		(in thousands, except per share amounts)		2023		2022
Net income (loss) to common shareholders	Net income (loss) to common shareholders	$	65,369	$	188,070	$	(921,833)	$	1,535,874	Net income (loss) to common shareholders		$	488,652	$	(51,741)
Adjustment of redeemable noncontrolling interests	Adjustment of redeemable noncontrolling interests	(17,730)		19,930		(62,168)		41,553		Adjustment of redeemable noncontrolling interests		13,473		(36,940)
Adjusted net income (loss) to common shareholders	Adjusted net income (loss) to common shareholders	$	47,639	$	208,000	$	(984,001)	$	1,577,427	Adjusted net income (loss) to common shareholders		$	502,125	$	(88,681)

Basic common shares outstanding	Basic common shares outstanding	13,564		13,758		13,609		13,790		Basic common shares outstanding		13,450		13,652

Dilutive potential common shares from restricted stock units and restricted stock (1)	Dilutive potential common shares from restricted stock units and restricted stock (1)	31		27		—		23		Dilutive potential common shares from restricted stock units and restricted stock (1)		25		—
Diluted common shares outstanding	Diluted common shares outstanding	13,595		13,785		13,609		13,813		Diluted common shares outstanding		13,475		13,652
Basic net income (loss) per common share	Basic net income (loss) per common share	$	3.51	$	15.12	$	(72.31)	$	114.39	Basic net income (loss) per common share		$	37.33	$	(6.50)
Diluted net income (loss) per common share (1)	Diluted net income (loss) per common share (1)	$	3.50	$	15.09	$	(72.31)	$	114.20	Diluted net income (loss) per common share (1)		$	37.26	$	(6.50)

(1) The impact of 2827 thousand shares from restricted stock units and restricted stock was excluded from the computation of diluted net loss per common share for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 because the effect would have been anti-dilutive.

~~14. Commitments and Contingencies~~

a) In March 2022, the Company completed a buy-out transaction with Markel CATCo Re and the Markel CATCo Funds, which are currently in run-off, that provided for an accelerated return of all remaining capital to investors in the Markel CATCo Funds. Under the terms of the transaction, the Company provided cash funding of $45.1 million to purchase substantially all of the Markel CATCo Funds' investments in Markel CATCo Re and also provided tail risk cover of $142.7 million to Markel CATCo Re to allow for the release of collateral to investors. In order to complete the transaction, the Company also made $101.9 million in additional payments, net of insurance proceeds, to or for the benefit of investors, which were recognized as an expense to the Company in the first quarter of 2022 and included in services and other expenses for the nine months ended September 30, 2022. In conjunction with the buy-out transaction, all investors holding securities in the Markel CATCo Funds, the Markel CATCo Group Companies (MCIM, the Markel CATCo Funds and Markel CATCo Re), Markel Corporation and each of their related parties, among others, granted mutual releases of all claims related to the transaction, the Markel CATCo Group Companies' businesses and the investors' investments in the Funds, including any pending litigation. See note 11 for further details about the Company's Markel CATCo operations and the buy-out transaction.

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14. Contingencies

Contingencies arise in the normal course of the Company's operations and are not expected to have a material impact on the Company's financial condition or results of operations.

~~15. Immaterial Correction to Prior Period Financial Statements for Accounting Policy Change~~

The Company defers and amortizes costs directly related to the successful acquisition of new or renewal insurance contracts over the related policy period, generally one year. Previously, the Company did not defer salaries and benefits associated with the successful acquisition of insurance contracts, as such amounts were quantified and assessed each period and were deemed not to be material to the consolidated financial statements. Effective January 1, 2022, the Company changed its accounting policy to defer salaries and benefits associated with the successful acquisition of insurance contracts in accordance with the requirements of FASB ASC 944, ~~Financial Services—Insurance~~.

To reflect the change in accounting policy, the Company made a cumulative adjustment to increase deferred policy acquisition costs by $28.2 million, increase deferred tax liabilities by $5.9 million and increase retained earnings by $22.3 million as of January 1, 2020, which is the beginning of the earliest year that will be presented in the consolidated financial statements included in the Company's 2022 Annual Report on Form 10-K. These increases in deferred policy acquisition costs, deferred tax liabilities and retained earnings are also reflected as increases to the previously reported amounts in the Company's consolidated balance sheet as of December 31, 2021 and as an adjustment to retained earnings as of January 1, 2021 in the accompanying consolidated statement of changes in equity for the nine months ended September 30, 2021. The Company considered both the quantitative and qualitative factors within the provisions of U.S. Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 99, ~~Materiality, and SAB No. 108,~~ ~~Considering the Effect of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements~~ and determined that the impact of the change in accounting policy was not material to the Company's previously issued consolidated financial statements. The Company did not adjust the amounts previously presented in the consolidated statements of income and comprehensive income for the years ended December 31, 2020 and 2021 for the change in accounting policy as the effects were not material. The cumulative income statement effect for those periods was recognized in the first quarter of 2022 and included in the consolidated statement of loss and comprehensive loss for the nine months ended September 30, 2022.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included under Item 1 Financial Statements and our ~~2021~~2022 Annual Report on Form 10-K. The accompanying consolidated financial statements and related notes 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 that meet the requirements for consolidation. See note 1(b) of the notes to consolidated financial statements for details of recently issued accounting pronouncements that we have not yet adopted and the expected effects on our consolidated financial position, results of operations and cash flows. This section is divided into the following sections:

•Our Business

•Results of Operations

•Financial Condition

•Critical Accounting Estimates

•Safe Harbor and Cautionary Statement

Our Business

We are a diverse financial holding company serving a variety of niche markets. We aspire to build one of the world's great companies and deploy three financial engines in pursuit of this goal.

Insurance - Our principal business markets and underwrites specialty insurance products using multiple platforms that enable us to best match risk and capital.

Investments - Our investing activities are primarily related to our underwriting operations. The majority of our investable assets come from premiums paid by policyholders and the remainder is comprised of shareholder funds.

Markel Ventures - Through our Markel Ventures operations, we own controlling interests in a diverse portfolio of businesses that operate ~~outside~~in a variety of ~~the specialty insurance marketplace.~~industries.

Our financial goals are to earn consistent underwriting and operating profits and superior investment returns to build shareholder value. To mitigate effects of short-term volatility and align with the long-term perspective that we apply to operating our businesses, we generally use five-year time periods to 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 effects~~Over the five-year period ended March 31, 2023, our common share price increased at a compound annual rate of ~~short-term volatility and align with~~2%. While this measure, considered independently of other factors, falls below our internal targets, we believe the ~~longer-term perspective we apply~~operating performance at all three of our engines positions us well to ~~operating~~achieve our ~~businesses, we generally use five-year time periods to measure our performance. Growth in~~targets over the long-term. We also consider the performance of book value per common share ~~is an important~~over 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 five-year period ended ~~September 30, 2022,~~March 31, 2023, the compound annual growth in book value per common share was 6.3%. 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 five-year period ended September 30, 2022, our common share price increased at a compound annual rate of 0.3%8%.

Insurance

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

•Underwriting - Our underwriting operations are comprised of our risk-bearing insurance and reinsurance operations.

•Insurance-linked securities - Our insurance-linked securities (ILS) operations provide investment management services for a variety of investment products, including insurance-linked securities, catastrophe bonds, insurance swaps and weather derivatives.

•Program services - Our program services business serves as a fronting platform that provides other insurance entities access to the U.S. property and casualty insurance market.

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Through our underwriting, ILS and program services 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 ILS and program services operations. Within each of these insurance platforms, we believe that our specialty product focus and niche market strategy enable 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 platform, we ~~may leverage the strength of our underwriting platform to~~have programs through which we write ~~certain risks~~insurance policies on behalf of our ILS operations ~~in accordance with their desired return objectives. We may also~~that are supported by third-party capital. Additionally, we cede certain risks 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 ~~capital risk~~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 advantage through which we have the ability to unlock additional value for our customers and business partners, which we refer to as "the power of the platform."

Underwriting

Our chief operating decision maker reviews our 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 our underwriting results, we consider 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 our underwriting operations. The Reinsurance segment includes all treaty reinsurance written on a risk-bearing basis within our underwriting operations.

Our Insurance segment includes both hard-to-place risks written outside of the standard market on an excess and surplus lines basis and unique and hard-to-place risks that ~~must be~~are typically written on an admitted basis due to marketing and regulatory reasons. Risks written in our Insurance segment are written on either a direct basis or a subscription basis, the latter of which means that the loss exposures brought into the market are typically insured by more than one insurance company or Lloyd's of London (Lloyd's) syndicate. 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. The following products are included in this segment: professional liability, general liability, personal lines, marine and energy, primary and excess of loss property, workers' compensation, credit and surety coverages, specialty program insurance for well-defined niche markets and liability and other coverages tailored for unique exposures. Business in this segment is primarily written through our Markel Specialty and Markel International divisions. The Markel Specialty division writes business on both an excess and surplus lines and admitted basis, primarily through our ~~platform~~platforms in the United States and Bermuda, as well as ~~Bermuda, London,~~the United Kingdom (U.K.) and ~~Europe.~~European Union. The Markel International division writes business worldwide from our London and Munich-based platforms, which include branch offices around the world. The Insurance segment also includes collateral protection insurance written on an admitted basis through our State National division.

Our Reinsurance segment includes casualty and specialty treaty reinsurance products offered to other insurance and reinsurance companies globally through the broker market. Our treaty reinsurance offerings include both quota share and excess of loss reinsurance and are typically written on a participation basis, which means each reinsurer shares proportionally in the business ceded under the reinsurance treaty written. Business in this segment is primarily written by our Global Reinsurance division. Principal lines of business include: professional liability, general liability, ~~workers' compensation and~~ credit and ~~surety. Previously, we also wrote property reinsurance~~surety, marine and retrocessional reinsurance business, however, effective January 1, 2022, we were off-risk for substantially all property loss exposures, including catastrophe exposures, previously written within our Reinsurance segment.energy and workers' compensation.

Insurance-Linked Securities

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) ~~serves as an~~provides investment and insurance management services through which we offer alternative capital to the reinsurance market while providing investors with investment strategies that typically are uncorrelated with traditional asset classes. Our Nephila fund management operations provide insurance and investment ~~fund manager that offers~~management 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, catastrophe bonds, insurance swaps and weather derivatives. We receive management fees for investment and insurance management services provided through these operations primarily based on the net asset value of the accounts managed, and for certain funds, incentive fees based on their annual performance.

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Nephila serves as the investment manager to several ~~Bermuda, Ireland and U.S. based~~Bermuda-based private funds (the Nephila Funds). To provide access for ~~investors in~~ the Nephila Funds to a variety of insurance-linked securities in the ~~insurance, reinsurance~~property catastrophe, climate and ~~weather~~specialty markets, Nephila acts as an insurance manager to certain Bermuda Class 3 and 3A reinsurance companies, Lloyd's Syndicate 2357 and Lloyd's Syndicate ~~2357 (Syndicate 2357)~~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 Corporation, and as such, these entities are not included in our consolidated financial statements. The Nephila Reinsurers subscribe to various reinsurance contracts based on their investors' risk profiles, including property reinsurance business fronted through our underwriting and program services platforms. See note 12 of the notes to consolidated financial statements for further details regarding transactions with entities managed through our Nephila operations.

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Nephila also served as a managing general agent prior to the ~~sale~~sales of our Velocity managing general agent operations in February 2022 and our Volante managing general agent operations in October 2022. ~~See "Results of Operations - Other Operations" for further details regarding these transactions.~~

Our insurance-linked securities operations also include our run-off ~~Lodgepine and~~ Markel CATCo operations, the results of which are reported separately from our ongoing insurance-linked securities operations. Our Markel CATCo operations are conducted through Markel CATCo Investment Management Ltd. (MCIM), an ILS investment fund manager headquartered in Bermuda. MCIM serves as the insurance manager for Markel CATCo Re Ltd. (Markel CATCo Re), a Bermuda Class 3 reinsurance company, and as the investment manager for Markel CATCo Reinsurance Fund Ltd., a Bermuda exempted mutual fund company comprised of multiple segregated accounts (Markel CATCo Funds). In July 2019, these operations were placed into run-off. In March 2022, we completed a buy-out transaction that provided for an accelerated return of all remaining capital to investors in the Markel CATCo Funds. Following the completion of the buy-out transaction, we consolidate Markel CATCo Re as its primary beneficiary. Results attributable to the run-off of Markel CATCo Re are included with our other Markel CATCo operations within services and other expenses, and for the ~~quarter and nine~~three months ended ~~September 30, 2022,~~March 31, 2023, these results were entirely attributable to noncontrolling interest holders in Markel CATCo Re. In connection with the buy-out transaction, we entered into a tail risk cover with Markel CATCo Re through which we have uncollateralized exposure to adverse development on loss reserves held by Markel CATCo Re for loss exposures in excess of limits that we believe are unlikely to be exceeded. See note 11 of the notes to consolidated financial statements for further details regarding our Markel CATCo operations and the consolidation of Markel CATCo ~~Re and note 14 for further details about the buy-out transaction.~~Re.

Program Services and Other Fronting

Our program services business generates fee income in the form of ceding fees in exchange for fronting insurance business to 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 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 ~~Syndicate 2357 and other~~the Nephila Reinsurers. These reinsurers are 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 to do so.

Through our program services business, we write a wide variety of insurance 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 write similar products, in order to protect our program services customers.

In certain instances, we also leverage the strength of our underwriting platform to write business on behalf of our ILS operations, in exchange for ceding fees, to support their business plans and assist in meeting their desired return objectives. This fronting business is conducted separately from our program services business and ~~primarily~~ consists of catastrophe-exposed property insurance and reinsurance business ~~which we no longer write on a risk-bearing basis.~~and specialty reinsurance business.

Although we reinsure substantially all of the risks inherent in our program services business and ILS fronting arrangements, 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. See note 12 of the notes to consolidated financial statements for further details regarding our programs with Nephila Reinsurers.

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Investments

Our business strategy recognizes the importance of both consistent underwriting and operating profits and superior investment returns to build shareholder value. We rely on sound underwriting practices to produce investable funds. The majority of our investable assets come from premiums paid by policyholders. We rely on sound underwriting practices to produce investable funds. Policyholder funds are invested predominantly in high-quality government and municipal bonds and ~~corporate bonds~~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 investable assets, comprised of shareholder funds, is available to be invested in equity securities, which over the long run, have produced higher returns relative to fixed maturity and short-term investments. When 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 hold these equity investments over the long-term. Substantially all of our investment portfolio is managed by company employees.

