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The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included under Item 1 Financial Statements and our 2025 Annual Report on Form 10-K. The accompanying consolidated financial statements and related notes have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) and include the accounts of our holding company, Markel Group Inc. (Markel Group), and its consolidated subsidiaries, as well as any variable interest entities that meet the requirements for consolidation (the Company). This section is divided into the following sections:
•Business Overview
•Results of Operations
•Financial Condition
•Non-GAAP Financial Measures
•Critical Accounting Estimates
•Safe Harbor and Cautionary Statement
Business Overview
Markel Group is a holding company that owns independently operated businesses across a range of industries. The cornerstone business, Markel Insurance, provides specialized insurance products that are not typically available through the standard insurance market. This insurance business sits at the center of the Company's strategy. It generates and holds capital used to support growth and investment across Markel Group. The other majority-owned businesses operate in diverse end markets, from industrial bakery equipment to ornamental plants to precast concrete. Markel Group also owns shares in publicly traded companies, which are primarily held within its insurance operations.
Markel Group supports each business by empowering leaders to make the best long-term decisions for their businesses. Customers, associates, and shareholders each benefit from this approach, given how it allows businesses to pursue opportunities that require time, stability, and trust. We believe this approach is difficult to replicate and makes Markel Group a distinctive home for businesses. The Company's long-term orientation and decision-making is rooted in the Company's culture, known as The Markel Style, which serves as a shared set of values that foster excellence and consistency across independent businesses, all while allowing each business to retain its entrepreneurial spirit.
A key principle of The Markel Style is building the value of the Company for shareholders. The design of Markel Group supports this goal by owning businesses that generate positive cash flows and redeploying those cash flows for additional growth. Markel Group has developed the skill and capability to redeploy capital efficiently, with low friction, across a large and diverse opportunity set, which includes reinvesting in existing businesses, acquiring majority-owned businesses, investing in publicly traded companies, and repurchasing Markel Group shares. Markel Group's unique company design and set of shared values have enabled it to compound shareholder capital at attractive rates over many decades.
Markel Group reports its business operations in four segments: Markel Insurance, Industrial, Financial, and Consumer and Other. See note 2 of the notes to consolidated financial statements for details regarding our reportable segments.
Results of Operations
The following table presents operating revenues by segment.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Markel Insurance $ 2,233,914 $ 2,279,633 $ 4,435,599 $ 4,506,309
Industrial 1,038,068 1,015,715 1,921,126 1,845,289
Financial 171,348 172,852 332,878 351,333
Consumer and Other 551,974 529,226 832,471 817,012
Corporate and eliminations 23,133 25,117 46,968 50,776
Total operating revenues $ 4,018,437 $ 4,022,543 $ 7,569,042 $ 7,570,719
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The following table presents consolidated operating income and a reconciliation to consolidated adjusted operating income, as well as adjusted operating income by segment. Consolidated adjusted operating income is a non-GAAP measure. See "Non-GAAP Financial Measures" for additional details.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Operating income $ 1,560,345 $ 1,107,340 $ 1,287,016 $ 1,389,864
Add: Amortization of acquired intangible assets 43,301 51,213 86,814 98,155
Less: Net investment gains 1,167,525 580,223 439,963 431,152
Adjusted operating income $ 436,121 $ 578,330 $ 933,867 $ 1,056,867
Markel Insurance $ 376,490 $ 269,755 $ 745,980 $ 551,870
Industrial 75,434 103,513 124,720 162,277
Financial (148,940) 78,422 (112,735) 158,033
Consumer and Other 122,146 101,523 161,901 133,911
Corporate and eliminations 10,991 25,117 14,001 50,776
Adjusted operating income $ 436,121 $ 578,330 $ 933,867 $ 1,056,867
Net investment gains and losses have caused, and are expected to continue to cause, significant volatility in our periodic operating income, net income, and comprehensive income. Net investment gains and losses are predominantly derived from our investments in publicly traded equity securities and typically include significant unrealized gains and losses from market value movements. We believe that net investment gains and losses, whether realized from sales or unrealized from market value movements, are distortive in understanding the short-term operating performance of our businesses. As such, we exclude net investment gains and losses from adjusted operating income. We believe adjusted operating income, both consolidated and by segment, is generally an accurate representation of the operating performance of our businesses in our periodic results.
