Markel's stock slips as 1Q profit shrinks by 66 percent

Markel Corp.'s stock slipped Thursday after the insurer reported its profit shrank by almost two-thirds in the first quarter on difficult competition and a rough quarter for the investment portfolio.

Markel earned $34 million, or $3.41 per share, in the first quarter, compared with profit of $98.7 million, or $9.88 per share, in the first quarter last year.

Analysts polled by Thomson Financial expected income of $7.68 per share.

Premiums shrank 6 percent to $500.4 million from $531.4 million. Markel also reported a $56.3 million loss in its investment portfolio, which was stung by volatility in financial markets.

Markel writes insurance policies covering unusual risks, like motorcycle insurance or life insurance for horses. The company said the insurance market has become very competitive, which has dragged down rates.

Stifel Nicolaus analyst Meyer Shields wrote in a client note carriers from the U.S., Bermuda and London are all jostling for market share in the insurance industry.

Of each premium dollar collected, Markel spent 92 cents administering claims, 5 cents on the dollar more than the first quarter last year.

Shares fell $14.40, or 3.3 percent, to $420 in afternoon trading.