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Q2 2023 Financial Statement

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q

______________________________________________________________________________________

  • Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2023

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: 001-15811

_________________________________________

MARKEL GROUP INC.

(Exact name of registrant as specified in its charter)

___________________________________________________________________________________

Virginia

54-1959284

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

4521 Highwoods Parkway, Glen Allen, Virginia 23060-6148

(Address of principal executive offices) (Zip Code)

(804) 747-0136

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of exchange on which registered

Common Stock, no par value

MKL

New York Stock Exchange

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 for 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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

x

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Number of shares of the registrant's common stock outstanding at July 26, 2023: 13,264,492

Table of Contents

Markel Group Inc.

Form 10-Q

Index

PART I. FINANCIAL INFORMATION

Page Number

Item 1.

Financial Statements

Consolidated BalanceSheets-June30,2023 and December 31, 2022

3

Consolidated Statements of Income (Loss) and Comprehensive Income(Loss)-Quartersand Six Months Ended

4

June 30, 2023 and 2022

Consolidated Statements of Changes inEquity-Quartersand Six Months Ended June 30, 2023 and 2022

5

Condensed Consolidated Statements of Cash Flows-Six Months Ended June 30, 2023 and 2022

7

Notes to Consolidated Financial Statements

8

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

50

Item 4.

Controls and Procedures

51

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

51

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

52

Item 5.

Other Information

52

Item 6.

Exhibits

53

Signatures

55

2

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MARKEL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2023

2022

(dollars in thousands)

(unaudited)

ASSETS

Investments, at estimated fair value:

Fixed maturity securities, available-for-sale (amortized cost of $13,653,557 in 2023 and $12,805,887 in 2022)

$

12,745,692

$

11,856,835

Equity securities (cost of $3,282,591 in 2023 and $3,100,040 in 2022)

8,688,860

7,671,912

Short-term investments, available-for-sale (estimated fair value approximates cost)

2,039,061

2,669,262

Total Investments

23,473,613

22,198,009

Cash and cash equivalents

4,305,884

4,137,432

Restricted cash and cash equivalents

935,045

1,084,081

Receivables

3,695,172

2,961,056

Reinsurance recoverables

8,296,043

8,446,745

Deferred policy acquisition costs

1,013,304

925,483

Prepaid reinsurance premiums

2,486,203

2,066,114

Goodwill

2,626,588

2,638,838

Intangible assets

1,677,621

1,747,464

Other assets

3,674,660

3,586,037

Total Assets

$

52,184,133

$

49,791,259

LIABILITIES AND EQUITY

Unpaid losses and loss adjustment expenses

$

21,374,813

$

20,947,898

Life and annuity benefits

643,572

650,721

Unearned premiums

7,072,182

6,220,748

Payables to insurance and reinsurance companies

972,194

669,742

Senior long-term debt and other debt (estimated fair value of $3,299,000 in 2023 and $3,541,000 in 2022)

3,813,917

4,103,629

Other liabilities

3,603,932

3,461,482

Total Liabilities

37,480,610

36,054,220

Redeemable noncontrolling interests

464,442

523,154

Commitments and contingencies

Shareholders' equity:

Preferred stock

591,891

591,891

Common stock

3,515,362

3,493,893

Retained earnings

10,818,989

9,832,804

Accumulated other comprehensive loss

(740,743)

(767,494)

Total Shareholders' Equity

14,185,499

13,151,094

Noncontrolling interests

53,582

62,791

Total Equity

14,239,081

13,213,885

Total Liabilities and Equity

$

52,184,133

$

49,791,259

See accompanying notes to consolidated financial statements.

3

Table of Contents

MARKEL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Quarter Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

(dollars in thousands, except per share data)

OPERATING REVENUES

Earned premiums

$

2,031,143

$

1,833,104

$

3,998,847

$

3,592,874

Net investment income

169,693

96,795

329,028

189,099

Net investment gains (losses)

484,527

(1,554,643)

857,090

(1,913,042)

Products revenues

784,882

776,959

1,362,808

1,258,580

Services and other revenues

672,291

639,992

1,238,152

1,270,932

Total Operating Revenues

4,142,536

1,792,207

7,785,925

4,398,443

OPERATING EXPENSES

Losses and loss adjustment expenses

1,187,876

1,058,810

2,360,890

2,031,182

Underwriting, acquisition and insurance expenses

697,887

609,469

1,373,592

1,199,834

Products expenses

651,469

697,718

1,167,225

1,145,537

Services and other expenses

590,817

557,481

1,071,436

1,147,372

Amortization of intangible assets

44,423

45,523

88,822

91,572

Total Operating Expenses

3,172,472

2,969,001

6,061,965

5,615,497

Operating Income (Loss)

970,064

(1,176,794)

1,723,960

(1,217,054)

Interest expense

(47,221)

(50,050)

(96,659)

(99,742)

Net foreign exchange gains (losses)

(14,976)

105,067

(47,904)

128,071

Income (Loss) Before Income Taxes

907,867

(1,121,777)

1,579,397

(1,188,725)

Income tax (expense) benefit

(191,937)

238,953

(325,668)

