Markel 8K Reports 32% Growth In Book Value Per Share | MKL 24 Jan 07

Exhibit 99.1

NEWS RELEASE



		MARKEL CORPORATION
		4521 Highwoods Parkway, Glen Allen, VA 23060 P.O. Box 2009, Glen Allen, VA 23058-2009 (804) 747-0136 (800) 446-6671 Fax: (804) 965-1600 www.markelcorp.com

MARKEL REPORTS 32% GROWTH IN BOOK VALUE PER SHARE


FOR IMMEDIATE RELEASE				CONTACT: BRUCE KAY
				TELEPHONE: 804-747-0136

Richmond, VA, January 24, 2007 — Markel Corporation (NYSE: MKL) reported diluted net income per share of $39.40 for the year ended December 31, 2006 compared to diluted net income per share of $14.80 for 2005. The 2006 combined ratio was 87% compared to 101% in 2005. Book value per common share outstanding increased 32% to $229.78 at December 31, 2006 due to comprehensive income of $525.8 million.

Alan I. Kirshner, Chairman and Chief Executive Officer, commented, “2006 was an exceptional year. While part of our success can be attributed to a benign hurricane season, good weather does not deserve all of the credit. Our associates deserve the real credit as their combined energy and discipline produced strong underwriting performance, outstanding investment returns and another year of record earnings.”

The following table presents selected financial data from 2006 and 2005 (amounts in thousands, except per share amounts).


	Year Ended December 31,
	2006		2005
Net income	$	392,502	$	147,915

Comprehensive income	$	525,782	$	63,641

Weighted average diluted shares		10,024		10,171

Diluted net income per share	$	39.40	$	14.80


	December 31, 2006		December 31, 2005
Book value per common share outstanding	$	229.78	$	174.04

Common shares outstanding		9,994		9,799

The 2006 increase in diluted net income per share was due to improved underwriting performance and higher investment returns in 2006 compared to 2005.

Comprehensive income for 2006 was $525.8 million compared to $63.6 million in 2005. The increase in comprehensive income was primarily due to higher 2006 net income and an increase in the market value of the investment portfolio during 2006.

Over the one- and five-year periods ended December 31, 2006, compound annual growth in book value per common share outstanding was 32% and 16%, respectively.


	-Combined Ratio Analysis-
	Year Ended December 31,
	2006	2005
Excess and Surplus Lines	78%	92%
Specialty Admitted	91%	83%
London Insurance Market	100%	126%
Other	NM	NM

Consolidated	87%	101%

NM - Ratio is not meaningful. Further discussion of Other underwriting loss follows.

The combined ratio for 2006 included $54.9 million, or 3 points, of underwriting losses related to Hurricanes Katrina, Rita and Wilma (“2005 Hurricanes”) compared to $246.3 million, or 12 points, of underwriting losses on the 2005 Hurricanes included in the 2005 combined ratio. The additional losses on the 2005 Hurricanes during 2006 were primarily concentrated in our contract property and delegated authority books of business included in the Excess and Surplus Lines and London Insurance Market segments. In addition to the favorable impact of the benign hurricane season experienced this year, the improved combined ratio for 2006 was due in part to $193.8 million of favorable development on prior years’ loss reserves before considering adverse development on the 2005 Hurricanes compared to favorable development of $50.6 million on prior years’ loss reserves in 2005.

The Excess and Surplus Lines segment’s combined ratio for the year ended December 31, 2006 was 78% (including 1 point of losses related to the 2005 Hurricanes) compared to 92% (including 10 points of losses related to the 2005 Hurricanes) in 2005. During 2006, unfavorable loss reserve development of $16.5 million on the 2005 Hurricanes was more than offset by $176.6 million of favorable development on other prior years’ loss reserves. The favorable development experienced during 2006 was primarily on the specified medical, medical malpractice, products liability and employment practices liability programs at the Shand Professional/Products Liability unit and was a result of the favorable rates and terms experienced on the 2002 to 2005 accident years.

The Specialty Admitted segment’s combined ratio for the year ended December 31, 2006 was 91% compared to 83% (including 5 points of losses related to

the 2005 Hurricanes) in 2005. The increase in the 2006 combined ratio was primarily due to lower favorable development on prior years’ loss reserves compared to 2005.