The following table presents the components of comprehensive income to shareholders.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Operating income $ 1,560,345 $ 1,107,340 $ 1,287,016 $ 1,389,864
Interest expense (52,390) (53,076) (103,276) (105,216)
Net foreign exchange gains (losses) 10,378 (191,909) 64,655 (264,542)
Income tax expense (332,869) (185,170) (267,287) (213,574)
Net income attributable to noncontrolling interests (16,625) (20,037) (24,558) (27,670)
Net income to shareholders 1,168,839 657,148 956,550 778,862
Preferred stock dividends and redemption premiums — (26,109) — (26,109)
Net income to common shareholders 1,168,839 631,039 956,550 752,753
Other comprehensive income (loss) to shareholders (67,514) 210,363 (195,655) 436,319
Comprehensive income to shareholders $ 1,101,325 $ 867,511 $ 760,895 $ 1,215,181
Markel Insurance
Markel Insurance is our core specialty insurance business comprised of empowered local leaders underwriting hard-to-place risks across the globe in service of their customers' needs. Markel Insurance generates income primarily through its core underwriting activities and by investing the capital held by its underwriting subsidiaries, as well as through other insurance-related activities, which includes fronting and strategic minority investments. Markel Insurance is primarily comprised of its U.S. Wholesale and Specialty, Program and Solutions, International, and Global Reinsurance divisions. Markel Insurance also includes the run-off of the discontinued intellectual property collateral protection insurance (IP CPI) product line, life and annuity reinsurance business, and certain asbestos and environmental exposures, none of which is managed through its divisions.
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We measure the operating performance of our Markel Insurance segment by its operating revenues and adjusted operating income, which represents operating income before net investment gains and amortization of acquired intangible assets. The following table summarizes the results of operations for our Markel Insurance segment.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Earned premiums $ 1,992,361 $ 2,063,622 $ 3,961,700 $ 4,080,161
Net investment income 231,223 207,728 460,842 415,245
Services and other revenues 10,330 8,283 13,057 10,903
Operating revenues $ 2,233,914 $ 2,279,633 $ 4,435,599 $ 4,506,309
Losses and loss adjustment expenses (1,138,117) (1,251,680) (2,252,116) (2,464,430)
Underwriting, acquisition, and insurance expenses (712,125) (748,742) (1,425,216) (1,472,369)
Services and other expenses (7,182) (9,456) (12,287) (17,640)
Adjusted operating income $ 376,490 $ 269,755 $ 745,980 $ 551,870
Combined ratio 93 % 97 % 93 % 96 %
The 40% and 35% increase in adjusted operating income for the quarter and six months ended June 30, 2026, respectively, was driven by higher underwriting profits and net investment income. For further details of Markel Insurance's investment performance, see "Consolidated Investment Results."
Recent Developments
Middle East Conflict
In February 2026, a regional military conflict emerged in the Middle East following U.S. and Israeli airstrikes on Iran. For the quarter and six months ended June 30, 2026, net losses and loss adjustment expenses related to the Middle East conflict were $41.0 million and $76.0 million, respectively, or two points on both the quarter-to-date and year-to-date combined ratios. Our losses and loss adjustment expenses from the Middle East conflict were primarily attributed to terrorism, energy, and marine war coverages written by the International division.
Loss estimates related to the Middle East conflict represent our best estimate as of June 30, 2026 based upon information currently available. Our estimates for these losses are based on known losses and reported claims, as well as an analysis of our ceded reinsurance contracts. Due to the inherent uncertainty associated with the assumptions surrounding the Middle East conflict, these estimates are subject to a wide range of variability. While we believe our reserves for losses and loss adjustment expenses related to the Middle East conflict as of June 30, 2026 are adequate based on information currently available, we continue to closely monitor reported claims, ceded reinsurance contract attachment, government actions, and areas impacted by the conflict and may adjust our loss estimates as new information becomes available.
Additionally, as the Middle East conflict is ongoing, additional losses may be incurred in subsequent periods, and such losses may be material to our results of operations, financial condition, and cash flows. Covering these types of risks is core to our expertise as a global specialty insurer, and we continue to underwrite risks in this region on a case by case basis. Furthermore, our marine war coverages allow for the re-rating of in-force premium on contracts at risk during the escalated risk environment. In the second quarter of 2026, we recognized $34.5 million in additional gross written premiums for these coverages. See "Risk Factors" in this report for additional information on the risks and uncertainties associated with this event.
Global Reinsurance
In August 2025, Markel Insurance sold the renewal rights for business written in its Global Reinsurance division, and the division entered into run-off. Gross premium volume in 2025 attributed to the Global Reinsurance division was $1.0 billion, including $321.7 million and $898.6 million for the quarter and six months ended June 30, 2025, respectively. As many of the contracts previously written within this division were multi-year agreements, we expect premiums to continue earning over the next two years and loss reserves to take several additional years to run off. Effective January 1, 2026, we reinsured the international marine and energy reinsurance business that was still on-risk, comprising $54.8 million of unearned premiums as of December 31, 2025.
