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What changed in MARKEL GROUP INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MARKEL GROUP INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+513 added−579 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-23)

Top changes in MARKEL GROUP INC.'s 2024 10-K

513 paragraphs added · 579 removed · 405 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

117 edited+31 added−70 removed45 unchanged
Biggest change(dollars in millions, except per share data) 2023 2022 2021 2020 2019 5-Year CAGR (1) Results of Operations Earned premiums $ 8,295 $ 7,588 $ 6,503 $ 5,612 $ 5,050 12 % Net investment income $ 735 $ 447 $ 367 $ 376 $ 442 11 % Net investment gains (losses) $ 1,524 $ (1,596) $ 1,979 $ 618 $ 1,602 Markel Ventures operating revenues $ 4,985 $ 4,758 $ 3,644 $ 2,795 $ 2,055 21 % Total operating revenues $ 15,804 $ 11,675 $ 12,846 $ 9,735 $ 9,526 18 % Markel Ventures operating income $ 438 $ 325 $ 273 $ 254 $ 168 Total operating income (loss) $ 2,929 $ (93) $ 3,242 $ 1,274 $ 2,477 Net income (loss) to common shareholders $ 1,960 $ (252) $ 2,387 $ 798 $ 1,790 Diluted net income (loss) per common share $ 146.98 $ (23.72) $ 176.38 $ 55.63 $ 129.07 Financial Position Invested assets (2) $ 30,854 $ 27,420 $ 28,292 $ 24,927 $ 22,258 10 % Total assets $ 55,046 $ 49,791 $ 48,477 $ 41,738 $ 37,474 11 % Unpaid losses and loss adjustment expenses $ 23,483 $ 20,948 $ 18,179 $ 16,222 $ 14,729 10 % Shareholders' equity $ 14,984 $ 13,151 $ 14,700 $ 12,822 $ 11,071 11 % Common shares outstanding (at year end, in thousands) 13,132 13,423 13,632 13,783 13,794 Consolidated Performance Measures Closing stock price $ 1,419.90 $ 1,317.49 $ 1,234.00 $ 1,033.30 $ 1,143.17 6 % 5-Year CAGR in closing stock price (1) 6 % 3 % 6 % 3 % 11 % Book value per common share $ 1,095.95 $ 935.65 $ 1,034.92 $ 887.34 $ 802.59 11 % 5-Year CAGR in book value per common share (1) 11 % 6 % 11 % 10 % 8 % (1) CAGR—compound annual growth rate.
Biggest change(dollars in millions, except per share data) 2024 2023 2022 2021 2020 5-Year CAGR (1) Consolidated Operating revenues $ 16,621 $ 15,804 $ 11,675 $ 12,846 $ 9,735 12 % Operating income (loss) $ 3,713 $ 2,929 $ (93) $ 3,242 $ 1,274 8 % Operating cash flows $ 2,594 $ 2,787 $ 2,709 $ 2,274 $ 1,738 15 % Comprehensive income (loss) to shareholders $ 2,608 $ 2,285 $ (1,206) $ 2,076 $ 1,192 4 % Closing stock price $ 1,726.23 $ 1,419.90 $ 1,317.49 $ 1,234.00 $ 1,033.30 9 % 5-Year CAGR in closing stock price (1) 9 % 6 % 3 % 6 % 3 % Insurance Operating revenues $ 8,728 $ 8,577 $ 8,085 $ 6,849 $ 5,951 10 % Operating income $ 601 $ 348 $ 929 $ 719 $ 137 11 % Combined ratio 95 % 98 % 92 % 90 % 98 % Investments Net investment income $ 920 $ 735 $ 447 $ 367 $ 376 16 % Net investment gains (losses) $ 1,807 $ 1,524 $ (1,596) $ 1,979 $ 618 Return on equity securities (2) 20.1 % 21.6 % (16.1) % 29.4 % 15.1 % 5-Year annual return on equity securities (2) 12.8 % 14.6 % 9.3 % 18.4 % 15.2 % Markel Ventures Operating revenues $ 5,120 $ 4,985 $ 4,758 $ 3,644 $ 2,795 20 % Operating income $ 520 $ 520 $ 404 $ 330 $ 307 20 % Financial Position Invested assets (3) $ 34,247 $ 30,854 $ 27,420 $ 28,292 $ 24,927 9 % Total assets $ 61,898 $ 55,046 $ 49,791 $ 48,477 $ 41,738 11 % Shareholders' equity $ 16,916 $ 14,984 $ 13,151 $ 14,700 $ 12,822 9 % Debt to capital 20 % 20 % 24 % 23 % 21 % Common shares outstanding (at year end, in thousands) 12,790 13,132 13,423 13,632 13,783 (1) CAGR—compound annual growth rate.
(together with its subsidiaries, Nephila) provides investment and insurance management services through which we offer alternative capital to the insurance and reinsurance markets while providing investors with investment strategies that typically are uncorrelated with traditional asset classes.
(together with its subsidiaries, Nephila) provides investment and insurance management services to investors through which we offer alternative capital to the insurance and reinsurance markets while providing the investors with investment strategies that typically are uncorrelated with traditional asset classes.
The FIO also can recommend to the FSOC that it designate an insurer as an entity posing risks to the U.S. financial stability in the event of the insurer's material financial distress or failure. We have not been so designated.
The FIO also can recommend to the FSOC that it designate an insurer as an entity posing risks to U.S. financial stability in the event of the insurer's material financial distress or failure. We have not been so designated.
Commodity Futures Trading Commission as a commodity pool operator or a commodity trading advisor under the Commodity Exchange Act, and/or • registered with the BMA as an insurance manager under the Bermuda Insurance Act 1978.
Commodity Futures Trading Commission as a commodity pool operator or a commodity trading advisor under the Commodity Exchange Act; and • registered with the BMA as an insurance manager under the Bermuda Insurance Act 1978.
As a result, subsidiaries involved in our ILS operations are subject to regulations that may impose substantive and material restrictions and requirements on their operations, including, among other things: a broader fiduciary duty to act in the best interests of their clients; disclosure of information about our businesses and conflicts of interests to clients; maintenance of written policies and procedures; maintenance of extensive books and records; restrictions on the types of fees we may charge, including performance fees; restrictions on solicitation arrangements; requirements regarding engaging in transactions with clients; maintenance of an effective compliance program; and other restrictions and requirements applicable to custody of client assets, client privacy, advertising, pay-to-play prohibitions and cybersecurity; as well as possible sanctions, disciplinary actions or other penalties for non-compliance.
As a result, subsidiaries involved in our ILS operations are subject to regulations that may impose substantive and material restrictions and requirements on their operations, including, among other things: • a broader fiduciary duty to act in the best interests of their clients and requirements regarding engaging in transactions with clients; • disclosure of information about our businesses and conflicts of interests to clients; • maintenance of written policies and procedures, an effective compliance program and extensive books and records; • restrictions on solicitation arrangements and the types of fees we may charge, including performance fees; and • other restrictions and requirements applicable to custody of client assets, client privacy, advertising, pay-to-play prohibitions and cybersecurity; • as well as possible sanctions, disciplinary actions or other penalties for non-compliance.
The supervisory college meets with executive management to evaluate the insurance group on both a group-wide and legal-entity basis, particularly with respect to its financial data, business strategies, enterprise risk management and corporate governance. The Illinois Department of Insurance is our lead insurance regulator for purposes of conducting our supervisory college.
The supervisory college meets with executive management to evaluate the insurance group on both a group-wide and legal-entity basis, particularly with respect to its financial data, business strategies, enterprise risk management and corporate governance. The Illinois Department of Insurance is our global lead insurance regulator for purposes of conducting our supervisory college.
International Legal Entity Abbreviation Country Markel Bermuda Limited MBL Bermuda Markel Insurance SE MISE Germany Markel International Insurance Company Limited MIICL United Kingdom Markel Syndicate 3000 Syndicate 3000 United Kingdom Markets and Distribution Our underwriting operations write business on a global basis and utilize multiple distribution channels to access our targeted risks.
International Legal Entity Abbreviation Country Markel Bermuda Limited MBL Bermuda Markel Insurance SE MISE Germany Markel International Insurance Company Limited MIICL United Kingdom Markel Syndicate 3000 Syndicate 3000 United Kingdom Markets and Distribution Our underwriting operations write business on a global basis and utilize multiple distribution channels to access our targeted markets.
SNIC Insurance - admitted Texas SureTec Insurance Company SIC Insurance - admitted Texas Through these U.S. insurance and reinsurance subsidiaries, we are licensed, authorized, or accredited to write business in all 50 states and the District of Columbia. The following table summarizes our international insurance and reinsurance underwriting subsidiaries.
SNIC Texas SureTec Insurance Company SIC Texas Through these U.S. insurance and reinsurance subsidiaries, we are licensed, authorized, or accredited to write business in all 50 states and the District of Columbia. The following table summarizes our international insurance and reinsurance underwriting subsidiaries.
Certain other ILS subsidiaries serve as the investment manager to one or more private funds that are registered with the BMA under the Investment Funds Act 2006, as amended, or the Segregated Accounts Companies Act 2000, as amended.
Certain other ILS subsidiaries serve as the investment manager to one or more private funds that are registered with the BMA under the Investment Funds Act 2006, or the Segregated Accounts Companies Act 2000.
Additionally, as a company with publicly traded securities, we are also subject to certain legal and regulatory requirements applicable generally to public companies, including the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and the New York Stock Exchange relating to reporting and disclosure, accounting and financial reporting, corporate governance and other matters.
Additionally, as a company with publicly traded securities, we are also subject to certain legal and regulatory requirements applicable generally to public companies, including the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and the listing standards of the New York Stock Exchange relating to reporting and disclosure, accounting and financial reporting, corporate governance and other matters.
Our strategy in making these acquisitions is similar to our strategy for purchasing equity securities. We seek to invest in profitable companies, with honest and talented management, that exhibit reinvestment opportunities and capital discipline, at reasonable prices. We intend to own the businesses acquired for a long period of time.
Our strategy in making these acquisitions is similar to our strategy 10K - 13 for purchasing equity securities. We seek to invest in profitable companies, with honest and talented management, that exhibit reinvestment opportunities and capital discipline, at reasonable prices. We intend to own the businesses acquired for a long period of time.
We also participate in the London insurance and reinsurance market, which is known for its ability to provide innovative, tailored coverage and capacity for unique and hard-to-place risks, many of which have significantly higher limits than risks placed through the standard market. Insurance brokers place most of the business in the London market.
We also participate in the London insurance and reinsurance market, which is a global market known for its ability to provide innovative, tailored coverage and capacity for unique and hard-to-place risks, many of which have significantly higher limits than risks placed through the standard market. Insurance brokers place most of the business in the London market.
Our market strategy in each of these areas of specialization is tailored to the unique nature of the loss exposure, coverage and services required by insureds. In each of the markets we serve, we assign teams of experienced underwriters and claims specialists who provide a full range of insurance services.
Our market strategy in each of these areas of specialization is tailored to the unique nature of the loss exposure, as well as coverage and services required by insureds. In each of the markets we serve, we assign teams of experienced underwriters and claims specialists who provide a full range of insurance services.
Our Markel Ventures management team does not manage the Markel Ventures portfolio of businesses at this level of aggregation due to the distinct characteristics of each business and the autonomy with which local management operates each business. 10K - 15 The following table provides summary information about our portfolio of Markel Ventures companies by type of business.
Our Markel Ventures management team does not manage the Markel Ventures portfolio of businesses at this level of aggregation due to the distinct characteristics of each business and the autonomy with which local management operates each business. 10K - 14 The following table provides summary information about our portfolio of Markel Ventures companies by type of business.
Management teams for each business operate autonomously and are responsible for developing strategic initiatives, managing day-to-day operations and making investment and capital allocation decisions for their respective companies. Our Markel Ventures management team is responsible for decisions regarding allocation of capital for acquisitions and new investments.
Management teams for each business operate autonomously and are responsible for developing strategic initiatives, managing day-to-day operations and making investment and capital allocation decisions for their respective companies. Our Markel Group management team is responsible for decisions regarding allocation of capital for acquisitions and new investments.
The E.U. has granted adequacy status to the U.K.'s data protection laws, valid until June 2025 with the possibility of renewal, meaning that they are deemed essentially equivalent to E.U. data protection laws. Solvency II requires our U.K. and German businesses to maintain certain capital standards and publish risk-related information in the form of a Solvency and Financial Condition Report.
The E.U. has granted adequacy status to the U.K.'s data protection laws, valid until June 2025 with the possibility of renewal, meaning that they are deemed essentially equivalent to E.U. data protection laws. 10K - 17 Solvency II requires our U.K. and German insurance businesses to maintain certain capital standards and publish risk-related information in the form of a Solvency and Financial Condition Report.
Through our underwriting, program services and other fronting and ILS operations, we have a suite of capabilities through which we can access capital to support our customers' risks, which includes our own capital through our underwriting operations, as well as third-party capital through our program services and other fronting and ILS operations.
Through our underwriting, program services and ILS operations, we have a suite of capabilities through which we can access capital to support our customers' risks, which includes our own capital through our underwriting operations, as well as third-party capital through our program services and ILS operations.
The admitted market is subject to more state regulation than the E&S market, particularly with regard to rate and form filing requirements, premium tax payment requirements and membership in various state associations, such as state guaranty funds and assigned risk plans. Business written in the admitted market is placed primarily by retail insurance agents.
The admitted market is subject to more state regulation than the E&S market, particularly with regard to rate and form filing requirements, premium tax payment requirements and membership in various state associations, such as state guaranty funds and assigned risk plans. Business written in the admitted market is placed primarily by retail insurance agents, as well as managing general agents.
The Bermuda property and casualty market is a significant source of capital for the U.S. market and the leading location for cessions by U.S. insurers. 3 Business written in the Bermuda market is typically placed by a Bermuda-based wholesale broker.
The Bermuda property and casualty market is a significant source of capital for the U.S. market and the leading location for cessions by U.S. insurers. 2 Business written in the Bermuda market is typically placed by a Bermuda-based wholesale broker.
Invested assets managed through our investment operations includes our portfolio of publicly traded fixed maturity and equity securities, as well as cash and short-term investments. Our underwriting operations provide our investment operations with steady inflows of premiums.
Invested assets managed through our investment operations include our portfolio of publicly traded fixed maturity and equity securities, as well as cash and short-term investments. Our underwriting operations provide our investment operations with steady inflows of premiums.
The U.S. federal laws that most affect our day-to-day insurance operations are: the Gramm-Leach-Bliley Act; the Fair Credit Reporting Act; the Health Insurance Portability and Accountability Act of 1996; the Terrorism Risk Insurance Act of 2002; anti-money laundering laws and regulations; the Nonadmitted and Reinsurance Reform Act of 2010; the Foreign Corrupt Practices Act, and the rules and regulations of the Office of Foreign Assets Control.
The U.S. federal laws that most affect our day-to-day insurance operations are: the Gramm-Leach-Bliley Act; the Fair Credit Reporting Act; the Health Insurance Portability and Accountability Act of 1996; the Terrorism Risk Insurance Act of 2002; the Nonadmitted and Reinsurance Reform Act of 2010; the Foreign Corrupt Practices Act, and the rules and regulations of the Office of Foreign Assets Control.
We also seek spontaneity and flexibility and have a respect for authority, but disdain for bureaucracy. Our holding company and each of our businesses is managed in a way to accomplish these principles. Each of our businesses operates with a high degree of autonomy so long as they operate within the principles of the Markel Style.
We also seek spontaneity and flexibility and have a respect for authority, but disdain for bureaucracy. Markel Group and each of our businesses is managed in a way to accomplish these principles. Each of our businesses operates with a high degree of autonomy so long as they operate within the principles of the Markel Style.
We allocate capital using a process that we have consistently followed for years. We first look to invest in our existing businesses for organic growth opportunities. After funding internal growth opportunities, we look to acquire controlling interests in businesses, build our portfolio of equity securities, or repurchase shares of our common stock.
We allocate capital using a process that we have consistently followed for years. We first look to invest in our existing businesses for organic growth opportunities that meet our capital return targets. After funding internal growth opportunities, we look to acquire controlling interests in businesses, build our portfolio of equity securities, or repurchase shares of our common stock.
These reinsurers include domestic and foreign insurers and institutional risk investors that want to access specific lines of U.S. property and casualty insurance business but may not have the required licenses, filings or financial strength ratings to do so.
These capacity providers include domestic and foreign insurers and institutional risk investors that want to access specific lines of U.S. property and casualty insurance business but may not have the required licenses, filings or financial strength ratings to do so.
In the U.S., we write business in the excess and surplus lines (E&S) and admitted insurance markets, as well as the reinsurance market. The primary distribution channels through which our U.S. business is placed are wholesale insurance and reinsurance brokers, retail insurance agents and alternative channels, including third-party managing general agents.
In the U.S., we write business in the excess and surplus lines (E&S) and admitted insurance markets, as well as the reinsurance market. The primary distribution channels through which our U.S. business is placed are wholesale insurance and reinsurance brokers, managing general agents, retail insurance agents and alternative channels.
We also participate in the reinsurance market in certain classes of reinsurance product offerings, primarily casualty lines and certain other specialty lines. In the reinsurance market, our clients are other insurance companies, or cedents.
We also participate in the specialty reinsurance market, primarily in certain classes of casualty reinsurance product offerings. In the reinsurance market, our clients are other insurance companies, or cedents.
Legal Entity Abbreviation Market State of Domicile Essentia Insurance Company Essentia Insurance - admitted Missouri Evanston Insurance Company EIC Insurance - non-admitted Illinois FirstComp Insurance Company FCIC Insurance - admitted Nebraska Markel American Insurance Company MAIC Insurance - admitted Virginia Markel Global Reinsurance Company MGRC Reinsurance Delaware Markel Insurance Company MIC Insurance - admitted Illinois National Specialty Insurance Company NSIC Insurance - admitted Texas State National Insurance Company, Inc.
Legal Entity Abbreviation State of Domicile Essentia Insurance Company Essentia Missouri Evanston Insurance Company EIC Illinois FirstComp Insurance Company FCIC Nebraska Markel American Insurance Company MAIC Virginia Markel Global Reinsurance Company MGRC Delaware Markel Insurance Company MIC Illinois National Specialty Insurance Company NSIC Texas State National Insurance Company, Inc.
While we operate in various other markets, substantially all of our gross written premiums in 2023 were written from our platforms in the United States, the United Kingdom, Bermuda and Germany. In 2023, 80% of gross premium writings from our global underwriting operations were attributed to risks or cedents located in the United States.
While we operate in various other markets, substantially all of our gross written premiums in 2024 were written from our platforms in the United States, the United Kingdom, Bermuda and Germany. In 2024, 75% of gross premium writings from our global underwriting operations were attributed to risks or cedents located in the United States.
These regulations, which vary depending on the jurisdiction, include, among others, solvency and market conduct regulations; anti-corruption, anti-money laundering, and anti-terrorism financing guidelines, laws and regulations; various privacy, insurance, tax, tariff, trade and sanctions laws and regulations; and corporate, competition, employment, intellectual property and investment laws and regulations.
Those regulations, which vary depending on the jurisdiction, include, among others: • solvency and market conduct regulations; • anti-corruption, anti-money laundering, and anti-terrorism financing guidelines, laws and regulations; • privacy, insurance, tax, tariff, economic and trade sanctions laws and regulations; and • corporate, competition, employment, intellectual property and investment laws and regulations.
Other 2008 2008 Panel Specialists - Manufacturer of dorm room furniture and wall panel systems Consumer and building products 1990 2009 Ellicott Dredges - Manufacturer and designer of cutter suction dredges Equipment manufacturing 1885 2009 RetailData - Provider of retail intelligence solutions Consulting services 1988 2010 PartnerMD - Concierge healthcare membership provider offering personalized primary care, advanced physicals, and wellness services Other 2003 2011 Weldship - Manufacturer of industrial and specialty gas transportation and storage equipment Transportation-related products 1946 2011 Havco - Manufacturer of laminated wood flooring for dry-van trailers, truck bodies and containers Transportation-related products 1978 2012 Eagle - Designer and builder of single family attached and detached homes Consumer and building products 1984 2013 Cottrell - Manufacturer of over-the-road auto hauler equipment Transportation-related products 1975 2014 CapTech - Management and information technology consulting firm Consulting services 1997 2015 Costa Farms - Largest producer of ornamental plants in the U.S. 4 Consumer and building products 1961 2017 Rosemont Investment Group - Specialist investor in asset and wealth management companies Other 2018 2018 Brahmin - Creator of fashion leather handbags Consumer and building products 1982 2018 VSC Fire & Security - Distributor of comprehensive fire protection, life safety, and low voltage solutions Construction services 1958 2019 Lansing Building Products - Supplier of exterior building products and materials to professional contractors Construction services 1955 2020 Buckner Heavylift Cranes - Provider of heavylift crane rental solutions Construction services 1947 2021 Metromont - Manufacturer of highly engineered precast concrete solutions Consumer and building products 1925 2021 Markel Ventures businesses encounter a variety of competitors that vary by industry, end market and geographic area.