The London Insurance Market segment’s combined ratio for the year ended December 31, 2006 was 100% (including 7 points of losses related to the 2005 Hurricanes) compared to 126% (including 22 points of losses related to the 2005 Hurricanes) in 2005. During 2006, unfavorable loss reserve development of $43.8 million on the 2005 Hurricanes was partially offset by $25.3 million of favorable development on other prior years’ loss reserves. This favorable prior year development reflects improved risk selection and the favorable rates and terms associated with the London market in recent years. The combined ratio for 2006 also improved due to lower frequency and severity of losses on several property classes of business compared to 2005.

The London Insurance Market segment reported a combined ratio of 87% for the fourth quarter of 2006, which represents the third consecutive quarter that this segment has reported an underwriting profit. The underwriting performance for this segment may vary to a greater degree than our other segments due to Markel International’s current mix of business, which includes a higher percentage of catastrophe-exposed business, and Markel International’s minimal use of reinsurance.

The Other segment produced an underwriting loss of $23.4 million for the year ended December 31, 2006 compared to an underwriting loss of $28.8 million in 2005. The underwriting loss in 2006 and in 2005 included $16.7 million and $31.3 million, respectively, of loss reserve development on asbestos and environmental (A&E) exposures and related reinsurance bad debt. The increase in A&E reserves in both years was a result of the completion of our annual review of these exposures during the third quarters of 2006 and 2005. During these reviews, we noted an increase in the severity of losses on reported claims, which caused us to increase our estimate of ultimate loss reserves for A&E exposures.


	-Premium Analysis- Year Ended December 31, *(dollars in thousands)*
	Gross Written Premiums				Earned Premiums
	2006		2005		2006		2005
Excess and Surplus Lines	$	1,465,725	$	1,439,744	$	1,242,184	$	1,138,525
Specialty Admitted		340,483		318,717		317,401		291,273
London Insurance Market		729,160		640,986		624,599		507,518
Other		862		1,887		197		1,145

Total	$	2,536,230	$	2,401,334	$	2,184,381	$	1,938,461

Gross written premiums for the year ended December 31, 2006 increased 6% compared to 2005. The increase was primarily due to rate increases achieved by Markel International’s Marine and Energy and Non-Marine Property divisions, as well as increased volume from new programs written by Markel Re’s Specialized Markel Alternative Risk Transfer division. With the exception of large rate increases on catastrophe-exposed business, rates have generally been flat or down slightly compared to 2005. We have continued to experience increased competition throughout 2006, most notably in our professional liability programs, where rates are

generally down 5% to 10%, and our casualty programs, where rates are generally flat to down 5%. We expect that competition in the property and casualty insurance industry will remain strong in 2007.

Net retention of gross premium volume was 87% for the year ended December 31, 2006 compared to 82% in 2005. Net written premiums for 2005 were reduced by $57.6 million of additional reinsurance costs resulting from the 2005 Hurricanes. As a result of these additional reinsurance costs, our net retention of gross premium volume was reduced by 3% for the year ended December 31, 2005. Aside from the impact of the storms in 2005, the increase in retention in 2006 was primarily due to purchasing lower amounts of reinsurance in the Excess and Surplus Lines and London Insurance Market segments during 2006 compared to 2005.

Earned premiums for the year ended December 31, 2006 increased 13% compared to 2005. Earned premiums for 2005 were reduced by $57.6 million of additional reinsurance costs resulting from the 2005 Hurricanes. In addition to the impact of additional reinsurance costs in 2005, earned premiums increased in 2006 due to higher gross premium volume and higher retentions compared to 2005.

Net investment income for the year ended December 31, 2006 was $271.0 million compared to $242.0 million in 2005. The increase in 2006 was due to higher investment yields on a larger investment portfolio compared to the same period of 2005.

Net realized investment gains for the year ended December 31, 2006 were $63.6 million compared to $19.7 million in 2005. Variability in the timing of realized and unrealized investment gains and losses is to be expected.

Interest expense for the year ended December 31, 2006 was $65.2 million compared to $63.8 million for 2005. The increase in interest expense is primarily due to the August 2006 issuance of $150 million of 7.50% unsecured senior debentures due August 22, 2046. Interest expense from the new debt issuance was partially offset by lower interest expense on our Junior Subordinated Deferrable Interest Debentures due to our retirement of a portion of these debentures during 2006. Proceeds from the August 2006 debt issuance were used to redeem the remaining Junior Subordinated Deferrable Interest Debentures on January 2, 2007. Interest expense in 2006 included interest expense on our Liquid Yield Option™ Notes (LYONs) through their redemption in December 2006.

