Whereas I nominated Fairfax Financial
For the full year, Markel's combined ratio was nominally positive at 99% (sub-100% results indicate profitable underwriting). Just as with Chubb
As for the insurance outlook, there are forces that may eventually work in Markel's favor. The economic recession will drive down premium dollars, as businesses have lower coverage needs. Markel thinks it can make up for this decline with higher rates, driving rates per unit of exposure -- and by extension, underwriting margins -- higher.
Competitors may undercut Markel on rates in the near term, but that's their loss -- literally. They risk underestimating the coming rise in claims, if Steve Markel is correct that people are "more likely to make claims and be unhappy" in this environment.
On the investment side, Markel's equity portfolio shed 34%, so it outpaced the market slightly. The largest realized losses in stocks stemmed from positions in General Electric
Resident Markel investing genius Tom Gayner noted that he's modestly buying stocks for the first time in 18 months. He cautions that this isn't a bottom call on the market by any means, but he does believe that the stock market is pricing in "depression-like conditions." On that assessment, he's happy to ratchet up Markel's exposure to quality stocks, as long as the insurance market firms from here.
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Fool contributor Toby Shute doesn't have a position in any company mentioned. Bank of America is a former Motley Fool Income Investor selection. The Fool owns shares of Markel. The Motley Fool has a modest disclosure policy.