Markel Reports 2012 Financial Results

                    Markel Reports 2012 Financial Results

PR Newswire

RICHMOND, Va., Feb. 4, 2013

RICHMOND, Va., Feb. 4, 2013 /PRNewswire/ -- Markel Corporation (NYSE: MKL)
reported diluted net income per share of $25.89 for the year ended December
31, 2012 compared to $14.60 in 2011. The 2012 combined ratio was 97% compared
to 102% in 2011. Book value per common share outstanding increased 15% to
$403.85 at December 31, 2012 from $352.10 at December 31, 2011. Over the
five-year period ended December 31, 2012, compound annual growth in book value
per common share outstanding was 9%.

Alan I. Kirshner, Chairman and Chief Executive Officer, commented, "We
produced strong underwriting results in 2012 even with the impact of Hurricane
Sandy in the fourth quarter. In addition, we earned solid investment returns
and total operating revenues for the year exceeded $3 billion as we continued
to expand both our insurance and non-insurance operations through acquisitions
and organic growth. The result was book value per share growth of 15% for the
year, with over $500 million in comprehensive income. In December, we
announced our agreement to acquire Alterra Capital Holdings Limited (NASDAQ:
ALTE; BSX: ALTE.BH). We believe the combination of Alterra with Markel will
create a strong company in global specialty insurance and investments, with a
demonstrated track record of underwriting discipline in niche market segments
and proven asset management strengths that should benefit shareholders of both
companies. We are well positioned to continue to build shareholder value and
want to thank our associates for their significant accomplishments in 2012."

The following tables present selected financial data from 2012 and 2011.

                                         Years Ended December 31,
(in thousands, except per share amounts) 2012               2011
Net income to shareholders               $    253,385       $    142,026
Comprehensive income to shareholders     $    503,802       $    251,853
Weighted average diluted shares          9,666              9,726
Diluted net income per share             $    25.89         $    14.60
(in thousands, except per share amounts) December 31, 2012  December 31, 2011
Book value per common share outstanding  $    403.85        $    352.10
Common shares outstanding                9,629              9,621

The increase in diluted net income per share during 2012 was primarily due to
improved underwriting results, which were driven by lower losses related to
natural catastrophes, more favorable development of prior years' loss reserves
and lower attritional losses.

Comprehensive income to shareholders for 2012 was $503.8 million compared to
$251.9 million in 2011. The increase was due to higher net income to
shareholders and a more favorable change in net unrealized gains on
investments in 2012 compared to 2011.



                         Combined Ratio Analysis
                         Years Ended December 31,
                         2012            2011
Excess and Surplus Lines 94%             86%
Specialty Admitted       108%            109%
London Insurance Market  89%             116%
Consolidated             97%             102%



The decrease in the consolidated combined ratio was due to a lower current
accident year loss ratio and more favorable development of prior years' loss
reserves, partially offset by a higher expense ratio compared to 2011. The
2012 combined ratio included $107.4 million, or five points, of underwriting
loss from Hurricane Sandy in the fourth quarter. The 2011 combined ratio
included $152.4 million, or eight points, of underwriting loss related to
natural catastrophes, including the Thai floods, Hurricane Irene, U.S.
tornadoes, Japanese earthquake and tsunami, Australian floods and New Zealand
earthquakes. Also contributing to the improvement in the current accident
year loss ratio were lower attritional losses primarily in the Excess and
Surplus Lines and London Insurance Market segments. The 2012 combined ratio
included $399.0 million of favorable development on prior years' loss reserves
compared to $354.0 million in 2011. The 2012 combined ratio also included
$43.1 million, or two points, of underwriting, acquisition and insurance
expenses related to the Company's prospective adoption of Financial Accounting
Standards Board Accounting Standards Update No. 2010-26, Accounting for Costs
Associated with Acquiring or Renewing Insurance Contracts (ASU No. 2010-26).
The combined ratios of each of our three operating segments likewise included
two points of underwriting, acquisition and insurance expenses related to the
prospective adoption of ASU No. 2010-26. Higher profit sharing costs in 2012
were offset by a favorable impact from higher premium volume.