Other services 2008 2008 Panel Specialists - Manufacturer of dorm room furniture and wall panel systems Consumer and building products 1990 2009 Ellicott Dredges - Manufacturer and designer of cutter suction and auger dredges Equipment manufacturing 1885 2009 RDSolutions (formerly, RetailData) - Provider of retail intelligence solutions Consulting services 1988 2010 PartnerMD - Concierge healthcare membership provider offering personalized primary care, advanced physicals and wellness services Other services 2003 2011 Weldship - Manufacturer of industrial and specialty gas transportation and storage equipment Transportation-related products 1946 2011 Havco - Manufacturer of laminated wood flooring for dry-van trailers, truck bodies and containers Transportation-related products 1978 2012 Eagle - Designer and builder of single family attached and detached homes Consumer and building products 1984 2013 Cottrell - Manufacturer of over-the-road auto hauler equipment Transportation-related products 1975 2014 CapTech - Management and information technology consulting firm Consulting services 1997 2015 Costa Farms - Largest producer of ornamental plants in the U.S. 3 Consumer and building products 1961 2017 Rosemont Investment Group - Specialist investor in asset and wealth management companies Other services 2018 2018 Brahmin - Creator of fashion leather handbags Consumer and building products 1982 2018 VSC Fire & Security - Provider of comprehensive fire protection, life safety and low voltage solutions Construction services 1958 2019 Lansing Building Products - Supplier of exterior building products and materials to professional contractors Construction services 1955 2020 Buckner Heavylift Cranes - Provider of heavylift crane rental solutions Construction services 1947 2021 Metromont - Manufacturer of highly engineered precast concrete solutions Consumer and building products 1925 2021 Valor Environmental - Provider of erosion control, stormwater management and related services Construction services 2003 2024 Educational Partners International - Sponsor of international teachers for placement in U.S. schools Other services 2006 2024 Markel Ventures businesses encounter a variety of competitors that vary by industry, end market and geographic area.
The following chart displays the types of businesses within our Markel Ventures segment based on 2023 operating revenues.
The following chart displays the types of businesses within our Markel Ventures segment based on 2024 operating revenues.
In 2020, the International Association of Insurance Supervisors adopted its Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame). ComFrame establishes a comprehensive framework for supervisors to address group-wide activities and risks of internationally active insurance groups (IAIGs) and lays the groundwork for better supervisory cooperation and coordination.
The International Association of Insurance Supervisors has adopted the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame). ComFrame establishes a comprehensive framework for supervisors to address group-wide activities and risks of internationally active insurance groups (IAIGs) and lays the groundwork for better supervisory cooperation and coordination.
When making these acquisitions, we seek, among other things, businesses whose leadership teams demonstrate equal measures of both integrity and talent. As a result, each Markel Ventures business fosters a culture within their operations, and with their employees, that aligns with the principles of the Markel Style. 10K - 21
When acquiring these businesses, we seek, 10K - 19 among other things, businesses whose leadership teams demonstrate equal measures of both integrity and talent. As a result, each Markel Ventures business fosters a culture within their operations, and with their employees, that aligns with the principles of the Markel Style.
A significant volume of premium for the property and casualty insurance and reinsurance industry is produced through a small number of large insurance and reinsurance brokers. In 2023, the top five independent brokers accounted for 37% of gross premiums written in our underwriting operations.
A significant volume of premium for the property and casualty insurance and reinsurance industry is produced through a small number of large insurance and reinsurance brokers. In 2024, the top five independent brokers accounted for 38% of gross premiums written in our underwriting operations.
Although we reinsure substantially all of the risks inherent in our program services and other fronting businesses, we have certain programs that contain limits on our reinsurers' obligations to us that expose us to underwriting risk, including loss ratio caps, aggregate reinsurance limits or exclusion of the credit risk of producers.
Although we reinsure substantially all of the risks inherent in our program services business, we have certain programs that contain limits on our reinsurers' obligations to us that expose us to underwriting risk, including loss ratio caps, aggregate reinsurance limits or exclusion of the credit risk of producers.
The following is a summary of significant regulations that apply to our businesses, but it is not intended to be a comprehensive review of every regulation to which we are subject. For information regarding certain risks associated with regulations applicable to our businesses, see Item 1A Risk Factors.
The following is a summary of the regulatory environment for our businesses, but it is not intended to be a comprehensive review of every regulation to which we are subject. For information regarding certain risks associated with regulations applicable to our businesses, see Item 1A Risk Factors.
Our renewable energy activities include coverages for onshore and offshore wind farms, as well as alternative energy generation and storage technology projects. Hull coverages consist of coverage for physical damage to ocean-going tonnage, yachts and mortgagees' interests.
Energy coverage includes all aspects of oil, gas and renewable energy activities. Our renewable energy activities include coverages for onshore and offshore wind farms, as well as alternative energy generation and storage technology projects. Hull coverages consist of coverage for physical damage to ocean-going tonnage, yachts and mortgagees' interests.
The breadth of our operating businesses, and the experience we garner from supporting them, also informs and enhances the efficacy of our investment activities. Invested assets, comprised of fixed maturity securities, equity securities, short-term investments, cash and cash equivalents and restricted cash and cash equivalents, were $30.9 billion at December 31, 2023.
The breadth of our operating businesses, and the experience we garner from supporting them, also informs and enhances the efficacy of our investment activities. Invested assets, comprised of fixed maturity securities, equity securities, short-term investments, cash and cash equivalents and restricted cash and cash equivalents, were $34.2 billion at December 31, 2024.
We greatly value our employees, encourage their career development and reward their pursuit of excellence, while also celebrating a diverse workforce. At December 31, 2023, we had approximately 21,600 employees, of whom approximately 5,400 were employed within our insurance operations and approximately 16,200 were employed within our Markel Ventures operations.
We greatly value our employees, encourage their career development and reward their pursuit of excellence, while also celebrating a diverse workforce. At December 31, 2024, we had approximately 22,000 employees, of whom approximately 5,600 were employed within our insurance operations and approximately 16,400 were employed within our Markel Ventures operations.
Under the Bermuda Insurance Act 1978, and related regulations and standards of the BMA, each Bermuda insurance company is subject to, among other things: licensing, capital, surplus and liquidity requirements; solvency standards; restrictions on dividends and distributions; and periodic examinations of the company and its financial condition.
Under the Bermuda Insurance Act 1978, and related regulations and standards of the BMA, each Bermuda insurance company is subject to, among other things: • licensing, capital, surplus, solvency and liquidity requirements; • restrictions on dividends and distributions; • periodic examinations of the company and its financial condition; and • requirements to maintain a principal office and principal representative in Bermuda.
We intend to hold these equity investments over the long-term. We believe our long-term time horizon and internal sourcing of capital for investment provides us with a distinct competitive advantage compared to other companies. Substantially all of our investment portfolio is managed by company employees, which helps minimize costs in our investment operations.
We believe our long-term time horizon and internal sourcing of capital for investment provides us with a distinct competitive advantage compared to other companies. Substantially all of our investment portfolio is managed by company employees, which helps minimize costs in our investment operations.
We write quota share and excess of loss reinsurance on a local, national and global basis. Our Reinsurance segment reported gross premium volume of $1.0 billion, earned premiums of $1.0 billion and an underwriting loss of $19.3 million in 2023. The following chart displays the types of products written in our Reinsurance segment based on 2023 gross premium volume.
We write quota share and excess of loss reinsurance on a local, national and global basis. Our Reinsurance segment reported gross premium volume of $1.2 billion, earned premiums of $1.0 billion and an underwriting loss of $5.4 million in 2024. The following chart displays the types of products written in our Reinsurance segment based on 2024 gross premium volume.
In 2022, the E&S market represented $98 billion, or 11%, of the $875 billion U.S. property and casualty industry. 1 In 2022, we were the third largest E&S writer in the U.S. as measured by direct premium writings. 1 Our U.S. business written in the admitted market focuses on unique and hard-to-place risks in the standard market, some of which must remain with an admitted insurance company for marketing and regulatory reasons.
In 2023, the E&S market represented $116 billion, or 12%, of the $967 billion U.S. property and casualty industry. 1 In 2023, we were the fourth largest E&S writer in the U.S. as measured by direct premium writings. 1 Our U.S. business written in the admitted market focuses on unique and hard-to-place risks in the standard market, some of which must remain with an admitted insurance company for marketing and regulatory reasons.
(Markel Ventures), we own controlling interests in high-quality businesses that operate in a variety of different industries with shared values and the shared goal of positively contributing to the long-term financial performance of Markel Group.
Markel Ventures Through our wholly owned subsidiary Markel Ventures, Inc. (Markel Ventures), we own controlling interests in high-quality, specialized businesses that operate in a variety of different industries with shared values and the goal of positively contributing to the long-term financial performance of Markel Group.
The following table summarizes the subsidiaries through which our program services business is written. Legal Entity Abbreviation State of Domicile City National Insurance Company CNIC Texas National Specialty Insurance Company NSIC Texas Pinnacle National Insurance Company PNIC Texas State National Insurance Company, Inc.
The following table summarizes the subsidiaries through which our program services business is written. Legal Entity Abbreviation Domicile City National Insurance Company CNIC Texas Markel International Insurance Company Limited MIICL United Kingdom National Specialty Insurance Company NSIC Texas Pinnacle National Insurance Company PNIC Texas State National Insurance Company, Inc.
Our program services business, which is provided through our State National division, offers issuing carrier capacity to both specialty managing general agents and other producers who sell, control and administer books of insurance business that are supported by third parties that assume reinsurance risk, including the Nephila Reinsurers.
Our State National program services business offers issuing carrier capacity to both specialty managing general agents and other producers who sell, control and administer books of insurance business that are supported by third parties that assume the risk.
Markel Ventures Our Markel Ventures operations are comprised of a diverse portfolio of businesses from different industries through which we own controlling interests. The Markel Ventures operations are viewed by management as separate and distinct from our insurance operations with local management teams that direct the strategy and day-to-day operations of their respective companies, including human capital matters.
Markel Ventures Our Markel Ventures operations are comprised of a diverse portfolio of businesses from a variety of industries through which we own controlling interests. The Markel Ventures businesses have local management teams that direct the strategy and day-to-day operations of their respective companies, including human capital matters.
We believe our system is uniquely equipped for long-term growth. To mitigate the effects of short-term volatility and align with the long-term perspective that we apply to operating our businesses and making investments, we generally use five-year time periods to measure our performance.
We believe our system is uniquely equipped for long-term growth. To mitigate the effects of short-term volatility and align with the long-term perspective that we apply to operating our businesses and managing investments, we generally use five-year time periods to measure our performance. We measure financial success using both operating income and total shareholder return.
SNIC Texas Superior Specialty Insurance Company SSIC Delaware United Specialty Insurance Company USIC Delaware Through these subsidiaries, our program services business is licensed or authorized to write business in all 50 states and the District of Columbia.
SNIC Texas Superior Specialty Insurance Company SSIC Delaware United Specialty Insurance Company USIC Delaware Through our U.S. subsidiaries, we are licensed or authorized to write business in all 50 states and the District of Columbia.
ComFrame requires the designation of a group-wide supervisor (regulator) for each IAIG and imposes a group capital requirement that will be applied to an IAIG in addition to the current legal entity capital requirements imposed by state and international insurance regulators.
In 2023, it was determined that we met the criteria to be identified as an IAIG. ComFrame requires the designation of a group-wide supervisor (regulator) for each IAIG and imposes a group capital requirement that will be applied to an IAIG in addition to legal entity capital requirements imposed by state and international insurance regulators.
Beginning in 2024, our State National division is expanding internationally through a partnership with our Markel International division to create an international program services division to serve managing general agents in the U.K. market. The new division is another example of how we can leverage our array of capabilities to effectively and efficiently connect capital with risk.
Our State National division expanded internationally in 2024 in partnership with our Markel International division to serve managing general agents in the U.K. market. This partnership is another example of how we can leverage our array of capabilities to effectively and efficiently connect capital with risk.
Credit and surety products consist primarily of trade credit and prepayment coverage and a range of bonds and guarantees that support contractual obligations, as well as other coverages for specific credit risks, markets and contingencies. Key credit risks covered include those of counterparty insolvency and defaults by government-owned entities.
Credit and surety products consist primarily of trade credit and prepayment coverage and a range of bonds and guarantees that support contractual obligations, contractual performance and judicial proceedings, as well as other coverages for specific credit risks, such as counterparty insolvency and defaults by government-owned entities.
Net retention of gross premium volume in our underwriting segments was 82% in 2023. Ceded reinsurance and retrocessional contracts do not legally discharge us from our primary liability for the full amount of the policies, and we will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement.
Ceded reinsurance and retrocessional contracts do not legally discharge us from our primary liability for the full amount of the policies we write, and we will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement.
Professional liability reinsurance primarily consists of the following: • Transaction liability, which provides representation, warranty and indemnity coverage for mergers and acquisitions, including coverage for tax and contingent liability; • Directors and officers liability for publicly-traded, private and non-profit companies; • Cyber and technology errors and omissions covering both first and third-party exposures; • Errors and omissions for lawyers, accountants, agents and brokers, services technicians and consultants; and • Healthcare liability for physicians, hospitals, long-term care and other medical facilities. 10K - 10 Program Services and Other Fronting Our program services and other fronting business generates fee income in the form of ceding fees in exchange for fronting insurance and reinsurance business for other insurance carriers (capacity providers).
Professional liability reinsurance primarily consists of the following: • Transaction liability, which provides representation, warranty and indemnity coverage for mergers and acquisitions, including coverage for tax and contingent liability; • Directors and officers liability for publicly traded, private and non-profit companies; • Cyber and technology errors and omissions covering both first and third-party exposures; • Errors and omissions for lawyers, accountants, agents and brokers, services technicians and consultants; and • Healthcare liability for physicians, hospitals, long-term care and other medical facilities.
Market , Reinsurance Association of America (2022) 10K - 6 See note 12 of the notes to consolidated financial statements included under Item 8 and Item 7A Quantitative and Qualitative Disclosures About Market Risk for additional information about our ceded reinsurance programs and exposures.
Market , Reinsurance Association of America (2022) 10K - 7 financial statements included under Item 8 and Item 7A Quantitative and Qualitative Disclosures About Market Risk for additional information about our ceded reinsurance programs and exposures.
Over the long run, equity securities have produced higher returns relative to fixed maturity securities and short-term investments. 10K - 13 When purchasing equity securities, we seek to invest in profitable companies with high returns on capital and low debt, with honest and talented management and significant reinvestment opportunities and capital discipline, all while paying reasonable prices for those securities.
When purchasing equity securities, we seek to invest in profitable companies with high returns on capital and low debt, with honest and talented management and significant reinvestment opportunities and capital discipline, all while paying reasonable prices for those securities. We intend to hold these equity investments over the long-term.
In general, fronting refers to business in which we write insurance on behalf of a general agent or capacity provider and then cede all, or substantially all, of the risk under these policies to the capacity provider in exchange for ceding fees. The results of our program services and other fronting operations are not included in a reportable segment.
In general, fronting refers to business in which we write insurance on behalf of a general agent or capacity provider and then cede all, or substantially all, of the risk under these policies to the capacity provider in exchange for ceding fees.
The following chart displays the composition of our invested assets as of December 31, 2023. We measure our investment performance by analyzing net investment income earned on our investment portfolio, which reflects the recurring interest and dividend earnings on our investment portfolio. In 2023, our net investment income was $734.5 million.
The following chart displays the composition of our invested assets as of the end of each of the past five years. We measure our investment performance by analyzing net investment income earned on our investment portfolio, which reflects the recurring interest and dividend earnings on our investment portfolio. In 2024, our net investment income was $920.5 million.
Insurance - markets and underwrites specialty insurance products using our underwriting, fronting and insurance-linked securities platforms that enable us to best match risk and capital Investments - invests premiums received by our underwriting operations and any available earnings provided by our operating businesses in fixed maturity and equity securities Markel Ventures - owns controlling interests in a diverse portfolio of businesses that operate in a variety of industries Our three interdependent engines form a system that provides diverse income streams, access to a wide range of investment opportunities and the ability to efficiently move capital to the best ideas across our three engines.
Insurance - markets and underwrites specialty insurance products using our underwriting, program services and insurance-linked securities platforms, which provide alternatives that enable us to best match risk and capital Investments - invests capital held within our underwriting operations, as well as capital allocated by Markel Group, in fixed maturity and equity securities Markel Ventures - owns controlling interests in a diverse portfolio of businesses that operate in a variety of industries Our three interdependent engines form a system that provides diverse income streams, access to a wide range of investment opportunities and the ability to efficiently move capital to the best ideas across our three engines in a tax efficient manner.
Management teams for each of our businesses proactively manage the risks and challenges posed by cyclicality, seasonality and inflation, among other things, in a variety of ways as appropriate and as needed for their business.
Greenhouse Grower's 2024 Top 100 Growers , Greenhouse Grower (May 14, 2024) 10K - 15 Management teams for each of our businesses proactively manage the risks and challenges posed by cyclicality, seasonality and inflation, among other things, in a variety of ways as appropriate and as needed for their business.
Few barriers exist to prevent competition from entering our markets within the property and casualty industry. Market conditions, risk tolerance and capital capacity influence the degree of competition at any point in time. During periods of excess underwriting capacity, as defined by availability of capital, competition can result in lower pricing and less favorable policy terms and conditions for insurers.
Market conditions, risk tolerance and capital capacity influence the degree of competition at any point in time. During periods of excess underwriting capacity, as defined by availability of capital, competition can result in lower pricing and less favorable policy terms and conditions for insurers.
These funds are invested predominantly in high-quality government and municipal bonds and mortgage-backed securities that generally match the duration and currency of our loss reserves. We typically hold these investments until maturity. As a result, unrealized holding gains and losses on these securities are generally expected to reverse as the securities mature.
These funds are invested predominantly in high-quality government and municipal bonds and mortgage-backed securities that generally match the duration and currency of our loss reserves. We typically hold these investments until maturity.
We continue to look for acquisition opportunities that align with our investment criteria and strategic objectives around diversification and specialization. In 2023, our Markel Ventures operations reported revenues of $5.0 billion, operating income of $437.5 million and earnings before interest, income taxes, depreciation and amortization (EBITDA) of $628.5 million.
We continue to look for opportunities to invest in and grow our existing businesses that align with our investment criteria and strategic objectives around diversification and specialization. In 2024, our Markel Ventures operations reported revenues of $5.1 billion, segment operating income of $520.1 million and earnings before interest, income taxes, depreciation and amortization (EBITDA) of $642.2 million.
Our international insurance operations are domiciled in the U.K., Europe and Bermuda and are subject to regulation in those jurisdictions. In addition, we conduct business in Canada, Asia, Australia and the Middle East, where our businesses also are supervised by local regulatory authorities. U.K. and European Regulation .
In addition, we conduct business in Canada, Asia, Australia and the Middle East, where our businesses also are supervised by local regulatory authorities. U.K. and European Regulation . We are subject to regulation by the Prudential Regulatory Authority and Financial Conduct Authority in respect of our U.K. insurance businesses.
Our U.K. and German insurance businesses are subject to both the E.U.'s General Data Protection Regulation (GDPR) and the Solvency II Directive (Solvency II). GDPR requires businesses operating in the E.U., and businesses transacting with E.U. citizens, to comply with conditions for processing personal data. Following the U.K.'s exit from the E.U., GDPR was transposed into U.K. law.
GDPR requires businesses operating in the E.U., and businesses transacting with E.U. citizens, to comply with conditions for processing personal data. Following the U.K.'s exit from the E.U., GDPR was transposed into U.K. law.
Greenhouse Grower's 2023 Top 100 Growers , Greenhouse Grower (May 11, 2023) 10K - 16 Businesses in this segment are reliant on inputs, such as raw materials and labor, to manufacture products and deliver services, and the operating results of these businesses could be impacted by the ability or inability to source these inputs and obtain price increases from customers in response to increases in the price of these inputs, including the cost of shipping.
Several businesses in this segment are reliant on inputs, such as raw materials and labor, to manufacture products and deliver services, and the operating results of these businesses could be impacted by the ability or inability to source these inputs and obtain price increases from customers in response to increases in the price of these inputs, including the cost of shipping. 3 Measured by 2024 square footage of production.
Specifically, the most significant of these laws and regulations cover the following areas: safety, health, employment, the environment, transportation, U.S. and international trade, anti-corruption, data privacy and security and government contracts. Human Capital Our culture is our greatest asset and is defined by the Markel Style.
The most significant of these laws and regulations cover the following areas: safety, health, employment, the environment, transportation, U.S. and international trade, anti-corruption, data privacy and security and government contracts.
We are subject to regulation by the Prudential Regulatory Authority and Financial Conduct Authority in respect of our U.K. insurance businesses. We are also subject to regulation by the Federal Financial Supervisory Authority, better known by its abbreviation BaFin, in respect of our German insurance carrier.
We are also subject to regulation by the Federal Financial Supervisory Authority, better known by its abbreviation BaFin, in respect of our German insurance carrier. Our U.K. and German insurance businesses are subject to both the E.U.'s General Data Protection Regulation (GDPR) and the Solvency II Directive (Solvency II).
Although the FIO is prohibited from directly regulating the business of insurance, it has authority to represent the U.S. in international insurance matters and has limited powers to preempt certain types of state insurance laws.
However, two federal government bodies, the Federal Insurance Office (FIO) and the Financial Stability Oversight Council (FSOC) may impact the regulation of insurance. Although the FIO is prohibited from directly regulating the business of insurance, it has authority to represent the U.S. in international insurance matters and has limited powers to preempt certain types of state insurance laws.
Our specialty treaty reinsurance products are written across a wide range of specialty product lines, primarily consisting of the following: • Credit and surety products, including structured and whole turnover credit, political risk and contract and commercial surety reinsurance programs covering worldwide exposures; • Workers' compensation and accident and health products covering both standard and catastrophe-exposed business in the U.S. and worldwide; • Marine and energy products covering both offshore and onshore marine, energy and renewable energy risks on a worldwide basis, including hull, cargo and liability; • Public entity reinsurance products offering casualty coverage for municipalities, schools, special districts, public housing authorities and public entity affiliated non-profits; • Mortgage default insurance offering coverage for private mortgage insurers predominantly located in the U.S. and Australia; • Aviation and space coverage, including major risk, general aviation, satellite launch and orbit; • Agriculture reinsurance covering multi-peril crop insurance, hail and related exposures for risks located in the U.S. and Canada; and • Discrete political violence and national terror pools in select jurisdictions globally.
