Markel on the Mark: Fool by Numbers

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On May 1, insurance company Markel (NYSE: MKL) released first-quarter earnings for the period ended March 31.

• Book value per share increased 4% sequentially to $238.
• Similar to its property and casualty peers (albeit on the reinsurance side) RenaissanceRe (NYSE: RNR) and Montpelier Re (NYSE: MRH), Markel's net investment income increases of 16% boosted the bottom line.
• The combined ratio improved 7 points, mostly due to favorable loss development in its professional and product liability insurance lines.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Q1 2007	Q1 2006	% Change
Premiums Earned	$531,410	$522,208	1.8%
Investment Income	$77,382	$66,724	16%
Net Income	$98,674	$76,590	28.8%
EPS	$9.88	$7.67	28.8%

Get back to basics with a look at an insurer's income statement.

Ratio Checkup

	Q1 2007	Q1 2006	Change
Loss Ratio	51.7%	60.4%	(8.74%)
Expense Ratio	35.1%	33.9%	1.17%
Combined Ratio	86.8%	94.4%	(7.57%)

*Expressed in percentage points.

What do these ratios mean?

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	% Change
Investments	$7,038,904	$6,218,167	13.2%
Cash and Equivalent	$402,982	$288,418	39.7%

Liabilities
Loss Reserve	$5,520,322	$5,775,510	(4.4%)
Unearned Premiums	$1,021,319	$1,038,283	(1.6%)
Long Term Debt	$752,482	$706,307	6.5%

Learn your way around an insurer's balance sheet.

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Montpelier Re is a both a recommendation of both the Hidden Gems and Stock Advisor  newsletters. Try any one of our investing services free for 30 days.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Emil Lee is an analyst and a disciple of value investing. He owns shares in Montpelier Re. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.