The Excess and Surplus Lines segment's combined ratio for 2012 was 94%
(including five points of underwriting loss related to Hurricane Sandy)
compared to 86% (including three points of underwriting loss related to
natural catastrophes) in 2011. The increase in the 2012 combined ratio was
primarily due to less favorable development of prior years' loss reserves
compared to 2011. The Excess and Surplus Lines segment's 2012 combined ratio
included $181.4 million of favorable development on prior years' loss reserves
compared to $227.5 million in 2011. The redundancies on prior years' loss
reserves experienced within the Excess and Surplus Lines segment in 2012 and
2011 were primarily on our professional and products liability and casualty
programs. Excluding the impact of natural catastrophes in both periods, the
Excess and Surplus Lines segment experienced a lower current accident year
loss ratio due to lower attritional property losses in 2012 compared to 2011.

The Specialty Admitted segment's combined ratio for 2012 was 108% (including
three points of underwriting loss related to Hurricane Sandy) compared to 109%
(including two points of underwriting loss related to natural catastrophes) in
2011. In 2012, more favorable development of prior years' loss reserves and a
lower current accident year loss ratio were offset by a higher expense ratio
compared to 2011. The Specialty Admitted segment's 2012 combined ratio
included $46.7 million of favorable development on prior years' loss reserves
compared to $27.4 million in 2011. The redundancies on prior years' loss
reserves in 2012 were most notable on the 2011 accident year across several
product lines. The improvement in the current accident year loss ratio was due
in part to improved underwriting performance for two programs within our
accident and health liability class. The increase in the 2012 expense ratio
was driven by higher underwriting, acquisition and insurance expenses related
to the Company's prospective adoption of ASU No. 2010-26, higher profit
sharing costs and the write-off of previously capitalized software development
costs.

The London Insurance Market segment's combined ratio for 2012 was 89%
(including six points of underwriting loss related to Hurricane Sandy)
compared to 116% (including 18 points of underwriting loss related to natural
catastrophes) in 2011. Excluding the impact of natural catastrophes in both
periods, the combined ratio decreased in 2012 due to more favorable
development of prior years' loss reserves and lower attritional losses on the
current accident year, primarily on our property lines within the Specialty
division. The London Insurance Market segment's 2012 combined ratio included
$192.0 million of favorable development on prior years' loss reserves compared
to $94.8 million in 2011. The redundancies on prior years' loss reserves
experienced within the London Insurance Market segment in 2012 and 2011
occurred in a variety of programs across each of our divisions. In 2012,
prior year redundancies included $39.1 million of favorable development on the
2001 and prior accident years.

The Other Insurance (Discontinued Lines) segment produced an underwriting loss
of $21.3 million for the year ended December 31, 2012 compared to an
underwriting profit of $4.7 million in 2011. The underwriting loss in 2012
included $31.1 million of loss reserve development on asbestos and
environmental exposures. We complete an annual review of these exposures
during the third quarter of the year unless circumstances suggest an earlier
review is appropriate. Over the past two years, the number of asbestos and
environmental claims reported each year across the property and casualty
industry has been on the decline. However, at the same time, the likelihood of
making an indemnity payment has risen, thus increasing the average cost per
reported claim. During our 2012 annual review, we reduced our estimate of the
ultimate claims count, while increasing our estimate of the number of claims
that would ultimately be closed with an indemnity payment. As a result, prior
years' loss reserves for asbestos and environmental exposures were increased.
During our 2011 review, we determined that no adjustment to loss reserves was
required. Adverse development of asbestos and environmental reserves in 2012
was partially offset by favorable movements in prior years' loss reserves and
allowances for reinsurance bad debt related to discontinued lines of business
originally written by Markel International.

                        Premium Analysis
                        Years Ended December 31,
                        Gross Written Premiums      Earned Premiums
(dollars in thousands)  2012          2011          2012          2011
Excess and Surplus      $ 956,273     $ 893,427     $ 793,159     $ 756,306
Lines
Specialty Admitted      669,692       572,392       588,758       527,293
London Insurance Market 887,720       825,301       765,216       695,753
Other Insurance         (4)           131           (5)           (12)
(Discontinued Lines)
Total                   $ 2,513,681   $ 2,291,251   $ 2,147,128   $ 1,979,340

