Executive Summary

Q4 2023 delivered total operating revenues of $4.64B, operating income of $1.13B, net income to common shareholders of $751.3M, and diluted EPS of $56.48, aided by $932.9M net investment gains and $213.3M net investment income .
Insurance underwriting was weak: consolidated combined ratio rose to 106.9% in Q4 (Insurance 104.8%, Reinsurance 124.6%) versus 93.3% a year ago, driven by higher attritional loss ratios, reserve strengthening in U.S. casualty/professional lines, and IP collateral protection losses; Q3’s combined ratio was 99% .
Markel Ventures posted strong performance: Q4 operating income of $107.4M; FY EBITDA reached a record $628.5M (+24% YoY) as margins normalized with stabilizing materials/freight costs .
Investment engine was a material tailwind (FY net investment income +64% YoY; 21.6% equity return), supporting book value per common share growth to $1,095.95 (+17% YoY) .
Management declined to provide quantified near-term combined ratio guidance, emphasizing near-term actions to improve the underwriting engine; key stock catalysts: visible reserve actions, attritional loss normalization, investment income tailwind, and Ventures resilience .

What Went Well and What Went Wrong

What Went Well

Markel Ventures delivered record EBITDA and higher operating margins across products businesses as materials/freight costs stabilized; CEO praised “phenomenal performance” by the Ventures team .
Investment engine strength: FY net investment income rose 64% on higher yields and increased cash allocation to money market funds; equity portfolio posted 21.6% return with $6.1B cumulative unrealized gains .
International insurance operations achieved double-digit top-line growth and a sub-90 combined ratio in 2023; State National and Nephila had “fantastic years” with strong margins and constructive property-cat market positioning .

What Went Wrong

Insurance segment attritional loss ratios increased in U.S. general liability and professional lines; Q4 consolidated combined ratio surged to 106.9% as reserves were strengthened following an extensive review of casualty construction and risk-managed E&O attachment dynamics .
Reinsurance segment posted a 124.6% Q4 combined ratio, with $57.1M adverse prior-year development (notably general liability and discontinued public entity exposures) .
Intellectual property collateral protection losses included $65.0M of credit losses tied to fraudulent letters of credit from Vesttoo, hitting the loss ratio and obscuring stronger results elsewhere; management is pursuing recoveries .

Financial Results

Income Statement and EPS (Quarterly)

Metric	Q4 2022	Q4 2023
Total Operating Revenues ($USD)	$4,210,747	$4,642,519
Operating Income ($USD)	$1,056,790	$1,132,058
Net Income to Common Shareholders ($USD)	$673,666	$751,306
Diluted EPS ($USD)	$49.20	$56.48
Net Investment Income ($USD)	$145,069	$213,297
Net Investment Gains ($USD)	$598,792	$932,881

Underwriting Combined Ratios (Quarter-to-Date)

Segment	Q4 2022	Q4 2023
Insurance Combined Ratio	93.8%	104.8%
Reinsurance Combined Ratio	90.8%	124.6%
Consolidated Combined Ratio	93.3%	106.9%

Segment Operating Revenues (Quarter)

Segment	Q4 2022	Q4 2023
Insurance	$1,786,085	$1,960,328
Reinsurance	$254,691	$214,611
Investing	$753,278	$1,145,501
Markel Ventures	$1,229,674	$1,247,053
Other	$187,019	$75,026
Total Operating Revenues	$4,210,747	$4,642,519

KPIs and Balance Sheet (Year-End)

Metric	FY 2022	FY 2023
Invested Assets ($USD)	$27,419,522	$30,854,019
Total Shareholders’ Equity ($USD)	$13,151,094	$14,983,928
Book Value per Common Share ($USD)	$935.65	$1,095.95
Common Shares Outstanding (000s)	13,423	13,132

Underwriting Mix and Volume (Quarter)

Metric	Q4 2022	Q4 2023
Total Underwriting Gross Premium Volume ($USD)	$2,315,566	$2,378,740
Program Services & Other Fronting Gross Premium Volume ($USD)	$733,009	$720,494
Net Written Premium – Total Underwriting ($USD)	$1,930,627	$1,944,522

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Combined Ratio	FY 2024	N/A	Management targeting “better” results; no quantified target provided	Maintained qualitative stance
Property Pricing Environment	2024	N/A	Expect increases to moderate but remain constructive with healthy margins	Commentary only

Management provided no formal quantitative guidance on revenue, margins, OpEx, OI&E, tax rate, or dividends for Q4/FY 2024; preferred dividends continued ($18M in Q4) per reported results .