Our specialty treaty reinsurance products are written across a wide range of specialty product lines, primarily consisting of the following: • Credit and surety products, including structured and whole turnover credit, political risk and contract and commercial surety reinsurance programs covering worldwide exposures; • Workers' compensation and accident and health products covering both standard and catastrophe-exposed business in the U.S. and worldwide; • Marine and energy products covering both offshore and onshore marine, energy and renewable energy risks on a worldwide basis, including hull, cargo and liability; • Aviation and space coverage, including major risk, general aviation, satellite launch and orbit; • Other products, including mortgage default, agriculture and discrete political violence coverages.
With treaty reinsurance contracts, we do not separately evaluate each of the individual risks assumed under the contracts and are largely dependent on the individual underwriting decisions made by the cedent. Accordingly, we review and analyze the cedent's risk management and underwriting practices in deciding whether to provide treaty reinsurance and in pricing of treaty reinsurance contracts.
With treaty reinsurance contracts, we do not separately evaluate each of the individual risks assumed under the contracts and are largely dependent on the underwriting decisions made by the cedent.
Under certain programs, including programs and contracts with Nephila Reinsurers, we also bear underwriting risk for annual aggregate agreement year losses in excess of a limit that we believe is unlikely to be exceeded. Insurance-Linked Securities Our insurance-linked securities operations are primarily comprised of our Nephila operations and are not included in a reportable segment. Nephila Holdings Ltd.
Under certain programs, we also bear underwriting risk for annual aggregate agreement year losses in excess of a limit that we believe is unlikely to be exceeded. 10K - 11 Insurance-Linked Securities Nephila Holdings Ltd.
The E&S, or non-admitted, market focuses on hard-to-place risks and loss exposures that generally are not written in the standard market. E&S eligibility allows our insurance subsidiaries to underwrite unique loss exposures with more flexible policy forms and unregulated premium rates. This typically results in coverages that are more restrictive and more expensive than coverages in the standard market.
The E&S, or non-admitted, market focuses on hard-to-place risks and loss exposures that generally are not written in the standard market. E&S eligibility allows our insurance subsidiaries to underwrite unique loss exposures with more flexible policy forms and unregulated premium rates. The E&S market is accessed primarily through wholesale insurance and reinsurance brokers, which have limited quoting and binding authority.
We also analyze net investment gains, which include unrealized gains and losses on our equity portfolio. Based on the potential for volatility in the financial markets, we understand that the level of gains or losses may vary from one period to the next, and therefore believe that our investment performance is best analyzed over longer periods of time.
Based on the potential for volatility in the financial markets, we understand that the level of gains or losses may vary significantly from one period to the next, and therefore believe that our investment performance is best analyzed over longer periods of time. Our annual return on equity securities for the five-year period ended December 31, 2024 was 12.8%.
The ORSA is a confidential internal assessment of the material and relevant risks associated with an insurer's current business plan and the sufficiency of capital resources to support those risks. In addition, we must file an annual enterprise risk report with our lead insurance regulator.
We must submit annually to our lead insurance regulator an: • Own Risk and Solvency Assessment Summary Report (ORSA), which is a confidential internal assessment of the material and relevant risks associated with an insurer's current business plan and the sufficiency of capital resources to support those risks; and • Annual enterprise risk report, which must identify the material risks within the insurance holding company system that could pose enterprise risk to our U.S. insurance subsidiaries.
The report must identify the material risks within the insurance holding company system that could pose enterprise risk to our U.S. insurance subsidiaries. 10K - 17 U.S. Insurance Regulation State Regulation Overview. Our U.S. insurance company subsidiaries are subject to varying degrees of regulation and supervision by the states and other jurisdictions in which they do business.
U.S. Insurance Regulation State Regulation Our U.S. insurance company subsidiaries are subject to varying degrees of regulation and supervision by the states and other jurisdictions in which they do business.
Certain of our ILS subsidiaries are organized and regulated as follows: • registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, • registered with the U.S.
ILS Regulation Our Nephila insurance-linked securities operations are subject to regulation and supervision by various regulatory authorities, both in the U.S. and internationally. Certain of our ILS subsidiaries are organized and regulated as follows: • registered with the SEC as an investment adviser under the Investment Advisers Act of 1940; • registered with the U.S.
In addition, certain products and programs written on an admitted basis are marketed directly to consumers. 1 Market Segment Report - U.S. Surplus Lines , A.M. Best (September 13, 2023) 10K - 5 Our U.S. reinsurance operations are conducted through MGRC. Reinsurance business is placed primarily through wholesale reinsurance brokers.
In addition, certain products and programs written on an admitted basis are marketed directly to consumers. 1 Market Segment Report - U.S. Surplus Lines , A.M. Best (September 13, 2023) 10K - 6 Managing general agents have broader underwriting authority than retail agents and brokers.
We also compete with new companies that continue to be formed to enter the insurance and reinsurance markets, particularly companies with new or "disruptive" technologies or business models.
We compete with numerous domestic and international insurance companies and reinsurers, Lloyd's syndicates, risk retention groups, risk securitization programs, alternative capital sources and alternative self-insurance mechanisms. We also compete with new companies that continue to be formed to enter the insurance and reinsurance markets, particularly companies with new or "disruptive" technologies or business models.
We believe that the ability to achieve consistent underwriting profits demonstrates knowledge and expertise, commitment to superior customer service and the ability to manage insurance risk. We use underwriting profit or loss as a basis for evaluating our underwriting performance.
Within our underwriting operations, we seek to earn an underwriting profit every year. We believe that the ability to achieve consistent underwriting profits demonstrates knowledge and expertise, commitment to superior customer service and the ability to manage insurance risk.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Primarily Related to Our Investments and Access to Capital Changes in Economic Conditions Our investment results may be impacted by changes in interest rates, U.S. and international monetary and fiscal policies as well as broader economic conditions. We receive premiums from customers for insuring their risks. We invest these funds until they are needed to pay policyholder claims.
Biggest changeThese type of events may impact our capital raises and redemptions within the funds we manage, as well as new funds, resulting in a decline in assets under management. 10K - 25 Risks Primarily Related to Our Investments and Access to Capital Changes in Economic Conditions Our investment results may be impacted by changes in interest rates, U.S. and international monetary and fiscal policies as well as broader economic conditions.
General economic and market conditions and industry specific conditions, including extended economic recessions or expansions; prolonged periods of slow economic growth; inflation or deflation; fluctuations and volatility in foreign currency exchange rates, commodity and energy prices and interest rates; volatility in the credit and capital markets; changes in U.S. government debt ratings; the imposition of tariffs and other changes in international trade regulation and other factors, could lead to: substantial realized and unrealized investment losses in future periods; declines in demand for, or increased frequency and severity of claims made under, our insurance products; disruptions in global supply chains and increased costs of inputs for our products and services; reduced demand for our services and the products we sell and distribute; changes in the carrying value of our other assets and liabilities; and limited or no access to the capital markets.
General economic and market conditions and industry specific conditions, including extended economic recessions or expansions; prolonged periods of slow economic growth; inflation or deflation; fluctuations and volatility in foreign currency exchange rates, commodity and energy prices and interest rates; volatility in the credit and capital markets; changes in U.S. government debt ratings; the imposition of duties, tariffs and other changes in international trade regulation and other factors, could lead to: substantial realized and unrealized investment losses in future periods; changes in the carrying value of our other assets and liabilities; declines in demand for, or increased frequency and severity of claims made under, our insurance products; disruptions in global supply chains and increased costs of inputs for our products and services; reduced demand for our services and the products we sell and distribute; and limited or no access to the capital markets.
A significant failure of our enterprise systems, or those of third parties upon which we may rely, whether because of a natural disaster, network outage or a cyberattack on those systems, including ransomware, could compromise our personal, confidential and proprietary information as well as that of our customers and business partners, impede or interrupt our business operations and could result in other negative consequences, including remediation costs, loss of revenue, additional regulatory scrutiny and fines, litigation and monetary and reputational damages.
A significant failure of our enterprise systems, or those of third parties upon which we may rely, whether because of a natural disaster, network outage or a cyberattack on those systems could compromise our personal, confidential and proprietary information as well as that of our customers and business partners, impede or interrupt our business operations and could result in other negative consequences, including remediation costs, loss of revenue, additional regulatory scrutiny and fines, litigation and monetary and reputational damages.
Factors that give rise, or may give rise, to those effects include, or may include, the following, as well as others that we cannot predict: • Insured or reinsured losses from pandemic-related claims that are different, or more extensive, than we expect; • Government actions or judicial decisions related to insurance or reinsurance coverages or rates, including, for example, requiring retroactive coverage of claims or expanding the scope of coverage; • Disputes, lawsuits and other legal actions challenging the promptness of coverage determinations, or the coverage determinations themselves, under applicable insurance or reinsurance policies, resulting in increased claims, litigation and related expenses; • Disruptions, delays and increased costs and risks related to having limited or no access to our facilities, workplace re-entry, employee safety concerns and reductions or interruptions of critical or essential services; • Continually changing business conditions and compliance obligations; and • Short or long-term impacts on the cost, availability or timeliness of required raw materials, supplies or services provided by third parties, including services provided by state, federal or foreign governments or government agencies.
Factors that give rise, or may give rise, to those effects include, or may include, the following, as well as others that we cannot predict: • Insured or reinsured losses from pandemic-related claims that are different, or more extensive, than we expect; • Government actions or judicial decisions related to insurance or reinsurance coverages or rates, including, for example, requiring retroactive coverage of claims or expanding the scope of coverage; 10K - 31 • Disputes, lawsuits and other legal actions challenging the promptness of coverage determinations, or the coverage determinations themselves, under applicable insurance or reinsurance policies, resulting in increased claims, litigation and related expenses; • Disruptions, delays and increased costs and risks related to having limited or no access to our facilities, workplace re-entry, employee safety concerns and reductions or interruptions of critical or essential services; • Continually changing business conditions and compliance obligations; and • Short or long-term impacts on the cost, availability or timeliness of required raw materials, supplies or services provided by third parties, including services provided by state, federal or foreign governments or government agencies.
The insurance and reinsurance markets have historically been cyclical, characterized by extended periods of intense price competition due to excessive underwriting capacity, and more recently alternative sources of capital, as well as periods when shortages of capacity permitted more favorable rate levels. Among our competitive strengths have been our specialty product focus and our niche market strategy.
The insurance and reinsurance markets have historically been cyclical, characterized by extended periods of intense price competition due to excessive underwriting capacity, and alternative sources of capital, as well as periods when shortages of capacity permitted more favorable rate levels. Among our competitive strengths have been our specialty product focus and our niche market strategy.
See "Critical Accounting Estimates - Goodwill and Intangible Assets" included under Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations and note 8 of the notes to consolidated financial statements included under Item 8 for information about our goodwill and intangible assets. 10K - 31 The loss of, or failure to successfully implement succession planning for, one or more key executives or an inability to attract and retain qualified personnel in our various businesses could have a material adverse effect on us.
See "Critical Accounting Estimates - Goodwill and Intangible Assets" included under Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations and note 8 of the notes to consolidated financial statements included under Item 8 for information about our goodwill and intangible assets. 10K - 29 The loss of, or failure to successfully implement succession planning for, one or more key executives or an inability to attract and retain qualified personnel in our various businesses could have a material adverse effect on us.
These activities are subject to internal guidelines and policies, as well as legal and regulatory requirements, including, among others, those related to privacy and data security, economic and trade sanctions, anti-corruption, anti-bribery and global finance and investments, customer protection and insurance matters. Our continued expansion into new businesses, distribution channels and markets brings about additional requirements.
These activities are subject to internal guidelines and policies, as well as legal and regulatory requirements, including, among others, those related to privacy and data security, artificial intelligence, economic and trade sanctions, anti-corruption, anti-bribery and global finance and investments, customer protection and insurance matters. Our continued expansion into new businesses, distribution channels and markets brings about additional requirements.
One or more future events could result in claims that substantially exceed our expectations, which could have a material adverse effect on our results of operations and financial condition. In addition, we seek to manage our loss exposures by policy terms, coverage exclusions and choice of legal forum. Disputes relating to coverage and choice of legal forum also arise.
One or more future events could result in claims that substantially exceed our expectations, which could have a material adverse effect on our results of operations and financial condition. In addition, we seek to manage our loss exposures through policy terms, coverage exclusions and choice of legal forum. Disputes relating to coverage and choice of legal forum also arise.
To the extent that cash flows generated by our operations are insufficient to fund future operating requirements, or that our capital position is adversely impacted by a decline in the fair value of our investment portfolio, losses from catastrophe events or otherwise, we may need to raise additional funds through financings or curtail our growth.
To the extent that cash flows generated by our operations are insufficient to fund future operating requirements, or the capital position of our insurance subsidiaries is adversely impacted by a decline in the fair value of our investment portfolio, losses from catastrophe events or otherwise, we may need to raise additional funds through financings or curtail our growth.
As a result, various provisions of our policies, such as choice of forum, or coverage limitations or exclusions, may not be enforceable in the manner we intend and some or all of our methods to manage loss exposures may prove ineffective. The effects of emerging claim and coverage issues on our business are uncertain.
As a result, various provisions of our policies, such as choice of forum, or coverage limitations or exclusions, may not be enforceable in the manner we intend and some or all of our methods to manage loss exposures may prove ineffective. 10K - 20 The effects of emerging claim and coverage issues on our business are uncertain.
For example, rising costs, litigation funding, social inflation, including new or expanded theories of liability, higher adverse verdicts, and 10K - 22 legislative changes, such as extended statutes of limitations, may result in higher and more frequent claims over a longer reporting period than originally expected.
For example, rising costs, litigation funding, social inflation, including new or expanded theories of liability, higher adverse verdicts, and legislative changes, such as extended statutes of limitations, may result in higher and more frequent claims over a longer reporting period than originally expected.
The global economy has been, and may in the future be, negatively impacted by regional or military conflicts, for example, the on-going conflicts between Russia and Ukraine and between Israel and Hamas. We may have operations in areas affected by a conflict, and some of our businesses may be adversely affected by a conflict and its effects.
The global economy has been, and may in the future be, negatively impacted by regional or military conflicts, for example, the on-going conflicts between Russia and Ukraine and in Israel and surrounding areas. We may have operations in areas affected by a conflict, and some of our businesses may be adversely affected by a conflict and its effects.
In addition, where applicable, our lenders may cancel their commitments to lend or issue letters of credit or require us to pledge additional or a different type of collateral. A default under one debt agreement may also put us at risk of a cross-default 10K - 28 under other debt agreements or other arrangements.
In addition, where applicable, our lenders may cancel their commitments to lend or issue letters of credit or require us to pledge additional or a different type of collateral. A default under one debt agreement may also put us at risk of a cross-default under other debt agreements or other arrangements.
Any of these effects could have a material adverse effect on our results of operations and financial condition. Our liquidity and our ability to meet our debt and other obligations, and pay dividends on our preferred stock, depend on the receipt of funds from our subsidiaries.
Any of these effects could have a material adverse effect on our results of operations and financial condition. 10K - 26 Our liquidity and our ability to meet our debt and other obligations, and pay dividends on our preferred stock, depend on the receipt of funds from our subsidiaries.
From time to time, to protect and grow market share or improve our efficiency, we invest in strategic initiatives to: • develop products that insure risks we have not previously insured, include new coverages or change coverage terms; • change commission terms; • change our underwriting processes; • improve business processes and workflow to increase efficiencies and productivity and to enhance the experience of our customers and producers; • expand distribution channels; and • enter geographic markets where we previously have had relatively little or no market share. 10K - 25 We may not be successful in these efforts, and even if we are successful, they may increase or create the following risks, among others: • demand for new products or expansion into new markets may not meet our expectations; • new products and expansion into new markets may increase or change our risk exposures, and the data and models we use to manage those exposures may not be as effective as those we use in existing markets or with existing products; • models underlying automated underwriting and pricing decisions may not be effective; • efforts to develop new products or markets or to change commission terms may create or increase distribution channel conflicts; • in connection with the conversion of existing policyholders to a new product, some policyholders' pricing may increase while the pricing for other policyholders may decrease, the net impact of which could negatively impact retention and profit margins; • changes to our business processes or workflow, including the use of new technologies, may give rise to execution risk; and • increased usage of artificial intelligence by us and third parties and the evolving regulatory landscape may increase underwriting and regulatory risk, while also presenting opportunity risk if we do not leverage artificial intelligence appropriately.
From time to time, to protect and grow market share or improve our efficiency, we invest in strategic initiatives to: • develop products that insure risks we have not previously insured, include new coverages or change coverage terms; • change commission terms; • change our underwriting processes; • improve business processes and workflow to increase efficiencies and productivity and to enhance the experience of our customers and producers; • expand distribution channels; and • enter geographic markets where we previously have had relatively little or no market share. 10K - 23 We may not be successful in these efforts, and even if we are successful, they may increase or create the following risks, among others: • demand for new products or expansion into new markets may not meet our expectations; • new products and expansion into new markets may increase or change our risk exposures, and the data and models we use to manage those exposures may not be as effective as those we use in existing markets or with existing products; • models underlying automated underwriting and pricing decisions may not be effective; • efforts to develop new products or markets or to change commission terms may create or increase distribution channel conflicts; • in connection with the conversion of existing policyholders to a new product, some policyholders' pricing may increase while the pricing for other policyholders may decrease, the net impact of which could negatively impact retention and profit margins; • changes to our business processes or workflow, including the use of new technologies, may give rise to execution risk and cost more and take longer than expected; and • increased usage of artificial intelligence by us and third parties and the evolving regulatory landscape may increase underwriting and regulatory risk, while also presenting opportunity risk if we do not leverage artificial intelligence appropriately.
In addition, reinsurance reserves are subject to greater uncertainty than insurance reserves primarily because a reinsurer relies on (i) the original underwriting decisions and claims decisions made by ceding companies and (ii) 10K - 23 information and data from ceding companies.
In addition, reinsurance reserves are subject to greater uncertainty than insurance reserves primarily because a reinsurer relies on (i) the original underwriting decisions and claims decisions made by ceding companies and (ii) information and data from ceding companies.
A material cyber security breach could have a material adverse effect on our results of operations and financial condition. 10K - 32 Third-party providers may perform poorly, breach their obligations to us or expose us to enhanced risks.
A material cyber security breach could have a material adverse effect on our results of operations and financial condition. 10K - 30 Third-party providers may perform poorly, breach their obligations to us or expose us to enhanced risks.
We may be further exposed to risks associated with artificial intelligence and machine learning technology if third-party service providers or any counterparts, where known or unknown to us, use such technology in their business activities.
We may be further exposed to risks associated with artificial intelligence and machine learning technology if third-party service providers or any counterparts, whether known or unknown to us, use such technology in their business activities.
As a result, such actions could have a material adverse effect on our results of operations and financial condition. Regulators may challenge our use of fronting arrangements in states in which our capacity providers are not licensed.
As a result, such actions could have a material adverse effect on our results of operations and financial condition. Regulators may challenge our use of fronting arrangements in jurisdictions in which our capacity providers are not licensed.
Department of the Treasury's Office of Foreign Assets Control and similar multi-national bodies and governmental agencies worldwide, as well as applicable anti-corruption and anti-bribery laws and regulations of the U.S. and other jurisdictions where we operate.
Department of the Treasury's Office of Foreign Assets Control and 10K - 27 similar multi-national bodies and governmental agencies worldwide, as well as applicable anti-corruption and anti-bribery laws and regulations of the U.S. and other jurisdictions where we operate.
Insurance regulators and rating 10K - 26 agencies evaluate company capital through financial models that calculate minimum capitalization requirements based on risk-based capital formulas for property and casualty insurance groups and their subsidiaries.
Insurance regulators and rating 10K - 24 agencies evaluate company capital through financial models that calculate minimum capitalization requirements based on risk-based capital formulas for property and casualty insurance groups and their subsidiaries.
If regulators in any of the states where we conduct our fronting business were to prohibit or limit those arrangements, we would be prevented or limited from conducting that business for which a capacity provider is not authorized in those states, unless and until the capacity provider is able to obtain the necessary licenses.
If regulators in any of the jurisdictions where we conduct fronting business were to prohibit or limit those arrangements, we would be prevented or limited from conducting that business for which a capacity provider is not authorized in those jurisdictions, unless and until the capacity provider is able to obtain the necessary licenses.
Increased competition could result in fewer submissions, lower premium rates, and less favorable policy terms and conditions, which could reduce our underwriting profits, or within our program services and other fronting operations, our operating profits, and have a material adverse effect on our results of operations and financial condition.
Increased competition could result in fewer submissions, lower premium rates, and less favorable policy terms and conditions, which could reduce our underwriting profits, or within our fronting operations, our operating profits, and have a material adverse effect on our results of operations and financial condition.
We have substantial international operations and investments, which expose us to increased political, civil, operational and economic risks. A substantial portion of our revenues and income is derived from our operations and investments outside the U.S., including from the U.K., Bermuda, Europe, Canada, the Middle East, Asia and Australia.
A substantial portion of our revenues and income is derived from our operations and investments outside the U.S., including from the U.K., Bermuda, Europe, Canada, the Middle East, Asia and Australia. Our international operations and investments expose us to increased political, civil, operational and economic risks.