Gross written premiums for 2012 increased 10% compared to 2011. The increase
in gross premium volume was attributable to higher gross premium volume in
each of our three operating segments. In 2012, the Specialty Admitted segment
included $79.2 million of gross written premiums from Thompson Insurance
Enterprises, LLC (THOMCO), which was acquired in the first quarter of 2012.
Gross premium volume in the Specialty Admitted segment also included $257.3
million of gross premium volume attributable to our workers' compensation
product line, compared to $226.7 million in 2011. The increase in gross
premium volume in 2012 further reflected higher gross premium volume in the
Excess and Surplus Lines segment and London Insurance Market segment, driven
by more favorable rates, primarily in the excess and umbrella and property
lines within the Excess and Surplus Lines segment and the Marine and Energy
and Specialty divisions within the London Insurance Market segment. Foreign
currency exchange rate movements did not have a significant impact on gross
premium volume in 2012.

During the latter part of 2011, we saw price declines stabilize and achieved
modest price increases in several lines, most notably the marine and energy
products within the London Insurance Market segment. During 2012, we have
generally seen mid-single digit favorable rate changes compared to flat to
small single digit rate declines in 2011. We routinely review the pricing of
our major product lines and will continue to pursue price increases for most
product lines in 2013; however, when we believe the prevailing market price
will not support our underwriting profit targets, the business is not
written. As a result of our underwriting discipline, gross premium volume may
vary when we alter our product offerings to maintain or improve underwriting
profitability.

Net retention of gross premium volume was 88% for 2012 and 89% for 2011. As
part of our underwriting philosophy, we seek to offer products with limits
that do not require significant amounts of reinsurance. We purchase
reinsurance in order to reduce our retention on individual risks and enable us
to write policies with sufficient limits to meet policyholder needs.

Earned premiums for 2012 increased 8% compared to 2011. In 2012, the
Specialty Admitted segment included $241.2 million of earned premiums
attributable to our workers' compensation product line, compared to $200.8
million in 2011, and $31.3 million of earned premiums from THOMCO. The
increase in earned premiums in 2012 also was due to higher earned premiums in
the Excess and Surplus Lines and London Insurance Market segments, primarily
as a result of higher gross premium volume. Foreign currency exchange rate
movements did not have a significant impact on earned premiums in 2012.

Net investment income for 2012 was $282.1 million compared to $263.7 million
in 2011. The increase in 2012 was primarily due to a favorable change in the
fair value of our credit default swap. Net investment income for 2012
included a favorable change in the fair value of our credit default swap of
$16.6 million compared to an adverse change of $4.1 million in 2011.
Excluding the change in the fair value of our credit default swap, lower
investment income on our fixed income portfolio, due to lower invested assets,
was offset by increased dividend income on our equity portfolio.

Net realized investment gains for 2012 were $31.6 million compared to $35.9
million in 2011. Net realized investment gains for 2012 included $12.1
million of write downs for other-than-temporary declines in the estimated fair
value of investments compared to $20.2 million of write downs in 2011.
Variability in the timing of realized and unrealized investment gains and
losses is to be expected.

Other revenues and other expenses include the results of our non-insurance
operations, which we refer to collectively as Markel Ventures. Our
non-insurance operations are comprised of a diverse portfolio of industrial
and service companies. In 2012, revenues from our non-insurance operations
were $489.4 million compared to $317.5 million in 2011. Net income to
shareholders from our non-insurance operations was $13.5 million in 2012
compared to $7.7 million in 2011 and EBITDA was $60.4 million in 2012 compared
to $37.3 million in 2011. Revenues, net income to shareholders and EBITDA from
our non-insurance operations increased in 2012 compared to 2011 primarily due
to our acquisitions of WI Holdings Inc. in late 2011 and Havco WP LLC (Havco)
in 2012.

In April 2012, we acquired an 85% controlling interest in Havco, a privately
held company based in Cape Girardeau, Missouri that manufactures laminated oak
and composite wood flooring used in the assembly of truck trailers, intermodal
containers and truck bodies. In July 2012, we acquired 100% of the outstanding
shares of Tromp Bakery Equipment B.V., a Netherlands based global supplier of
high-tech food processing equipment which designs and manufactures baking
equipment and sheeting lines for pizza, pastry, pie, and specialty bread
bakers worldwide. In September 2012, we acquired an 85% controlling interest
in Reading Baking Systems, a leading global designer and manufacturer of
industrial baking systems for the production of crackers, pretzels, cookies,
and other baked snacks based in Reading, Pennsylvania. Total consideration
for these three acquisitions was $123.8 million. In connection with these
three acquisitions, we recognized goodwill of $40.7 million and other
intangible assets of $45.2 million.

