UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1996
or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from _____ to _____
Commission File Number 0-15458
MARKEL CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-0292420
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
4551 Cox Road, Glen Allen, Virginia 23060-3382
(Address of principal executive offices)
(Zip code)
(804) 747-0136
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes [ X ] No [ ]
Number of shares of the registrant's common stock outstanding at October 27,
1996: 5,466,277
1
<PAGE>
Markel Corporation
Form 10-Q
Index
Page
Number
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheets--
September 30, 1996 and December 31, 1995 3
Consolidated Statements of Income--
Quarters and Nine Months Ended September 30, 1996 and 1995 4
Consolidated Statements of Cash Flows--
Nine Months Ended September 30, 1996 and 1995 5
Notes to Consolidated Financial Statements--
September 30, 1996 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 12
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MARKEL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
- ------------------------------------------------------------------------------------------------------------------------------
1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands)
ASSETS
<S> <C>
Investments, available-for-sale, at estimated fair value
Fixed maturities (cost of $711,470 in 1996 and $683,568 in 1995) $ 709,070 $ 706,055
Equity securities (cost of $134,584 in 1996 and $104,538 in 1995) 175,690 134,346
Short-term investments (estimated fair value approximates cost) 71,657 68,182
- ------------------------------------------------------------------------------------------------------------------------------
Total investments, available-for-sale 956,417 908,583
- ------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 16,252 18,315
Receivables 64,908 47,210
Reinsurance recoverable on unpaid losses 154,219 159,141
Reinsurance recoverable on paid losses 11,657 20,404
Deferred policy acquisition costs 35,336 32,024
Prepaid reinsurance premiums 41,892 39,728
Property and equipment 25,907 27,729
Intangible assets 39,957 41,657
Other assets 41,591 19,746
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $ 1,388,136 $ 1,314,537
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Unpaid losses and loss adjustment expenses $ 766,139 $ 734,409
Unearned premiums 187,410 170,697
Payables to insurance companies 19,762 17,247
Long-term debt (estimated fair value of $97,187 in 1996 and $109,189 in 1995) 99,678 106,689
Other liabilities 67,329 72,053
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,140,318 1,101,095
- ------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity
Common stock 23,970 23,118
Retained earnings 198,690 156,333
Net unrealized gains on fixed maturities and equity securities, net of taxes 25,158 33,991
- ------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 247,818 213,442
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 1,388,136 $ 1,314,537
- ------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
MARKEL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
--------------- -----------------
1996 1995 1996 1995
- ---------------------------------------------------------------------------------------------------
(dollars in thousands, except per share data)
<S> <C>
Operating revenues
Earned premiums $ 76,861 $ 75,659 $ 225,051 $ 209,892
Net investment income 12,363 12,058 36,500 30,530
Net realized gains from investment sales 449 3,037 2,956 7,650
Other 694 789 2,522 2,561
- ---------------------------------------------------------------------------------------------------
Total operating revenues 90,367 91,543 267,029 250,633
- ---------------------------------------------------------------------------------------------------
Operating expenses
Losses and loss adjustment expenses 50,592 49,651 151,471 137,685
Underwriting, acquisition and insurance expenses 25,773 25,575 74,592 70,254
Other 284 410 1,192 1,239
Amortization of intangible assets 660 899 1,995 2,192
- ---------------------------------------------------------------------------------------------------
Total operating expenses 77,309 76,535 229,250 211,370
- ---------------------------------------------------------------------------------------------------
Operating income 13,058 15,008 37,779 39,263
Interest expense 1,914 2,173 5,964 6,304
- ---------------------------------------------------------------------------------------------------
Income before income taxes 11,144 12,835 31,815 32,959
Income taxes (benefit) 2,675 3,851 (10,554) 9,083
- ---------------------------------------------------------------------------------------------------
Net income $ 8,469 $ 8,984 $ 42,369 $ 23,876
- ---------------------------------------------------------------------------------------------------
Earnings per share
Primary $ 1.50 $ 1.59 $ 7.50 $ 4.26
- ---------------------------------------------------------------------------------------------------
Fully diluted $ 1.50 $ 1.59 $ 7.50 $ 4.23
- ---------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MARKEL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------
1996 1995
- -----------------------------------------------------------------------------------------------
(dollars in thousands)
<S> <C>
Operating Activities
Net income $ 42,369 $ 23,876
Adjustments to reconcile net income to net cash provided
by operating activities 26,755 126,780
- -----------------------------------------------------------------------------------------------
Net cash provided by operating activities 69,124 150,656
- -----------------------------------------------------------------------------------------------
Investing Activities
Proceeds from sales of fixed maturities and equity securities 312,186 427,790
