Segment Reporting Disclosures

9 Months Ended

Sep. 30, 2022

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Segment Reporting Disclosures

Segment Reporting Disclosures

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

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

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

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

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

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

	Quarter Ended September 30, 2022
(dollars in thousands)	Insurance			Reinsurance			Investing		Markel Ventures (1)		Other (2)		Consolidated
Gross premium volume	$	2,299,325		$	179,455		$	—	$	—	$	995,991	$	3,474,771
Net written premiums	1,849,983			154,029			—		—		5,155		2,009,167
Earned premiums	1,695,029			260,535			—		—		1,266		1,956,830
Losses and loss adjustment expenses:
Current accident year	(1,100,511)			(166,485)			—		—		—		(1,266,996)
Prior accident years	53,760			29,505			—		—		(1,582)		81,683
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs	(362,137)			(68,662)			—		—		(383)		(431,182)
Other underwriting expenses	(200,604)			(11,638)			—		—		152		(212,090)
Underwriting profit (loss)	85,537			43,255			—		—		(547)		128,245
Net investment income	—			—			107,414		317		—		107,731
Net investment losses	—			—			(281,483)		—		—		(281,483)
Products revenues	—			—			—		586,531		—		586,531
Services and other revenues	—			—			—		629,215		67,321		696,536
Products expenses	—			—			—		(580,830)		—		(580,830)
Services and other expenses (3)	—			—			—		(556,207)		15,638		(540,569)
Amortization of intangible assets (4)	—			—			—		(18,567)		(24,851)		(43,418)
Segment profit (loss)	$	85,537		$	43,255		$	(174,069)	$	60,459	$	57,561	$	72,743
Interest expense													(47,348)
Net foreign exchange gains													115,130
Income before income taxes													$	140,525
U.S. GAAP combined ratio (5)	95		%	83		%					NM (6)		93		%

(1)    Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $23.7 million for the quarter ended September 30, 2022.

(2)    Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment. Amortization of intangible assets attributable to the Company's underwriting segments was $9.6 million for the quarter ended September 30, 2022, however, the Company does not allocate amortization of intangible assets between the Insurance and Reinsurance segments.

(3)    Services and other expenses for Other for the quarter ended September 30, 2022 included $53.4 million of favorable loss reserve development on the run-off of reinsurance contracts written by Markel CATCo Re Ltd., all of which was attributable to noncontrolling interests. See Note 11.

(4)    Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to the Company's Insurance and Reinsurance segments.

(5)    The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.

(6)    NM - Ratio is not meaningful

	Quarter Ended September 30, 2021
(dollars in thousands)	Insurance			Reinsurance			Investing		Markel Ventures (1)		Other (2)		Consolidated
Gross premium volume	$	1,899,592		$	180,673		$	—	$	—	$	888,337	$	2,968,602
Net written premiums	1,545,428			141,642			—		—		(2,260)		1,684,810
Earned premiums	1,381,235			250,962			—		—		(1,697)		1,630,500
Losses and loss adjustment expenses:
Current accident year	(866,481)			(221,872)			—		—		—		(1,088,353)
Prior accident years	124,133			16,292			—		—		(313)		140,112
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs	(289,201)			(63,723)			—		—		—		(352,924)
Other underwriting expenses	(202,961)			(12,101)			—		—		(1,770)		(216,832)
Underwriting profit (loss)	146,725			(30,442)			—		—		(3,780)		112,503
Net investment income	—			—			91,261		3		—		91,264
Net investment losses	—			—			(25,833)		—		—		(25,833)
Products revenues	—			—			—		405,711		—		405,711
Services and other revenues	—			—			—		502,471		83,241		585,712
Products expenses	—			—			—		(374,407)		—		(374,407)
Services and other expenses	—			—			—		(465,268)		(48,726)		(513,994)
Amortization of intangible assets (3)	—			—			—		(13,541)		(25,727)		(39,268)
Segment profit (loss)	$	146,725		$	(30,442)		$	65,428	$	54,969	$	5,008	$	241,688
Interest expense													(46,455)
Net foreign exchange gains													48,850
Income before income taxes													$	244,083
U.S. GAAP combined ratio (4)	89		%	112		%					NM (5)		93		%

(1)    Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $15.8 million for the quarter ended September 30, 2021.

(2)    Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment. Amortization of intangible assets attributable to the Company's underwriting segments was $10.3 million for the quarter ended September 30, 2021, however, the Company does not allocate amortization of intangible assets between the Insurance and Reinsurance segments.

(3)    Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to the Company's Insurance and Reinsurance segments.

(4)    The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.