Markel Ventures

Through our wholly owned subsidiary, Markel Ventures, Inc. (Markel Ventures), we own controlling interests in various high-quality businesses that operate ~~outside~~in a variety of ~~the specialty insurance marketplace but have~~different industries with the shared goal of positively contributing to the long-term financial performance of Markel Corporation. ~~Management views these businesses as separate and distinct from our insurance operations.~~ 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 ~~senior~~corporate management team is responsible for decisions regarding allocation of capital for acquisitions and new investments. Our strategy in making these ~~investments~~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. ~~This~~

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. The following types of businesses are included in this segment: construction services, consumer and building products, transportation-related products, consulting services and equipment manufacturing ~~products and consulting services. In December 2021, we acquired a controlling interest~~products. All of our businesses in ~~Metromont LLC (Metromont)~~this segment are headquartered in the U.S., ~~a precast concrete manufacturer and concrete building solutions provider for commercial projects. In August 2021, we acquired a controlling interest in Buckner HeavyLift Cranes (Buckner), a provider~~with subsidiaries of ~~crane rental services for large commercial contractors. See note 3~~certain businesses located outside of the ~~notes to consolidated financial statements for additional details related to these acquisitions.~~U.S.

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Results of Operations

The following table presents the components of ~~net income (loss) to shareholders, net income (loss) to common shareholders and~~operating revenues.


	Three Months Ended March 31,
(dollars in thousands)		2023		2022
Insurance segment		$	1,710,924	$	1,477,148
Reinsurance segment		257,234		283,967
Insurance-linked securities, program services and other insurance		41,774		180,401
Insurance operations		2,009,932		1,941,516
Net investment income		158,594		92,297
Net investment gains (losses)		372,563		(358,399)
Other		(2,380)		(19,570)
Investing segment		528,777		(285,672)
Markel Ventures segment		1,104,680		950,392
Total operating revenues		$	3,643,389	$	2,606,236

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The following table presents the components of comprehensive income (loss) to shareholders.


		Quarter Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		2022		2021		(dollars in thousands)		2023		2022
Insurance segment profit	Insurance segment profit	$	85,537	$	146,725	$	439,445	$	469,010	Insurance segment profit		$	96,504	$	187,494
Reinsurance segment profit (loss)		43,255		(30,442)		60,377		(58,563)
Investing segment profit (loss) (1)		(174,069)		65,428		(1,920,826)		1,459,878
Reinsurance segment profit										Reinsurance segment profit		24,234		13,283
Insurance-linked securities, program services and other insurance										Insurance-linked securities, program services and other insurance		56,602		20,014
Amortization of intangible assets (1)										Amortization of intangible assets (1)		(24,848)		(25,116)

Insurance operations										Insurance operations		152,492		195,675
Investing segment profit (loss)										Investing segment profit (loss)		528,777		(285,672)
Markel Ventures segment profit (2)	Markel Ventures segment profit (2)	60,459		54,969		217,242		215,097		Markel Ventures segment profit (2)		72,627		49,737
Other operations (3)		57,561		5,008		55,189		(19,106)
Interest expense	Interest expense	(47,348)		(46,455)		(147,090)		(135,412)		Interest expense		(49,438)		(49,692)
Net foreign exchange gains		115,130		48,850		245,356		61,677
Net foreign exchange gains (losses)										Net foreign exchange gains (losses)		(32,928)		23,004

Income tax (expense) benefit	Income tax (expense) benefit	(17,995)		(54,415)		239,536		(419,898)		Income tax (expense) benefit		(133,731)		18,136
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(57,161)		(1,598)		(93,062)		(18,809)		Net income attributable to noncontrolling interests		(49,147)		(2,929)
Net income (loss) to shareholders	Net income (loss) to shareholders	65,369		188,070		(903,833)		1,553,874		Net income (loss) to shareholders		488,652		(51,741)
Preferred stock dividends		—		—		(18,000)		(18,000)

Net income (loss) to common shareholders	Net income (loss) to common shareholders	65,369		188,070		(921,833)		1,535,874		Net income (loss) to common shareholders		488,652		(51,741)
Other comprehensive loss to shareholders		(432,797)		(107,834)		(1,274,071)		(264,987)
Other comprehensive income (loss) to shareholders										Other comprehensive income (loss) to shareholders		157,713		(460,173)
Comprehensive income (loss) to shareholders	Comprehensive income (loss) to shareholders	$	(367,428)	$	80,236	$	(2,177,904)	$	1,288,887	Comprehensive income (loss) to shareholders		$	646,365	$	(511,914)

(1) ~~Net investment income and net investment gains (losses), if any,~~Amortization of intangible assets includes all amortization attributable to ~~Markel Ventures are included in segment profit~~our insurance operations. Amortization of intangible assets attributable to our underwriting segments was $9.6 million and $9.8 million for ~~Markel Ventures. All~~the three months ended March 31, 2023 and 2022, respectively; however, we do not allocate amortization of intangible assets between the Insurance and Reinsurance segments. Amortization of intangible assets attributable to our insurance-linked securities, program services and other ~~net investment income~~insurance operations was $15.3 million and ~~net investment gains (losses) are included in Investing segment profit (loss).~~$15.4 million for the three months ended March 31, 2023 and 2022, respectively.

(2) Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures.

~~(3)~~ Other operations include the results attributable to our 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 our underwriting segments was $9.6 million and $29.0 million for the quarter and nine months ended September 30, 2022, respectively, and $10.3 million and $31.1 million for the quarter and nine months ended September 30, 2021, respectively; however, we do not allocate amortization of intangible assets between the Insurance and Reinsurance segments.

Our results for the first nine months of 2022 were significantly impacted by decreases in the fair value of our investment portfolio. Net investment losses on our equity portfolio reflect the impact of significant volatility and overall decline in the public equity markets. The fair value of our fixed maturity portfolio also decreased significantly, primarily due to increases in interest rates. Volatility in the public equity and bond markets reflects the impact of economic uncertainty and broader market conditions, which are impacting all three of our operating engines, including high levels of inflation, rising interest rates and global supply chain disruptions.

The change in comprehensive income (loss) to shareholders for the ~~third quarter of 2022~~three months ended March 31, 2023 compared to the ~~third quarter of 2021~~three months ended March 31, 2022 was primarily due to pre-tax net investment gains on our equity securities of $375.8 million in 2023 compared to pre-tax net investment losses on our equity securities of ~~$281.5~~$364.6 million in 2022, ~~compared to $25.8~~as well as pre-tax net unrealized gains on our fixed maturity securities of $209.2 million in ~~2021, as well as~~2023 compared to pre-tax net unrealized losses on our fixed maturity securities of ~~$530.2~~$665.8 million in ~~2022 compared to $133.2 million in 2021.~~

The change in comprehensive income (loss) to shareholders for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily due to pre-tax net investment losses of $2.2 billion in 2022 compared to pre-tax net investment gains of $1.2 billion in 2021, as well as pre-tax net unrealized losses on our fixed maturity securities of $1.6 billion in 2022 compared to $391.5 million in 2021.2022.

The components of net income (loss) to shareholders and comprehensive income (loss) to shareholders are discussed in further detail under ~~"Underwriting~~"Insurance Results," "Investing Results," "Markel Ventures~~" "Other Operations,~~ Results," "Interest Expense, Net Foreign Exchange Gains (Losses) and Income Taxes" and "Comprehensive Income (Loss) to Shareholders and Book Value per Common Share."

Insurance Results

Our Insurance engine includes our underwriting, insurance-linked securities, program services and other fronting 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 and third-party capital through our ILS and program services operations. Our underwriting operations, which are primarily comprised of our Insurance and Reinsurance segments, produce revenues primarily by underwriting insurance contracts and earning premiums in the specialty insurance market. Our insurance-linked securities and program services operations produce revenues primarily through fees earned for investment management services and fronting services, respectively. Our insurance operations also include the underwriting results of run-off lines of business that were discontinued prior to, or in conjunction with, insurance acquisitions, and the results of our run-off life and annuity reinsurance business.

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The following table presents the components of our Insurance engine gross premium volume and operating revenues.


	Three Months Ended March 31,
(dollars in thousands)		2023		2022		% Change
Gross premium volume:
Underwriting		$	2,658,258	$	2,519,615	6	%
Program services and other fronting (1)		777,754		878,672		(11)	%
Insurance operations		$	3,436,012	$	3,398,287	1	%

Operating revenues:
Insurance segment		$	1,710,924	$	1,477,148	16	%
Reinsurance segment		257,234		283,967		(9)	%
Insurance-linked securities, program services and other insurance		41,774		180,401		(77)	%
Insurance operations		$	2,009,932	$	1,941,516	4	%

(1) Substantially all gross premiums from our program services business and other fronting arrangements were ceded to third parties for the three months ended March 31, 2023 and 2022.

Underwriting Results

Underwriting profits are a key component of our strategy to build shareholder value. We believe that the ability to achieve consistent underwriting profits demonstrates knowledge and expertise, commitment to superior customer service and the ability to manage insurance risk. The property and casualty insurance industry commonly defines underwriting profit or loss as earned premiums net of losses and loss adjustment expenses and underwriting, acquisition and insurance expenses. We use underwriting profit or loss and the combined ratio as a basis for evaluating our underwriting performance. 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. The combined ratio is the sum of the loss ratio and the expense ratio. The loss ratio represents the relationship of incurred losses and loss adjustment expenses to earned premiums. The expense ratio represents the relationship of underwriting, acquisition and insurance expenses to earned premiums. A combined ratio less than 100% indicates an underwriting profit, while a combined ratio greater than 100% reflects an underwriting loss.

In addition to the U.S. GAAP combined ratio, loss ratio and expense ratio, we also evaluate our underwriting performance using measures that exclude the impacts of certain items on these ratios. We believe these adjusted measures, which are non-GAAP measures, provide financial statement users with a better understanding of the significant factors that comprise our underwriting results and how management evaluates underwriting performance.

When analyzing our combined ratio, we exclude current accident year losses and loss adjustment expenses attributed to natural ~~catastrophes. We also exclude losses~~catastrophes and ~~loss adjustment expenses attributed to~~ certain significant, infrequent loss events, for example, ~~the COVID-19 pandemic and~~ the military conflict between Russia and Ukraine that began following Russia's invasion of Ukraine in February 2022. Due to the unique characteristics of a catastrophe loss and other significant, infrequent events, there is inherent variability as to the timing or loss amount, which cannot be predicted in advance. We believe measures that exclude the effects of ~~catastrophe~~such events ~~the Russia-Ukraine conflict and COVID-19~~ are meaningful to understand the underlying trends and variability in our underwriting results that may be obscured by these items.

When analyzing our loss ratio, we evaluate losses and loss adjustment expenses attributable to the current accident year separate from losses and loss adjustment expenses attributable to prior accident years. Prior accident year reserve development, which can either be favorable or unfavorable, represents changes in our estimates of losses and loss adjustment expenses related to loss events that occurred in prior years. We believe a discussion of current accident year loss ratios, which exclude prior accident year reserve development, is helpful since it provides more insight into estimates of current underwriting performance and excludes changes in estimates related to prior year loss reserves. We also analyze our current accident year loss ratio excluding losses and loss adjustment expenses attributable to catastrophes and, in 2022, the Russia-Ukraine conflict. The current accident year loss ratio excluding the impact of catastrophes and other significant, infrequent loss events is also commonly referred to as an attritional loss ratio within the property and casualty insurance industry.

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~~Consolidated~~The following table presents summary data for our consolidated underwriting operations, which are comprised predominantly of our Insurance and Reinsurance segments. Our consolidated underwriting results also include results from discontinued lines of business and the retained portion of our program services operations.


		Quarter Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022			2021			% Change		2022			2021			% Change		(dollars in thousands)		2023			2022			% Change
Gross premium volume ~~(1)~~	Gross premium volume ~~(1)~~	$	2,483,052		$	2,078,005		19	%	$	7,528,922		$	6,348,877		19	%	Gross premium volume ~~(1)~~		$	2,657,807		$	2,518,116		6	%
Net written premiums	Net written premiums	$	2,009,167		$	1,684,810		19	%	$	6,273,696		$	5,317,331		18	%	Net written premiums		$	2,217,778		$	2,164,734		2	%
Earned premiums	Earned premiums	$	1,956,830		$	1,630,500		20	%	$	5,549,704		$	4,696,232		18	%	Earned premiums		$	1,967,704		$	1,759,770		12	%
Underwriting profit	Underwriting profit	$	128,245		$	112,503		14	%	$	490,103		$	408,255		20	%	Underwriting profit		$	118,985		$	197,033		(40)	%

Underwriting Ratios ~~(2)~~(1)	Underwriting Ratios ~~(2)~~(1)							Point Change								Point Change		Underwriting Ratios ~~(2)~~(1)								Point Change
Loss ratio	Loss ratio																	Loss ratio
Current accident year loss ratio	Current accident year loss ratio	64.7		%	66.7		%	(2.0)		61.6		%	64.1		%	(2.5)		Current accident year loss ratio		63.2		%	60.7		%	2.5
Prior accident years loss ratio	Prior accident years loss ratio	(4.2)		%	(8.6)		%	4.4		(3.7)		%	(7.8)		%	4.1		Prior accident years loss ratio		(3.6)		%	(5.5)		%	1.9
Loss ratio	Loss ratio	60.6		%	58.2		%	2.4		58.0		%	56.3		%	1.7		Loss ratio		59.6		%	55.3		%	4.3
Expense ratio	Expense ratio	32.9		%	34.9		%	(2.0)		33.2		%	35.0		%	(1.8)		Expense ratio		34.3		%	33.5		%	0.8
Combined ratio	Combined ratio	93.4		%	93.1		%	0.3		91.2		%	91.3		%	(0.1)		Combined ratio		94.0		%	88.8		%	5.2

Current accident year loss ratio catastrophe impact (3)		3.6		%	7.0		%	(3.4)		1.3		%	3.9		%	(2.6)

Current accident year loss ratio Russia-Ukraine conflict impact ~~(3)~~(2)	Current accident year loss ratio Russia-Ukraine conflict impact ~~(3)~~(2)	—		%	—		%	—		0.6		%	—		%	0.6		Current accident year loss ratio Russia-Ukraine conflict impact ~~(3)~~(2)		—		%	2.0		%	(2.0)
Prior accident years loss ratio COVID-19 impact (3)		—		%	(0.1)		%	0.1		—		%	0.3		%	(0.3)

Current accident year loss ratio, excluding catastrophes and Russia-Ukraine conflict		61.2		%	59.7		%	1.5		59.7		%	60.2		%	(0.5)
Combined ratio, excluding current year catastrophes, Russia-Ukraine conflict and COVID-19		89.9		%	86.2		%	3.7		89.3		%	87.1		%	2.2
Current accident year loss ratio, excluding Russia-Ukraine conflict impact																		Current accident year loss ratio, excluding Russia-Ukraine conflict impact		63.2		%	58.7		%	4.5
Combined ratio, excluding current year Russia-Ukraine conflict impact																		Combined ratio, excluding current year Russia-Ukraine conflict impact		94.0		%	86.8		%	7.2

(1) Gross premium volume excludes $991.7 million and $2.6 billion for the quarter and nine months ended September 30, 2022, respectively, and $890.6 million and $2.3 billion for the quarter and nine months ended September 30, 2021, respectively, of written premiums attributable to our program services business and other fronting arrangements that were ceded.