Proceeds from maturities of fixed maturities 49,401 15,561
Cost of fixed maturities and equity securities purchased (420,073) (587,422)
Net change in short-term investments (3,475) (16,041)
Purchase of Lincoln Insurance Company - net of cash acquired -- (21,747)
Proceeds from sale of Corporate headquarters buildings -- 19,068
Other (3,016) (3,454)
- -----------------------------------------------------------------------------------------------
Net cash used by investing activities (64,977) (166,245)
- -----------------------------------------------------------------------------------------------
Financing Activities
Borrowings under credit facility -- 27,500
Repayment of long-term debt and credit facility (7,050) (10,050)
Other 840 102
- -----------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities (6,210) 17,552
- -----------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (2,063) 1,963
Cash and cash equivalents at beginning of period 18,315 10,229
- -----------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 16,252 $ 12,192
- -----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--September 30, 1996
1. Principles of Consolidation
The consolidated balance sheet as of September 30, 1996, the related
consolidated statements of income for the quarters and nine months ended
September 30, 1996 and 1995, and the consolidated statements of cash flows for
the nine months ended September 30, 1996 and 1995, are unaudited. In the opinion
of management, all adjustments necessary for a fair presentation of such
consolidated financial statements have been included. Such adjustments consist
only of normal recurring items. Interim results are not necessarily indicative
of results of operations for the full year.
The consolidated financial statements and notes are presented as permitted by
Form 10-Q, and do not contain certain information included in the Company's
annual consolidated financial statements and notes.
2. Earnings per share
Earnings per share was determined by dividing net income, as adjusted below, by
the applicable shares outstanding (in thousands):
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------
<S> <C>
Net income, as reported $ 8,469 $ 8,984 $ 42,369 $ 23,876
Dividends on redeemable preferred stock (4) (4) (12) (12)
- -------------------------------------------------------------------------------------------------------
Primary and fully diluted income $ 8,465 $ 8,980 $ 42,357 $ 23,864
- -------------------------------------------------------------------------------------------------------
Average common shares outstanding 5,440 5,411 5,431 5,402
Shares applicable to common stock equivalents 211 221 208 195
- -------------------------------------------------------------------------------------------------------
Average primary shares outstanding 5,651 5,632 5,639 5,597
Additional dilution attributable to common
stock equivalents -- 16 -- 42
- -------------------------------------------------------------------------------------------------------
Average fully diluted shares outstanding 5,651 5,648 5,639 5,639
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
3. Reinsurance
The table below summarizes the effect of reinsurance on premiums written and
earned (dollars in thousands):
Quarter Ended September 30,
- -----------------------------------------------------------------------------
1996 1995
- -----------------------------------------------------------------------------
Written Earned Written Earned
Direct $ 106,445 $ 99,370 $ 105,517 $ 95,144
Assumed 4,216 4,653 4,624 5,717
Ceded (25,788) (27,162) (26,706) (25,202)
- -----------------------------------------------------------------------------
Net premiums $ 84,873 $ 76,861 $ 83,435 $ 75,659
- -----------------------------------------------------------------------------
Nine Months Ended September 30,
- -----------------------------------------------------------------------------
1996 1995
- -----------------------------------------------------------------------------
Written Earned Written Earned
Direct $ 304,599 $ 286,532 $ 280,767 $ 255,761
Assumed 7,858 11,230 22,111 23,434
Ceded (72,859) (72,711) (73,892) (69,303)
- -----------------------------------------------------------------------------
Net premiums $ 239,598 $ 225,051 $ 228,986 $ 209,892
- -----------------------------------------------------------------------------
Incurred losses and loss adjustment expenses are net of reinsurance recoveries
of $9.6 million and $16.9 million for the quarters ended September 30, 1996 and
1995, respectively, and $33.3 million and $47.1 million for the nine months
ended September 30, 1996 and 1995, respectively.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Quarter and Nine Months ended September 30, 1996 compared to Quarter and Nine
Months ended September 30, 1995
The Company underwrites specialty insurance products and programs to niche
markets. Significant areas of underwriting include professional and products
liability, excess and surplus lines, specialty programs and specialty personal
and commercial lines. Professional liability coverage is offered to physicians
and health professionals, insurance companies, directors and officers, attorneys
and architects and engineers. Special risk programs provide products liability
insurance for manufacturers and distributors and tailored coverages for other
unique exposures. Property/casualty insurance for nonstandard and hard-to-place
risks is underwritten on an excess and surplus lines basis. Specialty program
insurance includes coverage for camps, youth and recreation, child care, health
and fitness and agribusiness organizations, as well as accident and health
insurance for colleges. The Company also underwrites personal and commercial
property and liability coverages for watercraft, motorcycles, automobiles,
mobile homes, dwellings and commercial freight companies.