Any of these impacts could have a material adverse effect on our results of operations, financial condition, debt and financial strength ratings or our insurance subsidiaries' capital.
Any of these impacts could have a material adverse effect on our results of operations, financial condition, debt and financial strength ratings or the adequacy of our insurance subsidiaries' capital.
In addition, we reinsure substantially all of the risks inherent in our program services and other fronting businesses, however, we have certain programs that contain limits on our reinsurers' obligations to us that expose us to underwriting risk, including loss ratio caps, aggregate reinsurance limits or exclusion of the credit risk of producers.
In addition, we reinsure substantially all of the risks inherent in our program services and ILS fronting operations, however, we have certain programs that contain limits on our reinsurers' obligations to us that expose us to underwriting risk, including loss ratio caps, aggregate reinsurance limits or exclusion of the credit risk of producers.
Additionally, our equity investment portfolio is concentrated, and declines in the value of these significant investments could have a material adverse effect on our financial results and on our ability to carry out our business plans. Equity securities were 64% and 58% of our shareholders' equity at December 31, 2023 and 2022, respectively.
Additionally, our equity investment portfolio is concentrated, and declines in the value of these significant investments could have a material adverse effect on our financial results and on our ability to carry out our business plans. Equity securities were 70% and 64% of our shareholders' equity at December 31, 2024 and 2023, respectively.
Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition. As of December 31, 2023, goodwill and intangible assets totaled $4.2 billion and represented 28% of shareholders' equity. We record goodwill and intangible assets at fair value upon the acquisition of a business.
Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition. As of December 31, 2024, goodwill and intangible assets totaled $4.2 billion and represented 25% of shareholders' equity. We record goodwill and intangible assets at fair value upon the acquisition of a business.
In some cases, we must comply with many new 10K - 29 economic, financial and trade sanctions that are imposed over a short period of time, as occurred with the Russia-Ukraine conflict.
In some cases, we must comply with many new economic, financial and trade sanctions that are imposed over a short period of time, as occurred with the conflict between Russia and Ukraine.
For the year ended December 31, 2023, our top five independent brokers represented 37% of the gross premiums written by our underwriting operations. Loss of all or a substantial portion of the business provided by one or more of these brokers could have a material adverse effect on our business.
For the year ended December 31, 2024, our top five independent brokers represented 38% of the gross premiums written by our underwriting operations. Loss of all or a substantial portion of the business provided by one or more of these brokers could have a material adverse effect on our business.
In addition, insurance departments in states in which there is no such statutory or regulatory prohibition, could deem the assuming insurer to be transacting insurance business without a license and the issuing carrier to be aiding and abetting the unauthorized sale of insurance.
In addition, insurance regulators in jurisdictions in which there is no such statutory or regulatory prohibition, could deem the assuming insurer to be transacting insurance business without a license and the issuing carrier to be aiding and abetting the unauthorized sale of insurance.
For example, failure to implement data management and security controls in the use of artificial intelligence by us or third party providers may subject us to data privacy, intellectual property and general regulatory risk, particularly in light of emerging regulation on the use of artificial intelligence. Losses from legal and regulatory actions may have a material adverse effect on us.
For example, the use of artificial intelligence by us or third party providers may subject us to data privacy, intellectual property and general regulatory risk, particularly in light of emerging regulation on the use of artificial intelligence. Losses from legal and regulatory actions may have a material adverse effect on us.
Our reserving process for the life and annuity reinsurance book is designed with the objective of establishing appropriate reserves for the risks we assumed. Among other things, this process relies heavily on analysis of mortality, longevity and morbidity trends, lapse rates, interest rates and expenses. As of December 31, 2023, our reserves for life and annuity benefits totaled $649.1 million.
Our reserving process for the life and annuity reinsurance book is designed with the objective of establishing appropriate reserves for the risks we assumed. Among other things, this process relies heavily on analysis of mortality, longevity and morbidity trends, lapse rates, interest rates and expenses. As of December 31, 2024, our reserves for life and annuity benefits totaled $583.3 million.
See note 12 of the notes to consolidated financial statements included under Item 8 for information about ceded reinsurance for our program services and other fronting businesses. The ceding of insurance does not legally discharge us from our primary liability for the full amount of the policies.
See note 12 of the notes to consolidated financial statements included under Item 8 for information about ceded reinsurance for our fronting operations. The ceding of insurance does not legally discharge us from our primary liability for the full amount of the policies.
In addition, collateral may not be sufficient to cover the reinsurer's obligation to us, and we may not be able to cause the reinsurer to deliver additional collateral. As of December 31, 2023, we were the beneficiary of letters of credit, trust accounts and funds withheld in the aggregate amount of $5.1 billion, collateralizing $9.2 billion in reinsurance recoverables.
In addition, collateral may not be sufficient to cover the reinsurer's obligation to us, and we may not be able to cause the reinsurer to deliver additional collateral. As of December 31, 2024, we were the beneficiary of letters of credit, trust accounts and funds withheld in the aggregate amount of $5.8 billion, collateralizing $11.6 billion in reinsurance recoverables.
Our program services and other fronting business enters into fronting arrangements with general agents and domestic and foreign insurers that want to access specific U.S. property and casualty insurance business in states in which the capacity providers are not licensed or are not authorized to write particular lines of insurance. Some state insurance regulators may object to these fronting arrangements.
Our fronting businesses enter into fronting arrangements with general agents and domestic and foreign insurers that want to access specific U.S. and foreign property and casualty insurance business in jurisdictions in which the capacity providers are not licensed or are not authorized to write particular lines of insurance. Some insurance regulators may object to these fronting arrangements.
In certain states, an insurance commissioner has the authority to prohibit an authorized insurer from acting as an issuing carrier for an unauthorized insurer.
In certain jurisdictions, an insurance regulator has the authority to prohibit an authorized insurer from acting as an issuing carrier for an unauthorized insurer.
Pandemics Pandemics have had, and could have, material adverse effects on us. The effects of a pandemic, and related governmental responses, may be wide-ranging, costly, disruptive and rapidly changing, resulting in material adverse effects on our underwriting, investment, Markel Ventures and other operations, and on our results of operations and financial condition, as was the case with COVID-19.
The effects of a pandemic, and related governmental responses, may be wide-ranging, costly, disruptive and rapidly changing, resulting in material adverse effects on our insurance, investment and Markel Ventures operations, and on our results of operations and financial condition, as was the case with COVID-19.
Reliance on reinsurance recoveries may create credit risk as a result of the reinsurer's inability or unwillingness to pay reinsurance claims when due. We generally select well capitalized and highly rated reinsurers and in certain instances we require reinsurers to post substantial collateral to secure the reinsured risks.
Reinsurance recoverables create credit risk as a result of the reinsurer's potential inability or unwillingness to pay reinsurance claims when due. We generally select well capitalized and highly rated reinsurers for our reinsurance purchases and in certain instances we require reinsurers to post substantial collateral to secure the reinsured risks.
There is no guarantee that our desired amounts of reinsurance or retrocessional reinsurance will be available in the marketplace in the future. In addition, available capacity may not be on terms we deem appropriate or acceptable or with companies with whom we want to do business.
The availability and cost of reinsurance are determined by market conditions beyond our control. There is no guarantee that our desired amounts of reinsurance or retrocessional reinsurance will be available in the marketplace in the future. In addition, available capacity may not be on terms we deem appropriate or acceptable or with companies with whom we want to do business.
The process of estimating loss reserves is a difficult and complex exercise involving analytical models with many variables and subjective judgments. This process may also become more difficult if we experience a period of rising inflation, as has been the case since early 2021.
The process of estimating loss reserves is a difficult and complex exercise involving analytical models with many variables and subjective judgments. This process may also become more difficult if we experience a period of rising inflation, as we experienced in recent years.
The failure of a reinsurer to meet its obligations to us, whether due to insolvency, dispute or other unwillingness or inability to pay, or due to our inability to access sufficient collateral to cover our liabilities, could have a material adverse effect on our results of operations and financial condition. 10K - 24 The availability and cost of reinsurance are determined by market conditions beyond our control.
The failure of a reinsurer to meet its obligations to us, whether due to insolvency, dispute or other 10K - 22 unwillingness or inability to pay, or due to our inability to access sufficient collateral to cover our liabilities, could have a material adverse effect on our results of operations and financial condition.
Even if an unfavorable outcome does not materialize, these matters could have an adverse impact on our reputation and result in substantial expense and disruption. See note 21 of the notes to consolidated financial statements included under Item 8 and Item 3 Legal Proceedings.
Even if an unfavorable outcome does not materialize, these matters could have an adverse impact on our reputation and result in substantial expense and disruption. See note 21 of the notes to consolidated financial statements included under Item 8. Changes in tax laws, rates or regulations could have a material adverse effect on us.
A failure to fulfill any of those duties or obligations could result in significant liabilities, penalties or other losses, and harm our businesses and results of operations.
Some of our operating subsidiaries may owe certain legal duties and obligations to third-party investors. A failure to fulfill any of those duties or obligations could result in significant liabilities, penalties or other losses, and harm our businesses and results of operations.
In addition, a pandemic may, as has been the case with COVID-19, have the effect of triggering or intensifying many of the risks described elsewhere under this Item 1A.
In addition, a pandemic may, as has been the case with COVID-19, have the effect of triggering or intensifying many of the risks described elsewhere under this Item 1A. Risk Factors under Risks Primarily Related to Our Insurance Operations, Risks Primarily Related to Our Investments and Access to Capital, and Risks Related to All of Our Operations.
We continue to enhance our management, governance and oversight procedures to effectively support, and improve transparency throughout, our global operations and network of business entities; however, our operating strategy nonetheless could result in inconsistent management, governance, and oversight practices, which may have a material adverse effect on our results of operations and financial condition.
We continue to enhance our oversight procedures to effectively support our global businesses; however, our operating strategy nonetheless could result in inconsistent management, governance, and oversight practices, which may have a material adverse effect on our results of operations and financial condition. We have substantial international operations and investments, which expose us to increased political, civil, operational and economic risks.
It is not always possible to detect, deter or prevent employee errors or misconduct or fraud, and the controls and trainings that we have in place to mitigate these activities may not be sufficient or effective in all cases.
It is not always possible to detect, deter or prevent employee errors or misconduct or fraud, and the controls and trainings that we have in place to mitigate these activities may not be sufficient or effective in all cases. Global Operations Our businesses operate through independent local management teams, which could result in inconsistent management, governance and oversight practices.
Markel Ventures businesses have been, and may continue to be, adversely affected by increased costs of labor and materials and declines in demand for certain products and services due to 10K - 30 economic and industry specific conditions.
Markel Ventures businesses have been, and may continue to be, adversely affected by increased costs of labor and materials and declines in demand for certain products and services due to economic and industry specific conditions. In addition, in early 2025, the U.S. announced a series of new 10K - 28 or increased tariffs on certain foreign imports.
Concerns about the economic conditions, capital markets, political, civil and economic stability and solvency of certain countries may contribute to global market volatility. Political and civil changes in the jurisdictions where we operate and elsewhere, some of which may be disruptive, can also interfere with our customers and our activities in a particular location.
Political and civil changes in the jurisdictions where we operate and elsewhere, some of which may be disruptive, can also interfere with our customers and our activities in a particular location.
Risk Factors under Risks Primarily Related to Our Insurance Operations, Risks Primarily Related to Our Investments and Access to Capital, and Risks Related to All of Our Operations. 10K - 33 Climate Change The impacts of climate change, and legal or regulatory measures to address climate change, may adversely affect our results of operations or financial condition .
Climate Change The impacts of climate change, and legal or regulatory measures to address climate change, may adversely affect our results of operations or financial condition .
For example, investment performance at Nephila, as well as the broader ILS market, has been adversely impacted by consecutive years of elevated catastrophe losses, as well as by the COVID-19 pandemic in 2020.
For example, in 2022, we recognized an impairment of goodwill attributed to our Nephila ILS operations following consecutive years of elevated catastrophe losses, as well as by the COVID-19 pandemic in 2020, which negatively impacted investment performance at Nephila.
This could have a material adverse effect on our results of operations and financial condition. Insurance-Linked Securities Our ILS operations and our management of third-party capital may expose us to risks. Some of our operating subsidiaries may owe certain legal duties and obligations to third-party investors.
This could have a material adverse effect on our results of operations and financial condition, which in turn could result in an impairment of the goodwill or intangible assets related to this business. Insurance-Linked Securities Our ILS operations and our management of third-party capital may expose us to risks.
Our international operations and investments expose us to increased political, civil, operational and economic risks. Deterioration or volatility in foreign and international financial markets or general economic and political and civil conditions could adversely affect our operating results, financial condition and liquidity.
Deterioration or volatility in foreign and international financial markets or general economic and political and civil conditions could adversely affect our operating results, financial condition and liquidity. Concerns about the economic conditions, capital markets, political, civil and economic stability and solvency of certain countries may contribute to global market volatility.
There is generally greater uncertainty in estimating reserves for long-tail coverages, such as general liability, professional liability and workers' compensation, as they require a longer period of time for claims to be reported and settled. The impact of changes in economic and social inflation and medical costs are also more pronounced for long-tail coverages due to the longer settlement period.
The impact of changes in economic and social inflation and medical costs are also more pronounced for long-tail coverages due to the longer settlement period.
The impacts of climate change may increase the frequency and/or severity of weather-related catastrophes, which may result in elevated catastrophe-related losses or disruptions, which may be material. The failure of any of the methods we employ to manage our loss exposures could have a material adverse effect on us.
The failure of any of the methods we employ to manage our loss exposures could have a material adverse effect on us.
In addition, as discussed above, we use analytical models to assist our decision making in loss reserving, and actual results may differ materially from the model outputs and related analyses.
In addition, as discussed above, we use analytical models to assist our decision making in loss reserving, and actual results may differ materially from the model outputs and related analyses. 10K - 21 There is generally greater uncertainty in estimating reserves for long-tail coverages, such as general liability, professional liability and workers' compensation, as they require a longer period of time for claims to be reported and settled.
Declines in operating results, divestitures, sustained market declines and other factors that impact the fair value of a reporting unit could result in an impairment of goodwill or intangible assets and, in turn, a charge to net income. Such a charge could have a material adverse effect on our results of operations or financial condition.
Developments that adversely affect the future cash flows or earnings of an acquired business, including declining growth in industry segments or sustained market declines, as well as increases in cost of capital and other factors that impact the fair value of a reporting unit, could result in an impairment of goodwill or intangible assets and, in turn, a charge to net income.
Global Operations We manage our global operations through a network of business entities, which could result in inconsistent management, governance and oversight practices. We manage our global operations through a network of business entities located in the U.S., Bermuda, the U.K., Europe, Canada, the Middle East, Asia and Australia.
Our businesses operate through independent management teams located in the U.S., Bermuda, the U.K., Europe, Canada, the Middle East, Asia and Australia.
These business entities are managed by executives, and supported by shared and centralized services; however, for certain of our businesses, subsidiary-level management is responsible for day-to-day operations, profitability, personnel decisions, the growth of the business, and legal and regulatory compliance, including adherence to applicable local laws.
Our Markel Group senior management team oversees our businesses; however, independent local management teams are responsible for strategy, day-to-day operations, profitability, capital allocation decisions, personnel decisions, the growth of the business, and legal and regulatory compliance, including adherence to applicable laws. Operating through subsidiary-level management teams can make it difficult for us to implement coordinated procedures throughout our global businesses.
Operating through subsidiary-level management can make it difficult for us to implement strategic decisions and coordinated procedures throughout our global operations. In addition, some of our business entities operate with management, sales, and support personnel that may be insufficient to support growth in their respective locations and industries, without significant central oversight and coordination.
In addition, some of our businesses operate with management, sales, and support personnel that may be insufficient to support growth in their respective locations and industries.
Removed
These events, as well as volatility in the capital markets, also have impacted investor decisions around allocation of capital to ILS, which in turn have impacted, and may continue to impact, our capital raises and redemptions within the funds we manage, as well as new funds, resulting in a decline in assets under management.
Added
The impacts of climate change may increase the frequency and/or severity of weather-related catastrophes, which may result in elevated catastrophe-related losses or disruptions, which may be material. See "Climate Change" under this Item 1A Risk Factors for more information about the potential impacts of climate change.
Removed
See "Critical Accounting Estimates - Goodwill and Intangible 10K - 27 Assets" under Item 7. Management's Discussion & Analysis of Financial Condition and Results of Operations for discussion and considerations of these impacts on the valuation of goodwill and intangible assets attributed to our Nephila ILS operations.
Added
We receive premiums from customers for insuring their risks. We invest these funds until they are needed to pay policyholder claims.
Removed
Developments that adversely affect the future cash flows or earnings of an acquired business may cause the goodwill or intangible assets recorded for it to be impaired.
Added
Changes in federal, state or foreign tax laws, rates or regulations, or their interpretation and application, could adversely affect our tax positions or tax liabilities, require us to make adjustments in our operations or tax strategies, and increase our overall tax burden.
Added
These tariffs, or additional duties, tariffs and other trade barriers imposed by the U.S., and retaliatory countermeasures by other countries, may adversely affect the price and availability of goods for our businesses and the demand for our products.
Added
Such a charge could have a material adverse effect on our results of operations or financial condition.
Added
Shareholder Activism Our business could be disrupted as a result of a threatened proxy contest or other actions of activist shareholders. Publicly traded companies have increasingly become subject to campaigns by investors advocating corporate actions such as operational and financial restructuring, increased borrowing, special dividends, share repurchases or sales of assets or the entire company.
Added
For example, at a public investor conference on December 10, 2024, as well as in a subsequent letter to our Chief Executive Officer, JANA Partners made statements calling for us to, among other things, publicly announce a Board-led review to evaluate a potential simplification of Markel Group.
Added
While we value constructive feedback from our investors and regularly engage in dialogue with them on various matters, we may nonetheless be subject to actions or proposals from activist shareholders that may not align with our business strategies or the interests of our other shareholders.
Added
Responding to actions by such activist shareholders or others could be costly and time-consuming, disrupt our operations and divert the attention of our Board of Directors and senior management team from the pursuit of business strategies, which could adversely affect our business, financial condition and results of operations.
Added
In addition, actual or perceived uncertainties as to our future direction caused by activist activities may cause or appear to cause instability, potentially making it more difficult to attract and retain qualified personnel and identify and secure investment opportunities.
Added
Activist shareholder activities may also cause significant fluctuations in our share price based on temporary or speculative market perceptions, or other factors that do not necessarily reflect the fundamental underlying value of our businesses. Pandemics Pandemics have had, and could have, material adverse effects on us.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeInsurance In order to maintain a strong cybersecurity program, Markel uses a variety of controls and technology tools designed to identify, detect, prevent, respond to, and recover from security threats. Markel undergoes regular security audits including a System and Organization Controls (SOC) audit for Cybersecurity conducted annually by independent auditors in which cybersecurity threats are identified and assessed.
Biggest changeEach of our businesses is independently managed with respect to their information security and data protection programs. 10K - 32 Insurance In order to maintain a strong cybersecurity program, our insurance business, Markel, uses a variety of controls and technology tools designed to identify, detect, prevent, respond to, and recover from security threats.
For cybersecurity, this includes a review of the cybersecurity program and its governance, active and planned initiatives, protection and prevention matters, detection and response measures, and the threat landscape. 10K - 35 Cybersecurity Risks No previous cybersecurity incident has had, or is reasonably likely to have, a material adverse effect on Markel Group, its business strategy, results of operations, or financial condition.
For cybersecurity, this includes a review of the cybersecurity program and its governance, active and planned initiatives, protection and prevention matters, detection and response measures, and the threat landscape. Cybersecurity Risks No previous cybersecurity incident has had, or is reasonably likely to have, a material adverse effect on Markel Group, its business strategy, results of operations, or financial condition.
Material matters regarding cybersecurity risk management and cybersecurity incidents are discussed at these meetings. In addition, Markel Ventures management regularly meets with the businesses to discuss their risk identification, assessment, and management approach. These discussions include how the business assesses, identifies, and manages key risks, including cybersecurity risks.
Each Markel Ventures business has a board that meets regularly. Material matters regarding cybersecurity risk management and cybersecurity incidents are discussed at these meetings. In addition, Markel Ventures management regularly meets with the businesses to discuss their risk identification, assessment, and management approach. These discussions include how the business assesses, identifies, and manages key risks, including cybersecurity risks.
Markel also is able to map to both ISO (International Organization for Standardization) and BSI (British Standards Institution) among other cybersecurity standards. Markel's CISO has been with Markel 13 years and has 22 years' experience in information technology, with 17 years in information technology security, and is a certified Information Systems Security Professional (CISSP).
Markel also is able to map to both ISO (International Organization for Standardization) and BSI (British Standards Institution) among other cybersecurity standards. Markel's CISO has been with Markel 14 years and has 23 years' experience in information technology, with 18 years in information technology security, and is a certified Information Systems Security Professional (CISSP).
An internal team engages in tabletop exercises several times each year to enhance preparedness for such situations. Information security and data protection risks are the responsibility of all employees. Markel has a mandatory training program covering a variety of security and data protection disciplines.
An internal team engages in tabletop exercises on a regular basis to enhance preparedness for such situations. Information security and data protection risks are the responsibility of all employees. Markel has a mandatory training program covering a variety of security and data protection disciplines.
Markel Ventures has established processes for the Markel Ventures businesses to share information about how they assess, identify, and manage cybersecurity risk and shares information on material risks from cybersecurity incidents with Markel Group management, as appropriate. Each Markel Ventures business has a board that meets quarterly.