(5)    NM - Ratio is not meaningful

	Nine Months Ended September 30, 2022
(dollars in thousands)	Insurance			Reinsurance			Investing		Markel Ventures (1)		Other (2)		Consolidated
Gross premium volume	$	6,479,789		$	1,044,827		$	—	$	—	$	2,628,491	$	10,153,107
Net written premiums	5,289,165			983,087			—		—		1,444		6,273,696
Earned premiums	4,742,178			808,656			—		—		(1,130)		5,549,704
Losses and loss adjustment expenses:
Current accident year	(2,906,031)			(514,875)			—		—		—		(3,420,906)
Prior accident years	196,093			13,845			—		—		(5,527)		204,411
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs	(996,369)			(209,541)			—		—		(415)		(1,206,325)
Other underwriting expenses	(596,426)			(37,708)			—		—		(2,647)		(636,781)
Underwriting profit (loss)	439,445			60,377			—		—		(9,719)		490,103
Net investment income	—			—			273,699		424		—		274,123
Net investment losses	—			—			(2,194,525)		—		—		(2,194,525)
Products revenues	—			—			—		1,845,111		—		1,845,111
Services and other revenues	—			—			—		1,682,318		307,857		1,990,175
Products expenses	—			—			—		(1,726,367)		—		(1,726,367)
Services and other expenses (3)	—			—			—		(1,524,167)		(168,036)		(1,692,203)
Amortization of intangible assets (4)	—			—			—		(60,077)		(74,913)		(134,990)
Segment profit (loss)	$	439,445		$	60,377		$	(1,920,826)	$	217,242	$	55,189	$	(1,148,573)
Interest expense													(147,090)
Net foreign exchange gains													245,356
Loss before income taxes													$	(1,050,307)
U.S. GAAP combined ratio (5)	91		%	93		%					NM (6)		91		%

(1)    Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $75.3 million for the nine months ended September 30, 2022.

(2)    Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment. Amortization of intangible assets attributable to the Company's underwriting segments was $29.0 million for the nine months ended September 30, 2022, however, the Company does not allocate amortization of intangible assets between the Insurance and Reinsurance segments.

(3)    Services and other expenses for Other for the nine months ended September 30, 2022 included $81.6 million of favorable loss reserve development on the run-off of reinsurance contracts written by Markel CATCo Re Ltd., all of which was attributable to noncontrolling interests. See Note 11.

(4)    Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to the Company's Insurance and Reinsurance segments.

(5)    The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.

(6)    NM - Ratio is not meaningful

	Nine Months Ended September 30, 2021
(dollars in thousands)	Insurance			Reinsurance			Investing		Markel Ventures (1)		Other (2)		Consolidated
Gross premium volume	$	5,359,293		$	992,635		$	—	$	—	$	2,305,539	$	8,657,467
Net written premiums	4,427,301			893,082			—		—		(3,052)		5,317,331
Earned premiums	3,928,824			770,031			—		—		(2,623)		4,696,232
Losses and loss adjustment expenses:
Current accident year	(2,448,034)			(561,226)			—		—		—		(3,009,260)
Prior accident years	397,723			(34,104)			—		—		2,527		366,146
Underwriting, acquisition and insurance expenses:
Amortization of policy acquisition costs	(814,623)			(193,697)			—		—		—		(1,008,320)
Other underwriting expenses	(594,880)			(39,676)			—		—		(1,987)		(636,543)
Underwriting profit (loss)	469,010			(58,672)			—		—		(2,083)		408,255
Net investment income	—			—			284,087		8		—		284,095
Net investment gains	—			—			1,175,791		—		—		1,175,791
Products revenues	—			—			—		1,327,144		—		1,327,144
Services and other revenues	—			—			—		1,363,141		241,917		1,605,058
Products expenses	—			—			—		(1,173,135)		—		(1,173,135)
Services and other expenses	—			109			—		(1,260,957)		(181,494)		(1,442,342)
Amortization of intangible assets (3)	—			—			—		(41,104)		(77,446)		(118,550)
Segment profit (loss)	$	469,010		$	(58,563)		$	1,459,878	$	215,097	$	(19,106)	$	2,066,316
Interest expense													(135,412)
Net foreign exchange gains													61,677
Income before income taxes													$	1,992,581
U.S. GAAP combined ratio (4)	88		%	108		%					NM (5)		91		%

(1)     Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $47.7 million for the nine months ended September 30, 2021.

(2)     Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that is not allocated to a reportable segment. Amortization of intangible assets attributable to the Company's underwriting segments was $31.1 million for the nine months ended September 30, 2021, however, the Company does not allocate amortization of intangible assets between the Insurance and Reinsurance segments.

(3)     Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to the Company's Insurance and Reinsurance segments.

(4)     The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.

(5)     NM - Ratio is not meaningful

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

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