~~(2)~~ Amounts may not reconcile due to rounding.

~~(3)~~(2) The point impact of ~~catastrophes,~~ the Russia-Ukraine conflict ~~and COVID-19~~ is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums.

Premiums

The increase in gross premium volume in our underwriting operations for the ~~quarter and nine~~three months ended ~~September 30, 2022~~March 31, 2023 was driven by growth within our ~~insurance segment across all product lines.~~

We continue to see favorable rates across most of our product lines, particularly within our professional liability and general liability product lines, however, we are beginning to see rate increases moderate on many of our product lines. Rate increases continue to reflect general market conditions, including the impacts of both economic and social inflation on loss costs. Additionally, recent increases in economic inflation, and an expectation that this trend will continue, 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 net investment income in recent years, have resulted in higher rates. Additionally, following the high level of catastrophes that have occurred in recent years, we are also seeing more favorable rates on catastrophe-exposed lines of business. The primary exception to the favorable rate environment experience in recent years is workers' compensation, where we continue to see low single digit rate decreases given generally favorable loss experience in recent years. 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.

~~Table of Contents~~

~~Net retention of gross premium volume in our underwriting operations was 81% for the quarters ended September 30, 2022 and 2021.~~Insurance segment. Net retention of gross premium in our underwriting operations for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was 83% compared to ~~84%~~86% for the same period of ~~2021.~~2022. The decrease in net retention for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was driven by lower retention ~~within~~across both of our ~~Insurance segment, partially offset by higher retention within our Reinsurance segment.~~underwriting segments. Within our underwriting operations, we purchase reinsurance and retrocessional reinsurance to manage our net retention on individual risks and overall exposure to losses and to enable us to write policies with sufficient limits to meet policyholder needs.

The increase in earned premiums in our underwriting operations for the ~~quarter and nine~~three months ended ~~September 30, 2022~~March 31, 2023 was primarily attributable to higher gross premium ~~volume.~~volume in recent periods.

After several years of significant rate increases across most of our product lines, we began to see rate increases slow on many of our product lines in the latter half of 2022. The level of rate increases achieved in the first quarter of 2023 were broadly consistent with the latter half of 2022, with a few exceptions, and the current rate environment varies by product line. In certain product lines, such as property coverages, and marine and energy, we have continued to realize significant rate increases in the early part of 2023 due to recent industry loss experience and the rising cost of reinsurance within those product lines. We continue to see low single-digit rate decreases within our workers' compensation product line. In most of our casualty and professional liability product classes we continue to realize rate increases, with exceptions being in the large account directors and officers and excess casualty products. As a result of our underwriting discipline, gross premium volume is being impacted in certain product lines where we are concerned around the level of price adequacy and are allowing business to lapse to improve underwriting profitability. When we believe the prevailing market price will not support our underwriting profit targets, the business is not written.

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Combined Ratio

Underwriting results for the ~~quarter~~three months ended ~~September 30,~~March 31, 2022 included ~~$70.0 million of net losses and loss adjustment expenses from Hurricane Ian. Underwriting results for the quarter ended September 30, 2021 included $114.4~~$35.0 million of net losses and loss adjustment expenses attributed to ~~natural catastrophes, including Hurricane Ida and~~ the ~~floods in Europe.~~Russia-Ukraine conflict. Excluding these losses, ~~attributed to catastrophes,~~ the increase in our consolidated combined ratio for the ~~quarter~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the same period of ~~2021~~2022 was primarily driven by a higher attritional loss ratio and the impact of less favorable development on prior accident years loss reserves ~~and a higher attritional loss ratio within our Insurance segment~~ in ~~2022~~2023 compared to ~~2021, partially offset by a lower expense ratio~~2022 within our Insurance segment.

Underwriting results for the nine months ended September 30, 2022 included $70.0 million and $35.0 million of net losses and loss adjustment expenses attributed to Hurricane Ian and the Russia-Ukraine conflict, respectively. Underwriting results for the nine months ended September 30, 2021 included $182.3 million of net losses and loss adjustment expenses attributed to Winter Storm Uri, the floods in Europe and Hurricane Ida (2021 Catastrophes) as well as $15.2 million of net losses and loss adjustment expenses resulting from an increase in our estimate of ultimate losses and loss adjustment expenses attributed to COVID-19. Excluding these losses from the respective periods, the increase in our consolidated combined ratio for the nine months ended September 30, 2022 compared to the same period of 2021 was primarily driven by the impact of less favorable development on prior accident years loss reserves within our Insurance segment in 2022 compared to 2021, partially offset by a lower expense ratio within our Insurance segment.

~~Hurricane Ian~~

The net losses and loss adjustment expenses attributed to Hurricane Ian as of September 30, 2022 represent our best estimate based upon information currently available. Our estimate for these losses is based on preliminary industry loss estimates and output from industry, broker and proprietary models, as well as policy and reinsurance contract level reviews and analysis of our ceded reinsurance contracts. Due to limited claims activity, this estimate is based on various assumptions about coverage, liability and reinsurance and is therefore subject to change. While we believe our net reserves for Hurricane Ian as of September 30, 2022 are adequate, we continue to closely monitor reported claims and will adjust our estimate of net losses as new information becomes available.

~~Russia-Ukraine Conflict~~

Our results reflect underwriting losses from the military conflict between Russia and Ukraine that began following Russia's invasion of Ukraine in February 2022. The ongoing conflict has also contributed to certain aspects of the current economic conditions impacting all of our operations. For further discussion regarding the Russia-Ukraine conflict and risks related to our businesses, see Item 1A Risk Factors.

Our losses and loss adjustment expenses from the Russia-Ukraine conflict are primarily attributed to business written within our international insurance and reinsurance operations and are primarily associated with war and terrorism coverages within our marine and energy product lines, as well as our trade credit and surety product lines. Although premiums written in the impacted regions were not significant, many of our impacted policies have high exposure limits. Additionally, our marine war and trade credit products provide coverage for vessels and cargo that travel worldwide, including areas impacted by the conflict. We purchase significant excess of loss reinsurance on the impacted product lines to reduce our net exposures, resulting in significant ceded losses.

~~Table of Contents~~

The following table summarizes the losses and loss adjustment expenses and related reinstatement premiums attributed to the Russia-Ukraine conflict, all of which were recognized in the first quarter of 2022. There were no additional losses recognized or adjustments to our initial loss estimates in the second or third quarters of 2022.


~~(dollars in thousands)~~	~~Nine Months Ended September 30, 2022~~
~~Gross losses and loss adjustment expenses~~	$	~~105,000~~
~~Ceded losses and loss adjustment expenses~~	~~(70,000)~~
~~Net losses and loss adjustment expenses~~	~~35,000~~

~~Net ceded reinstatement premiums~~	~~12,253~~
~~Underwriting loss~~	$	~~47,253~~

Both the gross and net loss estimates for incurred losses attributed to the Russia-Ukraine conflict continue to represent our best estimates as of September 30, 2022 based upon information currently available. Our estimates for these losses are based on reported claims, detailed underwriting, actuarial and claims reviews of policies and in-force assumed reinsurance contracts for potential exposures, as well as analysis of our ceded reinsurance contracts and analysis provided by our brokers and claims counsel. These estimates include various assumptions about what areas within the affected regions have incurred losses, the nature and extent of such losses, which remain difficult to verify, as well as assumptions about coverage, liability and reinsurance. Due to the inherent uncertainty associated with the assumptions surrounding the Russia-Ukraine conflict, these estimates may be subject to a wide range of variability. Additionally, as the Russia-Ukraine conflict is ongoing, we believe it is possible that additional losses could be incurred in subsequent periods. Given the significant levels of ceded reinsurance on certain of our impacted policies, a significant portion of any additional incurred losses may be ceded. Additionally, increases in ceded losses may require payment of additional reinstatement premiums. Further, if coverage under our existing ceded reinsurance contracts is exhausted, we may need to purchase additional reinsurance to ensure that our net retained risks on the impacted product lines are within our corporate risk tolerances.

While we believe our gross and net reserves for losses and loss adjustment expenses for the Russia-Ukraine conflict as of September 30, 2022 are adequate based on information currently available, we continue to closely monitor reported claims, ceded reinsurance contract attachment, government actions and areas impacted by the conflict and may adjust our estimates of gross and net losses as new information becomes available. Any such adjustments or additional incurred losses may be material to our results of operations, financial condition and cash flows.

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Insurance Segment


		Quarter Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022			2021			% Change		2022			2021			% Change		(dollars in thousands)		2023			2022			% Change
Gross premium volume	Gross premium volume	$	2,299,325		$	1,899,592		21	%	$	6,479,789		$	5,359,293		21	%	Gross premium volume		$	2,097,938		$	1,943,306		8	%
Net written premiums	Net written premiums	$	1,849,983		$	1,545,428		20	%	$	5,289,165		$	4,427,301		19	%	Net written premiums		$	1,702,141		$	1,611,020		6	%
Earned premiums	Earned premiums	$	1,695,029		$	1,381,235		23	%	$	4,742,178		$	3,928,824		21	%	Earned premiums		$	1,710,924		$	1,477,148		16	%
Underwriting profit	Underwriting profit	$	85,537		$	146,725		(42)	%	$	439,445		$	469,010		(6)	%	Underwriting profit		$	96,504		$	187,494		(49)	%

Underwriting Ratios (1)	Underwriting Ratios (1)							Point Change								Point Change		Underwriting Ratios (1)								Point Change
Loss ratio	Loss ratio																	Loss ratio
Current accident year loss ratio	Current accident year loss ratio	64.9		%	62.7		%	2.2		61.3		%	62.3		%	(1.0)		Current accident year loss ratio		63.0		%	60.0		%	3.0
Prior accident years loss ratio	Prior accident years loss ratio	(3.2)		%	(9.0)		%	5.8		(4.1)		%	(10.1)		%	6.0		Prior accident years loss ratio		(3.7)		%	(6.7)		%	3.0
Loss ratio	Loss ratio	61.8		%	53.7		%	8.1		57.1		%	52.2		%	4.9		Loss ratio		59.3		%	53.3		%	6.0
Expense ratio	Expense ratio	33.2		%	35.6		%	(2.4)		33.6		%	35.9		%	(2.3)		Expense ratio		35.0		%	34.0		%	1.0
Combined ratio	Combined ratio	95.0		%	89.4		%	5.6		90.7		%	88.1		%	2.6		Combined ratio		94.4		%	87.3		%	7.1

Current accident year loss ratio catastrophe impact (2)		4.1		%	3.3		%	0.8		1.5		%	2.3		%	(0.8)

Current accident year loss ratio Russia-Ukraine conflict impact (2)	Current accident year loss ratio Russia-Ukraine conflict impact (2)	—		%	—		%	—		0.4		%	—		%	0.4		Current accident year loss ratio Russia-Ukraine conflict impact (2)		—		%	1.4		%	(1.4)
Prior accident years loss ratio COVID-19 impact (2)		—		%	—		%	—		—		%	(0.1)		%	0.1

Current accident year loss ratio, excluding catastrophes and Russia-Ukraine conflict		60.8		%	59.4		%	1.4		59.4		%	60.0		%	(0.6)
Combined ratio, excluding current year catastrophes, Russia-Ukraine conflict and COVID-19		90.8		%	86.0		%	4.8		88.8		%	85.9		%	2.9
Current accident year loss ratio, excluding Russia-Ukraine conflict impact																		Current accident year loss ratio, excluding Russia-Ukraine conflict impact		63.0		%	58.6		%	4.4
Combined ratio, excluding current year Russia-Ukraine conflict impact																		Combined ratio, excluding current year Russia-Ukraine conflict impact		94.4		%	86.0		%	8.4

(1) Amounts may not reconcile due to rounding.

(2) The point impact of ~~catastrophes,~~ the Russia-Ukraine conflict ~~and COVID-19~~ is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums.

Premiums

The increase in gross premium volume in our Insurance segment for the ~~both the quarter and nine~~three months ended ~~September 30, 2022~~March 31, 2023 was driven by ~~new business volume, strong policy retention levels,~~ more favorable rates, as well as new business growth, within our personal lines, property and ~~expanded product offerings, resulting in growth across all of our~~marine and energy product lines, ~~most notably~~partially offset by lower premium volume within our ~~general~~professional liability product lines, where we are adjusting our writings in response to changes in market conditions and downward pressure on rates. We continue to focus on rate adequacy, particularly within certain classes within our casualty and professional liability product ~~lines. For the quarter ended September 30, 2022, we also experienced notable growth within~~lines, and will not write business that does not meet our ~~marine and energy product lines.~~

underwriting profit targets. Net retention of gross premium volume was ~~80% for the quarter ended September 30, 2022 compared to~~ 81% for the ~~same period of 2021. Net retention of gross premium volume was 82% for the nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to 83% for the same period of ~~2021.~~2022. The decrease in net retention ~~for the quarter and nine months ended September 30, 2022~~ was primarily due to higher cession rates on our professional liability and personal lines product lines in ~~2022~~2023 compared to 2021, partially offset by the impact of low cession rates on new programs business. The decrease in net retention for the quarter ended September 30, 2022 was also partially offset by the impact of ceded reinstatement premiums in the third quarter of 2021 within our marine and energy product lines.

2022. The increase in earned premiums for the ~~quarter and nine~~three months ended ~~September 30, 2022~~March 31, 2023 was primarily due to higher gross premium ~~volume.~~volume across most product lines in recent periods.

~~Table of Contents~~

Combined ~~Ratio: Quarter-to-Date~~Ratio

The Insurance segment's current accident year losses and loss adjustment expenses for the ~~quarter~~three months ended ~~September 30,~~March 31, 2022 included ~~$70.0 million of net losses and loss adjustment expenses attributed to Hurricane Ian. Current accident year losses for the quarter ended September 30, 2021 included $46.0~~$20.0 million of net losses and loss adjustment expenses attributed to the ~~2021 Catastrophes.~~Russia-Ukraine conflict. Excluding these losses, ~~attributed to catastrophes,~~ the increase in the current accident year loss ratio for the ~~quarter~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the same period of ~~2021~~2022 was primarily attributable to higher attritional loss ratios within our professional liability and general liability product ~~lines. In response~~lines in 2023 compared to ~~recent loss development trends within these product lines, including the impacts of economic and social inflation, we increased~~2022. We have been increasing our estimates of the ultimate loss ratios for total earned premiums for the 2022 accident year on certain of these product lines during the quarter ended September 30, 2022. For the nine months ended September 30, 2022, the attritional loss ratios on these lines since the latter half of 2022 due to the impacts of recent claims trend, including impacts from economic and social inflation. We also increased our attritional loss ratios within our professional liability ~~and general liability~~ product lines ~~were modestly lower than~~in the ~~same period~~first quarter of ~~2021 due~~2023 related to ~~the benefit of achieving higher premium rates.~~exposures arising from recent bank failures.