Invested assets were $9.3 billion at December 31, 2012 compared to $8.7
billion at December 31, 2011. Equity securities were $2.4 billion, or 26% of
invested assets, at December 31, 2012 compared to $1.9 billion, or 21% of
invested assets, at December 31, 2011. Net unrealized gains on investments,
net of taxes, were $946.9 million at December 31, 2012 compared to $704.7
million at December 31, 2011. At December 31, 2012, we held securities with
gross unrealized losses of $17.2 million, or less than 1% of invested assets.

Interest expense for 2012 was $92.8 million compared to $86.3 million in
2011. The increase in 2012 was due in part to our $350 million issuance of
4.90% unsecured senior notes in July 2012.

Income tax expense for 2012 was 17% of our income before income taxes compared
to 22% in 2011. In both periods, the effective tax rate differs from the
statutory tax rate of 35% primarily as a result of tax-exempt investment
income. Additionally, in 2012, we had higher earnings from our foreign
operations, which are taxed at a lower rate.

In January 2012, we acquired THOMCO, a privately held program administrator
headquartered in Kennesaw, Georgia that underwrites multi-line,
industry-focused insurance programs. Results attributable to this acquisition
are included in the Specialty Admitted segment. Total consideration for this
acquisition was $108.5 million. In connection with the acquisition, we
recognized goodwill of $26.1 million and other intangible assets of $81.2
million.

FORWARD-LOOKING STATEMENTS

This release includes statements about future economic performance, finances,
expectations, plans and prospects of Alterra and Markel, both individually and
on a combined basis, that are forward-looking statements for purposes of the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. There are risks and uncertainties that could cause actual results to
differ materially from those expressed in or suggested by such statements. For
further information regarding factors affecting future results of Alterra and
Markel, please refer to their respective Annual Reports on Form 10-K for the
year ended December 31, 2011 and Quarterly Reports on Form 10-Q and other
documents filed by Alterra and Markel since March 1, 2012 with the Securities
Exchange Commission ("SEC"). These documents are also available free of
charge, in the case of Alterra, by directing a request to Alterra through Joe
Roberts, Chief Financial Officer, or Susan Spivak Bernstein, Senior Vice
President, Investor Relations, at 441-295-8800 and, in the case of Markel, by
directing a request to Bruce Kay, Investor Relations, at 804-747-0136. Neither
Alterra nor Markel undertakes any obligation to update or revise publicly any
forward-looking statement whether as a result of new information, future
developments or otherwise.

This release contains certain forward-looking statements within the meaning of
the U.S. federal securities laws. Statements that are not historical facts,
including statements about Alterra's and Markel's beliefs, plans or
expectations, are forward-looking statements. These statements are based on
Alterra's or Markel's current plans, estimates and expectations. Some
forward-looking statements may be identified by use of terms such as
"believe," "anticipate," "intend," "expect," "project," "plan," "may,"
"should," "could," "will," "estimate," "predict," "potential," "continue," and
similar words, terms or statements of a future or forward-looking nature. In
light of the inherent risks and uncertainties in all forward-looking
statements, the inclusion of such statements in this release should not be
considered as a representation by Alterra, Markel or any other person that
Alterra's or Markel's objectives or plans, both individually and on a combined
basis, will be achieved. A non-exclusive list of important factors that could
cause actual results to differ materially from those in such forward-looking
statements includes the following: (a) the occurrence of natural or man-made
catastrophic events with a frequency or severity exceeding expectations; (b)
the adequacy of loss reserves and the need to adjust such reserves as claims
develop over time; (c) the failure of any of the loss limitation methods the
parties employ; (d) any adverse change in financial ratings of either company
or their subsidiaries; (e) the effect of competition on market trends and
pricing; (f) cyclical trends, including with respect to demand and pricing in
the insurance and reinsurance markets; (g) changes in general economic
conditions, including changes in interest rates and/or equity values in the
United States of America and elsewhere; and (h) other factors set forth in
Alterra's and Markel's recent reports on Form 10-K, Form 10-Q and other
documents filed with the SEC by Alterra and Markel.

