Markel Earnings: Underwriting Results Get Worse

Markel finished a difficult year on a very mixed note. Underwriting results have been the company's Achilles' heel this past year, and while that issue only got worse in the fourth quarter, strong investment results acted as an offset. Overall, we are more concerned about the poor underwriting results, as we expect the investment side to be volatile quarter to quarter and think the company's relative investing advantage may be mooted going forward if interest rates remain high. We will maintain our $1,310 fair value estimate for the no-moat company and see the shares as roughly fairly valued at the moment.