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The Insurance segment's combined ratio for the ~~quarter~~three months ended ~~September 30, 2022~~March 31, 2023 included ~~$53.8~~$62.6 million of favorable development on prior accident years loss reserves compared to ~~$124.1~~$98.6 million for the same period of ~~2021.~~2022. The decrease in favorable development was primarily due to modest adverse development on our professional liability product lines and modest favorable development on our general liability and property product lines in 2022 compared to significant favorable development on these product lines in 2021. The decrease in favorable development attributable to these product lines was partially offset by favorable development on our programs product lines in 2022 compared to adverse development in 2021.

Adverse development on our professional liability product lines was most significant on the 2015 to 2019 accident years and was primarily attributable to unfavorable claim settlements and increased claim frequency and severity on certain products, including directors and officers, errors and omissions and employment practices liability. Development on prior years loss reserves within our professional liability product lines in 2022 was impacted by broader market conditions, including the effects of social inflation. These factors have created more uncertainty around the ultimate losses that will be incurred to settle claims on these longer-tail product lines, and as a result, we are approaching reductions to prior year loss reserves on more recent accident years cautiously. While we are not currently experiencing the same loss trends within most of our general liability product lines, similar to our professional liability product lines, we are also approaching reductions to prior years loss reserves cautiously due to the inherent uncertainty of the impact of economic and social inflation on these long-tail product lines. Consistent with our reserving philosophy, we are responding quickly to increase loss reserves following any indication of increased claims frequency or severity in excess of our previous expectations, whereas in instances where claims trends are more favorable than we previously anticipated, we are often waiting to reduce loss reserves and will evaluate our experience over additional periods of time.

For the quarter ended September 30, 2022, favorable development on prior accident years loss reserves was most significant on our workers' compensation and programs product lines, primarily on the 2020 and 2021 accident years, and credit and surety product lines, primarily on the 2021 accident year. The favorable development on prior years loss reserves in 2021 was most significant on our property, general liability, professional liability and workers' compensation product lines.

The decrease in the Insurance segment's expense ratio for the quarter ended September 30, 2022 compared to the same period of 2021 was primarily due to the favorable impact of higher earned premiums in 2022 while maintaining consistent levels of general expenses with the same period of 2021.

~~Combined Ratio: Year-to-Date~~

The Insurance segment's current accident year losses and loss adjustment expenses for the nine months ended September 30, 2022 included $70.0 million and $20.0 million of net losses and loss adjustment expenses attributed to Hurricane Ian and the Russia-Ukraine conflict, respectively. Current accident year losses for the nine months ended September 30, 2021 included $88.9 million of net losses and loss adjustment expenses attributed to the 2021 Catastrophes.

The Insurance segment's combined ratio for the nine months ended September 30, 2022 included $196.1 million of favorable development on prior accident years loss reserves compared to $397.7 million for the same period of 2021. The decrease in favorable development was primarily due to less favorable development on our general liability and professional liability product lines in 2022 compared to ~~2021. Development~~minimal development on these lines in 2023. We remain cautious in our approach to reducing prior year loss reserves on our longer tail general liability and professional liability ~~product~~ lines ~~for~~in the ~~nine~~prevailing economic environment.

For the three months ended ~~September 30, 2022 was unfavorably impacted by the same factors that impacted quarter-to-date development. For the nine months ended September 30, 2022,~~March 31, 2023, favorable development was most significant on our marine and energy, property, workers' compensation ~~property,~~ and programs product lines ~~primarily on~~in the ~~2020 and 2021~~more recent accident ~~years, and marine and energy, primarily on the 2021 accident year.~~years. The favorable development on prior years loss reserves in ~~2021~~2022 was most significant on our general liability, ~~property, workers' compensation, professional liability, and~~ marine and energy, workers' compensation and property product lines.

~~Table of Contents~~

The ~~decrease~~increase in the Insurance segment's expense ratio for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the same period of ~~2021~~2022 was primarily due to a higher policy acquisition cost ratio, due to changes in mix of business, as well as higher general and administrative expenses, which were largely offset by the favorable impact of higher earned ~~premiums in 2022 while maintaining consistent levels of general expenses with the same period of 2021.~~premiums.

Reinsurance Segment


		Quarter Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022			2021			% Change		2022			2021			% Change		(dollars in thousands)		2023			2022			% Change
Gross premium volume	Gross premium volume	$	179,455		$	180,673		(1)	%	$	1,044,827		$	992,635		5	%	Gross premium volume		$	552,061		$	576,316		(4)	%
Net written premiums	Net written premiums	$	154,029		$	141,642		9	%	$	983,087		$	893,082		10	%	Net written premiums		$	516,091		$	555,220		(7)	%
Earned premiums	Earned premiums	$	260,535		$	250,962		4	%	$	808,656		$	770,031		5	%	Earned premiums		$	257,234		$	283,967		(9)	%
Underwriting profit (loss)	Underwriting profit (loss)	$	43,255		$	(30,442)		NM (1)		$	60,377		$	(58,672)		NM (1)		Underwriting profit (loss)		$	24,234		$	13,283		82	%

Underwriting Ratios ~~(2)~~(1)	Underwriting Ratios ~~(2)~~(1)							Point Change								Point Change		Underwriting Ratios ~~(2)~~(1)								Point Change
Loss ratio	Loss ratio																	Loss ratio
Current accident year loss ratio	Current accident year loss ratio	63.9		%	88.4		%	(24.5)		63.7		%	72.9		%	(9.2)		Current accident year loss ratio		64.8		%	64.3		%	0.5
Prior accident years loss ratio	Prior accident years loss ratio	(11.3)		%	(6.5)		%	(4.8)		(1.7)		%	4.4		%	(6.1)		Prior accident years loss ratio		(3.4)		%	0.7		%	(4.1)
Loss ratio	Loss ratio	52.6		%	81.9		%	(29.3)		62.0		%	77.3		%	(15.3)		Loss ratio		61.5		%	65.0		%	(3.5)
Expense ratio	Expense ratio	30.8		%	30.2		%	0.6		30.6		%	30.3		%	0.3		Expense ratio		29.1		%	30.3		%	(1.2)
Combined ratio	Combined ratio	83.4		%	112.1		%	(28.7)		92.5		%	107.6		%	(15.1)		Combined ratio		90.6		%	95.3		%	(4.7)

Current accident year loss ratio catastrophe impact (3)(4)		—		%	27.2		%	(27.2)		—		%	12.1		%	(12.1)

Current accident year loss ratio Russia-Ukraine conflict impact ~~(3)~~(2)	Current accident year loss ratio Russia-Ukraine conflict impact ~~(3)~~(2)	—		%	—		%	—		1.9		%	—		%	1.9		Current accident year loss ratio Russia-Ukraine conflict impact ~~(3)~~(2)		—		%	5.3		%	(5.3)
Prior accident years loss ratio COVID-19 impact (3)		—		%	(0.6)		%	0.6		—		%	2.5		%	(2.5)

Current accident year loss ratio, excluding catastrophes and Russia-Ukraine conflict		63.9		%	61.2		%	2.7		61.8		%	60.8		%	1.0
Combined ratio, excluding current year catastrophes, Russia-Ukraine conflict and COVID-19		83.4		%	85.5		%	(2.1)		90.7		%	93.0		%	(2.3)
Current accident year loss ratio, excluding Russia-Ukraine conflict impact																		Current accident year loss ratio, excluding Russia-Ukraine conflict impact		64.8		%	59.0		%	5.8
Combined ratio, excluding current year Russia-Ukraine conflict impact																		Combined ratio, excluding current year Russia-Ukraine conflict impact		90.6		%	90.0		%	0.6

(1) ~~NM - Ratio is not meaningful~~

~~(2)~~ Amounts may not reconcile due to rounding.

~~(3)~~(2) The point impact of ~~catastrophes,~~ the Russia-Ukraine conflict ~~and COVID-19~~ is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums.

~~(4)~~ The point impact of catastrophes does not include the favorable impact of assumed reinstatement premiums associated with the 2021 Catastrophes of $16.7 million and $20.9 million for the quarter and nine months ended September 30, 2021, respectively. Reinstatement premiums were not significant for the quarter and nine months ended September 30, 2022.

Premiums

Gross premium volume for the quarter ended September 30, 2022 was consistent with the same period of 2021. Lower gross premiums within our professional liability and property product lines were largely offset by higher gross premiums within several of our other product lines, driven by more favorable premium adjustments and a favorable impact from the timing of renewals. Lower gross premiums within our professional liability product lines were primarily due to less favorable premium adjustments in the third quarter of 2022 compared to the same period of 2021, as well as non-renewals. Lower gross premiums within our property product lines were driven by non-renewals, as we have discontinued writing property retrocessional reinsurance business on a risk-bearing basis.

~~Table of Contents~~

The ~~increase~~decrease in gross premium volume in our Reinsurance segment for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~driven by increases on renewals within~~primarily attributable to lower gross premiums with our professional liability product lines, due to increased exposure arising from growth in underlying portfolios and more favorable rates, as well as new business, primarily on our professional liability and general liability product lines. Additionally, we had more favorable premium adjustments in 2022 compared to 2021, primarily on our general liability and credit and surety product ~~lines. These increases were~~lines, partially offset by ~~the impact of non-renewals~~higher gross premiums within our ~~property~~general liability and marine and energy product lines. Lower gross premiums within our professional liability and credit and surety product lines ~~as previously discussed, and the non-renewal of a large treaty~~was primarily attributable to unfavorable premium adjustments in 2023 compared to significant favorable premium adjustments in 2022. Higher gross premiums within our ~~workers' compensation~~general liability and marine and energy product ~~line.~~lines was primarily attributable to favorable timing differences and increases on renewals, due to increased exposures and more favorable rates. Significant variability in gross premium volume can be expected in our Reinsurance segment due to individually significant contracts and multi-year contracts.

Net retention of gross premium volume for the ~~quarter~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~86%~~93% compared to ~~78%~~96% for the same period of ~~2021. Net retention of gross premium volume for the nine months ended September 30, 2022 was 94% compared to 90% for the same period of 2021.~~2022. The ~~increase~~decrease in net retention ~~for both the quarter and nine months ended September 30, 2022~~ was driven by changes in mix of ~~business. We have experienced growth in~~business, as we are writing less of our highly retained professional liability and credit and surety business, and higher cession rates on our marine and energy product lines ~~during the year, while the non-renewed property business had a lower retention rate than the rest of the segment.~~in 2023 compared to 2022.

Table of Contents

The ~~increase~~decrease in earned premiums for the ~~quarter and nine~~three months ended ~~September 30, 2022~~March 31, 2023 was primarily attributable to ~~growth in gross premium volume within~~ our ~~professional liability~~credit and ~~general liability~~surety product lines, which had less favorable premium adjustments in ~~recent periods, partially offset by the impact of lower gross premiums within our property product lines.~~2023 compared to 2022.

Combined ~~Ratio: Quarter-to-Date~~Ratio

The Reinsurance segment's current accident year losses and loss adjustment expenses for the quarter ended September 30, 2022 did not include any losses attributed to Hurricane Ian. The Reinsurance segment's current accident year losses and loss adjustment expenses for the quarter ended September 30, 2021 included $68.4 million of net losses and loss adjustment expenses attributed to the 2021 Catastrophes. Excluding these losses, the increase in the current accident year loss ratio for the quarter ended September 30, 2022 compared to the same period of 2021 was primarily due to the benefit in 2021 of $16.7 million of favorable assumed reinstatement premiums attributed to the 2021 Catastrophes.

The Reinsurance segment's combined ratio for the quarter ended September 30, 2022 included $29.5 million of favorable development on prior accident years loss reserves, which was attributable to favorable development across several product lines, including favorable development on catastrophe reserves within our property product lines. Favorable development in 2022 was partially offset by the impact of additional exposures recognized on prior accident years related to net favorable premium adjustments on our professional liability, general liability and credit and surety product lines. For the quarter ended September 30, 2021, the combined ratio included $16.3 million of favorable development on prior accident years loss reserves, which was primarily attributable to our general liability product lines. Favorable development in 2021 was partially offset by the impact of additional exposures recognized on prior accident years related to net favorable premium adjustments on our professional liability and general liability product lines.

~~Combined Ratio: Year-to-Date~~

~~The Reinsurance segment's current accident year losses and loss adjustment expenses for the nine~~three months ended ~~September 30,~~March 31, 2022 included $15.0 million of net losses and loss adjustment expenses attributed to the Russia-Ukraine conflict. ~~Current accident year losses for the nine months ended September 30, 2021 included $93.4 million of net losses and loss adjustment expenses attributed to the 2021 Catastrophes.~~ Excluding these losses, ~~from the respective periods,~~ the increase in the current accident year loss ratio for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the same period of ~~2021~~2022 was primarily due to the unfavorable impact of changes in the mix of business within the segment and the benefit in 2021 of $20.9 million of favorable assumed reinstatement premiums attributed to the 2021 Catastrophes. The change in mix of business had an unfavorable impact as the non-renewed property business had a lower attritional loss ratio than the rest of the segment. These increases were partially offset by the benefit of higher premium rates on our general liability and professional liability product lines and moreless favorable premium adjustments in ~~2022~~2023 compared to ~~2021,~~2022, primarily on our ~~general~~professional liability and credit and surety product lines. The decrease in favorable prior period adjustments had an offsetting benefit in the segment prior accident year loss ratio.

~~Table of Contents~~

The Reinsurance segment's combined ratio for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 included ~~$13.8~~$8.7 million of favorable development on prior accident years loss reserves, which was primarily attributable to modest favorable development on our ~~credit~~professional liability and ~~surety product lines, primarily on the 2019 accident year, and our~~ property product lines ~~primarily on the 2018~~across several accident ~~year. Favorable~~years. This favorable development ~~on prior years loss reserves in 2022~~ was partially offset by additional exposures recognized on prior accident years related to net favorable premium adjustments on our general liability ~~professional liability and credit and surety~~ product lines. For the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, the combined ratio included ~~$34.1~~a $2.1 million ~~of adverse development on~~increase in prior accident years loss reserves, which was primarily attributable to ~~property product lines, as well as~~ additional exposures recognized on prior accident years related to net favorable premium adjustments on our credit and surety, professional liability and general liability product lines. This increase in prior years loss reserves for the three months ended March 31, 2022 was largely offset by modest favorable development across several of our other product lines, including our property product lines.