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Gross premium volume in 2026 includes premiums attributed to contracts signed prior to the division being placed into run-off and changes in our estimate of ultimate premium volumes from in-force contracts. Additionally, gross premium volume in 2026 includes premiums on certain international reinsurance deals that are being fronted as part of the transition of the renewal rights. The Global Reinsurance division combined ratio was 124% and 118% for the quarter and six months ended June 30, 2026, respectively, which had a two point unfavorable impact on both the quarter-to-date and year-to-date Markel Insurance segment combined ratios.
Hagerty
Effective January 1, 2026, Markel Insurance's business with Hagerty, Inc. (Hagerty) transitioned to a fronting arrangement, whereby Markel Insurance receives a fronting fee for writing business on behalf of Hagerty and ceding it to Hagerty Reinsurance Limited (Hagerty Re). Prior to transitioning to a fronting arrangement, the majority of our business with Hagerty was ceded to Hagerty Re. For the quarter and six months ended June 30, 2026, fronting gross premium volume attributed to Hagerty was $344.8 million and $598.1 million, respectively, all of which was ceded. For the quarter and six months ended June 30, 2025, underwriting gross premium volume attributed to Hagerty was $304.1 million and $524.0 million, respectively, of which $234.5 million and $404.1 million, respectively, was ceded to Hagerty Re. In connection with the transition, we also entered into agreements with Hagerty Re to reinsure our retained exposures on business written on behalf of Hagerty prior to January 1, 2026. Net losses and loss adjustment expenses and unearned premiums on these ceded policies totaled $62.2 million and $92.5 million, respectively, as of December 31, 2025.
The following table summarizes the results of Markel Insurance's underwriting and other insurance-related activities.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 % Change 2026 2025 % Change
Gross premium volume $ 3,669,116 $ 4,102,472 (11) % $ 6,472,111 $ 7,274,023 (11) %
Underwriting $ 2,387,090 $ 2,808,823 (15) % $ 4,602,663 $ 5,602,229 (18) %
Adjusted underwriting (1) $ 2,402,318 $ 2,183,041 10 % $ 4,595,311 $ 4,179,593 10 %
Fronting $ 1,282,026 $ 1,293,649 (1) % $ 1,869,448 $ 1,671,794 12 %
Net written premiums $ 2,043,670 $ 2,165,255 (6) % $ 3,814,898 $ 4,403,931 (13) %
Earned premiums $ 1,992,361 $ 2,063,622 (3) % $ 3,961,700 $ 4,080,161 (3) %
Underwriting profit $ 142,119 $ 63,200 125 % $ 284,368 $ 143,362 98 %
Services and other income (loss) $ 692 $ (2,863) NM (2) $ 3,658 $ (6,743) NM (2)
Underwriting Ratios (3) Point Change Point Change
Loss ratio
Current accident year loss ratio 65.5 % 64.5 % 1.0 63.8 % 66.0 % (2.2)
Prior accident years loss ratio (8.4) % (3.8) % (4.6) (6.9) % (5.6) % (1.3)
Loss ratio 57.1 % 60.7 % (3.6) 56.8 % 60.4 % (3.6)
Expense ratio 35.7 % 36.3 % (0.6) 36.0 % 36.1 % (0.1)
Combined ratio 92.9 % 96.9 % (4.0) 92.8 % 96.5 % (3.7)
Current accident year loss ratio catastrophe impact (4) 2.1 % (0.3) % 2.4 1.9 % 1.5 % 0.4
Current accident year loss ratio, excluding catastrophe impact (1) 63.4 % 64.7 % (1.3) 61.8 % 64.5 % (2.7)
Combined ratio, excluding current accident year catastrophe impact (1) 90.8 % 97.2 % (6.4) 90.9 % 95.0 % (4.1)
(1) This metric is a non-GAAP financial measure. See "Non-GAAP Financial Measures" for additional details.
(2) NM - Not meaningful.
(3) Amounts may not reconcile due to rounding.
(4) The point impact of catastrophes is calculated as the associated net losses and loss adjustment expenses divided by total earned premiums. For the quarter and six months ended June 30, 2026, current accident year losses and loss adjustment expenses attributed to catastrophes were related to the Middle East conflict.
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Premiums
Underwriting
The decrease in underwriting gross premium volume in our Markel Insurance segment for the quarter and six months ended June 30, 2026 was driven by the changes to our Global Reinsurance division and Hagerty relationship, as previously discussed. For both the quarter and six months ended June 30, 2026, adjusted underwriting gross premium volume, which excludes premiums attributed to the Global Reinsurance division and Hagerty in both periods, increased 10%. The increases in both periods were driven by growth within our international marine and energy, professional liability, and general liability product lines, as well as our U.S. programs and personal lines product lines, partially offset by lower premiums on our U.S. property and general liability product lines. Adjusted underwriting gross premium volume growth is a non-GAAP financial measure. See "Non-GAAP Financial Measures" for additional details.