Earnings Call Themes & Trends

Topic	Q2 2023 (Prior-2)	Q3 2023 (Prior-1)	Q4 2023 (Current)	Trend
Casualty/Professional loss trends & reserves	Highlighted higher attritional loss ratios; adverse development in excess & umbrella 2017–2019; cautious reserving	Combined ratio 99% incl. CATs/Vesttoo; reserve actions in GL/professional; remixing portfolio	Extensive reserve study; strengthened reserves (U.S. GL/PL); tail lengthening in construction defect; higher attritional picks	Deteriorated in Q4; proactive actions underway
Property market/pricing	Rates accelerating; attractive risk-adjusted returns; Nephila positioned	Attractive property pricing; capacity via insurance and ILS; 2024 expected to remain constructive	Expect moderation but constructive pricing/margins; continued opportunity	Favorable/stable
Investment income trajectory	Net investment income up 74% H1 on higher yields	Recurring interest/dividends +73% YTD; equity gains; unrealized gains ~$5B	FY NII +64%; equity return 21.6%; unrealized gains $6.1B	Improving
Markel Ventures performance	EBITDA +27% H1; largely organic	Operating income +52% YTD; EBITDA +35% YTD	EBITDA record $628M; strong margins	Strong and sustained
Fronting (State National) & ILS (Nephila)	Stable profitability; modest revenue growth; ILS AUM $7.2B	Strong execution; side-pocket release; AUM $6.8B; constructive cat pricing	“Fantastic years”; State National global platform; Nephila well positioned	Positive
Combined ratio target/near-term guidance	Not discussed quantitatively	Not discussed quantitatively	Refused to quantify; “better” first, then discuss	Unchanged qualitative
Litigation financing/social inflation	Raising attritional picks; industry-wide challenge	Noted social/economic inflation impacts; attachment erosion risks	Expect persistence; pricing/portfolio diversification to stay ahead	Persistent headwind
Capital allocation (buybacks/investments)	Share repurchases; higher new-money FI yields	Continued buybacks; incremental $270M equity; optionality across engines	322k shares repurchased ($445M) FY; pipeline improving at Ventures	Active, disciplined

Management Commentary

CEO on insurance underperformance and action plan: “We’re down 10 points... we’re taking active steps to improve our position... The transition year of 2023 produced results well below our expectations, but I am confident...” .
CFO on financial diversity and record levels: “EBITDA from Markel Ventures, the value of our investments and our net investment income hitting record highs” .
Insurance President on reserves and tail length: “Construction defect claims... longer reporting tail than originally anticipated... added significant reserves... ensured margin of safety” .
Reserves stance: “We continue to operate with a core belief that we should set reserves at a level that will prove more likely redundant than deficient... 70% of our total reserves are in IBNR” .
Ventures praise: “This is simply a phenomenal performance by the Ventures team...” .
Book value: “Book value per share went up over 17% in 2023” (book value per common share rose to $1,095.95 from $935.65) .

Q&A Highlights

Guidance: Asked for a 2024 combined ratio target; CEO declined to quantify (“Better... Let’s get better and then we’ll talk about it.”) .
Portfolio remixing: Insurance shed >$100M premium in challenged classes in Q4 while still growing overall; targeted exits, reduced limits/attachments, pricing actions .
Rate dynamics: Success pushing rate in casualty lines; property pricing attractive, expected to remain constructive in 2024 .
IP CPI classification: Credit losses from Vesttoo reflected in the loss ratio .
Reinsurance prior-year strengthening: Reserve increases in Reinsurance were precautionary, reflecting insurance findings rather than cedent reporting .

Estimates Context

Consensus EPS and revenue estimates for Q4 2023 from S&P Global were unavailable due to exceeded daily request limits during retrieval. We attempted to fetch “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and related metrics for Q4 2023 but could not access them at this time (S&P Global).
As a result, we cannot assess beat/miss versus Wall Street consensus for Q4 2023 in this report. We recommend revisiting estimates once access is restored (S&P Global).

Key Takeaways for Investors

Underwriting reset underway: Expect near-term reserve and attritional loss noise to persist as re-underwriting actions in U.S. casualty/professional lines earn through; watch combined ratio trajectory and reserve development updates each quarter .
Property tailwind: Constructive property pricing should support margins and growth across insurance and Nephila; monitor 2024 renewal rate adequacy and cat loss experience .
Investment income lever: Higher reinvestment yields and money market allocations should continue to lift net investment income, a key buffer for consolidated results .
Ventures resilience: Strong, largely organic performance with improved margins provides diversified cash flows and reduces dependence on underwriting cycles .
Capital deployment: Continued buybacks and disciplined Ventures pipeline suggest shareholder-friendly allocation while insurance re-underwriting progresses .
Risk watch: Social/economic inflation, litigation financing, and tail lengthening in construction defect remain structural headwinds; look for evidence of rate capture and portfolio diversification mitigating these .
Trading implications: Near term, sentiment sensitive to reserve commentary and combined ratio prints; medium term, thesis rests on underwriting normalization plus sustained investment/ventures contributions to book value growth .

Appendix: Additional Q4 2023 Details from 8-K

Q4 quarter-to-date loss ratios: Insurance 68.9% vs 60.7% prior year; Reinsurance 93.8% vs 58.7%; consolidated 71.6% vs 60.3% .
Program services and other fronting gross premium volume increased YoY FY, with notable growth in other fronting; Nephila AUM at $6.8B at year-end .
Invested assets reached $30.9B (+$3.4B YoY); holding company invested assets $3.5B after $445.5M buybacks and debt retirement .

No separate press releases beyond the 8-K exhibit were identified for Q4 2023 in the period reviewed [ListDocuments: press-release, none found].

MARKEL GROUP INC. (MKL)·Q4 2023 Earnings Summary