Shares of insurance specialist Markel (NYSE:MKL) shot up more than 4% yesterday after the company beat estimates with its strong first-quarter 2013 earnings report.

Source: Markel.

And why is anyone surprised, again?
Okay, so most of us know Markel is a great business, and the stock was already riding high after the company posted another rock-solid year in 2012.

Even so, Markel's first-quarter revenue rose 12% to $820 million, thanks to a 6% increase in revenue from insurance operations and a 67% increase from Markel Ventures. That beat average analysts' expectations, which called for $791.5 million. Even better, Markel's earnings per share rose more than 60% year-over-year to $9.50, absolutely crushing analysts' earning estimates of $5.37 per share.

In addition, thanks to both organic growth as well as its acquisitions of Thomco in early 2012 and Hagerty this January, Markel managed to increase its gross insurance premium volume for the quarter by 15% to $743 million. Markel's combined ratio also improved to 91% from 100% this time last year, meaning the company earned $9 per $100 in premiums written. Also note the quarter's combined ratio included $20 million in expenses, or four full points, related to its adoption of new DAC accounting standards.

From Markel's equity portfolio, net investment income fell 19% year over year to just under $65 million, and net realized investment gains rose 50% to $18 million from the first quarter of 2012. Finally, and perhaps predictably given the market's recent rally, unrealized investment gains have risen $250 million before taxes so far in 2013.

When all was said and done in March, Markel's book value per common share increased an impressive 7% to $431.10 from $403.85 at the end of 2012.

About that whale...
If that weren't enough, Markel also announced this morning it has officially completed its $3 billion acquisition of Alterra (NASDAQ: ALTE), which, as I noted back in February, was a radical departure from Markel's typically smaller buyout targets. While it will undoubtedly take some time to fully integrate Alterra's operations, management expressed excitement for Alterra's ability to help Markel expand its global footprint in the insurance and reinsurance market.

Better yet, in yesterday's press release, management finally stated "the application of Markel's investment expertise will drive higher returns on the combined investment portfolio." Remember, as it stands, Markel's relatively small capital base only allows CIO Tom Gayner to invest the company's shareholder equity.

Alterra, then, may be able to provide the necessary resources for Gayner to be able to prudently invest both Markel's shareholder equity and insurance float -- a luxury Warren Buffett thoroughly enjoys with Berkshire Hathaway. When that happens, you can bet we'll be watching closely to see how Gayner puts Markel's new money to work.

Foolish final thoughts
In the end, Markel's first quarter simply reaffirmed what we already know: This is a great company with an incredible knack for creating value for shareholders over the long run, and you'd be hard-pressed to find better places to invest your hard-earned money.