Following is a comparison of gross premium volume by significant underwriting
area:
<TABLE>
<CAPTION>
Gross Premium Volume
Quarter Ended Nine Months Ended
September 30, September 30,
- ------------------------------------------------------------------------------------------------------
<S> <C>
1996 1995 (amounts in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------
$ 28,648 $ 29,177 Professional/Products Liability $ 91,959 $ 96,395
30,788 28,585 Excess & Surplus Lines 89,723 80,241
29,135 31,686 Specialty Program Insurance 74,797 82,217
18,879 13,725 Specialty Personal and Commercial Lines 52,969 32,134
2,048 8,687 Other 8,333 19,413
- ------------------------------------------------------------------------------------------------------
$ 109,498 $ 111,860 Total $ 317,781 $ 310,400
- ------------------------------------------------------------------------------------------------------
</TABLE>
Gross premium volume was $109.5 million for the second quarter and $317.8
million for the nine month period in 1996 compared to $111.9 million and $310.4
million, respectively, for the same periods in 1995. Premiums from new programs
provided the majority of the growth for the quarter and nine month period in
1996. Runoff of Lincoln Insurance Company (LIC) and the sale of the Company's
wholesale brokerage operations reduced gross premium volume by $6.1 million and
$9.9 million for the quarter and nine month period in 1996, respectively.
Premiums from professional/products liability insurance were $28.6 million for
the third quarter and $92.0 million for the nine month period compared to $29.2
million and $96.4 million, respectively, for the same periods last year. Growth
in the employment practices and directors' and officers' product lines was more
than offset by lower production from other lines, including financial
institutions due to competition and the special risk programs due to changes in
risk selection.
Excess and surplus lines second quarter gross premium volume grew 8% to $30.8
million from $28.6 million a year earlier. For the nine month period, excess and
surplus lines gross premium volume rose 12% to $89.7 million from $80.2 million
in 1995. The casualty division benefitted from a new garage program and the
selective renewal of parts of the LIC book of business, while the property
division has seen favorable results from a new marketing plan. A new excess and
umbrella program also contributed to 1996 growth.
Gross premiums from specialty program insurance premiums were $29.1 million for
the third quarter and $74.8 million for the nine month period compared to $31.7
million and $82.2 million for the quarter and nine month periods in 1995.
Increased competition in the youth and recreation, agribusiness and health and
fitness programs contributed to the decrease.
Specialty personal and commercial lines premiums rose sharply to $18.9 million
for the third quarter and $53.0 million for the nine month period from $13.7
million and $32.1 million, respectively, during the same periods a year ago.
Several recently added programs, including physical damage for lenders and
personal autos, liability coverage for commercial autos, property coverage for
mobile homes and dwellings, and liability coverage for commercial vehicles
including taxi cab fleets, showed continued strong growth, contributing $3.2
million and $16.5 million of growth to quarterly and nine month 1996 production.
Other gross premiums totaled $2.0 million for the third quarter and $8.3 million
for the nine month period compared to $8.7 million and $19.4 million,
respectively, for the same periods in 1995. Other gross premium volume includes
production from the Company's wholesale brokerage operation which was sold in
September and run-off business related to Lincoln Insurance Company.
The Company enters into reinsurance agreements in order to reduce its liability
on individual risks and enable it to underwrite policies with higher limits. The
Company's net retention of gross premium volume increased to 78% in the third
quarter and 75% for the nine month period from 75% and 74%, respectively, for
the same periods a year earlier. The increase reflects higher retentions for the
specialty program insurance lines.
Following is a comparison of earned premiums by significant underwriting area:
<TABLE>
<CAPTION>
Earned Premiums
Quarter Ended Nine Months Ended
September 30, September 30,
- --------------------------------------------------------------------------------------------------------------------------
1996 1995 (amounts in thousands) 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
$ 26,149 $ 28,545 Professional/Products Liability $ 84,163 $ 84,275
20,025 17,987 Excess & Surplus Lines 55,239 51,724
18,322 16,699 Specialty Program Insurance 50,421 48,146
12,432 6,874 Specialty Personal and Commercial Lines 32,732 17,506
(67) 5,554 Other 2,496 8,241
- --------------------------------------------------------------------------------------------------------------------------
$ 76,861 $ 75,659 Total $ 225,051 $ 209,892
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Total operating revenues for the third quarter were $90.4 million compared to
$91.5 million in 1995. For the nine month period, operating revenues rose 7% to
$267.0 million from $250.6 million a year ago. Earned premiums advanced to $76.9
million for the quarter and $225.1 million for the nine month period from $75.7
million and $209.9 million, respectively, for the same periods in 1995. Higher
gross premium volume attributed to new products and increasing retentions in our
core products prompted the 2% quarterly and 7% year-to-date earned premium
increases. Although the property and casualty market remains competitive, the
Company will not sacrifice long term underwriting profits for premium growth.