Therefore, each business determines the appropriate IT systems and providers needed to do so. 10K - 33 Markel Ventures has established processes for the Markel Ventures businesses to share information about how they assess, identify, and manage cybersecurity risk, and Markel Ventures shares information on material risks from cybersecurity incidents with Markel Group management, as appropriate.
In all instances, however, ultimate responsibility rests with each business' Chief Executive Officer. Markel Group Board Oversight The Markel Group Board of Directors oversees Markel Group's risk management framework on an enterprise-wide basis, which includes cybersecurity risks.
Markel Group Board Oversight The Markel Group Board of Directors oversees Markel Group's risk management framework on an enterprise-wide basis, which includes cybersecurity risks.
Markel performs continuous monitoring of all its third parties to ensure they are maintaining acceptable levels of security controls and remediating any known weaknesses. 10K - 34 Markel participates in the Financial Services Information Sharing and Analysis Center to share information about the latest cyber threats and preparedness measures. Markel also shares threat intelligence information with other partners.
Markel participates in the Financial Services Information Sharing and Analysis Center to share information about the latest cyber threats and preparedness measures. Markel also shares threat intelligence information with other partners.
Markel Ventures requires real-time reporting of material cybersecurity incidents to understand how the matters are being managed, assess whether public disclosure is required and inform Markel Group senior management of relevant matters. Depending on the cybersecurity incident, third parties may be engaged by the Markel Ventures businesses to assist them in understanding and managing the event.
Markel Ventures requires real-time reporting of cybersecurity incidents to understand how the matters are being managed, assess whether public disclosure is required, with escalation to Markel Group senior management as warranted by the severity of the situation.
Given the varying size and complexity of the Markel Ventures businesses, a diverse array of individuals assume responsibility for managing cybersecurity risks within them. In some instances, primary responsibility may be with a member of the executive management team. In other instances, primary responsibility may land with information technology professionals.
Depending on the cybersecurity incident, third parties may be engaged by the Markel Ventures businesses to assist them in understanding and managing the event. Given the varying size and complexity of the Markel Ventures businesses, a diverse array of individuals assume responsibility for managing cybersecurity risks within them.
Markel regularly tests aspects of its internal security and conducts security risk interviews and assessments on third parties with whom it does business, depending on the nature of the relationship. Markel has invested in technology that assists its risk management teams in measuring and addressing weaknesses in its third-party and supply chain community.
Markel undergoes regular security audits including a System and Organization Controls, or SOC, audit for Cybersecurity conducted annually by independent auditors in which cybersecurity threats are identified and assessed. Markel regularly tests aspects of its internal security and conducts security risk interviews and assessments on third parties with whom it does business, depending on the nature of the relationship.
Item 1C. CYBERSECURITY Markel Group is a holding company comprised of a diverse group of companies and investments. Our specialty insurance business, Markel, sits at the core of our company. Markel Group utilizes information technology systems and services, including cybersecurity, provided and/or administered by Markel. Through Markel Group's wholly owned subsidiary, Markel Ventures, Inc.
Information technology systems and services, including cybersecurity, used by the small team of individuals at the Markel Group holding company are provided and/or administered by teams within our insurance business, consistent with practices outlined above.
Removed
(Markel Ventures), Markel Group owns controlling interests in businesses that operate in a variety of industries. The Markel Ventures businesses are independently managed with respect to their information security and data protection programs.
Added
Item 1C. CYBERSECURITY Markel Group is a holding company comprised of a diverse group of businesses and investments. Our specialty insurance business, which operates under the name Markel, sits at the core of our company. Markel Group also owns controlling interests in businesses that operate in a variety of other industries.
Removed
Therefore, each business determines the appropriate IT systems and providers needed to do so. Management for each business shares information on material risks from cybersecurity incidents with Markel Ventures management.
Added
We refer to this group of businesses as Markel Ventures.
Added
Markel has invested in technology that assists its risk management teams in measuring and addressing weaknesses in its third-party and supply chain community. Markel performs continuous monitoring of all its critical third parties to ensure they are maintaining acceptable levels of security controls and remediating any known weaknesses.
Added
In some instances, primary responsibility may be with a member of the executive management team. In other instances, primary responsibility may land with information technology professionals. In all instances, however, ultimate responsibility rests with each business' Chief Executive Officer.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAdditionally, our Markel Ventures businesses maintain office space, factories and warehouses, both through leased and owned properties, throughout the U.S. and in certain international locations. The property needs of our Markel Ventures businesses vary based on the nature of the operations of each business. We believe our properties are suitable and adequate for our current operations.
Biggest changeAdditionally, our Markel Ventures businesses maintain office space, factories and warehouses, both through leased and owned properties, throughout the U.S. and in certain international locations. The property needs of our Markel Ventures businesses vary based on the nature of the operations of each business.
Item 2. PROPERTIES We lease office space in Glen Allen, Virginia for our Markel Group corporate headquarters, which also serves as the headquarters for our insurance and Markel Ventures operations. Our insurance operations lease office space throughout the U.S. and in various locations in other countries. In total, we have 64 insurance offices in 17 countries.
Item 2. PROPERTIES We lease office space in Glen Allen, Virginia for our Markel Group corporate headquarters, which also serves as the headquarters for our insurance and Markel Ventures operations. Our insurance operations lease office space throughout the U.S. and in various locations in other countries. In total, we have 64 insurance offices in 16 countries.
Added
We believe our properties are suitable and adequate for our current operations. 10K - 34 Information About Our Executive Officers Thomas S. Gayner Chief Executive Officer since January 2023. Co-Chief Executive Officer from January 2016 to December 2022. President and Chief Investment Officer from May 2010 to December 2015. Chief Investment Officer from January 2001 to December 2015.
Added
Director from 1998 to 2004. Director since August 2016. Age 63. Michael R. Heaton Executive Vice President and Chief Operating Officer since February 2024 and Executive Vice President since May 2022. President, Markel Ventures from January 2016 to May 2022.
Added
President and Chief Executive Officer, Markel Ventures, Inc., a subsidiary, from May 2020 to May 2022; President and Chief Operating Officer, Markel Ventures, Inc., from January 2016 to May 2020. Chief Operating Officer, Markel Ventures, Inc., from September 2013 to December 2015. Age 48. Andrew G. Crowley President, Markel Ventures since May 2022.
Added
President, Markel Ventures, Inc., a subsidiary, since May 2022. Executive Vice President, Markel Ventures, Inc., from May 2020 to May 2022. Managing Director, Markel Ventures, Inc., from January 2017 to May 2020. Age 42. Jeremy A. Noble President, Insurance since January 2023. Senior Vice President and Chief Financial Officer from September 2018 to December 2022.
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Senior Vice President, Finance from June 2018 to September 2018. Finance Director, Markel International from July 2015 to June 2018. Managing Director, Internal Audit from September 2011 to July 2015. Age 49. Richard R. Grinnan Senior Vice President, Chief Legal Officer and Secretary of Markel Group since February 2020 and of Markel since October 2022.
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General Counsel and Secretary from June 2014 to February 2020. Assistant General Counsel from August 2012 to June 2014. Age 56. Brian J. Costanzo Chief Financial Officer of Markel Group and of Markel since December 2023. Senior Vice President, Finance, Chief Accounting Officer and Controller from October 2022 to December 2023.
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Principal financial officer (on an interim basis) from January 2023 to March 2023. Chief Accounting Officer and Controller from June 2021 to October 2022. Controller from December 2019 to June 2021. Segment Controller - U.S. Insurance from March 2014 to December 2019. Age 46. 10K - 35 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+1 added−0 removed3 unchanged
Biggest changeIssuer Purchases of Equity Securities (a) (b) (c) (d) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2023 through October 31, 2023 16,635 $ 1,470.02 16,635 $ 221,111 November 1, 2023 through November 30, 2023 75,841 $ 1,400.09 75,841 $ 748,196 December 1, 2023 through December 31, 2023 25,200 $ 1,396.70 25,200 $ 712,999 Total 117,676 $ 1,409.25 117,676 $ 712,999 (1) The Board of Directors approved the repurchase of up to $750 million of our common shares pursuant to a share repurchase program publicly announced in November 2023.
Biggest changeIssuer Purchases of Equity Securities (a) (b) (c) (d) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2024 through October 31, 2024 28,980 $ 1,570.21 28,980 $ 286,594 November 1, 2024 through November 30, 2024 32,860 $ 1,636.09 32,860 $ 1,977,832 December 1, 2024 through December 31, 2024 43,346 $ 1,725.20 43,346 $ 1,903,051 Total 105,186 $ 1,654.66 105,186 $ 1,903,051 (1) The Board of Directors approved the repurchase of up to $2 billion of our common shares pursuant to a share repurchase program publicly announced in November 2024.
The new program terminated and replaced a similar $750 million share repurchase program authorized in February 2022. Under our share repurchase program, we may repurchase outstanding common shares of our stock from time to time in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934.
The new program terminated and replaced a similar $750 million share repurchase program authorized in November 2023. Under our share repurchase program, we may repurchase outstanding common shares of our stock from time to time in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934.
Securities and Exchange Commission. We make available free of charge on or through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the U.S. Securities and Exchange Commission.
We make available free of charge on or through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the U.S. Securities and Exchange Commission. Our website address is www.mklgroup.com.
Our current strategy is to retain earnings and, consequently, we have not paid and do not expect to pay a cash dividend on our common stock. 10K - 38 Common Share Repurchases The following table summarizes our common share repurchases for the quarter ended December 31, 2023.
Our current strategy is to retain earnings and, consequently, we have not paid and do not expect to pay a cash dividend on our common stock. 10K - 36 Common Share Repurchases The following table summarizes our common share repurchases for the quarter ended December 31, 2024.
The shareholders meeting will be part of a two-day event we are calling the 2024 Reunion, which is open to shareholders, employees, and friends of Markel Group. More information on the agenda and registration for the 2024 Reunion is available at www.mklreunion.com. 10K - 39
The shareholders meeting will be part of a two-day event we call the Reunion, which is open to shareholders, employees, and friends of Markel Group. More information on the agenda and registration for the Reunion is available at www.mklreunion.com. 10K - 37
Our website address is www.mklgroup.com. Transfer Agent Equiniti Trust Company, LLC, 48 Wall Street, Floor 23, New York, NY 10005 (800) 937-5449 helpast@equiniti.com Annual Shareholders Meeting Our annual shareholders meeting will take place on May 22, 2024 at the University of Richmond Robins Center in Richmond, Virginia at 2:00 p.m. (Eastern Time).
Transfer Agent Equiniti Trust Company, LLC, 48 Wall Street, Floor 23, New York, NY 10005 (800) 937-5449 helpast@equiniti.com Annual Shareholders Meeting Our annual shareholders meeting will take place on May 21, 2025 at the University of Richmond Robins Center in Richmond, Virginia at 2:00 p.m. (Eastern Time).
The number of shareholders of record as of January 31, 2024 was approximately 260. The total number of shareholders, including those holding shares in street name or in brokerage accounts, is estimated to be in excess of 220,000.
The number of shareholders of record as of February 5, 2025 was approximately 238. The total number of shareholders, including those holding shares in street name or in brokerage accounts, is estimated to be in excess of 238,000.
Property & Casualty Insurance Index 100 127 131 160 184 209 (1) $100 invested on December 31, 2018 in our common stock or the listed index. Includes reinvestment of dividends. Common Stock and Dividend Information Our common stock trades on the New York Stock Exchange under the symbol MKL.
Property & Casualty Insurance Index 100 103 126 145 164 219 (1) $100 invested on December 31, 2019 in our common stock or the listed index. Includes reinvestment of dividends. Common Stock and Dividend Information Our common stock trades on the New York Stock Exchange under the symbol MKL.
The share repurchase program has no expiration date but may be terminated by the Board at any time. Securities Authorized for Issuance Under Equity Compensation Plans See Part III for information on securities authorized for issuance under our equity compensation plans. Available Information This document represents Markel Group's Annual Report on Form 10-K, which is filed with the U.S.
The share repurchase program has no expiration date but may be terminated by the Board at any time. Securities Authorized for Issuance Under Equity Compensation Plans See Part III for information on securities authorized for issuance under our equity compensation plans.
Years Ended December 31, 2018 (1) 2019 2020 2021 2022 2023 Markel Group Inc. $ 100 $ 110 $ 100 $ 119 $ 127 $ 137 S&P 500 Index 100 131 156 200 164 207 Dow Jones U.S.
Years Ended December 31, 2019 (1) 2020 2021 2022 2023 2024 Markel Group Inc. $ 100 $ 90 $ 108 $ 115 $ 124 $ 151 S&P 500 Index 100 118 152 125 158 197 Dow Jones U.S.
Added
Available Information This document represents Markel Group's Annual Report on Form 10-K, which is filed with the United States Securities and Exchange Commission.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm 10K - 73 Consolidated Balance Sheets—December 31, 202 3 and 202 2 10K - 75 Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)—Years Ended December 31, 202 3 , 202 2 and 202 1 10K - 76 Consolidated Statements of Changes in Equity—Years Ended December 31, 202 3 , 202 2 and 202 1 10K - 77 Consolidated Statements of Cash Flows—Years Ended December 31, 202 3 , 202 2 and 202 1 10K - 78 Notes to Consolidated Financial Statements 10K - 79
Biggest changeFinancial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm 10K - 70 Consolidated Balance Sheets—December 31, 202 4 and 202 3 10K - 72 Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)—Years Ended December 31, 202 4 , 202 3 and 202 2 10K - 73 Consolidated Statements of Changes in Equity—Years Ended December 31, 202 4 , 202 3 and 202 2 10K - 74 Consolidated Statements of Cash Flows—Years Ended December 31, 202 4 , 202 3 and 202 2 10K - 75 Notes to Consolidated Financial Statements 10K - 76
Item 6. [Reserved] NONE Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 10K - 40 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 10K - 69 Item 8.
Item 6. [Reserved] NONE Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 10K - 38 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 10K - 66 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

177 edited+53 added−97 removed66 unchanged
Biggest changeProgram Services and Other Fronting, Insurance-linked Securities and Other Insurance The following table presents the components of operating revenues and operating expenses attributable to our program services and other fronting, insurance-linked securities and other insurance operations, including our run-off block of life and annuity reinsurance contracts, none of which are included in a reportable segment. 10K - 47 Years Ended December 31, 2023 2022 (dollars in thousands) Operating revenues Operating expenses Net Operating revenues Operating expenses Net Services and other: Program services and other fronting $ 155,654 $ 31,591 $ 124,063 $ 149,993 $ 27,613 $ 122,380 Program services - disposition gain 16,923 — 16,923 — — — Insurance-linked securities 97,550 75,950 21,600 109,020 125,316 (16,296) Insurance-linked securities - disposition gains — — — 225,828 — 225,828 Life and annuity (1) 40 12,070 (12,030) 1,040 11,073 (10,033) Markel CATCo buy-out — — — — 101,904 (101,904) Markel CATCo Re (2) — (71,491) 71,491 — (89,862) 89,862 Other 11,484 18,122 (6,638) 11,683 19,431 (7,748) 281,651 66,242 215,409 497,564 195,475 302,089 Underwriting (3) (1,520) 8,655 (10,175) (3,818) 3,292 (7,110) 280,131 74,897 205,234 493,746 198,767 294,979 Amortization of intangible assets 61,168 (61,168) 61,202 (61,202) Impairment of goodwill — — 80,000 (80,000) $ 280,131 $ 136,065 $ 144,066 $ 493,746 $ 339,969 $ 153,777 (1) Investment income earned on the investments that support life and annuity policy benefit reserves are included in our Investing segment.
Biggest changeWe do not allocate amortization of acquired intangible assets to our operating segments, including our other insurance operations. 10K - 45 Years Ended December 31, 2024 2023 (dollars in thousands) Operating revenues Operating income (loss) Operating revenues Operating income (loss) Program services Fronting $ 155,355 $ 122,341 $ 134,914 $ 103,323 Disposition gain — — 16,923 16,923 Program services total 155,355 122,341 151,837 120,246 Insurance-linked securities 127,514 41,241 118,290 42,340 Life and annuity (1) (145) (18,445) 40 (12,030) Markel CATCo Re (2) — 58,099 — 71,491 Other 12,581 (4,508) 11,484 (6,638) 295,305 198,728 281,651 215,409 Underwriting (3) (3,432) (14,248) (1,520) (10,175) Other insurance operations $ 291,873 $ 184,480 $ 280,131 $ 205,234 (1) Investment income earned on the investments that support life and annuity policy benefit reserves is included in our Investing segment.
Due to the unique characteristics of these events, there is inherent variability as to the timing or loss amount, which cannot be predicted in advance. We believe measures that exclude the effects of such events are meaningful to understand the underlying trends and variability in our underwriting results that may be obscured by these items.
Due to the unique characteristics of these events, there is inherent variability as to the timing or amount of the loss, which cannot be predicted in advance. We believe measures that exclude the effects of such events are meaningful to understand the underlying trends and variability in our underwriting results that may be obscured by these items.
We also analyze net investment gains, which include unrealized gains and losses on our equity portfolio. Based on the potential for volatility in the financial markets, we understand that the level of gains or losses may vary from one period to the next, and therefore believe that our investment performance is best analyzed over longer periods of time.
We also analyze net investment gains, which include unrealized gains and losses on our equity portfolio. Based on the potential for volatility in the financial markets, we understand that the level of gains or losses may vary significantly from one period to the next, and therefore believe that our investment performance is best analyzed over longer periods of time.
However, deterioration of market conditions related to the general economy or the specific industries in which we operate, a sustained trend of weaker than anticipated financial performance within a reporting unit beyond that which we considered or included in our assessments, or an increase in the market-based weighted average cost of capital, among other factors, could impact the impairment analysis and may result in future goodwill or intangible asset impairment charges. 10K - 65 See the risk factor titled "Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition" within Item 1A Risk Factors for further discussion of risks associated with our goodwill and intangible assets.
However, deterioration of market conditions related to the general economy or the specific industries in which we operate, a sustained trend of weaker than anticipated financial performance within a reporting unit beyond that which we considered or included in our assessments, or an increase in the market-based weighted average cost of capital, among other factors, could impact the impairment analysis and may result in future goodwill or intangible asset impairment charges. 10K - 62 See the risk factor titled "Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition" within Item 1A Risk Factors for further discussion of risks associated with our goodwill and intangible assets.
In developing its best estimate of loss reserves, management's philosophy is to establish loss reserves that are more likely to be redundant rather than deficient, and therefore, will ultimately prove to be adequate. Management's approach to establishing loss reserves typically results in loss reserves that exceed the calculated actuarial point estimate.
In developing its best estimate of loss reserves, management's philosophy is to establish loss reserves that are more likely to be redundant rather than deficient, and therefore, will ultimately prove to be adequate. Management's approach to establishing loss reserves results in loss reserves that exceed the calculated actuarial point estimate.
Additionally, in response to Pillar Two, in December 2023, Bermuda enacted the Corporate Income Tax Act of 2023 (the Bermuda CIT Act) effective January 1, 2025, which imposes a 15% corporate income tax on certain Bermuda businesses of large, multi-national enterprises.
Additionally, in response to Pillar Two, Bermuda enacted the Corporate Income Tax Act of 2023 (the Bermuda CIT Act) effective January 1, 2025, which imposes a 15% corporate income tax on certain Bermuda businesses of large, multi-national enterprises.
For product lines in which loss reserves are established on a underwriting year basis, we have developed a methodology to convert from underwriting year to accident year for financial reporting purposes.
For product lines in which loss reserves are established on an underwriting year basis, we have developed a methodology to convert from underwriting year to accident year for financial reporting purposes.
Consistent with our reserving philosophy, we are responding quickly to increase loss reserves following any indication of increased claims frequency or severity in excess of our previous expectations, whereas in instances where claims trends are more favorable than we previously anticipated, we are often 10K - 63 waiting to reduce loss reserves and will evaluate our experience over additional periods of time.
Consistent with our reserving philosophy, we are responding quickly to increase loss reserves following any indication of increased claims frequency or severity in excess of our previous expectations, whereas in instances where claims trends are more favorable than we previously anticipated, we are often waiting to reduce loss reserves and will evaluate our experience over additional periods of time.
The current accident year loss ratio excluding the impact of catastrophes and other significant, infrequent loss events is also commonly referred to as an attritional loss ratio within the property and casualty insurance industry. 10K - 42 The following table presents summary data for our consolidated underwriting operations, which are comprised predominantly of our Insurance and Reinsurance segments.
The current accident year loss ratio excluding the impact of catastrophes and other significant, infrequent loss events is also commonly referred to as an attritional loss ratio within the property and casualty insurance industry. 10K - 40 The following table presents summary data for our consolidated underwriting operations, which are comprised predominantly of our Insurance and Reinsurance segments.
Changes in prior years loss reserves, including the trends and factors that impacted loss reserve development in 2023 and 2022, as well as further details regarding the historical development of reserves for losses and loss adjustment expenses and changes in assumptions used to calculate reserves for unpaid losses and loss adjustment expenses are discussed in further detail in note 11 of the notes to consolidated financial statements included under Item 8.
Changes in prior years loss reserves, including the trends and factors that impacted loss reserve development in 2024 and 2023, as well as further details regarding the historical development of reserves for losses and loss adjustment expenses and changes in assumptions used to calculate reserves for unpaid losses and loss adjustment expenses are discussed in further detail in note 11 of the notes to consolidated financial statements included under Item 8.
When analyzing our loss ratio, we evaluate losses and loss adjustment expenses attributable to the current accident year separate from losses and loss adjustment expenses attributable to prior accident years.
When analyzing our loss ratio, we typically evaluate losses and loss adjustment expenses attributable to the current accident year separate from losses and loss adjustment expenses attributable to prior accident years.