The decrease in the Reinsurance segment's expense ratio for the three months ended March 31, 2023 compared to the same period of 2022 was primarily due to the favorable impact of a change in mix of business within the segment as certain contracts with higher commission rates were not renewed in 2023.

Insurance-linked Securities, Program Services and Other Insurance

The following table presents the components of operating revenues and operating expenses attributable to our insurance-linked securities, program services and other insurance operations, including our run-off block of life and annuity reinsurance contracts, none of which are included in a reportable segment. Underwriting results attributable to these operations include results from discontinued lines of business, which are reported separate from our Insurance and Reinsurance segments, and the retained portion of our program services operations. Investment income earned on the investments that support life and annuity policy benefit reserves are included in our Investing segment.


	Three Months Ended March 31,
	2023						2022
(dollars in thousands)	Operating revenues		Operating expenses		Net		Operating revenues		Operating expenses		Net
Services and other:
Program services and other fronting	$	29,190	$	7,287	$	21,903	$	34,071	$	7,383	$	26,688
Insurance-linked securities	9,778		14,401		(4,623)		37,009		37,746		(737)
Insurance-linked securities - disposition gain	—		—		—		107,293		—		107,293
Life and annuity	25		3,206		(3,181)		325		3,396		(3,071)
Markel CATCo buy-out	—		—		—		—		101,904		(101,904)
Markel CATCo Re	—		(44,792)		44,792		—		—		—
Other	3,235		3,771		(536)		3,048		7,559		(4,511)
	42,228		(16,127)		58,355		181,746		157,988		23,758
Underwriting	(454)		1,299		(1,753)		(1,345)		2,399		(3,744)
	41,774		(14,828)		56,602		180,401		160,387		20,014
Amortization of intangible assets			15,281		(15,281)				15,365		(15,365)

	$	41,774	$	453	$	41,321	$	180,401	$	175,752	$	4,649

Table of Contents

Program Services and Other Fronting

For the three months ended March 31, 2023, the decrease in operating revenues in our program services and other fronting operations was primarily due to lower gross written premiums within our program services operations driven by the non-renewal and termination of certain programs, partially offset by growth from new programs. Gross written premiums in our program services operations were $619.4 million and $705.6 million for the three months ended March 31, 2023 and 2022, respectively. Gross written premiums from our other fronting operations, which consist of business written by our underwriting platform on behalf of our ILS operations, were $158.4 million and $173.1 million for the three months ended March 31, 2023 and 2022, respectively.

Insurance-Linked Securities

For the three months ended March 31, 2023, the decrease in operating revenues and operating expenses in our Nephila ILS operations was primarily due to the disposition of our Velocity and Volante managing general agent operations in February 2022 and October 2022, respectively, as well as lower revenues in our fund management operations. The sale of the majority of our controlling interest in our Velocity managing general agent operations resulted in a gain of $107.3 million during the first quarter of 2022. Our Nephila ILS operations in 2023 are solely comprised of our fund management operations. As of March 31, 2023, Nephila's net assets under management were $7.2 billion.

Markel CATCo

In March 2022, we completed a buy-out transaction with Markel CATCo Re and the Markel CATCo Funds that provided for an accelerated return of all remaining capital to investors in the Markel CATCo Funds and resulted in the consolidation of Markel CATCo Re upon completion of the transaction. In order to complete the transaction, we made $101.9 million in payments, net of insurance proceeds, to or for the benefit of investors that were recognized as an expense during the first quarter of 2022. For the three months ended March 31, 2023, results attributable to Markel CATCo Re were primarily related to favorable loss reserve development on the run-off of reinsurance contracts, all of which were attributable to noncontrolling interest holders in Markel CATCo Re. See note 11 of the notes to consolidated financial statements for further details regarding our Markel CATCo operations, the buy-out transaction and the consolidation of Markel CATCo Re.

~~Investing Results~~Markel CATCo

Our business strategy recognizes the importance of both consistent underwriting and operating profits and superior investment returns to build shareholder value. We rely on sound underwriting practices to produce investable funds. We measure investing results by our net investment income, net investment gainsIn March 2022, we completed a buy-out transaction with Markel CATCo Re and the ~~change~~Markel CATCo Funds that provided for an accelerated return of all remaining capital to investors in the Markel CATCo Funds and resulted in the consolidation of Markel CATCo Re upon completion of the transaction. In order to complete the transaction, we made $101.9 million in payments, net ~~unrealized gains on available-for-sale investments,~~of insurance proceeds, to or for the benefit of investors that were recognized as ~~well as investment yield and taxable equivalent total investment return.~~

~~The following table summarizes our investment performance.~~

Quarter Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2022 2021 Change 2022 2021 Change
Net investment income $ 107,731 $ 91,264 18 % $ 274,123 $ 284,095 (4) %
Net investment gains (losses) $ (281,483) $ (25,833) $ (255,650) $ (2,194,525) $ 1,175,791 $ (3,370,316)
Change in net unrealized gains (losses) on available-for-sale investments (1)
$ (538,347) $ (131,671) $ (406,676) $ (1,600,063) $ (337,914) $ (1,262,149)
Investment Ratios
Investment yield (2)
0.5 % 0.5 % — 1.4 % 1.5 % (0.1)
Taxable equivalent total investment return
(13.2) % 5.1 % (18.3)

~~(1)~~ ~~The change in net unrealized gains (losses) on available-for-sale investments included~~ an ~~increase~~expense during the first quarter of 2022. For the three months ended March 31, 2023, results attributable to Markel CATCo Re were primarily related to ~~an adjustment~~favorable loss reserve development on the run-off of reinsurance contracts, all of which were attributable to our life and annuity benefit reserves of $56.6 million for nine months ended September 30, 2022, and increases of $6.4 million and $56.7 million for the quarter and nine months ended September 30, 2021, respectively. There was no adjustment to our life and annuity benefit reserves for the quarter ended September 30, 2022.noncontrolling interest holders in Markel CATCo Re. See note ~~9 of the notes to consolidated financial statements for details on our life and annuity benefit reserve adjustments.~~

~~(2)~~ ~~Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.~~

The increase in net investment income for the quarter ended September 30, 2022 compared to the same period of 2021 was primarily attributable to higher interest income on our short-term investments due to higher short-term interest rates in 2022 compared to 2021. The decrease in net investment income for the nine months ended September 30, 2022 compared to the same period of 2021 was driven by losses on our equity method investments in 2022 compared to income in 2021, partially offset by higher interest income on our short-term investments. Additionally, net investment income on our fixed maturity securities for the quarter and nine months ended September 30, 2022 increased modestly compared to the same periods of 2021, as the impact of higher average holdings of fixed maturity securities during both the quarter and nine months ended September 30, 2022 compared to the same periods of 2021 was mostly offset by a lower yield in 2022 compared to 2021. See note 4(d) of the notes to consolidated financial statements for details regarding the components of net investment income.

Net investment losses for the quarter and nine months ended September 30, 2022 were primarily attributable to decreases in the fair value of our equity portfolio driven by unfavorable market value movements in 2022. Net investment gains for the nine months ended September 30, 2021 were primarily attributable to increases in the fair value of our equity portfolio driven by favorable market value movements. See note 4(e)11 of the notes to consolidated financial statements for further details onregarding our Markel CATCo operations, the ~~components~~buy-out transaction and the consolidation of ~~net investment gains (losses).~~

The decreases in net unrealized gains (losses) on available-for-sale investments for the quarter and nine months ended September 30, 2022 and 2021 were primarily attributable to decreases in the fair value of our fixed maturity investment portfolio as a result of increases in interest rates during 2022 and 2021.

~~Table of Contents~~

Taxable equivalent total investment return is a non-GAAP financial measure. Taxable equivalent total investment return includes items that impact net income, such as coupon interest on fixed maturity securities, changes in fair value of equity securities, dividends on equity securities and realized investment gains or losses on available-for-sale securities, as well as changes in unrealized gains or losses on available-for-sale securities, which do not impact net income. Certain items that are included in net investment income have been excluded from the calculation of taxable equivalent total investment return, such as amortization and accretion of premiums and discounts on our fixed maturity portfolio, to provide a comparable basis for measuring our investment return against industry investment returns. The calculation of taxable equivalent total investment return also includes the current tax benefit associated with income on certain investments that is either taxed at a lower rate than the statutory income tax rate or is not fully included in U.S. taxable income. We believe the taxable equivalent total investment return is a better reflection of the economics of our decision to invest in certain asset classes. We focus on our long-term investment return, understanding that the level of investment gains or losses may vary from one period to the next.

~~The following table reconciles investment yield to taxable equivalent total investment return.~~

Nine Months Ended September 30,
2022 2021
Investment yield (1)
1.4 % 1.5 %
Adjustment of investment yield from amortized cost to fair value (0.3) % (0.4) %
Net amortization of net premium on fixed maturity securities 0.4 % 0.3 %
Net investment gains (losses) and change in net unrealized investment gains (losses) on available-for-sale securities (15.7) % 3.2 %
Taxable equivalent effect for interest and dividends (2)
0.1 % 0.1 %
Other (3)
0.9 % 0.4 %
Taxable equivalent total investment return (13.2) % 5.1 %

~~(1)~~ ~~Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.~~

~~(2)~~ ~~Adjustment to tax-exempt interest and dividend income to reflect a taxable equivalent basis.~~

~~(3)~~ ~~Adjustment to reflect the impact of time-weighting the inputs to the calculation of taxable equivalent total investment return.~~Markel CATCo Re.

~~Markel Ventures~~

Our Markel Ventures segment includes a diverse portfolio of businesses from different industries that offer various types of products and services to businesses and consumers, predominantly in the United States. We measure Markel Ventures' results by its operating income and net income, as well as earnings before interest, income taxes, depreciation and amortization (EBITDA). We consolidate the results of our Markel Ventures subsidiaries on a one-month lag, with the exception of significant transactions or events that occur during the intervening period.

~~The following table summarizes the operating revenues, operating income, EBITDA and net income to shareholders from our Markel Ventures segment.~~

Quarter Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2022 2021 % Change 2022 2021 % Change
Operating revenues $ 1,216,063 $ 908,185 34 % $ 3,527,853 $ 2,690,293 31 %
Operating income $ 60,459 $ 54,969 10 % $ 217,242 $ 215,097 1 %
EBITDA $ 102,764 $ 84,348 22 % $ 352,623 $ 303,883 16 %
Net income to shareholders $ 36,358 $ 34,398 6 % $ 130,341 $ 135,632 (4) %

The increase in operating revenues for the quarter and nine months ended September 30, 2022 compared to the same periods of 2021 was driven by contributions from Metromont and Buckner, which were acquired in December 2021 and August 2021, respectively. Operating revenues for the quarter and nine months ended September 30, 2022 included $184.4 million and $450.2 million, respectively, attributable to these acquisitions. Additionally, operating revenues for the quarter and nine months ended September 30, 2022 increased as a result of the impact of increased demand and higher prices at many of our other businesses, most notably at our construction services businesses.

~~Table of Contents~~

The benefit of increases in operating revenues to operating income, EBITDA and net income to shareholders was reduced by increased costs of materials and labor across many of our businesses, which are reflective of current economic conditions. The higher cost of materials is due in part to a shortage in the availability of certain products, the higher cost of shipping and a prolonged period of elevated inflation. We try to mitigate the impact of these cost increases through a variety of actions, such as increasing the prices of our products and services, pre-purchasing materials, locking in prices in advance or utilizing alternative sources of materials. Our businesses have had varying levels of success with these efforts and even when we are successful, there can be a time lag before the impacts of these changes are reflected in our margins.

The increases in operating income and EBITDA for the quarter and nine months ended September 30, 2022 compared to the same periods of 2021 were primarily due to the impact of higher revenues and improved operating results at our construction services businesses, consulting services businesses and transportation-related businesses, as well as the contribution of Metromont. These increases were partially offset by the impact of lower operating margins at one of our consumer and building products businesses in 2022 compared to 2021. For the nine months ended September 30, 2022, the increases in operating income and EBITDA were also partially offset by the impact of a pre-tax disposition gain of $22.0 million in the first quarter of 2021, which was included in services and other expenses.

Markel Ventures EBITDA is a non-GAAP financial measure. We use Markel Ventures EBITDA as an operating performance measure in conjunction with U.S. GAAP measures, including operating revenues, operating income and net income to shareholders, to monitor and evaluate the performance of our Markel Ventures segment. Because EBITDA excludes interest, income taxes, depreciation and amortization, it provides an indicator of economic performance that is useful to both management and investors in evaluating our Markel Ventures businesses as it is not affected by levels of debt, interest rates, effective tax rates or levels of depreciation or amortization resulting from purchase accounting. The following table reconciles Markel Ventures operating income to Markel Ventures EBITDA.