Third quarter net investment income was $12.4 million up from $12.1 million a
year ago. For the nine month period, net investment income increased 20% to
$36.5 million from $30.5 million in 1995. The increases were primarily the
result of the Company's larger investment portfolio over the past year,
partially offset by lower yields.
The Company reported realized investment gains of $0.4 million for the third
quarter and realized investment gains of $3.0 million for nine months compared
to realized investment gains of $3.0 million and $7.7 million, respectively, for
the same periods last year. Variability in the timing of realized investment
gains is to be expected and often results from interest rate volatility which
affects the market values of fixed maturity and equity investments.
Total operating expenses for the third quarter were $77.3 million compared to
$76.5 million in 1995. Total operating expenses for the nine month period were
$229.3 million compared to $211.4 million a year ago. The increases resulted
primarily from higher variable expenses associated with higher earned premiums.
Following is a comparison of selected data from the Company's operations (in
thousands):
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
- ------------------------------------------------------------------------------------------------------------------
1996 1995 (amounts in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
$109,498 $ 111,860 Gross premium volume $ 317,781 $ 310,400
$ 84,873 $ 83,435 Net premiums written $ 239,598 $ 228,986
78% 75% Net retention 75% 74%
$ 76,861 $ 75,659 Earned premiums $ 225,051 $ 209,892
$ 50,592 $ 49,651 Losses and loss adjustment expenses $ 151,471 $ 137,685
Underwriting, acquisition, and
$ 25,773 $ 25,575 insurance expenses $ 74,592 $ 70,254
GAAP ratios
66% 65% Loss ratio 67% 65%
33% 34% Expense ratio 33% 34%
- ------------------------------------------------------------------------------------------------------------------
99% 99% Combined ratio 100% 99%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
The third quarter combined loss and expense ratio was flat at 99% compared to
1995. For the nine month period, the combined ratio increased to 100% from 99%
in 1995. The quarterly loss ratio rose to 66% from 65% in 1995. The 1996 third
quarter includes $1.7 million in property losses from Hurricane Fran. Hurricane
losses were partially offset by favorable development in the Company's excess
<PAGE>
and surplus lines casualty book of business and certain professional liability
lines. The nine month loss ratio increased to 67% from 65% a year ago due to
reserve increases in the medical malpractice book of business and property
losses from the winter storms and Hurricane Fran. The third quarter and nine
month expense ratios fell to 33% from 34% in 1995. The decrease in both periods
was the result of the recognition of contingent profit commissions partially
offset by higher acquisition costs and start-up costs in several new programs.
In evaluating its operating performance, the Company focuses on core
underwriting and investing results before consideration of realized gains or
losses from the sales of investments and expenses related to the amortization of
intangible assets. Management believes this is a better indicator of the
Company's operating performance because it reduces the variability in results
associated with realized investment gains or losses and eliminates the impact of
accounting conventions which do not reflect current operating costs. For the
third quarter of 1996, income from core underwriting and investing operations
after taxes increased 13% to $8.7 million from $7.7 million in 1995. The growth
was due to increased investment income and underwriting profits. For the nine
month period, income from core operations grew 14% to $23.6 million from $20.6
million last year, primarily as a result of increased investment income.
The Company's effective tax rate for the third quarter and nine month period was
24% and (33%) of income before income taxes, respectively, compared to 30% and
28% of income before income taxes, respectively, for the same periods last year.
In the second quarter of 1996, the Company recognized a nonrecurring benefit of
$18.4 million related to the realization of tax benefits attributable to certain
differences between financial reporting and tax bases of assets acquired in a
prior period. This benefit was recognized when management determined that
estimated tax liabilities were less than amounts previously accrued.
Third quarter 1996 net income was $8.5 million compared to $9.0 million in 1995.
Third quarter net income fell due to lower realized gains which were partially
offset by continuing underwriting profitability and growth in net investment
income. For the nine month period, net income advanced to $42.4 million from
$23.9 million last year. The increase was primarily the result of the $18.4
million nonrecurring benefit and higher net investment income, partially offset
by lower realized gains.