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis includes discussion of changes in our results of operations and financial condition from 2022 to 2023 and should be read in conjunction with the consolidated financial statements and related notes included under Item 8, Item 1 Business, Item 1A Risk Factors and "Safe Harbor and Cautionary Statement" under Item 7.
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis includes discussion of changes in our results of operations and financial condition from 2023 to 2024 and should be read in conjunction with the consolidated financial statements and related notes included under Item 8, Item 1 Business, Item 1A Risk Factors and "Safe Harbor and Cautionary Statement" under Item 7.
We may increase the capacity of the facility by up to $200 million subject to obtaining commitments for the increase and certain other terms and conditions. Markel Group guaranteed the obligations under the facility of the insurance subsidiaries that are also parties to the credit agreement. This facility expires in June 2028.
We may increase the capacity of the facility by up to $200 million subject to obtaining commitments for the increase and certain other terms and conditions. Markel Group guarantees the obligations under the facility of the insurance subsidiaries that are also parties to the credit agreement. This facility expires in June 2028.
Beginning in the latter half of 2022, select lines within our U.S. and Bermuda general liability and professional liability portfolio were impacted by consecutive quarters of unfavorable loss cost trends and increased claim frequency and severity, resulting in adverse development on these lines in both 2023 and 2022.
Beginning in the latter half of 2022, select lines within our U.S. general liability and professional liability portfolio were impacted by consecutive quarters of unfavorable loss cost trends and increased claim frequency and severity, resulting in significant adverse development on these lines in both 2023 and 2022.
Based on the results of our assessments, there were no impairments of goodwill in 2023, and none of our reporting units are at risk of a material impairment of goodwill. Additionally, there were no significant events or changes in circumstances impacting our reporting units between the assessment date and December 31, 2023.
Based on the results of our assessments, there were no impairments of goodwill in 2024, and none of our reporting units are at risk of a material impairment of goodwill. Additionally, there were no significant events or changes in circumstances impacting our reporting units between the assessment date and December 31, 2024.
We believe a discussion of current accident year loss ratios, which exclude prior accident year reserve development, is helpful since it provides more insight into estimates of current underwriting performance and excludes changes in estimates related to prior year loss reserves.
We believe a discussion of current accident year loss ratios, which exclude prior accident year reserve development, is helpful in most cases since it provides more insight into estimates of current underwriting performance and excludes changes in estimates related to prior year loss reserves.
As with insurance business, we evaluate this information and estimate the expected ultimate losses. 10K - 59 Our liabilities for unpaid losses and loss adjustment expenses can generally be categorized into two distinct groups, short-tail business and long-tail business.
As with insurance business, we evaluate this information and estimate the expected ultimate losses. Our liabilities for unpaid losses and loss adjustment expenses can generally be categorized into two distinct groups, short-tail business and long-tail business.
In some cases, actuarial 10K - 61 analyses, which are generally based on statistical analysis, cannot fully incorporate all of the subjective factors that affect development of losses. In other cases, management's perspective of these more subjective factors may differ from the actuarial perspective.
In some cases, actuarial analyses, which are generally based on statistical analysis, cannot fully incorporate all of the subjective factors that affect development of losses. In other cases, management's perspective of these more subjective factors may differ from the actuarial perspective.
This assessment serves as a basis for determining whether it is necessary to perform a quantitative impairment test. We completed our annual tests for impairment as of October 1, 2023 based upon results of operations through September 30, 2023.
This assessment serves as a basis for determining whether it is necessary to perform a quantitative impairment test. We completed our annual tests for impairment as of October 1, 2024 based upon results of operations through September 30, 2024.
(3) Interest expense is accrued in the period incurred and therefore, only a portion of the future interest payments presented in this table represents a liability on our consolidated balance sheet as of December 31, 2023.
(3) Interest expense is accrued in the period incurred and therefore, only a portion of the future interest payments presented in this table represents a liability on our consolidated balance sheet as of December 31, 2024.
Goodwill and intangible assets are recorded as a result of business acquisitions. Goodwill represents the excess of the amount paid to acquire a business over the net fair value of assets acquired and liabilities assumed at the date of acquisition. Indefinite-lived and other intangible assets are recorded at fair value as of the acquisition date.
Goodwill represents the excess of the amount paid to acquire a business over the net fair value of assets acquired and liabilities assumed at the date of acquisition. Indefinite-lived and other intangible assets are recorded at fair value as of the acquisition date.
We have a suite of capabilities through which we can access capital to support our customers' risks, which includes our own capital through our underwriting operations and third-party capital through our program services and other fronting and ILS operations.
We have a suite of capabilities through which we can access capital to support our customers' risks, which includes our own capital through our underwriting operations and third-party capital through our program services and ILS operations.
Readers are cautioned not to place undue reliance on any forward-looking statements, which are based on our current knowledge and speak only as at their dates. 10K - 68
Readers are cautioned not to place undue reliance on any forward-looking statements, which are based on our current knowledge and speak only as at their dates. 10K - 65
Our insurance operations also include the underwriting results of run-off lines of business that were discontinued prior to, or in conjunction with, insurance acquisitions, 10K - 41 and the results of our run-off life and annuity reinsurance business. The following table presents the components of our Insurance engine gross premium volume and operating revenues.
Our insurance operations also include the underwriting results of run-off lines of business that were discontinued prior to, or in conjunction with, insurance acquisitions, and the results of our run-off life and annuity reinsurance business. 10K - 39 The following table presents the components of our Insurance operations gross premium volume and operating revenues.
See note 11 of the notes to consolidated financial statements included under Item 8 for more information on the Reinsurance segment's prior year loss reserve development.
See note 11 of the notes to consolidated financial statements included under Item 8 for more information on the Insurance segment's prior year loss reserve development.
Additional factors that could cause actual results to differ from those predicted are set forth under Item 1 Business, Item 1A Risk Factors, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 7A Quantitative and Qualitative Disclosures About Market Risk in this report or are included in the items listed below: • the effect of cyclical trends or changes in market conditions on our underwriting, investing, Markel Ventures and other operations, including demand and pricing in the insurance, reinsurance and other markets in which we operate; • actions by competitors, including the use of technology and innovation to simplify the customer experience, increase efficiencies, redesign products, alter models and effect other potentially disruptive changes in the insurance industry, and the effect of competition on market trends and pricing; • our efforts to develop new products, expand in targeted markets or improve business processes and workflows may not be successful and may increase or create new risks (e.g., insufficient demand, change to risk exposures, distribution channel conflicts, execution risk, regulatory risk, increased expenditures); • the frequency and severity of man-made, health-related and natural catastrophes may exceed expectations, are unpredictable and, in the case of some natural catastrophes, may be exacerbated by changing conditions in the climate, oceans and atmosphere, resulting in increased frequency and/or severity of extreme weather-related events; • we offer insurance and reinsurance coverage against terrorist acts in connection with some of our programs, and in other instances we are legally required to offer terrorism insurance; in both circumstances, we actively manage our exposure, but if there is a covered terrorist attack, we could sustain material losses; • emerging claim and coverage issues, changing industry practices and evolving legal, judicial, social and other claims and coverage trends or conditions, can increase the scope of coverage, the frequency and severity of claims and the period over which claims may be reported; these factors, as well as uncertainties in the loss estimation process, can adversely impact the adequacy of our loss reserves and our allowance for reinsurance recoverables; • reinsurance reserves are subject to greater uncertainty than insurance reserves, primarily because of reliance upon the original underwriting decisions made by ceding companies and the longer lapse of time from the occurrence of loss events to their reporting to the reinsurer for ultimate resolution; • inaccuracies (whether due to data error, human error or otherwise) in the various modeling techniques and data analytics (e.g., scenarios, predictive and stochastic modeling, and forecasting) we use to analyze and estimate exposures, loss trends and other risks associated with our insurance and insurance-linked securities businesses could cause us to misprice our products or fail to appropriately estimate the risks to which we are exposed; • changes in the assumptions and estimates used in establishing reserves for our life and annuity reinsurance book (which is in runoff), for example, changes in assumptions and estimates of mortality, longevity, morbidity and interest rates, could result in material changes in our estimated loss reserves for that business; • adverse developments in insurance coverage litigation or other legal or administrative proceedings could result in material increases in our estimates of loss reserves; 10K - 66 • initial estimates for catastrophe losses and other significant, infrequent events are often based on limited information, are dependent on broad assumptions about the nature and extent of losses, coverage, liability and reinsurance, and those losses may ultimately differ materially from our expectations; • changes in the availability, costs, quality and providers of reinsurance coverage, which may impact our ability to write or continue to write certain lines of business or to mitigate the volatility of losses on our results of operations and financial condition; • the ability or willingness of reinsurers to pay balances due may be adversely affected by industry and economic conditions, deterioration in reinsurer credit quality and coverage disputes, and collateral we hold, if any, may not be sufficient to cover a reinsurer's obligation to us; • after the commutation of ceded reinsurance contracts, any subsequent adverse development in the re-assumed loss reserves will result in a charge to earnings; • regulatory actions can impede our ability to charge adequate rates and efficiently allocate capital; • general economic and market conditions and industry specific conditions, including extended economic recessions or expansions; prolonged periods of slow economic growth; inflation or deflation; fluctuations in foreign currency exchange rates, commodity and energy prices and interest rates; volatility in the credit and capital markets; and other factors; • economic conditions, actual or potential defaults in corporate bonds, municipal bonds, mortgage-backed securities or sovereign debt obligations, volatility in interest and foreign currency exchange rates, changes in U.S. government debt ratings and changes in market value of concentrated investments can have a significant impact on the fair value of our fixed maturity securities and equity securities, as well as the carrying value of our other assets and liabilities, and this impact may be heightened by market volatility and our ability to mitigate our sensitivity to these changing conditions; • economic conditions may adversely affect our access to capital and credit markets; • the effects of government intervention, including material changes in the monetary policies of central banks, to address financial downturns, inflation and other economic and currency concerns; • the impacts that political and civil unrest and regional conflicts may have on our businesses and the markets they serve or that any disruptions in regional or worldwide economic conditions generally arising from these situations may have on our businesses, industries or investments; • the impacts of liability, transaction and physical risks associated with climate change; • the significant volatility, uncertainty and disruption caused by health epidemics and pandemics, as well as governmental, legislative, judicial or regulatory actions or developments in response thereto; • changes in U.S. tax laws, regulations or interpretations, or in the tax laws, regulations or interpretations of other jurisdictions in which we operate, and adjustments we may make in our operations or tax strategies in response to those changes; • a failure or security breach of, or cyberattack on, enterprise information technology systems that we, or third parties who perform certain functions for us, use or a failure to comply with data protection or privacy regulations; • third-party providers may perform poorly, breach their obligations to us or expose us to enhanced risks; • our acquisitions may increase our operational and internal control risks for a period of time; • we may not realize the contemplated benefits, including cost savings and synergies, of our acquisitions; • any determination requiring the write-off of a significant portion of our goodwill and intangible assets; • the failure or inadequacy of any methods we employ to manage our loss exposures; • the loss of services of any senior executive or other key personnel, or an inability to attract and retain qualified personnel, for our businesses could adversely impact one or more of our operations; • the manner in which we manage our global operations through a network of business entities could result in inconsistent management, governance and oversight practices and make it difficult for us to implement strategic decisions and coordinate procedures; • our substantial international operations and investments expose us to increased political, civil, operational and economic risks, including foreign currency exchange rate and credit risk; • our ability to obtain additional capital for our operations on terms favorable to us; 10K - 67 • the compliance, or failure to comply, with covenants and other requirements under our credit facilities, senior debt and other indebtedness and our preferred shares; • our ability to maintain or raise third-party capital for existing or new investment vehicles and risks related to our management of third-party capital; • the effectiveness of our procedures for compliance with existing and future guidelines, policies and legal and regulatory standards, rules, laws and regulations; • the impact of economic and trade sanctions and embargo programs on our businesses, including instances in which the requirements and limitations applicable to the global operations of U.S. companies and their affiliates are more restrictive than, or conflict with, those applicable to non-U.S. companies and their affiliates; • regulatory changes, or challenges by regulators, regarding the use of certain issuing carrier or fronting arrangements; • our dependence on a limited number of brokers for a large portion of our revenues and third-party capital; • adverse changes in our assigned financial strength, debt or preferred share ratings or outlook could adversely impact us, including our ability to attract and retain business, the amount of capital our insurance subsidiaries must hold and the availability and cost of capital; • changes in the amount of statutory capital our insurance subsidiaries are required to hold, which can vary significantly and is based on many factors, some of which are outside our control; • losses from litigation and regulatory investigations and actions; and • a number of additional factors may adversely affect our Markel Ventures operations, and the markets they serve, and negatively impact their revenues and profitability, including, among others: adverse weather conditions, plant disease and other contaminants; changes in government support for education, healthcare and infrastructure projects; changes in capital spending levels; changes in the housing, commercial and industrial construction markets; liability for environmental matters; supply chain and shipping issues, including increases in freight costs; volatility in the market prices for their products; and volatility in commodity, wholesale and raw materials prices and interest and foreign currency exchange rates.
Additional factors that could cause actual results to differ from those predicted are set forth under Item 1 Business, Item 1A Risk Factors, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 7A Quantitative and Qualitative Disclosures About Market Risk in this report or are included in the items listed below: • the effect of cyclical trends or changes in market conditions on our Insurance, Investments Markel Ventures operations, including demand and pricing in the markets in which we operate; • actions by competitors, including the use of technology and innovation to simplify the customer experience, increase efficiencies, redesign products, alter models and effect other potentially disruptive changes, and the effect of competition on market trends and pricing; • our efforts to develop new products, expand in targeted markets or improve business processes and workflows may not be successful, may cost more or take longer than expected and may increase or create new risks (e.g., insufficient demand, change to risk exposures, distribution channel conflicts, execution risk, regulatory risk, increased expenditures); • the frequency and severity of man-made, health-related and natural catastrophes may exceed expectations, are unpredictable and, in the case of some natural catastrophes, may be exacerbated by changing conditions in the climate, oceans and atmosphere, resulting in increased frequency and/or severity of extreme weather-related events; • we offer insurance and reinsurance coverage against terrorist acts in connection with some of our programs, and in other instances we are legally required to offer terrorism insurance; in both circumstances, we actively manage our exposure, but if there is a covered terrorist attack, we could sustain material losses; • emerging claim and coverage issues, changing industry practices and evolving legal, judicial, social and other claims and coverage trends or conditions, can increase the scope of coverage, the frequency and severity of claims and the period over which claims may be reported; these factors, as well as uncertainties in the loss estimation process, can adversely impact the adequacy of our loss reserves and our allowance for reinsurance recoverables; • reinsurance reserves are subject to greater uncertainty than insurance reserves, primarily because of reliance upon the original underwriting decisions made by ceding companies and the longer lapse of time from the occurrence of loss events to their reporting to the reinsurer for ultimate resolution; • inaccuracies (whether due to data error, human error or otherwise) in the various modeling techniques and data analytics (e.g., scenarios, predictive and stochastic modeling, and forecasting) we use to analyze and estimate exposures, loss trends and other risks associated with all of our insurance businesses could cause us to misprice our products or fail to appropriately estimate the risks to which we are exposed; • changes in the assumptions and estimates used in establishing reserves for our life and annuity reinsurance book (which is in runoff), for example, changes in assumptions and estimates of mortality, longevity, morbidity and interest rates, could result in material changes in our estimated loss reserves for that business; • adverse developments in insurance coverage litigation or other legal or administrative proceedings could result in material increases in our estimates of loss reserves; • initial estimates for catastrophe losses and other significant, infrequent events are often based on limited information, are dependent on broad assumptions about the nature and extent of losses, coverage, liability and reinsurance, and those losses may ultimately differ materially from our expectations; 10K - 63 • changes in the availability, costs, quality and providers of reinsurance coverage, which may impact our ability to write, or continue to write, certain lines of business or to mitigate the volatility of losses on our results of operations and financial condition; • the ability or willingness of reinsurers to pay balances due may be adversely affected by industry and economic conditions, deterioration in reinsurer credit quality and coverage disputes, and collateral we hold, if any, may not be sufficient to cover a reinsurer's obligation to us; • after the commutation of ceded reinsurance contracts, any subsequent adverse development in the re-assumed loss reserves will result in a charge to earnings; • regulatory actions affecting our insurance operations can impede our ability to charge adequate rates and efficiently allocate capital; • general economic and market conditions and industry specific conditions, including extended economic recessions or expansions; prolonged periods of slow economic growth; inflation or deflation; fluctuations in foreign currency exchange rates, commodity and energy prices and interest rates; volatility in the credit and capital markets; and other factors; • economic conditions, actual or potential defaults in corporate bonds, municipal bonds, mortgage-backed securities or sovereign debt obligations, volatility in interest and foreign currency exchange rates, changes in U.S. government debt ratings and changes in market value of concentrated investments can have a significant impact on the fair value of our fixed maturity securities and equity securities, as well as the carrying value of our other assets and liabilities, and this impact may be heightened by market volatility and our ability to mitigate our sensitivity to these changing conditions; • economic conditions may adversely affect our access to capital and credit markets; • the effects of government intervention, including material changes in the monetary policies of central banks, to address financial downturns, inflation and other economic and currency concerns; • the impacts that political and civil unrest and regional conflicts may have on our businesses and the markets they serve or that any disruptions in regional or worldwide economic conditions generally arising from these situations may have on our businesses, industries or investments; • the impacts of liability, transition and physical risks associated with climate change; • the significant volatility, uncertainty and disruption caused by health epidemics and pandemics, as well as governmental, legislative, judicial or regulatory actions or developments in response thereto; • changes in U.S. tax laws, regulations or interpretations, or in the tax laws, regulations or interpretations of other jurisdictions in which we operate, and adjustments we may make in our operations or tax strategies in response to those changes; • a failure or security breach of, or cyberattack on, enterprise information technology systems that we, or third parties who perform certain functions for us, use, or a failure to comply with data protection or privacy regulations or regulations related to the use of artificial intelligence or machine learning technology; • third-party providers may perform poorly, breach their obligations to us or expose us to enhanced risks; • our acquisitions may increase our operational and internal control risks for a period of time; • we may not realize the contemplated benefits, including cost savings and synergies, of our acquisitions; • any determination requiring the write-off of a significant portion of our goodwill and intangible assets; • the failure or inadequacy of any methods we employ to manage our loss exposures; • the loss of services of any senior executive or other key personnel, or an inability to attract and retain qualified leaders to run any of our businesses could adversely impact one or more of our operations; • the manner in which our businesses operate through independent local management teams could result in inconsistent management, governance and oversight practices; • our substantial international operations and investments expose us to increased political, civil, operational and economic risks, including foreign currency exchange rate and credit risk; • our ability to obtain additional capital for our operations on terms favorable to us; • the compliance, or failure to comply, with covenants and other requirements under our credit facilities, senior debt and other indebtedness and our preferred shares; 10K - 64 • our ability to maintain or raise third-party capital for existing or new investment vehicles and risks related to our management of third-party capital; • the effectiveness of our procedures for compliance with existing and future guidelines, policies and legal and regulatory standards, rules, laws and regulations; • the impact of economic and trade sanctions and embargo programs on our businesses, including instances in which the requirements and limitations applicable to the global operations of U.S. companies and their affiliates are more restrictive than, or conflict with, those applicable to non-U.S. companies and their affiliates; • regulatory changes, or challenges by regulators, regarding the use of certain issuing carrier or fronting arrangements; • our dependence on a limited number of brokers for a large portion of our revenues for our insurance operations; • adverse changes in our assigned financial strength, debt or preferred share ratings or outlook could adversely impact us, including our ability to attract and retain business, the amount of capital our insurance subsidiaries must hold and the availability and cost of capital; • changes in the amount of statutory capital our insurance subsidiaries are required to hold, which can vary significantly and is based on many factors, some of which are outside our control; • losses from litigation and regulatory investigations and actions; • disruptions resulting from a threatened proxy contest or other actions by activist shareholders; • considerations and limitations relating to the use of intrinsic value as a performance metric, including the possibility that shareholders, analysts or other market participants may have a different perception of our intrinsic value, which may result in our stock price varying significantly from our intrinsic value calculations; and • a number of additional factors may adversely affect our Markel Ventures businesses, and the markets they serve, and negatively impact their revenues and profitability, including, among others: adverse weather conditions, plant disease and other contaminants; changes in government support for education, healthcare and infrastructure projects; changes in capital spending levels; changes in the housing, commercial and industrial construction markets; liability for environmental matters; supply chain and shipping issues, including increases in freight costs; volatility in the market prices for their products; and volatility in commodity, wholesale and raw materials prices and interest and foreign currency exchange rates.
Results from our underwriting, investing, Markel Ventures and other operations have been and will continue to be potentially materially affected by these factors. By making forward-looking statements, we do not intend to become obligated to publicly update or revise any such statements whether as a result of new information, future events or other changes.
Results from our Insurance, Investments and Markel Ventures operations have been and will continue to be potentially materially affected by these factors. By making forward-looking statements, we do not intend to become obligated to publicly update or revise any such statements whether as a result of new information, future events or other changes.
There are also regulatory restrictions on the amount of dividends that certain of our foreign insurance subsidiaries may pay based on applicable laws in their respective jurisdictions. At December 31, 2023, our domestic insurance subsidiaries and Markel Bermuda Limited could pay ordinary dividends of $1.2 billion during the following twelve months under these laws.