The effective tax rate was 29% for 2006 compared to 20% for 2005. The effective tax rate in both years differs from the statutory tax rate of 35% primarily due to tax exempt investment income.

At December 31, 2006, our investment portfolio increased 14% to $7.5 billion from $6.6 billion at December 31, 2005. Net unrealized holding gains, net of taxes, on fixed maturities and equity securities were $462.5 million at December 31, 2006 compared to $302.5 million at December 31, 2005. Equity securities were $1.8 billion, or 23%, of our total investment portfolio at December 31, 2006 compared to $1.4 billion, or 21%, of our total investment portfolio at December 31, 2005.

Net cash provided by operating activities was $511.6 million for the year ended December 31, 2006 compared to $551.3 million for 2005. The decrease was primarily due to higher claim payments related to hurricanes and higher income tax payments in 2006 compared to 2005, offset in part by collections of related reinsurance balances, increased premium volume and cash received from reinsurance commutation agreements completed in 2006.

This release may contain forward-looking statements. This is a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995 concerning forward-looking statements. It also contains general cautionary statements regarding our business, estimates and management assumptions. Future actual results may materially differ from those in any forward-looking statements because of many factors, including:

•

Gross and net loss estimates related to the 2005 Hurricanes are based upon currently available information related to covered exposures and assumptions about how coverage applies. As actual losses are reported, claims are adjusted and, as specific reinsurers are associated with those losses, both gross and net losses for the 2005 Hurricanes may change significantly.

•

Adverse developments in insurance coverage litigation could result in material increases in our estimates of loss reserves.

•

The costs and availability of reinsurance may impact our ability to write certain lines of business.

•

Our anticipated premium volume is based on current knowledge and assumes no significant man-made or natural catastrophes, no significant changes in products or personnel and no adverse changes in market conditions.

•

Changing legal and social trends and inherent uncertainties (including but not limited to those uncertainties associated with our asbestos and environmental reserves) in the loss estimation process can adversely impact the adequacy of loss reserves and the allowance for reinsurance recoverables.

•

Regulatory actions can impede our ability to charge adequate rates and efficiently allocate capital.

•

Economic conditions, volatility in interest and foreign exchange rates and concentration of investments can have a significant impact on the market value of fixed maturity and equity investments as well as on the carrying value of other assets and liabilities.

Our premium volume and underwriting and investment results have been and will continue to be potentially materially affected by these factors. Additional factors that could affect our business are discussed in our most recent reports on Forms 10-Q and 10-K. 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.

Our previously announced conference call, which will involve discussion of our financial results and business developments and may include forward-looking information, will be held Thursday, January 25, 2007 at approximately 10:30 a.m.

(Eastern Standard Time). Any person interested in listening to the call, or a replay of the call, which will be available from approximately two hours after the conclusion of the call until Friday, February 2, 2007, should contact Markel’s Investor Relations Department at 804-747-0136. Investors, analysts and the general public may also listen to the call free over the Internet through Markel Corporation’s web site,www.markelcorp.com. A replay of the call will also be available on this web site until Friday, February 2, 2007.

* * * * * * * *

Markel Corporation markets and underwrites specialty insurance products and programs to a variety of niche markets. In each of these markets, the Company seeks to provide quality products and excellent customer service so that it can be a market leader. The financial goals of the Company are to earn consistent underwriting profits and superior investment returns to build shareholder value.

MARKEL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income


	Quarter Ended December 31,						Year Ended December 31,
	2006			2005			2006			2005
	(dollars in thousands, except per share data)
OPERATING REVENUES
Earned premiums	$	558,750		$	517,694		$	2,184,381		$	1,938,461
Net investment income		67,665			62,361			271,016			241,979
Net realized investment gains (losses)		23,758			(427	)		63,608			19,708

Total Operating Revenues		650,173			579,628			2,519,005			2,200,148

OPERATING EXPENSES
Losses and loss adjustment expenses		250,601			227,999			1,132,579			1,299,983
Underwriting, acquisition and insurance expenses		216,520			177,455			767,853			650,323

Total Operating Expenses		467,121			405,454			1,900,432			1,950,306

Operating Income		183,052			174,174			618,573			249,842
Interest expense		17,364			15,700			65,172			63,842

Income Before Income Taxes		165,688			158,474			553,401			186,000
Income tax expense		44,306			35,346			160,899			38,085