257,089

Net Income (Loss)

715,930

(882,824)

1,253,729

(931,636)

Net income attributable to noncontrolling interests

(20,419)

(32,972)

(69,566)

(35,901)

Net Income (Loss) to Shareholders

695,511

(915,796)

1,184,163

(967,537)

Preferred stock dividends

(18,000)

(18,000)

(18,000)

(18,000)

Net Income (Loss) to Common Shareholders

$

677,511

$

(933,796)

$

1,166,163

$

(985,537)

OTHER COMPREHENSIVE INCOME (LOSS)

Change in net unrealized gains (losses) on available-for-sale investments, net of

taxes:

Net holding gains (losses) arising during the period

$

(134,991)

$

(362,392)

$

26,215

$

(883,592)

Reclassification adjustments for net losses included in net income (loss)

405

1,261

3,399

1,698

Change in net unrealized gains (losses) on available-for-sale investments, net

(134,586)

(361,131)

29,614

(881,894)

of taxes

Change in discount rate for life and annuity benefits, net of taxes

3,224

63,198

(5,828)

123,891

Change in foreign currency translation adjustments, net of taxes

361

(4,275)

2,940

(5,523)

Change in net actuarial pension loss, net of taxes

18

373

36

1,505

Total Other Comprehensive Income (Loss)

(130,983)

(301,835)

26,762

(762,021)

Comprehensive Income (Loss)

584,947

(1,184,659)

1,280,491

(1,693,657)

Comprehensive income attributable to noncontrolling interests

(20,398)

(33,029)

(69,577)

(35,945)

Comprehensive Income (Loss) to Shareholders

$

564,549

$

(1,217,688)

$

1,210,914

$

(1,729,602)

NET INCOME (LOSS) PER COMMON SHARE

Basic

$

50.20

$

(69.15)

$

87.50

$

(75.56)

Diluted

$

50.09

$

(69.15)

$

87.34

$

(75.56)

See accompanying notes to consolidated financial statements.

4

Table of Contents

MARKEL GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

Quarter Ended June 30, 2023 (dollars in thousands)

March 31, 2023

Accumulated

Total

Redeemable

Preferred

Common

Retained

Other

Noncontrolling

Comprehensive

Shareholders'

Total Equity

Noncontrolling

Stock

Stock

Earnings

Loss

Equity

Interests

Interests

$

591,891

$

3,506,972

$ 10,255,401

$

(609,781)

$

13,744,483

$

44,838

$ 13,789,321

$

491,883

Net income

695,511

-

695,511

8,745

704,256

11,674

Other comprehensive loss

-

(130,962)

(130,962)

-

(130,962)

(21)

Comprehensive Income

564,549

8,745

573,294

11,653

Repurchase of common stock

-

-

(105,197)

-

(105,197)

-

(105,197)

-

Preferred stock dividends

-

-

(18,000)

-

(18,000)

-

(18,000)

-

Restricted stock awards expensed

-

4,830

-

-

4,830

-

4,830

-

Adjustment of redeemable noncontrolling

-

-

(5,758)

-

(5,758)

-

(5,758)

5,758

interests

Purchase of noncontrolling interests

-

3,931

-

-

3,931

-

3,931

(36,431)

Other

-

(371)

(2,968)

-

(3,339)

(1)

(3,340)

(8,421)

June 30, 2023

$

591,891

$

3,515,362

$

10,818,989

$

(740,743)

$

14,185,499

$

53,582

$

14,239,081

$

464,442

Accumulated

Total

Redeemable

Preferred

Common

Retained

Other

Noncontrolling

Comprehensive

Shareholders'

Noncontrolling

Six Months Ended June 30, 2023

Stock

Stock

Earnings

Loss

Equity

Interests

Total Equity

Interests

(dollars in thousands)

December 31, 2022

$

591,891

$

3,493,893

$

9,832,804

$

(767,494)

$

13,151,094

$

62,791

$

13,213,885

$

523,154

Net income

1,184,163

-

1,184,163

53,438

1,237,601

16,128

Other comprehensive income

-

26,751

26,751

-

26,751

11

Comprehensive Income

1,210,914

53,438

1,264,352

16,139

Repurchase of common stock

-

-

(187,161)

-

(187,161)

-

(187,161)

-

Preferred stock dividends

-

-

(18,000)

-

(18,000)

-

(18,000)

-

Restricted stock awards expensed

-

26,528

-

-

26,528

-

26,528

-

Adjustment of redeemable noncontrolling

-

-

7,715

-

7,715

-

7,715

(7,715)

interests

Purchase of noncontrolling interests

-

(4,688)

-

-

(4,688)

-

(4,688)

(49,477)

Redemption of Markel CATCo Re

-

-

-

-

-

(62,646)

(62,646)

-

noncontrolling interests

Other

-

(371)

(532)

-

(903)

(1)

(904)

(17,659)

June 30, 2023

$

591,891

$

3,515,362

$

10,818,989

$

(740,743)

$

14,185,499

$

53,582

$

14,239,081

$

464,442

5

Disclaimer

Markel Group Inc. published this content on 02 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 August 2023 20:39:52 UTC.

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