Quarter Ended September 30, Nine Months Ended September 30,
(dollars in thousands) 2022 2021 2022 2021
Markel Ventures operating income $ 60,459 $ 54,969 $ 217,242 $ 215,097
Depreciation expense 23,738 15,838 75,304 47,682
Amortization of intangible assets 18,567 13,541 60,077 41,104
Markel Ventures EBITDA $ 102,764 $ 84,348 $ 352,623 $ 303,883

~~Other Operations~~

~~The following tables present the components of operating revenues and operating expenses that are not included in a reportable segment.~~

Quarter Ended September 30,
2022 2021
(dollars in thousands) Services and other revenues Services and other expenses Amortization of intangible assets Services and other revenues Services and other expenses Amortization of intangible assets
Other operations:
Insurance-linked securities $ 25,879 $ 32,899 $ 9,512 $ 46,481 $ 43,375 $ 9,612
Program services and other fronting 40,820 7,256 5,234 32,531 2,755 5,235
Life and annuity 118 (4,633) — 345 (1,351) —
Markel CATCo Re — (53,363) — — — —
Other (1)
504 2,203 526 3,884 3,947 599
67,321 (15,638) 15,272 83,241 48,726 15,446
Underwriting operations (2)
9,579 10,281
Total $ 67,321 $ (15,638) $ 24,851 $ 83,241 $ 48,726 $ 25,727

~~(1)~~ ~~Other includes the results of our run-off Lodgepine and Markel CATCo investment management operations for both periods presented.~~

~~(2)~~ ~~Amortization of intangible assets attributable to our underwriting operations is not allocated between the Insurance and Reinsurance segments.~~

~~Table of Contents~~

Nine Months Ended September 30,
2022 2021
(dollars in thousands) Services and other revenues Services and other expenses Amortization of intangible assets Services and other revenues Services and other expenses Amortization of intangible assets
Other operations:
Insurance-linked securities $ 86,089 $ 105,494 $ 28,569 $ 139,223 $ 131,918 $ 28,836
Insurance-linked securities - disposition gain 107,293 — — — — —
Program services and other fronting 104,653 21,370 15,702 88,721 15,265 15,703
Life and annuity 724 5,852 — 1,002 11,041 —
Markel CATCo buy-out — 101,904 — — — —
Markel CATCo Re — (81,562) — — — —
Other (1)
9,098 14,978 1,668 12,971 23,270 1,806
307,857 168,036 45,939 241,917 181,494 46,345
Underwriting operations (2)
28,974 31,101
Total $ 307,857 $ 168,036 $ 74,913 $ 241,917 $ 181,494 $ 77,446

~~(1)~~ ~~Other includes the results of our run-off Lodgepine and Markel CATCo investment management operations for both periods presented.~~

~~(2)~~ ~~Amortization of intangible assets attributable to our underwriting operations is not allocated between the Insurance and Reinsurance segments.~~

~~Insurance-Linked Securities~~

For both the quarter and nine months ended September 30, 2022, the decrease in operating revenues and operating expenses in our Nephila ILS operations was primarily due to the disposition of our Velocity managing general agent operations during the first quarter of 2022. In February 2022, we sold the majority of our controlling interest in our Velocity managing general agent operations for total cash consideration of $181.3 million, which resulted in a gain of $107.3 million. Velocity provides risk origination services for our Nephila fund management operations, as well as for third parties, and was a source of growth within our ILS operations since we acquired Nephila in 2018. We continue to have a minority interest in Velocity after the sale, and Velocity continues to be a source for risk origination for our Nephila fund management operations.

In October 2022, we sold our controlling interest in our Volante managing general agent operations for estimated total cash consideration of $155 million. Volante, which has also been a source of growth within our ILS operations, underwrites and administers specialty insurance and reinsurance policies and provides delegated underwriting services to third-party providers of insurance capital.

Following the disposition of our Velocity and Volante managing general agent operations, our Nephila ILS operations are solely comprised of the fund management operations. As of September 30, 2022, Nephila's net assets under management were $7.8 billion, which reflects the impact of Hurricane Ian during the third quarter of 2022.

~~Program Services and Other Fronting~~

For the quarter and nine months ended September 30, 2022, the increase in operating revenues was primarily due to higher gross earned premiums, on which our fees are based, in 2022 compared to 2021, driven by the expansion of existing programs in recent periods. Gross written premiums in our program services operations were $711.7 million and $2.1 billion for the quarter and nine months ended September 30, 2022, respectively, compared to $726.6 million and $2.1 billion for the quarter and nine months ended September 30, 2021, respectively. Additionally, gross written premiums from our other fronting operations, which consist of business written by our underwriting platform on behalf of our ILS operations, were $279.6 million and $494.1 million for the quarter and nine months ended September 30, 2022, respectively, compared to $161.8 million and $205.8 million for the quarter and nine months ended September 30, 2021, respectively.

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Markel CATCo

In March 2022, we completed a buy-out transaction with Markel CATCo Re and the Markel CATCo Funds that provided for an accelerated return of all remaining capital to investors in the Markel CATCo Funds and resulted in the consolidation of Markel CATCo Re upon completion of the transaction. In order to complete the transaction, we made $101.9 million in payments, net of insurance proceeds, to or for the benefit of investors that were recognized as an expense during the first quarter of 2022. For the ~~quarter and nine~~three months ended ~~September 30, 2022,~~March 31, 2023, results attributable to Markel CATCo Re were primarily related to favorable loss reserve development on the run-off of reinsurance contracts, all of which were attributable to noncontrolling interest holders in Markel CATCo Re. See note 11 of the notes to consolidated financial statements for further details regarding our Markel CATCo operations, the buy-out transaction and the consolidation of Markel CATCo ReRe.

Investing Results

Our business strategy recognizes the importance of both consistent underwriting and operating profits and superior investment returns to build shareholder value. We rely on sound underwriting practices to produce investable funds. We measure our investment performance by analyzing net investment income earned on our investment portfolio, as well as through net investment gains, which include unrealized gains on our equity portfolio, and the change in net unrealized gains on available-for-sale investments. Our investment performance measures also include investment yield and taxable equivalent total investment return. Other income or losses within our investing operations primarily relate to equity method investments in our investing segment, which are managed separately from the rest of our investment portfolio.

The following table summarizes our consolidated investment performance, which consists predominantly of our Investing segment.


	Three Months Ended March 31,
(dollars in thousands)		2023			2022			Change
Net investment income		$	159,335		$	92,304		73		%
Net investment gains (losses)		$	372,563		$	(358,399)		$	730,962
Change in net unrealized gains (losses) on available-for-sale investments		$	208,369		$	(659,948)		$	868,317
Other		$	(2,380)		$	(19,570)		$	17,190

Investment Ratios
Investment yield (1)		0.7		%	0.5		%	0.2
Taxable equivalent total investment return		3.0		%	(3.5)		%	6.5

(1) Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.

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The increase in net investment income for the three months ended March 31, 2023 compared to the same period of 2022 was primarily attributable to higher interest income on short-term investments and cash equivalents due to higher short-term interest rates in 2023 compared to 2022. Additionally, interest income on our fixed maturity securities increased, primarily attributable to a higher yield and higher average holdings of fixed maturity securities during the three months ended March 31, 2023 compared to the same period of 2022. See note 143(d) of the notes to consolidated financial statements for details regarding the components of net investment income.

Net investment gains for the three months ended March 31, 2023 were primarily attributable to increases in the fair value of our equity portfolio driven by favorable market value movements. Net investment losses for the three months ended March 31, 2022 were primarily attributable to decreases in the fair value of our equity portfolio driven by unfavorable market value movements. See note 3(e) of the notes to consolidated financial statements for further details ~~about~~on the ~~buy-out transaction.~~components of net investment gains (losses).

The change in net unrealized gains (losses) on available-for-sale investments for the three months ended March 31, 2023 was primarily attributable to increases in the fair value of our fixed maturity investment portfolio as a result of decreases in interest rates during the period. The change in net unrealized gains (losses) on available-for-sale investments for the three months ended March 31, 2022 was primarily attributable to decreases in the fair value of our fixed maturity investment portfolio as a result of increases in interest rates during the period. As of March 31, 2023, our fixed maturity portfolio had an average rating of "AAA," with 99% rated "A" or better by at least one nationally recognized rating organization.

The following table reconciles investment yield to taxable equivalent total investment return.


	Three Months Ended March 31,
	2023		2022
Investment yield (1)	0.7	%	0.5	%
Adjustment of investment yield from amortized cost to fair value	(0.1)	%	(0.1)	%
Net amortization of net premium on fixed maturity securities	0.1	%	0.1	%
Net investment gains (losses) and change in net unrealized investment gains (losses) on available-for-sale securities	2.3	%	(4.0)	%
Taxable equivalent effect for interest and dividends (2)	—	%	—	%

Taxable equivalent total investment return	3.0	%	(3.5)	%

(1) Investment yield reflects net investment income as a percentage of monthly average invested assets at amortized cost.

(2) Adjustment to tax-exempt interest and dividend income to reflect a taxable equivalent basis.

Markel Ventures Results

Our Markel Ventures segment includes a diverse portfolio of businesses from different industries that offer various types of products and services to businesses and consumers, predominantly in the United States. Our strategy in acquiring these businesses is to invest in profitable companies, with honest and talented management, that exhibit reinvestment opportunities and capital discipline, at reasonable prices. We measure Markel Ventures' results by its operating income and net income, as well as earnings before interest, income taxes, depreciation and amortization (EBITDA). We consolidate the results of our Markel Ventures subsidiaries on a one-month lag, with the exception of significant transactions or events that occur during the intervening period.

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The following table summarizes the operating revenues, operating income, EBITDA and net income to shareholders from our Markel Ventures segment.


	Three Months Ended March 31,
(dollars in thousands)		2023		2022		% Change
Operating revenues		$	1,104,680	$	950,392	16	%
Operating income		$	72,627	$	49,737	46	%
EBITDA		$	119,541	$	95,705	25	%
Net income to shareholders		$	39,423	$	25,779	53	%

The increase in operating revenues for the three months ended March 31, 2023 compared to the same period of 2022 was driven by higher revenues across our construction services, equipment manufacturing and transportation-related businesses, primarily due to increased demand and higher prices. The increase in operating revenues was also attributable to a full quarter contribution from Metromont in 2023, compared to a partial quarter in 2022 following its acquisition. These increases were partially offset by the impact of decreased demand at our other consumer and building products businesses and our consulting services businesses.

The increases in operating income, EBITDA and net income to shareholders for the three months ended March 31, 2023 compared to the same period of 2022 were primarily due to the impact of higher revenues and improved operating results at our transportation-related and equipment manufacturing businesses, as well as the increased contribution of Metromont. In 2022, the operating margins at many of our businesses were impacted by increased costs of materials and labor, which reflected the impact of broader economic conditions. We began to see conditions stabilize to varying degrees at many of our businesses toward the end of 2022, which continued into early 2023, particularly in regards to our materials costs. The increases in operating income, EBITDA and net income to shareholders for the three months ended March 31, 2023 at many of our businesses were partially offset by the impact of lower revenues and operating margins at our consulting services businesses.


	Three Months Ended March 31,
(dollars in thousands)		2023		2022
Markel Ventures operating income		$	72,627	$	49,737
Depreciation expense		27,363		25,035
Amortization of intangible assets		19,551		20,933
Markel Ventures EBITDA		$	119,541	$	95,705

Interest Expense, Net Foreign Exchange Gains (Losses) and Income Taxes

Interest Expense

Interest expense was ~~$47.3 million and $147.1~~$49.4 million for the ~~quarter and nine~~three months ended ~~September 30, 2022, respectively,~~March 31, 2023, compared to ~~$46.5 million and $135.4~~$49.7 million for the same ~~periods~~period of ~~2021.~~2022. The ~~increase~~modest decrease in interest expense for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was primarily attributable to ~~higher Markel Ventures interest expense and the issuance of our 3.45% unsecured senior notes issued in May 2021, partially offset by~~ the impact of the retirement of our ~~4.90%~~4.9% unsecured senior notes in July ~~2022.~~2022, partially offset by higher Markel Ventures interest expense. See note 10 of the notes to consolidated financial statements for further details regarding the retirement of our senior long-term debt.

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Net Foreign Exchange Gains (Losses)

Net foreign exchange ~~gains~~losses included in net income were ~~$115.1 million and $245.4~~$32.9 million for the ~~quarter and nine~~three months ended ~~September 30, 2022, respectively,~~March 31, 2023, compared to ~~$48.9 million and $61.7~~net foreign exchange gains of $23.0 million for the same ~~periods~~period of ~~2021.~~2022. Net foreign exchange gains (losses) are primarily due to the remeasurement of our foreign currency denominated insurance reserves to the U.S. Dollar. ~~The~~During the first quarter of 2023, the U.S. Dollar ~~strengthened~~weakened against the Euro and British Pound, the predominant foreign currencies within our insurance operations, while it strengthened during ~~2022 and 2021, particularly in~~ the ~~second and third quarters~~first quarter of 2022. ~~There is an offsetting impact within other comprehensive income for~~Pre-tax net foreign exchange gains and losses attributed to changes in exchange rates on available-for-sale securities supporting our insurance reserves, which are included in the changes in net unrealized gains (losses) on available-for-sale investments ~~net~~in other comprehensive income (losses), were gains of ~~taxes.~~$33.9 million and losses of $16.0 million for the three months ended March 31, 2023 and 2022, respectively.

Income Taxes

The effective tax rate was ~~23%~~20% and ~~21%~~27% for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. We use the estimated annual effective tax rate method for calculating our tax provision in interim periods. This method applies our best estimate of the effective tax rate expected for the full year to year-to-date earnings before income taxes. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated (discrete items), are excluded from the estimated annual effective tax rate, and the related tax expense or benefit is reported in the same period as the related item. The estimated annual effective tax rate was ~~21%~~22% and ~~22%~~21% for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

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Comprehensive Income (Loss) to Shareholders and Book Value per Common Share

The following table summarizes the components of comprehensive income (loss) to shareholders.


		Quarter Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		2022		2021		(dollars in thousands)		2023		2022
Net income (loss) to shareholders	Net income (loss) to shareholders	$	65,369	$	188,070	$	(903,833)	$	1,553,874	Net income (loss) to shareholders		$	488,652	$	(51,741)
Other comprehensive loss:
Other comprehensive income (loss):										Other comprehensive income (loss):
Change in net unrealized gains (losses) on available-for-sale investments, net of taxes	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 net unrealized gains (losses) on available-for-sale investments, net of taxes		164,200		(520,763)
Change in discount rate for life and annuity benefits, net of taxes										Change in discount rate for life and annuity benefits, net of taxes		(9,052)		60,693
Other, net of taxes	Other, net of taxes	(8,569)		(3,851)		(12,587)		1,502		Other, net of taxes		2,597		(116)
Other comprehensive (income) loss attributable to noncontrolling interest	Other comprehensive (income) loss attributable to noncontrolling interest	110		31		66		(3)		Other comprehensive (income) loss attributable to noncontrolling interest		(32)		13
Other comprehensive loss to shareholders		(432,797)		(107,834)		(1,274,071)		(264,987)
Other comprehensive income (loss) to shareholders										Other comprehensive income (loss) to shareholders		157,713		(460,173)
Comprehensive income (loss) to shareholders	Comprehensive income (loss) to shareholders	$	(367,428)	$	80,236	$	(2,177,904)	$	1,288,887	Comprehensive income (loss) to shareholders		$	646,365	$	(511,914)

Book value per common share ~~decreased 16% from $1,036.20~~was $984.33 as of March 31, 2023 compared to $935.65 at December 31, ~~2021 to $868.68 as of September 30, 2022, primarily due to comprehensive loss to shareholders for the nine months ended September 30,~~ 2022.

Financial Condition

Liquidity and Capital Resources

We seek to maintain prudent levels of liquidity and financial leverage for the protection of our policyholders, creditors and shareholders. Our consolidated debt to capital ratio was ~~25%~~22% at ~~September 30, 2022~~March 31, 2023 and ~~23%~~24% at December 31, ~~2021.~~2022. The ~~increase~~decrease reflects a decrease in ~~shareholders' equity,~~senior long-term debt, primarily attributable to ~~a decline in~~ the ~~fair value~~retirement of our ~~investment portfolio, driven by unfavorable movements~~3.625% unsecured senior notes due March 30, 2023, as well as an increase in ~~the public equity markets and increases in interest rates in 2022.~~shareholders' equity.