Net Income	$	121,382		$	123,128		$	392,502		$	147,915

OTHER COMPREHENSIVE INCOME (LOSS)
Net unrealized gains (losses) on securities, net of taxes:
Net holding gains (losses) arising during the period	$	133,480		$	(14,509	)	$	201,318		$	(61,755	)
Less reclassification adjustments for net gains (losses) included in net income		(15,442	)		278			(41,345	)		(12,810	)

Net unrealized gains (losses)		118,038			(14,231	)		159,973			(74,565	)
Currency translation adjustments, net of taxes		(2,482	)		989			(1,680	)		(9,709	)
Net unrealized pension loss, net of taxes		(25,013	)		—			(25,013	)		—

Total Other Comprehensive Income (Loss)		90,543			(13,242	)		133,280			(84,274	)

Comprehensive Income	$	211,925		$	109,886		$	525,782		$	63,641

NET INCOME PER SHARE
Basic	$	12.41		$	12.57		$	40.43		$	15.05
Diluted	$	12.17		$	12.21		$	39.40		$	14.80


Selected Data (dollars and shares in thousands, except per share data)							December 31, 2006			December 31, 2005
Total investments and cash and cash equivalents							$	7,535,295		$	6,588,222
Reinsurance recoverable on paid and unpaid losses								1,362,456			1,915,611
Goodwill								339,717			339,717
Total assets								10,088,131			9,814,098
Unpaid losses and loss adjustment expenses								5,583,879			5,863,677
Unearned premiums								1,007,801			993,737
Convertible notes payable								—			98,891
Senior long-term debt								751,978			608,945
Junior Subordinated Deferrable Interest Debentures								106,379			141,045
Total shareholders' equity								2,296,393			1,705,433
Book value per share							$	229.78		$	174.04
Common shares outstanding								9,994			9,799

Markel Corporation

Segment Reporting Disclosures

For the Quarters and Years Ended December 31, 2006 and 2005

Segment Gross Written Premiums


Quarter Ended December 31,								Year Ended December 31,
2006			2005				*(dollars in thousands)*	2006			2005
$	346,264		$	387,636			Excess and Surplus Lines	$	1,465,725		$	1,439,744
	70,391			68,744			Specialty Admitted		340,483			318,717
	147,743			138,430			London Insurance Market		729,160			640,986
	261			(39	)		Other		862			1,887

$	564,659		$	594,771			Consolidated	$	2,536,230		$	2,401,334


						Segment Net Written Premiums

Quarter Ended December 31,								Year Ended December 31,
2006			2005				*(dollars in thousands)*	2006			2005
$	293,116		$	317,280			Excess and Surplus Lines	$	1,228,797		$	1,160,948
	65,158			66,229			Specialty Admitted		322,466			299,665
	137,776			118,938			London Insurance Market		643,485			510,836
	15			(60	)		Other		197			1,145

$	496,065		$	502,387			Consolidated	$	2,194,945		$	1,972,594


							Segment Revenues

Quarter Ended December 31,								Year Ended December 31,
2006			2005				*(dollars in thousands)*	2006			2005
$	309,528		$	301,518			Excess and Surplus Lines	$	1,242,184		$	1,138,525
	80,125			77,685			Specialty Admitted		317,401			291,273
	169,082			138,551			London Insurance Market		624,599			507,518
	91,423			61,934			Investing		334,624			261,687
	15			(60	)		Other		197			1,145

$	650,173		$	579,628			Consolidated	$	2,519,005		$	2,200,148


						Reconciliation of Segment Profit (Loss) to Consolidated Operating Income

Quarter Ended December 31,								Year Ended December 31,
2006			2005				*(dollars in thousands)*	2006			2005
$	62,130		$	128,267			Excess and Surplus Lines	$	279,315		$	96,180
	8,652			25,556			Specialty Admitted		28,096			50,261
	21,389			(40,784	)		London Insurance Market		(24	)		(129,491	)
	91,423			61,934			Investing		334,624			261,687
	(542	)		(799	)		Other		(23,438	)		(28,795	)

$	183,052		$	174,174			Consolidated	$	618,573		$	249,842


							Combined Ratios

Quarter Ended December 31,								Year Ended December 31,
2006			2005					2006			2005
	80%			57%			Excess and Surplus Lines		78%			92%
	89%			67%			Specialty Admitted		91%			83%
	87%			129%			London Insurance Market		100%			126%
	NM			NM			Other		NM			NM
	84%			78%			Consolidated		87%			101%

	NM - Ratio is not meaningful.

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Markel (MKL) 8-KMarkel Reports 32% Growth In Book Value Per Share