AM Best Affirms Ratings For Markel Group
AM Best has affirmed stable credit ratings across Markel’s global operations, highlighting their strong balance sheets and solid performance.
The ratings agency said, “AM Best has affirmed the Long-Term Issuer Credit Rating [Long-Term ICR] of “bbb+” [Good] and the Long-Term Issue Credit Ratings [Long-Term IR] of Markel Group Inc. [Markel] [Glen Allen, VA]. AM Best also has affirmed the Financial Strength Rating [FSR] of A [Excellent] and the Long-Term ICRs of “a+” [Excellent] of all the members of the Markel North America Insurance Group [Markel NA]. Additionally, AM Best has affirmed the FSR of A [Excellent] and the Long-Term ICRs of “a+” [Excellent] of Markel Bermuda Limited [Hamilton, Bermuda] and its affiliate, Markel Global Reinsurance Company [Delaware] [collectively referred to as Markel Bermuda].
“Concurrently, AM Best has affirmed the FSR of A [Excellent] and the Long-Term ICRs of “a+” [Excellent] of the members of State National Group [State National]. All State National companies are headquartered in Bedford, TX. The outlook of all these Credit Ratings [ratings] is stable. [See below for a detailed list of the companies and ratings.]
“The ratings of Markel NA, which is considered the lead rating unit in the Markel enterprise, reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management [ERM].
“The balance sheet strength assessment for Markel NA is supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio [BCAR]. The balance sheet strength assessment further considers Markel NA’s generally favorable reserve development on prior accident years, its demonstrated ability to grow surplus organically and the effectiveness of its reinsurance program, as well as other actions taken, to manage net exposures to catastrophe losses. Offsetting these factors somewhat are exposure to variability in the capital base resulting from equity investments, as Markel NA maintains common stock leverage that is substantially elevated relative to peer group averages.
“Markel NA’s adequate operating performance assessment is based on its underwriting results, which generally outperform peers based on better-than-average loss and loss adjustment expense ratios. This outperformance is offset partially by a weaker-than-average underwriting expense ratio. Markel NA’s investment policy reflects its long-term capital appreciation objectives. As a result, the group typically reports favorable total return metrics, but below-average net investment income due to its above-average allocation to common stocks.
“Markel NA maintains a favorable business profile, ranking among the 30 largest property/casualty insurance organizations in the United States, based on consolidated U.S. net premiums written in 2024. It is the sixth-largest writer of excess and surplus [E&S] business in the United States, after Lloyd’s, the Berkshire Hathaway Insurance Group, American International Group, Inc., Fairfax Financial [USA] Group and the W. R. Berkley Insurance Group. Markel NA’s business is well-diversified by line of business and state within the United States. The group also includes Markel’s Europe-based operating companies, which provides international diversification. The group’s participation in admitted and non-admitted markets provides it with advantages across market cycles. Markel NA’s ERM program is embedded appropriately within the organization to manage the risks of Markel’s complex global operations, which include insurance and non-insurance sectors.
“The ratings of Markel Bermuda reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
“Markel Bermuda’s balance sheet strength assessment reflects its strongest level of risk-adjusted capitalization, as measured by BCAR, which has been supported by organic surplus growth in recent years. The assessment of the business profile acknowledges the diverse geographies and lines of business in which the group operates, which is offset by the run-off of Markel’s Global Reinsurance division. Markel Bermuda’s ratings also reflect rating enhancement that it receives as a result of its strategic importance to the Markel enterprise, as well as the benefits it receives through its relationship with other Markel subsidiaries.”