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Investments, cash and cash equivalents and restricted cash and cash equivalents (invested assets) were ~~$25.9~~$28.0 billion and ~~$28.3~~$27.4 billion at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The following table presents the composition of our invested assets.


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Fixed maturity securities	Fixed maturity securities	45	%	44	%	Fixed maturity securities	44	%	43	%
Equity securities	Equity securities	27	%	32	%	Equity securities	29	%	28	%
Short-term investments, cash and cash equivalents and restricted cash and cash equivalents	Short-term investments, cash and cash equivalents and restricted cash and cash equivalents	28	%	24	%	Short-term investments, cash and cash equivalents and restricted cash and cash equivalents	27	%	29	%
Total	Total	100	%	100	%	Total	100	%	100	%

Our holding company had ~~$4.3~~$3.1 billion and ~~$5.3~~$3.7 billion of invested assets at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The decrease was ~~primarily~~ due in part to ~~declines in~~ the ~~fair value~~retirement of our ~~equity and fixed maturity securities, as well as the repayment of our 4.90%~~3.625% unsecured senior notes due ~~July 1, 2022.~~March 30, 2023. The following table presents the composition of our holding company's invested assets.


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Fixed maturity securities	Fixed maturity securities	4	%	4	%	Fixed maturity securities	6	%	4	%
Equity securities	Equity securities	49	%	53	%	Equity securities	48	%	40	%
Short-term investments, cash and cash equivalents and restricted cash and cash equivalents	Short-term investments, cash and cash equivalents and restricted cash and cash equivalents	47	%	43	%	Short-term investments, cash and cash equivalents and restricted cash and cash equivalents	46	%	56	%
Total	Total	100	%	100	%	Total	100	%	100	%

~~In February 2022,~~We have a share repurchase program, authorized by our Board of Directors, ~~approved a new share repurchase program~~ that provides for the repurchase of up to $750 million of common stock. As of ~~September 30, 2022, $585.6~~March 31, 2023, $428.4 million remained available for repurchases under the program. This share repurchase program has no expiration date but may be terminated by the Board of Directors at any time.

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We may from time to time seek to prepay, retire or repurchase our outstanding senior notes or preferred shares, through open market purchases, privately negotiated transactions or otherwise. Those prepayments, retirements or repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

We maintain a corporate revolving credit facility which provides up to $300 million of capacity for future acquisitions, investments and stock repurchases, and for other working capital and general corporate purposes. At our discretion, up to $200 million of the total capacity may be used for letters of credit. We may increase the capacity of the facility by up to $200 million subject to obtaining commitments for the increase and certain other terms and conditions. At March 31, 2023 and December 31, 2022, there were no borrowings outstanding under this revolving credit facility. This facility expires in April 2024. As of March 31, 2023, we were in compliance with all covenants contained in our corporate revolving credit facility. To the extent that we are not in compliance with our covenants, access to the revolving credit facility could be restricted. While we believe this to be unlikely, the inability to access the revolving credit facility could adversely affect our liquidity.

We have access to various capital sources, including dividends from certain of our subsidiaries, holding company invested assets, undrawn capacity under our revolving credit facility and access to the debt and equity capital markets. We believe we have adequate liquidity to meet our capital and operating needs, including that which may be required to support the operating needs of our subsidiaries. However, the availability of these sources of capital and the availability and terms of future financings will depend on a variety of factors.

Various of our Markel Ventures subsidiaries maintain revolving credit facilities or lines of credit, which provide up to $650 million of aggregate capacity for working capital and other general operational purposes. A portion of the capacity on certain of these credit facilities may be used as security for letters of credit and other obligations. At March 31, 2023 and December 31, 2022, the Company had $288.9 million and $238.1 million, respectively, of borrowings outstanding under these credit facilities. As of March 31, 2023, all of our subsidiaries were in compliance with all covenants contained in their respective credit facilities. To the extent our subsidiaries are not in compliance with their respective covenants, access to their credit facilities could be restricted, which could adversely affect their operations.

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Cash Flows

Net cash provided by operating activities was ~~$1.9 billion~~$284.2 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~$1.6 billion~~$414.9 million for the same period of ~~2021.~~2022. The ~~increase~~decrease in net cash flows from operating activities for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was primarily ~~driven by higher net premiums within~~due to a $125.1 million payment made to complete a retroactive reinsurance transaction to cede our ~~Insurance segment, partially offset by $101.9 million~~portfolio of ~~payments made in connection with the Markel CATCo buy-out transaction.~~policies comprised of liabilities related to our run-off book of U.K. motor casualty business.

Net cash used by investing activities was ~~$1.3 billion~~$108.5 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~$2.7 billion~~$50.0 million for the same period of ~~2021.~~2022. During the ~~nine~~three months ended ~~September 30,~~March 31, 2023, net cash used by investing activities included net purchases of fixed maturity securities and equity securities of $214.7 million and $65.1 million, respectively, and a net decrease in short-term investments of $210.2 million. During the three months ended March 31, 2022, net cash used by investing activities included net purchases of fixed maturity securities, short-term investments and equity securities of ~~$875.6~~$397.9 million, ~~$625.3~~$287.0 million and ~~$128.7~~$36.0 million, respectively. Net cash used by investing activities for the three months ended March 31, 2022 was net of $630.0 million of net cash and restricted cash acquired as part of our consolidation of Markel CATCo Re, of which $169.4 million was subsequently distributed to Markel CATCo investors for shares that were redeemed in conjunction with the buy-out transaction. During the nine months ended September 30, 2021, net cash used by investing activities included net purchases of fixed maturity securities, short-term investments and equity securities of $1.7 billion, $727.4 million and $20.5 million. Net cash used by investing activities in 2021 also included $237.9 million of net cash used for the acquisition of Buckner.Re. Cash ~~flow~~flows from investing activities is affected by various factors such as anticipated payment of claims, financing activity, acquisition opportunities and individual buy and sell decisions made in the normal course of our investment portfolio management.

Net cash used by financing activities was ~~$491.1~~$412.2 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~net cash provided by financing activities of $439.4~~$18.9 million for the same period of ~~2021.~~2022. During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, net cash used by financing activities included ~~$350.0~~$250.0 million to retire our ~~4.90%~~3.625% unsecured senior notes due ~~July 1, 2022. Financing activities during~~March 30, 2023. During the ~~nine~~three months ended ~~September 30,~~March 31, 2022, ~~also reflected~~we had net increases in borrowings, ~~and repayments~~primarily on a revolving line of credit at ~~certain~~one of our Markel Ventures ~~businesses, primarily on revolving lines of credit. During the nine months ended September 30, 2021, we received net proceeds of $591.4 million from our May 2021 debt offering.~~businesses. Cash of ~~$208.1~~$82.0 million and ~~$122.4~~$79.3 million was used to repurchase shares of our common stock during the first ~~nine~~three months of ~~2022~~2023 and ~~2021,~~2022, respectively.

Critical Accounting Estimates

Critical accounting estimates are those estimates that both are important to the portrayal of our financial condition and results of operations and require us to exercise significant judgment. The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of material contingent assets and liabilities. These estimates, by necessity, are based on assumptions about numerous factors.

Our critical accounting estimates consist of estimates and assumptions used in determining the reserves for unpaid losses and loss adjustment expenses as well as estimates and assumptions used in the valuation of goodwill and intangible assets. We review the adequacy of reserves for unpaid losses and loss adjustment expenses quarterly. Estimates and assumptions for goodwill and intangible assets are reviewed in conjunction with acquisitions and impairment assessments. Goodwill and indefinite-lived intangible assets are reassessed for impairment at least annually. All intangible assets, including goodwill, are also reviewed for impairment when events or circumstances indicate that their carrying value may not be recoverable. Actual results may differ materially from the estimates and assumptions used in preparing the consolidated financial statements.

Readers are urged to review our ~~2021~~2022 Annual Report on Form 10-K for a more complete description of our critical accounting estimates.

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Safe Harbor and Cautionary Statement

This report contains statements concerning or incorporating our expectations, assumptions, plans, objectives, future financial or operating performance and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may use words such as "anticipate," "believe," "estimate," "expect," "intend," "predict," "project" and similar expressions as they relate to us or our management.

There are risks and uncertainties that may cause actual results to differ materially from predicted results in forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additional factors that could cause actual results to differ from those predicted are set forth under "Business, ~~Overview,~~" "Risk Factors," ~~and~~ "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk" in our ~~2021~~2022 Annual Report on Form 10-K, or are included in the items listed below:

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•our expectations about future results of our underwriting, investing, Markel Ventures and other operations are based on current knowledge and assume no significant man-made or natural catastrophes, no significant changes in products or personnel and no adverse changes in market conditions;

•the effect of cyclical trends on our underwriting, investing, Markel Ventures and other operations, including demand and pricing in the insurance, reinsurance and other markets in which we operate;

•actions by competitors, including the use of technology and innovation to simplify the customer experience, increase efficiencies, redesign products, alter models and effect other potentially disruptive changes in the insurance industry, and the effect of competition on market trends and pricing;

•our efforts to develop new products, expand in targeted markets or improve business processes and workflows may not be successful and may increase or create new risks (e.g., insufficient demand, change to risk exposures, distribution channel conflicts, execution risk, increased expenditures);

•the frequency and severity of man-made and natural catastrophes (including earthquakes, wildfires and weather-related catastrophes) may exceed expectations, are unpredictable and, in the case of wildfires and weather-related catastrophes, may be exacerbated if, as many forecast, changing conditions in the climate, oceans and atmosphere result in increased hurricane, flood, drought or other adverse weather-related activity;

•we offer insurance and reinsurance coverage against terrorist acts in connection with some of our programs, and in other instances we are legally required to offer terrorism insurance; in both circumstances, we actively manage our exposure, but if there is a covered terrorist attack, we could sustain material losses;

•emerging claim and coverage issues, changing industry practices and evolving legal, judicial, social and other ~~environmental~~claims and coverage trends or conditions, can increase the scope of coverage, the frequency and severity of claims and the period over which claims may be reported; these factors, as well as uncertainties in the loss estimation process, can adversely impact the adequacy of our loss reserves and our allowance for reinsurance recoverables;

•reinsurance reserves are subject to greater uncertainty than insurance reserves, primarily because of reliance upon the original underwriting decisions made by ceding companies and the longer lapse of time from the occurrence of loss events to their reporting to the reinsurer for ultimate resolution;

•inaccuracies (whether due to data error, human error or otherwise) in the various modeling techniques and data analytics (e.g., scenarios, predictive and stochastic modeling, and forecasting) we use to analyze and estimate exposures, loss trends and other risks associated with our insurance and insurance-linked securities businesses could cause us to misprice our products or fail to appropriately estimate the risks to which we are exposed;

•changes in the assumptions and estimates used in establishing reserves for our life and annuity reinsurance book (which is in runoff), for example, changes in assumptions and estimates of mortality, longevity, morbidity and interest rates, could result in material ~~increases~~changes in our estimated loss reserves for such business;

•adverse developments in insurance coverage litigation or other legal or administrative proceedings could result in material increases in our estimates of loss reserves;

•initial estimates for catastrophe losses and other significant, infrequent events (such as the COVID-19 pandemic and the Russia-Ukraine conflict), are often based on limited information, are dependent on broad assumptions about the nature and extent of losses, coverage, liability and reinsurance, and those losses may ultimately differ materially from our expectations;

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•changes in the availability, costs, quality and providers of reinsurance coverage, which may impact our ability to write or continue to write certain lines of business or to mitigate the volatility of losses on our results of operations and financial condition;

•the ability or willingness of reinsurers to pay balances due may be adversely affected by industry and economic conditions, deterioration in reinsurer credit quality and coverage disputes, and collateral we hold, if any, may not be sufficient to cover a reinsurer's obligation to us;

•after the commutation of ceded reinsurance contracts, any subsequent adverse development in the re-assumed loss reserves will result in a charge to earnings;

•regulatory actions can impede our ability to charge adequate rates and efficiently allocate capital;

•general economic and market conditions and industry specific conditions, including extended economic recessions or expansions; prolonged periods of slow economic growth; inflation or deflation; fluctuations in foreign currency exchange rates, commodity and energy prices and interest rates; volatility in the credit and capital markets; and other factors;

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•economic conditions, actual or potential defaults in corporate bonds, municipal bonds, mortgage-backed securities or sovereign debt obligations, volatility in interest and foreign currency exchange rates and changes in market value of concentrated investments can have a significant impact on the fair value of our fixed maturity securities and equity securities, as well as the carrying value of our other assets and liabilities, and this impact may be heightened by market volatility and our ability to mitigate our sensitivity to these changing conditions;

•economic conditions may adversely affect our access to capital and credit markets;

•the effects of government intervention, including material changes in the monetary policies of central banks, to address financial downturns, ~~(such as in response to the COVID-19 pandemic),~~ inflation and other economic and currency concerns;

•the impacts that political and civil unrest and regional conflicts, such as the conflict between Russia and Ukraine, may have on our businesses and the markets they serve or that any disruptions in regional or worldwide economic conditions generally arising from these situations may have on our businesses, industries or investments;

•the significant volatility, uncertainty and disruption caused by health epidemics and pandemics, including the COVID-19 pandemic and its variants, as well as governmental, legislative, judicial or regulatory actions or developments in response thereto;

•changes in U.S. tax laws, regulations or interpretations, or in the tax laws, regulations or interpretations of other jurisdictions in which we operate, and adjustments we may make in our operations or tax strategies in response to those changes;

•a failure or security breach of, or ~~cyber-attack~~cyberattack on, enterprise information technology systems that we use or a failure to comply with data protection or privacy regulations;

•third-party providers may perform poorly, breach their obligations to us or expose us to enhanced risks;

•our acquisitions may increase our operational and internal control risks for a period of time;

•we may not realize the contemplated benefits, including cost savings and synergies, of our acquisitions;

•any determination requiring the write-off of a significant portion of our goodwill and intangible assets;

•the failure or inadequacy of any methods we employ to manage our loss exposures;

•the loss of services of any senior executive or other key personnel of our businesses could adversely impact one or more of our operations;

•the manner in which we manage our global operations through a network of business entities could result in inconsistent management, governance and oversight practices and make it difficult for us to implement strategic decisions and coordinate procedures;

•our substantial international operations and investments expose us to increased political, civil, operational and economic risks, including foreign currency exchange rate and credit risk;

•the political, legal, regulatory, financial, tax and general economic impacts, and other impacts we cannot anticipate, related to the United Kingdom's withdrawal from the European Union (Brexit), which could have adverse consequences for our businesses, particularly our London-based international insurance operations;

•our ability to obtain additional capital for our operations on terms favorable to us;

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•our compliance, or failure to comply, with covenants and other requirements under our ~~revolving~~ credit ~~facility,~~facilities, senior debt and other indebtedness and our preferred shares;

•our ability to maintain or raise third-party capital for existing or new investment vehicles and risks related to our management of third-party capital;

•the effectiveness of our procedures for compliance with existing and future guidelines, policies and legal and regulatory standards, rules, laws and regulations;

•the impact of economic and trade sanctions and embargo programs on our businesses, including instances in which the requirements and limitations applicable to the global operations of U.S. companies and their affiliates are more restrictive than, or conflict with, those applicable to non-U.S. companies and their affiliates;

•regulatory changes, or challenges by regulators, regarding the use of certain issuing carrier or fronting arrangements;

•our dependence on a limited number of brokers for a large portion of our revenues and third-party capital;

•adverse changes in our assigned financial strength, debt or preferred share ratings or outlook could adversely impact us, including our ability to attract and retain business, the amount of capital our insurance subsidiaries must hold and the availability and cost of capital;

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•changes in the amount of statutory capital our insurance subsidiaries are required to hold, which can vary significantly and is based on many factors, some of which are outside our control;

•losses from litigation and regulatory investigations and actions;

•investor litigation or disputes, as well as regulatory inquiries, investigations or proceedings related to our Markel CATCo operations; delays or disruptions in the run-off of those operations; or the failure to realize the benefits of the transaction that permitted the accelerated return of capital to our Markel CATCo investors; and

•a number of additional factors may adversely affect our Markel Ventures operations, and the markets they serve, and negatively impact their revenues and profitability, including, among others: adverse weather conditions, plant disease and other contaminants; changes in government support for education, healthcare and infrastructure projects; changes in capital spending levels; changes in the housing, commercial and industrial construction markets; liability for environmental matters; supply chain and shipping issues, including increases in freight costs; volatility in the market prices for their products; and volatility in commodity, wholesale and raw materials prices and interest and foreign currency exchange rates.