Risks and uncertainties relating to the proposed transaction include the risks
that: (1) the parties will not obtain the requisite shareholder or regulatory
approvals for the transaction; (2) the anticipated benefits of the transaction
will not be realized or the parties may experience difficulties in
successfully integrating the two companies; (3) the parties may not be able to
retain key personnel; (4) the conditions to the closing of the proposed merger
may not be satisfied or waived; (5) the outcome of any legal proceedings to
the extent initiated against Alterra or Markel or its respective directors and
officers following the announcement of the proposed merger is uncertain; (6)
the acquisition may involve unexpected costs; and (7) the businesses may
suffer as a result of uncertainty surrounding the acquisition. These risks, as
well as other risks of the combined company and its subsidiaries may be
different from what the companies expect, or have previously experienced, and
each party's management may respond differently to any of the aforementioned
factors. These risks, as well as other risks associated with the merger, are
more fully discussed in the joint proxy statement/prospectus of Markel and
Alterra that has been filed with the SEC. Readers are cautioned not to place
undue reliance on any forward-looking statements, which speak only as of the
date on which they are made.

ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER AND WHERE TO FIND IT

This release relates to a proposed merger between Alterra and Markel. On
December 27, 2012, Markel filed with the SEC a registration statement on Form
S-4, and on January 18, 2013, Markel and Alterra each filed the definitive
joint proxy statement/prospectus. This release is not a substitute for the
definitive joint proxy statement/prospectus or any other document that Markel
or Alterra filed or may file with the SEC or send to its shareholders in
connection with the proposed merger. INVESTORS AND SECURITY HOLDERS ARE URGED
TO READ THE DEFINITVE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT
DOCUMENTS FILED OR THAT MAY BE FILED WITH THE SEC OR SENT TO SHAREHOLDERS AS
THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED MERGER. All documents, when filed, will be
available free of charge at the SEC's website (www.sec.gov) or, in the case of
Alterra, by directing a request to Joe Roberts, Chief Financial Officer, or
Susan Spivak Bernstein, Senior Vice President, Investor Relations, at
441-295-8800 and, in the case of Markel, by directing a request to Bruce Kay,
Investor Relations, at 804-747-0136.

PARTICIPANTS IN THE SOLICITATION

Alterra and Markel and their respective directors and executive officers may
be deemed to be participants in any solicitation of proxies from both
Alterra's and Markel's shareholders in favor of the proposed transaction.
Information about Alterra's directors and executive officers and their
ownership in Alterra common stock is available in the proxy statement dated
March 26, 2012 for Alterra's 2012 annual general meeting of shareholders.
Information about Markel's directors and executive officers and their
ownership of Markel common stock is available in the proxy statement dated
March 16, 2012 for Markel's 2012 annual meeting of shareholders.

CONFERENCE CALL

Our previously announced conference call, which will involve discussion of our
financial results and business developments and may include forward-looking
information, will be held Tuesday, February 5, 2013, beginning at 10:30 a.m.
(Eastern Standard Time). Any person interested in listening to the call
should contact Markel's Investor Relations Department at 804-747-0136.
Investors, analysts and the general public also may listen to the call free
over the Internet through Markel Corporation's web site, www.markelcorp.com.
There will be no replay of the call.

Markel Corporation is a diverse financial holding company serving a variety of
niche markets. The Company's principal business markets and underwrites
specialty insurance products. In each of the Company's businesses, it seeks
to provide quality products and excellent customer service so that it can be a
market leader. The financial goals of the Company are to earn consistent
underwriting and operating profits and superior investment returns to build
shareholder value. Visit Markel Corporation on the web at www.markelcorp.com.