Fronting
The change in fronting gross premium volume for the quarter and six months ended June 30, 2026 was attributable to the change in our Hagerty relationship to a fronting arrangement and the fronted premiums within our Global Reinsurance division, as previously discussed, and lower premiums on our property catastrophe programs with Nephila period-over-period. For the quarter ended June 30, 2026, fronting gross premium volume consisted of $783.1 million, $344.8 million, and $154.1 million attributable to Nephila, Hagerty, and Global Reinsurance, respectively. For the six months ended June 30, 2026, fronting gross premium volume consisted of $1.0 billion, $598.1 million, and $231.1 million attributable to Nephila, Hagerty, and Global Reinsurance, respectively. For the quarter and six months ended June 30, 2025, fronting gross premium volume was fully attributable to Nephila.
Rate Discussion
Rates in the aggregate across our diversified global product portfolio remained relatively flat in the first half of 2026 with various offsetting rate increases and decreases across different product lines. Product lines achieving the most notable rate increases include our U.S. personal lines, commercial package, and general liability product lines. Product lines with notable rate decreases include our U.S. property product lines and our international cyber, professional liability, and energy product lines. While we are seeing rate decreases across several lines within our international portfolio due to the high level of recent profitability, we still believe that we are getting adequate rates for these product lines. Within our U.S. property product lines, we continue to see a softening market with overall rate decreases, particularly on large account risks, where we are seeing more pronounced rate softening and heightened competition.
We examine each of our product classes regularly by evaluating pricing and exposure, underwriting terms and conditions, deal structure, including limits and attachment points, and our expectations around loss cost trends, among other things. We target premium growth only in product lines where we are confident in the levels of rate adequacy.
Net Retention
Net retention of underwriting gross premium volume for the quarters ended June 30, 2026 and 2025 was 86% and 77%, respectively. Net retention of underwriting gross premium volume for the six months ended June 30, 2026 and 2025 was 83% and 79%, respectively.
The increase in net retention for both the quarter and six months ended June 30, 2026 was primarily driven by the impact of our Hagerty business transitioning to a fronting arrangement in 2026, which we ceded at approximately 80% in 2025. For the six months ended June 30, 2026, the increase in net retention was partially offset by the impact of the ceded written premiums within our Global Reinsurance division and with our Hagerty business related to previously written business that was reinsured during the first quarter of 2026, as previously discussed. Within our underwriting operations, we purchase reinsurance and retrocessional reinsurance to manage our net retention on individual risks and overall exposure to losses and to enable us to write policies with sufficient limits to meet policyholder needs.
Earned
The decrease in earned premiums for both the quarter and six months ended June 30, 2026 was primarily due to the impact of the changes in gross premium volume and net retention in recent periods, as previously discussed.
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Combined Ratio
Quarter-to-Date
Underwriting results for the quarter ended June 30, 2026 included $41.0 million, or two points on the combined ratio, of net of losses and loss adjustment expenses related to the Middle East conflict. Underwriting results for the quarter ended June 30, 2025 included a $5.2 million reduction of our estimate of losses attributable to the series of wildfires that occurred in southern California in January 2025 (California Wildfires). Excluding losses attributed to catastrophes, the decrease in the Markel Insurance segment combined ratio for the quarter ended June 30, 2026 was primarily attributable to more favorable development on prior accident years loss reserves and a lower attritional loss ratio.
The decrease in the attritional loss ratio for the quarter ended June 30, 2026 was primarily attributable to lower attritional loss ratios across our general liability and professional liability product lines due to the impact of recent underwriting actions and the change in mix of business, as our growing lines of business generally have lower attritional loss ratios than the lines of business for which we have reduced our premium writings. Additionally, we recognized current accident year losses on our discontinued IP CPI product line in the second quarter of 2025 compared to no such losses in the second quarter of 2026.
The combined ratio for the quarter ended June 30, 2026 included $166.6 million of favorable development on prior accident years loss reserves compared to $78.9 million for the same period of 2025. The increase in favorable development was primarily driven by more favorable development on our property insurance product lines and less adverse development on our U.S. and Bermuda professional liability product lines. For the quarter ended June 30, 2026, favorable development was most significant on the more recent accident years within our property, marine and energy, and workers' compensation insurance product lines. For the quarter ended June 30, 2025, favorable development was most significant within our property and marine and energy insurance product lines. Favorable development in the second quarter of 2025 was net of $127.0 million of adverse development on our run-off risk-managed directors and officers product lines and adverse development on our general liability product lines within our Global Reinsurance division.