Results from our underwriting, investing, Markel Ventures and other operations have been and will continue to be potentially materially affected by these factors.

By making forward-looking statements, we do not intend to become obligated to publicly update or revise any such statements whether as a result of new information, future events or other changes. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as at their dates.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of economic losses due to adverse changes in the estimated fair value of a financial instrument as the result of changes in equity prices, interest rates, foreign currency exchange rates and commodity prices. Our consolidated balance sheets include assets and liabilities with estimated fair values that are subject to market risk. Our primary market risks are equity price risk associated with investments in equity securities, interest rate risk associated with investments in fixed maturity securities and foreign currency exchange rate risk associated with our international operations. During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, there were no material changes in our market risk exposures from those described in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

~~Additionally, we have~~Credit Risk

Credit risk, which is not considered a market risk, is the risk that an entity becomes unable or unwilling to fulfill their obligations to us. Our primary credit risks are the credit risk within our fixed maturity portfolio ~~from~~and the ~~potential for loss resulting from adverse changes in an issuer's ability to repay its debt obligations. We monitor our investment portfolio to ensure that~~ credit risk ~~does not exceed prudent levels. We manage exposure~~related to ~~credit risk by investing in high quality securities~~our reinsurance recoverables within our underwriting, program services and by diversifying our holdings. Our policy is to invest in investment grade securities and to minimize investments in fixed maturity securities that are unrated or rated below investment grade. As of September 30, 2022, our fixed maturity portfolio had an average rating of "AAA," with 99% rated "A" or better by at least one nationally recognized rating organization.other fronting operations. During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, there were no material changes in ~~the composition of~~ our ~~fixed maturity portfolio.~~

~~We also have~~ credit risk toexposures from those described in our Annual Report on Form 10-K for the extent any of our reinsurers are unwilling or unable to meet their obligations under our ceded reinsurance agreements. We monitor changes in the financial condition of each of our reinsurers, including their credit ratings, and we assess our concentration of credit risk on a regular basis. As ofyear ended December 31, 2021, all of our ten largest reinsurers within our underwriting operations were rated "A" or better by A.M. Best Company (Best) and within our program services business, four of our ten largest reinsurers were rated "A" or better by Best. For reinsurers within our program services business with a credit rating of lower than "A" we employ a stringent collateral monitoring program, under which the majority of the reinsurance recoverable balances are fully collateralized. During the nine months ended September 30, 2022, there were no material changes to the credit ratings of the top ten reinsurers within our underwriting and program services operations as of December 31, 2021.2022.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (Disclosure Controls), as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (Exchange Act). This evaluation was conducted under the supervision and with the participation of our management, including the ~~Co-Principal~~Principal Executive ~~Officers (Co-PEOs)~~Officer (PEO) and the Principal Financial Officer (PFO).

Based upon this evaluation, the ~~Co-PEOs~~PEO and PFO concluded that effective Disclosure Controls were in place to ensure that the information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the ~~third~~first quarter of ~~2022~~2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Thomas Yeransian v. Markel Corporation

We previously reported that Thomas Yeransian, in his capacity as the representative of holders of certain contingent value rights, has filed three suits against the Company:

•Thomas Yeransian v. Markel Corporation (U.S. District Court for the District of Delaware), filed September 15, 2016;

•Thomas Yeransian v. Markel Corporation (U.S. District Court for the District of Delaware), filed November 13, 2018; and

•Thomas Yeransian v. Markel Corporation (U.S. District Court for the District of Delaware), filed June 5, 2020.

The three suits have been consolidated. We have asked the court to dismiss, or grant us summary judgment on, all counts. For additional information regarding these three suits, see Item 3 Legal Proceedings in our ~~2021~~2022 Annual Report on Form 10-K. We believe Mr. Yeransian's suits to be without merit. We further believe that any material loss resulting from the suits to be remote.

Item ~~1A. Risk Factors~~

The disclosure below supplements risk factors previously disclosed in our 2021 Annual Report on Form 10-K. These risks and uncertainties, along with those previously disclosed, could materially adversely affect our businesses, results of operations or financial condition.

~~Our businesses, results of operations and financial condition could be adversely affected by the ongoing conflict between Russia and Ukraine and related disruptions in the global economy.~~ The global economy has been negatively impacted by the military conflict between Russia and Ukraine. While we have no operations in Russia or Ukraine, some of our businesses have been, and may continue to be, adversely affected by this conflict and its effects. Within our underwriting operations, we have insurance contracts with exposure to losses attributed to the Russia-Ukraine conflict, which we discuss under Item 2 Management's Discussion & Analysis of Financial Condition and Results of Operations. Our other operations do not have significant direct exposure to customers and vendors in Russia or Ukraine. However, certain of our businesses have experienced, and may continue to experience, shortages in materials and increased costs for transportation, energy, and raw materials due in part to the negative impact of the Russia-Ukraine conflict on the global economy.

Furthermore, governments in the U.S., United Kingdom, and European Union, among others, have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. These export controls and sanctions, or our failure to comply with them, could result in restrictions on our ability to do business in one or more of the jurisdictions in which we conduct business or have the other adverse effects discussed in our 2021 Annual Report on Form 10-K in Item 1A Risk Factors under "We are subject to laws and regulations relating to economic and trade sanctions and bribery and corruption, the violation of which could have a material adverse effect on us."

We are unable to predict the impact the ongoing conflict will have on our businesses or the global economy. The impact of further escalation of geopolitical tensions related to this conflict, including increased trade barriers or restrictions on global trade, is unknown and could result in, among other things, heightened cybersecurity threats, supply disruptions, protracted or increased inflation, lower consumer demand, fluctuations in interest and foreign exchange rates and increased volatility in financial markets, any of which could adversely affect our businesses, results of operations and financial condition. In addition, the ongoing conflict may have the effect of triggering or intensifying many of the risks described under Item 1A Risk Factors in our 2021 Annual Report on Form 10-K.

The risks and uncertainties discussed above, as well as those previously disclosed in our 2021 Annual Report on Form 10-K, that may have, or have had, an adverse effect on our businesses, results of operations or financial condition also may be discussed elsewhere in this report, including under "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Safe Harbor and Cautionary Statement" and "Quantitative and Qualitative Disclosures About Market Risk."

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~~Item~~ 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes our common share repurchases for the quarter ended ~~September 30, 2022.~~March 31, 2023.


Issuer Purchases of Equity Securities	Issuer Purchases of Equity Securities							Issuer Purchases of Equity Securities
		(a)	(b)		(c)	(d)			(a)	(b)		(c)	(d)
Period	Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands)		Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands)
July 1, 2022 through July 31, 2022		14,793	$	1,284.35	14,793	$	649,203
August 1, 2022 through August 31, 2022		26,194	$	1,217.73	26,194	$	617,306
September 1, 2022 through September 30, 2022		27,365	$	1,156.94	27,365	$	585,646
January 1, 2023 through January 31, 2023								January 1, 2023 through January 31, 2023	14,200	$	1,385.53	14,200	$	492,065
February 1, 2023 through February 28, 2023								February 1, 2023 through February 28, 2023	19,539	$	1,345.98	19,539	$	465,766
March 1, 2023 through March 31, 2023								March 1, 2023 through March 31, 2023	29,533	$	1,263.95	29,533	$	428,438
Total	Total	68,352	$	1,207.81	68,352	$	585,646	Total	63,272	$	1,316.57	63,272	$	428,438

(1) The Board of Directors approved the repurchase of up to $750 million of our common shares pursuant to a share repurchase program publicly announced in February 2022. Under our share repurchase program, we may repurchase outstanding common shares of our stock from time to time in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934. The share repurchase program has no expiration date but may be terminated by the Board at any time.

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Item 6. Exhibits


Exhibit No.			Document Description

3.1(a)			Amended and Restated Articles of Incorporation (incorporated by reference from Exhibit 3.1 in the Registrant's report on Form 8-K filed with the Commission May 13, 2011)

3.1(b)			Articles of Amendment to the Amended and Restated Articles of Incorporation (incorporated by reference from Exhibit 3.1 in the Registrant's report on Form 8-K filed with the Commission May 27, 2020)

3.2			Bylaws, as amended and restated ~~May 11, 2020~~January 1, 2023 (incorporated by reference from Exhibit 3.2 in the Registrant's report on Form ~~10-Q~~10-K filed with the Commission for the ~~quarter~~year ended ~~June 30, 2020)~~December 3 1 , 202 2 )

4.1(a)			Indenture dated as of June 5, 2001, between Markel Corporation and The Chase Manhattan Bank, as Trustee (incorporated by reference from Exhibit 4.1 in the Registrant's report on Form 8-K filed with the Commission June 5, 2001)

4.1(b)			Form of Third Supplemental Indenture dated as of August 13, 2004 between Markel Corporation and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.2 in the Registrant's report on Form 8-K filed with the Commission August 11, 2004)

~~4.1(c)~~4.1(			Form of Seventh Supplemental Indenture dated as of July 2, 2012 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.2 in the Registrant's report on Form 8-K filed with the Commission June 29, 2012)c

~~4.1(d)~~)			Form of Eighth Supplemental Indenture dated as of March 8, 2013 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.2 in the Registrant's report on Form 8-K filed with the Commission March 7, 2013)

~~4.1(e)~~4.1(d )			Form of Ninth Supplemental Indenture dated as of March 8, 2013 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.3 in the Registrant's report on Form 8-K filed with the Commission March 7, 2013)

~~4.1(f)~~4.1(e )			Form of Tenth Supplemental Indenture dated as of April 5, 2016 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.2 in the Registrant's report on Form 8-K filed with the Commission March 31, 2016)

~~4.1(g)~~4.1(f )			Eleventh Supplemental Indenture dated as of November 2, 2017 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.2 in the Registrant's report on Form 8-K filed with the Commission November 2, 2017)

~~4.1(h)~~4.1(g )			Twelfth Supplemental Indenture dated as of November 2, 2017 between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.3 in the Registrant's report on Form 8-K filed with the Commission November 2, 2017)

~~4.1(i)~~4.1(h )			Thirteenth Supplemental Indenture, dated as of May 20, 2019, between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.2 in the Registrant's report on Form 8-K filed with the Commission May 20, 2019)

~~4.1(j)~~4.1(i )			Fourteenth Supplemental Indenture, dated as of September 17, 2019, between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.2 in the Registrant's report on Form 8-K filed with the Commission September 17, 2019)

~~4.1(k)~~4.1(j )			Fifteenth Supplemental Indenture, dated as of September 17, 2019, between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.3 in the Registrant's report on Form 8-K filed with the Commission September 17, 2019)

~~4.1(l)~~4.1(k )			Sixteenth Supplemental Indenture, dated as of May 7, 2021, between Markel Corporation and The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as Trustee, including form of the securities as Exhibit A (incorporated by reference from Exhibit 4.2 in the Registrant's report on Form 8-K filed with the Commission May 7, 2021)

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The registrant hereby agrees to furnish to the Securities and Exchange Commission, upon request, a copy of all other instruments defining the rights of holders of long-term debt of the registrant and its subsidiaries.

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~~10.1~~10.1(a)			~~Amendment to~~Form of Amended and Restated Executive Employment Agreement with Andrew G. Crowley, Robert C. Cox, Michael R. Heaton, Jeremy A. Noble , Richard R. Whitt, IIIGrinnan a nd T er e sa S. Gendron (incorporated by reference from Exhibit 10.5 in the Registrant's report on Form 10-K filed with the Commission for the year ended December 31, 2021 )

10.1(b)			Sign-on Bonus and Reimbursement Agreement with Teresa S. Gendron* **

31.1			Certification of ~~Co-Principal~~Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)**

31.2			Certification of Co-Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)**

~~31.3~~			Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)**

32.1			Certification furnished Pursuant to 18 U.S.C. Section 1350**

101			The following consolidated financial statements from Markel Corporation's Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2022,~~March 31, 2023, filed on ~~November 1, 2022,~~April 26, 2023, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income (Loss) and Comprehensive Income (Loss), (iii) Consolidated Statements of Changes in Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements.**
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Indicates management contract or compensatory plan or arrangement

** Filed with this report

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, this 126stth day of ~~November 2022.~~April 2023.


			Markel Corporation

			By:			/s/ Thomas S. Gayner
						Thomas S. Gayner
						~~Co-Chief~~Chief Executive Officer
						(~~Co-Principal~~Principal Executive Officer)

			By:			/s/ ~~Richard R. Whitt, III~~Teresa S. Gendron
						~~Richard R. Whitt, III~~Teresa S. Gendron
						~~Co-Chief Executive Officer~~
						~~(Co-Principal Executive Officer)~~

			~~By:~~			~~/s/ Jeremy A. Noble~~
						~~Jeremy A. Noble~~
						~~Senior Vice President and~~ Chief Financial Officer
						(Principal Financial Officer)

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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


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