There are also regulatory restrictions on the amount of dividends that certain of our foreign insurance subsidiaries may pay based on applicable laws in their respective jurisdictions. At December 31, 2024, our domestic insurance subsidiaries and Markel Bermuda Limited could pay ordinary dividends of $1.3 billion during the following twelve months under these laws.
Financing activities in 2023 and 2022 also reflected borrowings and repayments at certain our Markel Ventures businesses, primarily on revolving lines of credit.
Financing activities in 2024 and 2023 also reflected borrowings and repayments at certain our Markel Ventures businesses, primarily on revolving lines of credit.
In the period shortly after an event occurs, more weight is put on modeling and industry estimates, whereas with the passage of time, greater reliance is placed on incurred claims data and historical claim patterns.
In the period shortly after an event occurs, more weight is put on modeling and industry estimates, whereas with the passage of time, greater reliance is placed on incurred claims data, individual contract exposures and historical claim patterns.
A discussion of changes in our results of operations and financial condition from 2021 to 2022 may be found in Part II Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission on February 17, 2023.
A discussion of changes in our results of operations and financial condition from 2022 to 2023 may be found in Part II Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission on February 23, 2024.
The following table reconciles Markel Ventures operating income to Markel Ventures EBITDA.
The following table reconciles Markel Ventures segment operating income to EBITDA.
The following table summarizes our estimated contractual cash obligations at December 31, 2023 and the estimated amount expected to be paid in 2024.
The following table summarizes our estimated contractual cash obligations at December 31, 2024 and the estimated amount expected to be paid in 2025.
The Reinsurance segment's 2023 combined ratio included $57.1 million of adverse development on prior accident years loss reserves, which was driven by $95.5 million, or nine points, of adverse development on our general liability product lines and $53.7 million, or five points, of adverse development on our public entity product line, as well as additional exposures recognized on prior accident years related to net favorable premium adjustments on our general liability product lines.
In 2023, the combined ratio included $57.1 million of adverse development on prior accident years loss reserves, which was driven by $95.5 million, or nine points, of adverse development on our general liability product lines and $55.7 million, or five points, of adverse development on our public entity product line, as well as additional exposures recognized on prior accident years related to net favorable premium adjustments on our general liability product lines.
The availability of data from these procedures varies depending on the timing of the event relative to the point at which we develop our estimate. We also consider loss experience on historical events that may have similar characteristics to the underlying event and current market conditions, including the level of economic inflation.
The availability of data from these procedures varies depending on the timing of the event relative to the point at which we develop our estimate. We also consider loss experience on historical events that may have similar characteristics to the underlying event and current market conditions.
As of December 31, 2023 and 2022, there were no borrowings outstanding under this revolving credit facility. We were in compliance with all covenants contained in our corporate revolving credit facility at December 31, 2023. To the extent that we are not in compliance with our 10K - 54 covenants, access to the revolving credit facility could be restricted.
As of December 31, 2024 and 2023, there were no borrowings outstanding under this revolving credit facility. We were in compliance with all covenants contained in our corporate revolving credit facility at December 31, 2024. To the extent that we are not in compliance with our covenants, access to the revolving credit facility could be restricted.
During the years ended December 31, 2023 and 2022, we experienced favorable development on prior years loss reserves of 0.3% and 1.5%, respectively, of beginning of year net loss reserves.
During the year ended December 31, 2024, we experienced favorable development on prior years loss reserves of 3.1% of beginning of year net loss reserves. This followed favorable development of 0.3% and 1.5% of beginning of year net loss reserves during the years ended December 31, 2023 and 2022, respectively.
(2) The point impact of catastrophes and the Russia-Ukraine conflict is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums.
(2) The point impact of catastrophes is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums.
As of December 31, 2023, the average duration of our reserves for unpaid losses and loss adjustment expenses was 3.8 years. See note 11 of the notes to consolidated financial statements included under Item 8 for further details on our loss reserve estimates.
As of December 31, 2024, the average duration of our reserves for unpaid losses and loss adjustment expenses was 4.0 years. See note 11 of the notes to consolidated financial statements included under Item 8 for further details on our loss reserve estimates.
In general, these businesses operate using limited long-term debt and rely primarily on revolving lines of credit for their operational financing needs. Markel Ventures, Inc. may also provide loans or make contributions to these operating subsidiaries to fund strategic growth investments and projects.
In general, these businesses operate using limited long-term debt and rely primarily on revolving lines of credit for their operational financing needs. Certain businesses also utilize term debt to finance capital asset acquisitions. Markel Ventures, Inc. may also provide loans or make contributions to these operating subsidiaries to fund strategic growth investments and projects.
Markel Ventures EBITDA is a non-GAAP financial measure. We use Markel Ventures EBITDA as an operating performance measure in conjunction with U.S. GAAP measures, including operating income, to monitor and evaluate the performance of our Markel Ventures segment.
We use Markel Ventures segment EBITDA as an operating performance measure in conjunction with U.S. GAAP measures, including operating income, to monitor and evaluate the performance of our Markel Ventures segment.
See note 4(d) of the notes to consolidated financial statements included under Item 8 for details regarding the components of net investment income. Markel Ventures Results We measure Markel Ventures' results by its operating income, as well as earnings before interest, income taxes, depreciation and amortization (EBITDA).
See note 4(d) of the notes to consolidated financial statements included under Item 8 for details regarding the components of net investment income. 10K - 47 Markel Ventures Results We measure the operating performance of our Markel Ventures segment by its operating income, as well as earnings before interest, income taxes, depreciation and amortization (EBITDA).
Additionally, we have pledged investments and cash and cash equivalents totaling $450.5 million at December 31, 2023 as security for letters of credit that have been issued by various banks on our behalf. These invested assets and the related liabilities are included in our consolidated balance sheet.
Additionally, we have pledged investments and cash and cash equivalents totaling $419.1 million at December 31, 2024 as security for letters of credit that have been issued by various banks on our behalf. These invested assets and the related liabilities are included in our consolidated balance sheet.
Additionally, consolidated unpaid losses and loss adjustment expenses as of December 31, 2023 and December 31, 2022 included $185.0 million and $347.9 million, respectively, of fully collateralized reserves attributable to Markel CATCo Re, which we consolidate following the Markel CATCo buy-out.
Additionally, consolidated unpaid losses and loss adjustment expenses as of December 31, 2024 and December 31, 2023 included $25.0 million and $185.0 million, respectively, of fully collateralized reserves attributable to Markel CATCo Re, which we consolidate following the Markel CATCo buy-out.
Significant variability in gross premium volume can be expected in our Reinsurance segment due to individually significant contracts and multi-year contracts. Net retention of gross premium volume was 92% in 2023 compared to 95% in 2022.
Significant variability in gross premium volume can be expected in our Reinsurance segment due to individually significant contracts and multi-year contracts. Net retention of gross premium volume was 90% in 2024 compared to 92% in 2023.
Pre-tax net foreign exchange gains and losses attributed to changes in exchange rates on available-for-sale securities supporting our insurance reserves, which are included in the changes in net unrealized gains (losses) on available-for-sale investments in other comprehensive income (loss), were gains of $74.0 million in 2023 compared to losses of $79.5 million in 2022.
Pre-tax net foreign exchange gains and losses attributed to changes in exchange rates on available-for-sale securities supporting our insurance reserves, which are included in the changes in net unrealized gains (losses) on available-for-sale investments in other comprehensive income (loss), were losses of $93.2 million in 2024 compared to gains of $74.0 million in 2023.
As a result, the liability for unpaid losses and loss adjustment expenses includes significant estimates for incurred but not reported claims. There is normally a time lag between when a loss event occurs and when it is reported to us.
There is normally a time lag between when a loss event occurs and when it is reported to us, and some claims may not be reported for many years. As a result, the liability for unpaid losses and loss adjustment expenses includes significant estimates for incurred but not reported claims.
Our underwriting operations, which are primarily comprised of our Insurance and Reinsurance segments, produce revenues primarily by underwriting insurance contracts and earning premiums in the specialty insurance market. Our program services and other fronting and insurance-linked securities operations produce revenues primarily through fees earned for fronting services and investment management services, respectively.
Our underwriting operations, which are primarily comprised of our Insurance and Reinsurance segments, produce revenues primarily by underwriting insurance contracts and earning premiums in the specialty insurance market. Our program services and ILS operations produce revenues primarily through fees earned for fronting services and investment management services.
(4) There is inherent uncertainty in the process of estimating the timing of payments for life and annuity benefits and actual cash payments for settled contracts could vary significantly from these estimates. We expect $631.3 million of our cash obligation for life and annuity benefits to be paid beyond five years.
(5) There is inherent uncertainty in the process of estimating the timing of payments for life and annuity benefits and actual cash payments for settled contracts could vary significantly from these estimates. We expect $553.6 million of our cash obligation for life and annuity benefits to be paid beyond five years.
The magnitude of our historical trend of favorable loss reserve development, which ranged from 4.6% to 6.4% of beginning of year net loss reserves over the preceding five years, was disrupted in 2022 and 2023 as a result of the emergence of multiple factors that impacted the claims and loss trends on certain of our general liability and professional liability product lines, which resulted in net adverse loss development within the select product lines previously discussed.
The magnitude of our historical trend of favorable loss reserve development, which ranged from 4.6% to 6.4% of beginning of year net loss reserves from 2016 to 2021, was disrupted in 2022 and 2023 as a result of the emergence of multiple factors that impacted the claims and loss trends on certain of our U.S. general liability and professional liability product lines, which resulted in net adverse loss development within the select product lines previously discussed.
(6) Purchase obligations are primarily related to open purchase order commitments with subcontractors and suppliers under contracts in our insurance and Markel Ventures operations. Restricted Assets and Capital At December 31, 2023, we had $5.0 billion of invested assets held in trust or on deposit for the benefit of policyholders or ceding companies or to support underwriting activities.
(6) Purchase obligations are primarily related to open purchase order commitments with subcontractors and suppliers under contracts in our insurance and Markel Ventures operations. 10K - 55 Restricted Assets and Capital At December 31, 2024, we had $4.7 billion of invested assets held in trust or on deposit for the benefit of policyholders or ceding companies or to support underwriting activities.
Our consolidated underwriting results also include results from discontinued lines of business and the retained portion of our program services and other fronting operations.
Our consolidated underwriting results also include results from discontinued lines of business and the retained portion of our fronting operations.
Net cash used by investing activities was $2.7 billion in 2023 compared to $1.7 billion in 2022. In 2023, net cash used by investing activities included net purchases of fixed maturity securities and equity securities of $2.2 billion and $339.7 million, respectively, and net sales of short-term investments of $202.9 million.
In 2023, net cash used by investing activities included net purchases of fixed maturity securities and equity securities of $2.2 billion and $339.7 million, respectively, and net sales of short-term investments of $202.9 million.
Years Ended December 31, (dollars in thousands) 2023 2022 2021 2020 2019 Net investment income $ 734,532 $ 446,755 $ 367,417 $ 375,826 $ 442,182 Yield on fixed maturity securities (1) 2.8 % 2.3 % 2.6 % 3.1 % 3.5 % Yield on short-term investments (1) 4.5 % 1.5 % 0.1 % 0.5 % 1.9 % Yield on cash and cash equivalents and restricted cash and cash equivalents (1) 2.8 % 0.6 % 0.0 % 0.2 % 0.9 % Net realized investment gains (losses) $ (42,177) $ (40,983) $ 37,908 $ 14,780 $ (1,482) Change in fair value of equity securities 1,566,231 (1,554,750) 1,940,626 603,199 1,603,204 Net investment gains (losses) $ 1,524,054 $ (1,595,733) $ 1,978,534 $ 617,979 $ 1,601,722 Return on equity securities (2) 21.6 % (16.1) % 29.4 % 15.1 % 29.8 % Five-year annual return 14.6 % 9.3 % 18.4 % 15.2 % 11.4 % Ten-year annual return 11.9 % 12.9 % 16.9 % 14.3 % 14.7 % Twenty-year annual return 10.2 % 10.6 % 11.0 % 10.5 % 11.0 % Other (3) $ (11,854) $ (17,661) $ 7,184 $ (3,996) $ 9,706 Change in net unrealized gains (losses) on available-for-sale investments $ 390,558 $ (1,463,876) $ (513,084) $ 510,247 $ 433,280 (1) Yield reflects the applicable interest income as a percentage of the applicable monthly average invested assets at amortized cost.
Years Ended December 31, (dollars in thousands) 2024 2023 2022 2021 2020 Net investment income $ 920,496 $ 734,532 $ 446,755 $ 367,417 $ 375,826 Yield on fixed maturity securities (1) 3.2 % 2.8 % 2.3 % 2.6 % 3.1 % Yield on short-term investments (1) 4.8 % 4.5 % 1.5 % 0.1 % 0.5 % Yield on cash and cash equivalents and restricted cash and cash equivalents (1) 3.7 % 2.8 % 0.6 % 0.0 % 0.2 % Net realized investment gains (losses) $ 4,423 $ (42,177) $ (40,983) $ 37,908 $ 14,780 Change in fair value of equity securities 1,802,796 1,566,231 (1,554,750) 1,940,626 603,199 Net investment gains (losses) $ 1,807,219 $ 1,524,054 $ (1,595,733) $ 1,978,534 $ 617,979 Return on equity securities (2) 20.1 % 21.6 % (16.1) % 29.4 % 15.1 % Five-year annual return 12.8 % 14.6 % 9.3 % 18.4 % 15.2 % Ten-year annual return 12.1 % 11.9 % 12.9 % 16.9 % 14.3 % Twenty-year annual return 10.5 % 10.2 % 10.6 % 11.0 % 10.5 % Other (3) $ 52,253 $ (11,854) $ (17,661) $ 7,184 $ (3,996) Change in net unrealized gains (losses) on available-for-sale investments $ (165,423) $ 390,558 $ (1,463,876) $ (513,084) $ 510,247 (1) Yield reflects the applicable interest income as a percentage of the monthly average invested assets at amortized cost.
Capital used by Markel Ventures, Inc. to complete acquisitions consists of profits generated by Markel Ventures, as well as capital contributions from Markel Group and loans from our insurance subsidiaries. Operating cash flows from our Markel Ventures operations was $568.1 million in 2023 and $260.3 million in 2022.
Capital used by Markel Ventures, Inc. to complete acquisitions consists of profits generated by Markel Ventures, as well as capital contributions from Markel Group and loans from our insurance subsidiaries. Operating cash flows from our Markel Ventures operations was $497.0 million in 2024 and $568.1 million in 2023.
See note 8 of the notes to consolidated financial statements for further details. Safe Harbor and Cautionary Statement This report contains statements concerning or incorporating our expectations, assumptions, plans, objectives, future financial or operating performance and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.
Safe Harbor and Cautionary Statement This report contains statements concerning or incorporating our expectations, assumptions, plans, objectives, future financial or operating performance and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.
December 31, 2023 2022 Fixed maturity securities 4 % 4 % Equity securities 49 % 40 % Short-term investments, cash and cash equivalents and restricted cash and cash equivalents 47 % 56 % Total 100 % 100 % After satisfying our interest and principal obligations on our senior long-term debt and paying dividends on our preferred stock when declared by our Board of Directors, as well as any other holding company obligations, capital at Markel Group is available to, among other things, allocate to our existing businesses, complete acquisitions, build our portfolio of equity securities or repurchase shares of our common stock.
December 31, 2024 2023 Fixed maturity securities 3 % 4 % Equity securities 48 % 49 % Short-term investments, cash and cash equivalents and restricted cash and cash equivalents 49 % 47 % Total 100 % 100 % After satisfying our interest and principal obligations on our senior long-term debt and paying dividends on our preferred stock when declared by our Board of Directors, as well as any other holding company obligations, capital at Markel Group is available to, among other things, allocate to our existing businesses, complete acquisitions, build our portfolio of equity securities or repurchase shares of our common stock. 10K - 52 In November 2024, our Board of Directors approved a new share repurchase program that replaced the previous share repurchase program.
See note 13 of the notes to consolidated financial statements included under Item 8 for further details on our estimates for life and annuity benefit reserves. (5) See note 9 of the notes to consolidated financial statements included under Item 8 for further details on our lease obligations and the expected timing of future payments.
(4) See note 9 of the notes to consolidated financial statements included under Item 8 for further details on our lease obligations and the expected timing of future payments.
The loss trends observed over the past two years have created more uncertainty around the ultimate losses that will be incurred to settle claims on these longer-tail product lines.
The loss trends observed over the past several years have created more uncertainty around the ultimate losses that will be incurred to settle claims on our longer-tail professional liability and general liability product lines.
(2) Results attributable to Markel CATCo Re were entirely attributable to noncontrolling interest holders in Markel CATCo Re. (3) Underwriting results attributable to our other insurance operations include results from discontinued lines of business and the retained portion of our program services and other fronting operations.
(2) Results attributable to Markel CATCo Re Ltd. (Markel CATCo Re) for both periods were entirely attributable to noncontrolling interest holders in Markel CATCo Re. (3) Underwriting results attributable to our other insurance operations are comprised of results from discontinued lines of business and the retained portion of our fronting operations.
In June 2023, we entered into an amended and restated credit agreement for our corporate revolving credit facility, which provides up to $300 million of capacity for future acquisitions, investments and stock repurchases, and for other working capital and general corporate purposes. At our discretion, up to $200 million of the total capacity may be used for letters of credit.
We maintain a corporate revolving credit facility, which provides up to $300 million of capacity for future acquisitions, investments and stock repurchases, and for other working capital and general corporate purposes. At our discretion, up to $200 million of the total capacity may be used for letters of credit.
In the initial months after a catastrophic event occurs, our actuaries estimate losses and loss adjustment expenses based on claims received to date, industry loss estimates and output from industry, broker and proprietary models, as well as analysis of our ceded reinsurance contracts. We may also perform detailed policy and reinsurance contract level reviews.
In the initial months after a catastrophic event occurs, our actuaries estimate losses and loss adjustment expenses based on claims received to date, analysis of exposures in the impacted areas, industry loss estimates and output from industry, broker and proprietary models, as well as analysis of our ceded reinsurance contracts.
Some factors that contribute to the uncertainty and volatility of long-tail business, and thus require a significant degree of judgment in the reserving process, include the effects of unanticipated levels of economic inflation, the impact of social inflation, the inherent uncertainty as to the length of reporting and payment development patterns, the possibility of judicial interpretations or legislative changes, including changes in workers' compensation benefit laws, that might impact future loss experience relative to prior loss experience and the potential lack of comparability of the underlying data used in performing loss reserve analyses.
Some factors that contribute to the uncertainty and volatility of long-tail business, 10K - 57 and thus require a significant degree of judgment in the reserving process, include the effects of unanticipated levels of economic inflation, the impact of social inflation, the inherent uncertainty as to the length of reporting and payment development patterns and the possibility of judicial interpretations or legislative changes that might impact future loss experience relative to prior loss experience.
Unpaid Losses and Loss Adjustment Expenses Our consolidated balance sheets included estimated unpaid losses and loss adjustment expenses of $23.5 billion and reinsurance recoverables on unpaid losses of $8.8 billion at December 31, 2023 compared to $20.9 billion and $8.0 billion, respectively, at December 31, 2022.
Unpaid Losses and Loss Adjustment Expenses Our consolidated balance sheets included estimated unpaid losses and loss adjustment expenses of $26.6 billion and reinsurance recoverables on unpaid losses of $11.1 billion at December 31, 2024 compared to $23.5 billion and $8.8 billion, respectively, at December 31, 2023.
There is also often a time lag between cedents establishing case reserves or re-estimating their reserves and notifying us of those new or revised case reserves. As a result, the reporting lag is more pronounced in our reinsurance contracts than in our insurance contracts.
The reporting lag can be more pronounced in our reinsurance contracts than in our insurance contracts due to a time lag between cedents establishing case reserves or re-estimating their reserves and notifying us of those new or revised case reserves.
The impact of economic and social inflation, including the rising cost to adjust and settle claims and the impact of more pervasive litigation financing trends, has contributed to the loss cost trends, leading to higher than anticipated losses in older accident years for these product lines.
The impact of economic and social inflation, including the rising cost to adjust and settle claims and the impact of more pervasive litigation financing trends, contributed to the loss cost trends, leading to higher than anticipated losses.
We also analyze our current accident year loss ratio excluding losses and loss adjustment expenses attributable to catastrophes and, in 2022, the Russia-Ukraine conflict.
We also analyze our current accident year loss ratio excluding losses and loss adjustment expenses attributable to catastrophes.
The cash flow projections included management's best estimate of future growth and margins. The discount rate was primarily based on a capital asset pricing model. Based on the results of our quantitative assessment, the estimated fair value of the reporting unit exceeded the carry value.
The cash flow projections included management's best estimate of future growth and margins. The discount rates used were primarily based on a capital asset pricing model. Based on the results of our quantitative assessments, the estimated fair value of each reporting unit exceeded its carrying value.
Adverse development in 2023 on our U.S. and Bermuda general liability and professional liability product lines totaled $330.7 million, or five points.
Adverse development in 2023 on our U.S. general liability and professional liability product lines within our Insurance segment totaled $330.7 million.
(2) The point impact of catastrophes and the Russia-Ukraine conflict is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums. Premiums The increase in gross premium volume in our underwriting operations in 2023 was driven by growth within our Insurance segment, partially offset by lower gross premium volume within our Reinsurance segment.
(2) The point impact of catastrophes is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums. Premiums The increase in gross premium volume in our underwriting operations in 2024 was driven by growth within both of our underwriting segments.
We do not expect Pillar Two or the Bermuda CIT Act to have a material impact on our results of operations, financial condition or cash flows, however, we will continue to evaluate these tax law changes as additional guidance is issued by the OECD and relevant tax authorities.