Year-to-Date
Underwriting results for the six months ended June 30, 2026 included $76.0 million, or two points on the combined ratio, of net losses and loss adjustment expenses related to the Middle East conflict. Underwriting results for the six months ended June 30, 2025 included $60.9 million, or one and a half points on the combined ratio, of net losses and loss adjustment expenses attributed to the California Wildfires. Excluding losses attributed to catastrophes, the decrease in the Markel Insurance segment combined ratio for the six months ended June 30, 2026 was primarily attributable to a lower attritional loss ratio and more favorable development on prior accident years loss reserves. The decrease in the attritional loss ratio for the six months ended June 30, 2026 was due to the same factors as discussed on a quarter-to-date basis.
The combined ratio for the six months ended June 30, 2026 included $273.5 million of favorable development on prior accident years loss reserves compared to $227.8 million for the same period of 2025. The increase in favorable development was primarily attributable to more favorable development on our property insurance product lines and less adverse development on our U.S. and Bermuda professional liability product lines, partially offset by less favorable development on our general liability insurance product line. For the six months ended June 30, 2026, favorable development was most significant on the more recent accident years within our property, marine and energy, workers' compensation, and credit and surety insurance product lines. For the six months ended June 30, 2025, favorable development was most significant within our marine and energy, property, general liability, and workers' compensation insurance product lines. Favorable development in the first half of 2025 was net of adverse development on our run-off risk-managed directors and officers product lines and adverse development on our general liability product lines within our Global Reinsurance division.
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Markel Insurance - Divisional Results
The following tables present the divisional results of the Markel Insurance segment's underwriting and other insurance-related activities.
Quarter-to-Date
Quarter Ended June 30, 2026
(dollars in thousands) U.S. Wholesale and Specialty Programs and Solutions International Global Reinsurance Other Markel Insurance
Gross premium volume - underwriting $ 798,663 $ 716,968 $ 890,205 $ (15,228) $ (3,518) $ 2,387,090
Gross premium volume - fronting — 1,127,930 — 154,096 — 1,282,026
Gross premium volume $ 798,663 $ 1,844,898 $ 890,205 $ 138,868 $ (3,518) $ 3,669,116
Net written premiums $ 687,890 $ 623,620 $ 753,550 $ (17,873) $ (3,517) $ 2,043,670
Earned premiums $ 617,627 $ 589,266 $ 661,736 $ 126,201 $ (2,469) $ 1,992,361
Losses and loss adjustment expenses:
Current accident year - attritional (411,178) (415,301) (322,584) (116,200) 1,569 (1,263,694)
Current accident year - catastrophe — — (40,983) — — (40,983)
Prior accident years 8,405 75,736 88,359 (6,201) 261 166,560
Underwriting, acquisition, and insurance expenses (196,756) (215,422) (267,390) (33,621) 1,064 (712,125)
Underwriting profit (loss) $ 18,098 $ 34,279 $ 119,138 $ (29,821) $ 425 $ 142,119
Services and other revenues $ — $ 5,487 $ (571) $ 576 $ 2,382 $ 7,874
Services and other expenses — (3,158) (757) — (3,267) (7,182)
Services and other income (loss) $ — $ 2,329 $ (1,328) $ 576 $ (885) $ 692
Current accident year loss ratio 66.6 % 70.5 % 54.9 % 92.1 % 65.5 %
Prior accident years loss ratio (1.4) % (12.9) % (13.4) % 4.9 % (8.4) %
Loss ratio 65.2 % 57.6 % 41.6 % 97.0 % 57.1 %
Expense ratio 31.9 % 36.6 % 40.4 % 26.6 % 35.7 %
Combined ratio 97.1 % 94.2 % 82.0 % 123.6 % 92.9 %
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Quarter Ended June 30, 2025
(dollars in thousands) U.S. Wholesale and Specialty Programs and Solutions International Global Reinsurance Other Markel Insurance
Gross premium volume - underwriting $ 828,772 $ 980,901 $ 677,471 $ 321,676 $ 3 $ 2,808,823
Gross premium volume - fronting — 1,293,649 — — — 1,293,649
Gross premium volume $ 828,772 $ 2,274,550 $ 677,471 $ 321,676 $ 3 $ 4,102,472
Net written premiums $ 673,926 $ 619,526 $ 588,750 $ 283,980 $ (927) $ 2,165,255
Earned premiums $ 659,902 $ 576,858 $ 535,088 $ 285,404 $ 6,370 $ 2,063,622
Losses and loss adjustment expenses:
Current accident year - attritional (448,476) (363,154) (272,263) (226,851) (25,057) (1,335,801)