Financial Condition as of September 30, 1996
The Company's insurance operations collect premiums and pay current claims,
reinsurance commissions and operating expenses. Premiums collected and positive
cash flows from the insurance operations are invested primarily in short-term
investments and long-term bonds. The Company's short-term investments provide
liquidity for projected claims, reinsurance costs and operating expenses.
For the nine month period ended September 30, 1996, the Company reported net
cash provided by operating activities of $69.1 million, compared to net cash
provided by operating activities of $150.7 million for the same period in 1995.
Operating cash flows reflected reinsurer commutations and other settlements of
$6.6 million in 1996 compared to $72.6 million in 1995. The Company does not
expect commutations to be a significant source of operating cash flow in 1996 or
future years.
<PAGE>
For the nine month period ended September 30, 1996, the Company reported net
cash used by investing activities of $65.0 million compared to $166.2 million in
1995. The difference is primarily attributable to lower reinsurer commutation
activity and other settlements in 1996. The Company's invested assets were
$956.4 million at September 30, 1996 compared to $908.6 million at December 31,
1995. The unrealized appreciation of the Company's investment portfolio
decreased $13.6 million since December 31, 1995. As of September 30, 1996, the
cost of the Company's fixed maturity investments exceeded the estimated fair
value by $2.4 million, while the estimated fair value of its equity investments
exceeded cost by $41.1 million.
At September 30, 1996, the Company's fixed maturity and equity investments
comprised approximately 74% and 18% of total investments, respectively. The
Company expects variability in its realized and unrealized investment gains due
to interest rate volatility as well as other economic conditions.
As of September 30, 1996 the unused balances available under the Company's
revolving credit facility totaled $40.0 million compared to $33.0 million at
December 31, 1995. The Company repaid $7.0 million of the revolving credit
facility in the second quarter of 1996.
Shareholders' equity at September 30, 1996 was $247.8 million compared to $213.4
million at December 31, 1995. Book value per share rose to $45.36 at September
30, 1996 from $39.37 at December 31, 1995. During the nine month period, net
unrealized investment gains, net of income taxes, decreased by $8.8 million.
Other Items
On May 16, 1996, the Company and Investors Insurance Group (Investors) jointly
announced that they had executed a definitive agreement for the acquisition of
Investors Insurance Holding Corporation and its subsidiaries for approximately
$38 million. The Company has received all necessary regulatory approvals and the
purchase is expected to close on October 31, 1996. The purchase of Investors, an
excess and surplus lines insurer with total assets of approximately $233 million
at September 30, 1996, will be financed with cash and $15 million of borrowings
under the Company's revolving credit agreement.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The Exhibits to this Report are listed in the Exhibit Index.
(b) No reports on Form 8-K were filed during the quarter ended September 30,
1996.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized, this 30th day of October, 1996.
Markel Corporation
By Alan I. Kirshner
--------------------------------
Alan I. Kirshner
Chief Executive Officer
(Principal Executive Officer)
By Anthony F. Markel
-------------------------------
Anthony F. Markel
President
(Principal Operating Officer)
By Steven A. Markel
-------------------------------
Steven A. Markel
Vice Chairman
By Darrell D. Martin
------------------------------
Darrell D. Martin
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
<PAGE>
Exhibit Index
Number Description
27 Financial Data Schedule *
* Filed electronically with the Commission's operational EDGAR system.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements contained in the Form 10-Q for the quarterly period
ended September 30, 1996 for Markel Corporation and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<DEBT-HELD-FOR-SALE> 709,070
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 175,690
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 956,417
<CASH> 16,252
<RECOVER-REINSURE> 11,657
<DEFERRED-ACQUISITION> 35,336
<TOTAL-ASSETS> 1,388,136
<POLICY-LOSSES> 766,139
<UNEARNED-PREMIUMS> 187,410
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 99,678
0
0
<COMMON> 23,970
<OTHER-SE> 223,848
<TOTAL-LIABILITY-AND-EQUITY> 1,388,136
225,051
<INVESTMENT-INCOME> 36,500
<INVESTMENT-GAINS> 2,956
<OTHER-INCOME> 2,522
<BENEFITS> 151,471
<UNDERWRITING-AMORTIZATION> 54,862
<UNDERWRITING-OTHER> 19,730
<INCOME-PRETAX> 31,815
<INCOME-TAX> (10,554)
<INCOME-CONTINUING> 42,369
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 42,369
<EPS-PRIMARY> 7.50
<EPS-DILUTED> 7.50
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