Pillar Two and the Bermuda CIT Act did not have a material impact on our results of operations, financial condition or cash flows in 2024, and we do not expect either to have a material impact on our results of operations, financial condition or cash flows in future periods, however, we will continue to evaluate these tax law changes as additional guidance is issued by the OECD and relevant tax authorities. 10K - 51 Other Comprehensive Income (Loss) to Shareholders The following table summarizes the components of other comprehensive income (loss) to shareholders.
Any adjustments to reserves resulting from our interim or year-end reviews, including changes in estimates, are recorded as a component of losses and loss adjustment expenses in the period of the change. Reserve changes that increase previous estimates of ultimate claims cost are referred to as unfavorable or adverse development, or reserve strengthening.
Any adjustments to reserves resulting from our interim or year-end reviews, including changes in estimates, are recorded as a component of losses and loss adjustment expenses in the period of the change.
Similar to the development of our estimate of ultimate losses, actuarial ranges are developed based on known events as of the valuation date, while ultimate paid losses are subject to events and circumstances that are unknown as of the valuation date.
Similar to the development of our estimate of ultimate losses, actuarial ranges are developed based on known events as of the valuation date, while ultimate paid losses are subject to events and circumstances that are unknown as of the valuation date. Changes in Estimates Our ultimate liability may be greater or less than current reserves.
There were no capital contributions from our holding company to our insurance subsidiaries in 2023. Markel Ventures Our Markel Ventures operating subsidiaries include a diverse portfolio of businesses in a variety of industries. The nature of the cash inflows and outflows generated by each of the individual operating businesses varies based on their individual industries and business strategies.
In 2023, our insurance subsidiaries paid dividends totaling $310.0 million to Markel Group. Markel Ventures Our Markel Ventures operating subsidiaries include a diverse portfolio of businesses in a variety of industries. The nature of the cash inflows and outflows generated by each of the individual operating businesses varies based on their individual industries and business strategies.
The decrease in net retention was driven by changes in mix of gross premium volume, as our professional liability business is fully retained and our marine and energy business carries a higher cession rate than the rest of the segment.
The decrease in net retention was driven by the increased premium volume in our marine and energy business, which carries a higher cession rate than the rest of the segment.
Item 7 is divided into the following sections: • Results of Operations • Liquidity and Capital Resources • Critical Accounting Estimates • Safe Harbor and Cautionary Statement For a discussion of our significant accounting policies, as well as recently issued accounting pronouncements that we have not yet adopted and their expected effects on our consolidated financial position, results of operations and cash flows, see note 1 of the notes to consolidated financial statements included under Item 8.
Item 7 is divided into the following sections: • Results of Operations • Liquidity and Capital Resources • Critical Accounting Estimates • Safe Harbor and Cautionary Statement For a discussion of our significant accounting policies, see note 1 of the notes to consolidated financial statements included under Item 8.
Intangible assets with definite lives are reviewed for impairment when events or circumstances indicate that their carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested for impairment annually, or when events or circumstances indicate that their carrying value may not be recoverable.
We did not make any significant acquisitions during the year ended December 31, 2023. Intangible assets with definite lives are reviewed for impairment when events or circumstances indicate that their carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested for impairment annually, or when events or circumstances indicate that their carrying value may not be recoverable.
(dollars in millions) Net Loss Reserves Held Low End of Actuarial Range (1) High End of Actuarial Range (1) Insurance $ 11,048.5 $ 8,940.1 $ 11,929.5 Reinsurance $ 3,339.5 $ 2,732.9 $ 3,795.0 Other underwriting $ 89.8 $ 62.1 $ 109.6 (1) Due to the actuarial methods used to determine the separate ranges for each component of our business, it is not appropriate to aggregate the high or low ends of the separate ranges to determine the high and low ends of the actuarial range on a consolidated basis.
(dollars in millions) Net Loss Reserves Held Low End of Actuarial Range (1) High End of Actuarial Range (1) Insurance $ 11,938.9 $ 10,022.3 $ 12,573.0 Reinsurance $ 3,472.5 $ 2,569.9 $ 4,130.5 (1) Due to the actuarial methods used to determine the separate ranges for each component of our business, it is not appropriate to aggregate the high or low ends of the separate ranges to determine the high and low ends of the actuarial range on a consolidated basis.
The range determinations are based on estimates and actuarial judgements and are intended to encompass reasonably likely changes in one or more of the factors that were used to determine the point estimates. Using statistical models, our actuaries establish a range of reasonable reserve estimates for each of our underwriting segments.
The range determinations are based on estimates and actuarial judgements and are intended to encompass reasonably likely changes in one or more of the factors that were used to determine the point estimates.
Included in these balances were unpaid losses and loss adjustment expenses and reinsurance recoverables on unpaid losses attributable to our program services business and other fronting arrangements totaling $5.2 billion as of both December 31, 2023 and 2022.
Included in these balances were unpaid losses and loss adjustment expenses and reinsurance recoverables on unpaid losses attributable to business that was fronted through our program services and ILS operations totaling $6.5 billion and $5.2 billion as of December 31, 2024 and 2023, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

25 edited+1 added−2 removed21 unchanged
Biggest change(dollars in millions) Estimated Fair Value Hypothetical Change in Interest Rates (bp=basis points) Estimated Fair Value after Hypothetical Change in Interest Rates Hypothetical Percentage Increase (Decrease) in Fair Value of Fixed Maturity Securities Shareholders' Equity Assets As of December 31, 2023 Fixed maturity securities $ 14,373 200 bp decrease $ 15,614 8.6 % 6.5 % 100 bp decrease 14,978 4.2 3.2 100 bp increase 13,815 (3.9) (2.9) 200 bp increase 13,280 (7.6) (5.8) As of December 31, 2022 Fixed maturity securities $ 11,857 200 bp decrease $ 12,843 8.3 % 6.0 % 100 bp decrease 12,334 4.0 2.9 100 bp increase 11,406 (3.8) (2.7) 200 bp increase 10,972 (7.5) (5.3) Liabilities (1) As of December 31, 2023 Senior long-term debt and other debt $ 3,353 200 bp decrease $ 4,222 100 bp decrease 3,747 100 bp increase 3,026 200 bp increase 2,753 As of December 31, 2022 Senior long-term debt and other debt $ 3,541 200 bp decrease $ 4,384 100 bp decrease 3,922 100 bp increase 3,225 200 bp increase 2,962 (1) Changes in estimated fair value have no impact on shareholders' equity. 10K - 70 Foreign Currency Exchange Rate Risk We have foreign currency exchange rate risk associated with certain of our international operations' assets and liabilities.
Biggest change(dollars in millions) Estimated Fair Value Hypothetical Change in Interest Rates (bp=basis points) Estimated Fair Value after Hypothetical Change in Interest Rates Hypothetical Percentage Increase (Decrease) in Fair Value of Fixed Maturity Securities Shareholders' Equity Assets As of December 31, 2024 Fixed maturity securities $ 15,746 200 bp decrease $ 17,047 8.3 % 6.1 % 100 bp decrease 16,377 4.0 2.9 100 bp increase 15,151 (3.8) (2.8) 200 bp increase 14,585 (7.4) (5.4) As of December 31, 2023 Fixed maturity securities $ 14,373 200 bp decrease $ 15,614 8.6 % 6.5 % 100 bp decrease 14,978 4.2 3.2 100 bp increase 13,815 (3.9) (2.9) 200 bp increase 13,280 (7.6) (5.8) Liabilities (1) As of December 31, 2024 Senior long-term debt and other debt $ 3,791 200 bp decrease $ 4,757 100 bp decrease 4,228 100 bp increase 3,427 200 bp increase 3,121 As of December 31, 2023 Senior long-term debt and other debt $ 3,353 200 bp decrease $ 4,222 100 bp decrease 3,747 100 bp increase 3,026 200 bp increase 2,753 (1) Changes in estimated fair value have no impact on shareholders' equity. 10K - 67 Foreign Currency Exchange Rate Risk We have foreign currency exchange rate risk associated with certain of our international operations' assets and liabilities.
The selected hypothetical changes do not indicate what could be the potential best or worst case scenarios.
The selected hypothetical changes do not indicate what could be the potential best or worst case scenarios.
We manage the exposure to credit risk in our municipal bond portfolio by investing in high quality securities and by diversifying our holdings, which are typically either general obligation or revenue bonds related to essential products and services. 10K - 71 Reinsurance Recoverables We have credit risk within our reinsurance recoverables to the extent any of our reinsurers are unwilling or unable to meet their obligations to us under our ceded reinsurance agreements.
We manage the exposure to credit risk in our municipal bond portfolio by investing in high quality securities and by diversifying our holdings, which are typically either general obligation or revenue bonds related to essential products and services. 10K - 68 Reinsurance Recoverables We have credit risk within our reinsurance recoverables to the extent any of our reinsurers are unwilling or unable to meet their obligations to us under our ceded reinsurance agreements.
At December 31, 2023 and 2022, our foreign currency denominated assets and liabilities that are subject to foreign currency exchange rate risk were substantially matched or hedged. Credit Risk Credit risk, which is not considered a market risk, is the risk that an entity becomes unable or unwilling to fulfill their obligation to us.
At December 31, 2024 and 2023, our foreign currency denominated assets and liabilities that are subject to foreign currency exchange rate risk were substantially matched or hedged. Credit Risk Credit risk, which is not considered a market risk, is the risk that an entity becomes unable or unwilling to fulfill their obligation to us.
Our primary credit risks are the credit risk within our fixed maturity portfolio and the credit risk related to our reinsurance recoverables within our underwriting, program services and other fronting operations. Fixed Maturity Investments Credit risk exists within our fixed maturity portfolio from the potential for loss resulting from adverse changes in an issuer's ability to repay its debt obligations.
Our primary credit risks are the credit risk within our fixed maturity portfolio and the credit risk related to our reinsurance recoverables within our underwriting, program services and ILS fronting operations. Fixed Maturity Investments Credit risk exists within our fixed maturity portfolio from the potential for loss resulting from adverse changes in an issuer's ability to repay its debt obligations.
The usefulness of a single point-in-time model is limited, as it is unable to accurately incorporate the full complexity of market interactions. The following table summarizes our interest rate risk and shows the effect of hypothetical changes in interest rates as of December 31, 2023 and 2022.
The usefulness of a single point-in-time model is limited, as it is unable to accurately incorporate the full complexity of market interactions. The following table summarizes our interest rate risk and shows the effect of hypothetical changes in interest rates as of December 31, 2024 and 2023.
We have investment guidelines that set limits on the equity holdings of our insurance subsidiaries. The following table summarizes our equity price risk and shows the effect of a hypothetical 35% increase or decrease in market prices as of December 31, 2023 and 2022.
We have investment guidelines that set limits on the equity holdings of our insurance subsidiaries. The following table summarizes our equity price risk and shows the effect of a hypothetical 35% increase or decrease in market prices as of December 31, 2024 and 2023.
Senior long-term debt and other debt is recorded at amortized cost in our financial statements, and therefore, changes in fair value do not impact our financial position or results of operations. 10K - 69 Our underwriting operations provide our investment operations with steady inflows of premiums.
Senior long-term debt and other debt is recorded at amortized cost in our financial statements, and therefore, changes in fair value do not impact our financial position or results of operations. 10K - 66 Our underwriting operations provide our investment operations with steady inflows of premiums.
For this business, we require collateral up to a specified level of annual aggregate agreement year losses, which is held in a trust for which we are the beneficiary. The required collateral is monitored regularly against the annual aggregate agreement year losses to ensure adequacy of the collateral in the event of a loss. 10K - 72
For this business, we require collateral up to a specified level of annual aggregate agreement year losses, which is held in a trust for which we are the beneficiary. The required collateral is monitored regularly against the annual aggregate agreement year losses to ensure adequacy of the collateral in the event of a loss. 10K - 69
For four of the remaining five reinsurers, as of December 31, 2023, collateral held exceeded the related reinsurance recoverable. Within our program services business, we mitigate credit risk by either selecting well capitalized, highly rated authorized reinsurers or requiring that the reinsurer post substantial collateral to secure the reinsured risks, which, in some instances, exceeds the related reinsurance recoverable.
For all five of the remaining reinsurers, as of December 31, 2024, collateral held exceeded the related reinsurance recoverable. Within our program services business, we mitigate credit risk by either selecting well capitalized, highly rated authorized reinsurers or requiring that the reinsurer post substantial collateral to secure the reinsured risks, which, in some instances, exceeds the related reinsurance recoverable.
We were the beneficiary of letters of credit, trust accounts and funds withheld in the aggregate amount of $2.0 billion at December 31, 2023, collateralizing reinsurance recoverable balances due from these ten reinsurers, and $3.3 billion for our total reinsurance recoverables balance. Five of our ten largest reinsurers were rated "A" or better by A.M. Best.
We were the beneficiary of letters of credit, trust accounts and funds withheld in the aggregate amount of $2.2 billion at December 31, 2024, collateralizing reinsurance recoverable balances due from these ten reinsurers, and $3.6 billion for our total reinsurance recoverables balance. Five of the ten largest reinsurers were rated "A" or better by A.M. Best.
Investments in the property and casualty insurance industry represented $1.7 billion, or 18%, of our equity portfolio at December 31, 2023 and included a $1.2 billion investment in the common stock of Berkshire Hathaway Inc., a company whose subsidiaries engage in a number of diverse business activities in addition to insurance.
Investments in the property and casualty insurance industry represented $2.2 billion, or 18%, of our equity portfolio at December 31, 2024 and included a $1.5 billion investment in the common stock of Berkshire Hathaway Inc., a company whose subsidiaries engage in a number of diverse business activities in addition to insurance.
We monitor our investment portfolio to ensure that credit risk does not exceed prudent levels. We have consistently invested in high credit quality, investment grade securities. As of December 31, 2023, 97% of our fixed maturity portfolio was rated "AA" or better.
We monitor our investment portfolio to ensure that credit risk does not exceed prudent levels. We have consistently invested in high credit quality, investment grade securities. As of December 31, 2024, 98% of our fixed maturity portfolio was rated "AA" or better.
At December 31, 2023, our equity portfolio was concentrated in terms of the number of issuers and industries. Such concentrations can lead to higher levels of volatility. At December 31, 2023, our ten largest equity holdings represented $3.9 billion, or 41%, of the equity portfolio.
At December 31, 2024, our equity portfolio was concentrated in terms of the number of issuers and industries. Such concentrations can lead to higher levels of volatility. At December 31, 2024, our ten largest equity holdings represented $4.9 billion, or 42%, of the equity portfolio.
These funds are invested predominantly in high-quality government and municipal bonds and mortgage-backed securities that generally match the duration and currency of our loss reserves. As of December 31, 2023, our fixed maturity portfolio had an average duration of 4.1 years and 97% of the portfolio was rated "AA" or better.
These funds are invested predominantly in high-quality government and municipal bonds and agency mortgage-backed securities that generally match the duration and currency of our loss reserves. As of December 31, 2024, our fixed maturity portfolio had an average duration of 3.9 years and 98% of the portfolio was rated "AA" or better.
Underwriting Within our underwriting operations, our reinsurance recoverables balance for the ten largest reinsurers was $2.6 billion at December 31, 2023, representing 65% of the $4.0 billion total reinsurance recoverables, before considering allowances for credit losses.
Underwriting Within our underwriting operations, our reinsurance recoverables balance for the ten largest reinsurers was $3.2 billion at December 31, 2024, representing 63% of the $5.0 billion total reinsurance recoverables, before considering allowances for credit losses.
(dollars in millions) Estimated Fair Value Hypothetical Price Change Estimated Fair Value after Hypothetical Change in Prices Estimated Hypothetical Percentage Increase (Decrease) in Shareholders' Equity As of December 31, 2023 Equity securities $ 9,578 35% increase $ 12,930 17.7 % 35% decrease 6,226 (17.7) As of December 31, 2022 Equity securities $ 7,672 35% increase $ 10,357 16.2 % 35% decrease 4,987 (16.2) Interest Rate Risk Our fixed maturity investments and senior long-term debt and other debt are subject to interest rate risk.
(dollars in millions) Estimated Fair Value Hypothetical Price Change Estimated Fair Value after Hypothetical Change in Prices Estimated Hypothetical Percentage Increase (Decrease) in Shareholders' Equity As of December 31, 2024 Equity securities $ 11,785 35% increase $ 15,909 19.3 % 35% decrease 7,660 (19.3) As of December 31, 2023 Equity securities $ 9,578 35% increase $ 12,930 17.7 % 35% decrease 6,226 (17.7) Interest Rate Risk Our fixed maturity investments and senior long-term debt and other debt are subject to interest rate risk.
We were the beneficiary of letters of credit, trust accounts and funds withheld in the aggregate amount of $919.2 million at December 31, 2023, collateralizing reinsurance recoverable balances due from these ten reinsurers. Nine of our ten largest reinsurers within our underwriting operations were rated "A" or better by A.M. Best Company (A.M. Best).
We were the beneficiary of letters of credit, trust accounts and funds withheld in the aggregate amount of $1.1 billion at December 31, 2024, collateralizing reinsurance recoverable balances due from these ten reinsurers, and $1.5 billion for our total reinsurance recoverables balance. Nine of the ten largest reinsurers within our underwriting operations were rated "A" or better by A.M.
Our forward contracts generally have maturities of three months. At both December 31, 2023 and 2022, 90% of our invested assets were denominated in United States (U.S.) Dollars. At both December 31, 2023 and 2022, 89% of our combined reserves for unpaid losses and loss adjustment expenses and life and annuity benefits were denominated in U.S. Dollars.
At December 31, 2024 and 2023, 91% and 90%, respectively, of our invested assets were denominated in United States (U.S.) Dollars. At December 31, 2024 and 2023, 90% and 89%, respectively, of our combined reserves for unpaid losses and loss adjustment expenses and life and annuity benefits were denominated in U.S. Dollars.
To participate in our reinsurance program, prospective companies generally must: (i) maintain an A.M. Best or Standard & Poor's rating of "A" (excellent) or better; (ii) maintain minimum capital and surplus of $750 million; and (iii) provide collateral for recoverables in excess of an individually established amount.
Best or Standard & Poor's rating of "A" (excellent) or better; (ii) maintain minimum capital and surplus of $750 million; and (iii) provide collateral for recoverables in excess of an individually established amount. We also consider qualitative factors when evaluating reinsurers for eligibility to participate in our reinsurance program.
We also consider qualitative factors when evaluating reinsurers for eligibility to participate in our reinsurance program. In addition, certain foreign reinsurers for our U.S. insurance operations must provide collateral equal to 100% of recoverables, with the exception of reinsurers who have been granted certified or authorized status by an insurance company's state of domicile.
In addition, certain foreign reinsurers for our U.S. insurance operations must provide collateral equal to 100% of recoverables, with the exception of reinsurers who have been granted certified or authorized status by an insurance company's state of domicile. Our credit exposure to Lloyd's of London syndicates is managed through individual and aggregate exposure thresholds.
Our credit exposure to Lloyd's of London syndicates is managed through individual and aggregate exposure thresholds. Program Services Within our program services business, our reinsurance recoverables balance for the ten largest reinsurers was $2.8 billion at December 31, 2023, representing 56% of the $4.9 billion total reinsurance recoverables, before considering allowances for credit losses.
Program Services Within our program services business, our reinsurance recoverables balance for the ten largest reinsurers was $3.3 billion at December 31, 2024, representing 55% of the $6.0 billion total reinsurance recoverables, before considering allowances for credit losses.
Other Fronting For our other fronting arrangements, which are written on behalf of our ILS operations, our total reinsurance recoverables balance was $448.3 million at December 31, 2023. As of December 31, 2023, our ILS operations held investor collateral in excess of the related reinsurance recoverables.
ILS Fronting For the business we front through our ILS operations, our total reinsurance recoverables balance was $787.8 million at December 31, 2024. As of December 31, 2024, our ILS operations held investor collateral that exceeded the related reinsurance recoverables.
We manage this risk primarily by matching assets and liabilities that are subject to foreign exchange rate risk as closely as possible. To assist with this matching, we periodically purchase foreign currency forward contracts and purchase or sell foreign currencies in the open market. Realized and unrealized gains and losses on our forward contracts are recorded in earnings.
We also periodically purchase foreign currency forward contracts and purchase or sell foreign currencies in the open market. Realized and unrealized gains and losses on our forward contracts are recorded in earnings. Our forward contracts generally have maturities of three months.
For the remaining reinsurer, which is a related party, our reinsurance recoverable was fully collateralized as of December 31, 2023.
Best Company (A.M. Best). For the remaining reinsurer, which is a related party, our reinsurance recoverable was fully collateralized as of December 31, 2024. Within our underwriting operations, we attempt to minimize credit exposure to reinsurers through adherence to internal reinsurance guidelines. To participate in our reinsurance program, prospective companies generally must: (i) maintain an A.M.
Removed
In 2023, we recognized $65.0 million of credit losses in connection with fraudulent letters of credit that were provided by an affiliate of Vesttoo Ltd. as collateral for reinsurance purchased on two policies, which we believe represents our full exposure to credit losses on the related reinsurance recoverables.
Added
We manage this risk primarily by matching assets and liabilities that are subject to foreign exchange rate risk as closely as possible. We do this primarily through the purchase of fixed maturity securities that generally match the currency and duration of our loss reserves.
Removed
We are actively pursuing remedies to make recoveries on the reinsurance recoverables impacted by the fraudulent letters of credit and do not have any other ceded reinsurance contracts with Vesttoo Ltd. or its affiliates. Within our underwriting operations, we attempt to minimize credit exposure to reinsurers through adherence to internal reinsurance guidelines.

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