Markel Corporation and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
                       Quarters Ended December 31,  Years Ended December 31,
(dollars in thousands, 2012            2011         2012          2011
except per share data)
OPERATING REVENUES
Earned premiums        $  573,939      $  516,825   $ 2,147,128   $ 1,979,340
Net investment income  74,273          67,125       282,107       263,676
Net realized
investment gains:
Other-than-temporary   (7,927)         (2,697)      (12,078)      (14,250)
impairment losses
Other-than-temporary
impairment losses      —               (2,640)      —             (5,946)
recognized in other
comprehensive income
Other-than-temporary
impairment losses      (7,927)         (5,337)      (12,078)      (20,196)
recognized in net
income
Net realized
investment gains,
excluding              14,164          15,771       43,671        56,053
other-than-temporary
impairment losses
Net realized           6,237           10,434       31,593        35,857
investment gains
Other revenues         153,506         90,716       539,284       351,077
Total Operating        807,955         685,100      3,000,112     2,629,950
Revenues
OPERATING EXPENSES
Losses and loss        340,994         282,343      1,154,068     1,209,986
adjustment expenses
Underwriting,
acquisition and        234,150         208,668      929,472       810,179
insurance expenses
Amortization of        8,434           6,705        33,512        24,291
intangible assets
Other expenses         134,786         90,776       478,248       309,046
Total Operating        718,364         588,492      2,595,300     2,353,502
Expenses
Operating Income       89,591          96,608       404,812       276,448
Interest expense       23,694          21,736       92,762        86,252
Income Before Income   65,897          74,872       312,050       190,196
Taxes
Income tax expense     7,804           22,565       53,802        41,710
Net Income             $  58,093       $  52,307    $ 258,248     $ 148,486
Net income
attributable to        1,301           2,131        4,863         6,460
noncontrolling
interests
Net Income to          $  56,792       $  50,176    $ 253,385     $ 142,026
Shareholders
OTHER COMPREHENSIVE
INCOME
Change in net
unrealized gains on
investments, net of
taxes:
Net holding gains
arising during the     $  20,369       $  147,445   $ 266,425     $ 141,839
period
Unrealized
other-than-temporary
impairment losses on   (24)            2,286        (160)         3,943
fixed maturities
arising during the
period
Reclassification
adjustments for net    (3,897)         (7,055)      (24,051)      (22,341)
gains included in net
income
Change in net
unrealized gains on    16,448          142,676      242,214       123,441
investments, net of
taxes
Change in foreign
currency translation   (1,393)         1,347        1,534         (4,191)
adjustments, net of
taxes
Change in net
actuarial pension      5,177           (10,539)     6,664         (9,459)
loss, net of taxes
Total Other            20,232          133,484      250,412       109,791
Comprehensive Income
Comprehensive Income   $  78,325       $  185,791   $ 508,660     $ 258,277
Comprehensive income
attributable to        1,338           2,095        4,858         6,424
noncontrolling
interests
Comprehensive Income   $  76,987       $  183,696   $ 503,802     $ 251,853
to Shareholders
NET INCOME PER SHARE
Basic                  $  6.25         $  5.21      $ 25.96       $ 14.66
Diluted                $  6.23         $  5.19      $ 25.89       $ 14.60
Selected Data                                       December 31,
(dollars and shares in
thousands, except per                               2012          2011
share data)
Total investments and
cash and cash                                       $ 9,332,745   $ 8,728,147
equivalents
Reinsurance
recoverable on paid                                 829,919       829,310
and unpaid losses
Goodwill and                                        1,049,225     867,558
intangible assets
Total assets                                        12,556,588    11,532,103
Unpaid losses and loss                              5,371,426     5,398,869
adjustment expenses
Unearned premiums                                   1,000,261     915,930
Senior long-term debt                               1,492,550     1,293,520
and other debt
Total shareholders'                                 3,888,657     3,387,513
equity
Book value per common                               $ 403.85      $ 352.10
share outstanding
Common shares                                       9,629         9,621
outstanding