Current accident year - catastrophe (60) (253) 5,000 500 — 5,187
Prior accident years 2,516 51,808 75,144 (49,534) (1,000) 78,934
Underwriting, acquisition, and insurance expenses (224,447) (215,154) (223,246) (82,844) (3,051) (748,742)
Underwriting profit (loss) $ (10,565) $ 50,105 $ 119,723 $ (73,325) $ (22,738) $ 63,200
Services and other revenues $ — $ 5,824 $ 829 $ — $ (60) $ 6,593
Services and other expenses — (2,365) (2,543) — (4,548) (9,456)
Services and other income (loss) $ — $ 3,459 $ (1,714) $ — $ (4,608) $ (2,863)
Current accident year loss ratio 68.0 % 63.0 % 49.9 % 79.3 % 64.5 %
Prior accident years loss ratio (0.4) % (9.0) % (14.0) % 17.4 % (3.8) %
Loss ratio 67.6 % 54.0 % 35.9 % 96.7 % 60.7 %
Expense ratio 34.0 % 37.3 % 41.7 % 29.0 % 36.3 %
Combined ratio 101.6 % 91.3 % 77.6 % 125.7 % 96.9 %
U.S. Wholesale and Specialty
The 4% decrease in gross premium volume and 6% decrease in earned premiums within the U.S. Wholesale and Specialty division for the quarter ended June 30, 2026 were primarily due to certain underwriting actions taken within our general liability product lines aimed at improving overall profitability and rebalancing our product mix, as well as lower rates within our property product lines. The U.S. Wholesale and Specialty division's combined ratio for the quarter ended June 30, 2026 decreased five points primarily due to improved performance within our property product lines and our binding business.
Programs and Solutions
The 27% decrease in underwriting gross premium volume within the Programs and Solutions division for the quarter ended June 30, 2026 was primarily attributable to the transition of the Hagerty business to a fronting arrangement, partially offset by growth within our programs product lines, as well as specialty lines written from our Bermuda platform. The 13% decrease in fronting gross premium volume was driven by lower premiums on our property catastrophe programs with Nephila driven by rate decreases. The Programs and Solutions division's combined ratio for the quarter ended June 30, 2026 increased three points primarily due to a higher attritional loss ratio, partially offset by more favorable development on prior accident years loss reserves.
International
The 31% increase in gross premium volume and 24% increase in earned premiums within the International division for the quarter ended June 30, 2026 were driven by increases on our marine and energy, general liability, and professional liability product lines. The International division combined ratio was 82% in the second quarter of 2026, which included six points of net losses on the combined ratio related to the Middle East conflict.
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Year-to-Date
Six Months Ended June 30, 2026
(dollars in thousands) U.S. Wholesale and Specialty Programs and Solutions International Global Reinsurance Other Markel Insurance
Gross premium volume - underwriting $ 1,471,336 $ 1,372,824 $ 1,751,190 $ 7,352 $ (39) $ 4,602,663
Gross premium volume - fronting — 1,638,335 — 231,113 — 1,869,448
Gross premium volume $ 1,471,336 $ 3,011,159 $ 1,751,190 $ 238,465 $ (39) $ 6,472,111
Net written premiums $ 1,275,894 $ 1,123,347 $ 1,466,802 $ (51,107) $ (38) $ 3,814,898
Earned premiums $ 1,246,173 $ 1,156,553 $ 1,270,695 $ 286,211 $ 2,068 $ 3,961,700
Losses and loss adjustment expenses:
Current accident year - attritional (800,540) (763,462) (643,426) (242,177) 1 (2,449,604)
Current accident year - catastrophe — — (76,011) — — (76,011)
Prior accident years 31,595 111,588 148,869 (20,054) 1,501 273,499
Underwriting, acquisition, and insurance expenses (412,814) (417,384) (517,823) (76,189) (1,006) (1,425,216)
Underwriting profit (loss) $ 64,414 $ 87,295 $ 182,304 $ (52,209) $ 2,564 $ 284,368
Services and other revenues $ — $ 8,827 $ 3,793 $ 749 $ 2,576 $ 15,945
Services and other expenses — (5,544) (1,479) — (5,264) (12,287)
Services and other income (loss) $ — $ 3,283 $ 2,314 $ 749 $ (2,688) $ 3,658
Current accident year loss ratio 64.2 % 66.0 % 56.6 % 84.6 % 63.8 %
Prior accident years loss ratio (2.5) % (9.6) % (11.7) % 7.0 % (6.9) %
Loss ratio 61.7 % 56.4 % 44.9 % 91.6 % 56.8 %
Expense ratio 33.1 % 36.1 % 40.8 % 26.6 % 36.0 %
Combined ratio 94.8 % 92.5 % 85.7 % 118.2 % 92.8 %
Six Months Ended June 30, 2025
(dollars in thousands) U.S. Wholesale and Specialty Programs and Solutions International Global Reinsurance Other Markel Insurance
Gross premium volume - underwriting $ 1,570,989 $ 1,787,129 $ 1,347,792 $ 898,603 $ (2,284) $ 5,602,229
Gross premium volume - fronting — 1,671,794 — — — 1,671,794
Gross premium volume $ 1,570,989 $ 3,458,923 $ 1,347,792 $ 898,603 $ (2,284) $ 7,274,023
Net written premiums $ 1,278,942 $ 1,164,369 $ 1,161,242 $ 801,082 $ (1,704) $ 4,403,931
Earned premiums $ 1,322,531 $ 1,144,103 $ 1,044,483 $ 559,652 $ 9,392 $ 4,080,161
Losses and loss adjustment expenses:
Current accident year - attritional (906,132) (712,921) (550,335) (416,710) (45,226) (2,631,324)
Current accident year - catastrophe (18,227) (16,200) (25,000) (1,450) — (60,877)
Prior accident years 43,042 73,981 139,780 (31,860) 2,828 227,771
Underwriting, acquisition, and insurance expenses (450,260) (423,205) (432,569) (160,299) (6,036) (1,472,369)
Underwriting profit (loss) $ (9,046) $ 65,758 $ 176,359 $ (50,667) $ (39,042) $ 143,362
Services and other revenues $ — $ 9,234 $ 1,926 $ — $ (263) $ 10,897
Services and other expenses — (4,805) (5,343) — (7,492) (17,640)
Services and other income (loss) $ — $ 4,429 $ (3,417) $ — $ (7,755) $ (6,743)
Current accident year loss ratio 69.9 % 63.7 % 55.1 % 74.7 % 66.0 %
Prior accident years loss ratio (3.3) % (6.5) % (13.4) % 5.7 % (5.6) %
Loss ratio 66.6 % 57.3 % 41.7 % 80.4 % 60.4 %
Expense ratio 34.0 % 37.0 % 41.4 % 28.6 % 36.1 %
Combined ratio 100.7 % 94.3 % 83.1 % 109.1 % 96.5 %
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U.S. Wholesale and Specialty
The 6% decrease in gross premium volume and earned premiums within the U.S. Wholesale and Specialty division for the six months ended June 30, 2026 was primarily due to certain underwriting actions taken within our general liability product lines aimed at improving overall profitability and rebalancing our product mix, as well as lower rates within our property product lines. The U.S. Wholesale and Specialty division's combined ratio for the six months ended June 30, 2026 decreased six points primarily due to a lower current accident year loss ratio.
Programs and Solutions
The 23% decrease in underwriting gross premium volume within the Programs and Solutions division for the six months ended June 30, 2026 was primarily attributable to the transition of the Hagerty business to a fronting arrangement, partially offset by growth within our personal lines and programs product lines, as well as specialty lines written from our Bermuda platform. The 2% decrease in fronting gross premium volume was driven by lower premiums on our property catastrophe programs with Nephila driven by rate decreases, partially offset by the transition of the Hagerty business to a fronting arrangement. The Programs and Solutions division's combined ratio for the six months ended June 30, 2026 decreased two points primarily due to more favorable development on prior accident years loss reserves.
International
The 30% increase in gross premium volume and 22% increase in earned premiums within the International division for the six months ended June 30, 2026 were driven by increases on our marine and energy, professional liability, and general liability product lines. The International division combined ratio was 86% in the second quarter of 2026, which included six points of net losses on the combined ratio related to the Middle East conflict.
Industrial
The Industrial segment is comprised of businesses that operate in the industrial sector. We measure the operating performance of our Industrial segment by its operating revenues and adjusted operating income, which represents operating income before amortization of acquired intangible assets. We consolidate the results of the businesses in the Industrial segment on a one-month lag, with the exception of significant transactions or events that occur during the intervening period. The following table summarizes the operating performance of our Industrial segment.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 % Change 2026 2025 % Change
Operating revenues $ 1,038,068 $ 1,015,715 2 % $ 1,921,126 $ 1,845,289 4 %
Adjusted operating income $ 75,434 $ 103,513 (27) % $ 124,720 $ 162,277 (23) %
Quarter-to-Date
For the quarter ended June 30, 2026, the increase in operating revenues reflected the contribution from an acquisition made by one of our businesses in December 2025. Organic revenue growth for our Industrial segment was flat for the quarter ended June 30, 2026. Organic revenue growth is a non-GAAP financial measure. See "Non-GAAP Financial Measures" for additional details.