Markel Corporation and Subsidiaries
Segment Reporting Disclosures
For the Quarters and Years Ended December 31, 2012 and 2011
Segment Gross Written Premiums
Quarters Ended December 31,                       Years Ended December 31,
2012            2011        (dollars in           2012           2011
                            thousands)
$  250,424      $ 229,438   Excess and Surplus    $ 956,273      $ 893,427
                            Lines
173,673         140,788     Specialty Admitted    669,692        572,392
183,209         148,408     London Insurance      887,720        825,301
                            Market
2               6           Other Insurance       (4)            131
                            (Discontinued Lines)
$  607,308      $ 518,640   Consolidated          $ 2,513,681    $ 2,291,251
Segment Net Written Premiums
Quarters Ended December 31,                       Years Ended December 31,
2012            2011        (dollars in           2012           2011
                            thousands)
$  213,859      $ 202,036   Excess and Surplus    $ 811,601      $ 772,279
                            Lines
160,425         132,513     Specialty Admitted    628,147        543,213
152,436         132,919     London Insurance      774,383        726,359
                            Market
2               (8)         Other Insurance       (5)            (13)
                            (Discontinued Lines)
$  526,722      $ 467,460   Consolidated          $ 2,214,126    $ 2,041,838
Segment Revenues
Quarters Ended December 31,                       Years Ended December 31,
2012            2011        (dollars in           2012           2011
                            thousands)
$  208,635      $ 198,348   Excess and Surplus    $ 793,159      $ 756,306
                            Lines
166,482         138,593     Specialty Admitted    633,726        560,838
207,934         181,806     London Insurance      770,180        695,753
                            Market
80,510          77,559      Investing             313,700        299,533
2               1           Other Insurance       (5)            (12)
                            (Discontinued Lines)
$  663,563      $ 596,307   Consolidated          $ 2,510,760    $ 2,312,418
Reconciliation of Segment Profit (Loss) to Consolidated Operating Income
Quarters Ended December 31,                       Years Ended December 31,
2012            2011        (dollars in           2012           2011
                            thousands)
$  (4,765)      $ 44,625    Excess and Surplus    $ 50,141       $ 109,035
                            Lines
(9,011)         (13,723)    Specialty Admitted    (43,293)       (45,268)
15,362          (11,693)    London Insurance      82,663         (109,475)
                            Market
80,510          77,559      Investing             313,700        299,533
(1,063)         2,180       Other Insurance       (21,283)       4,706
                            (Discontinued Lines)
144,392         88,793      Other Revenues        489,352        317,532
                            (Non-Insurance)
(127,400)       (84,428)    Other Expenses        (432,956)      (275,324)
                            (Non-Insurance)
(8,434)         (6,705)     Amortization of       (33,512)       (24,291)
                            Intangible Assets
$  89,591       $ 96,608    Consolidated          $ 404,812      $ 276,448
Segment Combined Ratios
Quarters Ended December 31,                       Years Ended December 31,
2012            2011        (dollars in           2012           2011
                            thousands)
102         %   78        % Excess and Surplus    94          %  86          %
                            Lines
107         %   107       % Specialty Admitted    108         %  109         %
92          %   106       % London Insurance      89          %  116         %
                            Market
100         %   95        % Consolidated          97          %  102         %



Reconciliation of Non-GAAP Financial Measure

The following table reconciles earnings before interest, income taxes,
depreciation and amortization (EBITDA) of Markel Ventures to consolidated net
income to shareholders.

                         Quarters Ended December 31,  Years Ended December 31,
(dollars in thousands)   2012           2011          2012          2011
Markel Ventures EBITDA   $  18,980      $  3,117      $  60,361     $ 37,325
Interest expense         (2,233)        (2,722)       (9,782)       (10,871)
Income tax benefit       (3,036)        2,815         (7,868)       (4,335)
(expense)
                                        (1,708)                     (5,106)
Depreciation expense     (4,738)                      (14,205)
                                                                   
Amortization of          (4,076)        (2,695)       (15,031)      (9,267)
intangible assets
Markel Ventures net      4,897          (1,193)       13,475        7,746
income (loss)
Net income from other    51,895         51,369        239,910       134,280
Markel operations
Net income to            $  56,792      $  50,176     $  253,385    $ 142,026
shareholders

Interest expense for the quarters ended December 31, 2012 and 2011 includes
intercompany interest expense of $1.6 million. Interest expense for the years
ended December 31, 2012 and 2011 includes intercompany interest expense of
$6.4 million and $6.0 million, respectively.

Markel Ventures EBITDA is a non-GAAP financial measure and is reconciled to
consolidated net income to shareholders in the above table. Markel Ventures
EBITDA reflects income attributable to our ownership interest in Markel
Ventures before interest, income taxes, depreciation and amortization. We use
Markel Ventures EBITDA as an operating performance measure in conjunction with
U.S. GAAP measures, including revenues and net income, to monitor and evaluate
the performance of our non-insurance operations.



SOURCE Markel Corporation

Website: http://www.markelcorp.com
Contact: Bruce Kay, Markel Corporation, +1-804-747-0136, bkay@markelcorp.com
 
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