For the quarter ended June 30, 2026, the impact of increased demand for our precast concrete products and higher sales volume of our fire safety services in the commercial construction industry were largely offset by lower sales volume of our car-hauling equipment, driven by a down cycle in demand for the industry, and of our industrial bakery equipment.
For the quarter ended June 30, 2026, the decrease in adjusted operating income was primarily attributable to a lower operating margin for the segment, due to changes in the mix of business and higher operating expenses at certain businesses.
Year-to-Date
For the six months ended June 30, 2026, the increase in operating revenues reflected organic growth and the contribution from an acquisition made by one of our businesses in December 2025. Organic revenue growth for our Industrial segment was 2% for the six months ended June 30, 2026.
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Organic revenue growth was primarily attributable to increased demand for our precast concrete products and higher sales volume of our fire safety and other services in the construction industry, partially offset by lower sales volume of our car-hauling equipment and industrial bakery equipment, as previously discussed.
For the six months ended June 30, 2026, the decrease in adjusted operating income was due to the same factors as discussed on a quarter-to-date basis.
Financial
The Financial segment is comprised of insurance services and investment management businesses that operate in the financial sector, including State National and Nephila. We measure the operating performance of our Financial segment by its operating revenues and adjusted operating income, which represents operating income before amortization of acquired intangible assets. The following table summarizes the operating performance of our Financial segment.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 % Change 2026 2025 % Change
Operating revenues $ 171,348 $ 172,852 (1) % $ 332,878 $ 351,333 (5) %
Adjusted operating income (loss) $ (148,940) $ 78,422 NM (1) $ (112,735) $ 158,033 NM (1)
(1) NM - Not meaningful.
Quarter-to-Date
For the quarter ended June 30, 2026, the decrease in operating revenues was primarily attributable to the impact of income related to our minority investment in Velocity Holdco, LLC (Velocity) in the second quarter of 2025 following the sale of its insurance carrier in May 2025, partially offset by 3% organic revenue growth, driven by higher management fees for our insurance-linked securities investment management services.
For the quarter ended June 30, 2026, the decrease in adjusted operating income was primarily attributable to the impact of a $205.3 million provision for expected credit losses within our State National program services operations. Additionally, the decrease in adjusted operating income was due in part to the impact of the income related to our minority investment in Velocity, as previously discussed.
The provision for expected credit losses within our State National program services operations relates to reinsurance recoverables due from a capacity provider that is currently in bankruptcy. In the second quarter of 2026, we completed an actuarial reserve assessment on the programs in which this capacity provider participated, which included a third-party actuarial reserve study, and increased our gross and ceded losses related to these programs. We do not expect to be able to obtain additional collateral from the capacity provider to secure the related increase in reinsurance recoverables and, therefore, recognized a $205.3 million provision for expected credit losses. We continue to pursue additional collateral and other contractual means of recovery for these reinsurance recoverables. See note 7 of the notes to consolidated financial statements for additional details.
Year-to-Date
For the six months ended June 30, 2026, the decrease in operating revenues was primarily attributable to the impact of $41.4 million of income related to our minority investment in Velocity in 2025 following the sale of its managing general agent operations and insurance carrier, partially offset by 6% organic revenue growth.
Organic revenue growth was primarily attributable to higher management fees for our insurance-linked securities investment management services and higher earned premiums from our lender services offerings, partially offset by the impact of a $14.4 million impairment of an equity method investment in an asset management firm in the first quarter of 2026.
For the six months ended June 30, 2026, the decrease in adjusted operating income was primarily attributable to the impact of a $205.3 million charge within our State National program services operations, as previously discussed. Additionally, the decrease in adjusted operating income was due in part to the impact of the income related to our minority investment in Velocity in 2025 and an impairment of an equity method investment in 2026, as previously discussed.
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Consumer and Other
The Consumer and Other segment is comprised of businesses that operate in the consumer sector, as well as a variety of other sectors, including information technology, real estate, and healthcare. We measure the operating performance of our Consumer and Other segment by its operating revenues and adjusted operating income, which represents operating income before amortization of acquired intangible assets. We consolidate the results of the businesses in the Consumer and Other segment on a one-month lag, with the exception of significant transactions or events that occur during the intervening period.
Costa Farms, which is the largest business in the Consumer and Other segment, is a seasonal ornamental plant business, with a significant portion of its sales occurring in the second quarter. The following table summarizes the operating performance of our Consumer and Other segment.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 % Change 2026 2025 % Change
Operating revenues $ 551,974 $ 529,226 4 % $ 832,471 $ 817,012 2 %
Adjusted operating income $ 122,146 $ 101,523 20 % $ 161,901 $ 133,911 21 %
Quarter-to-Date
For the quarter ended June 30, 2026, the increase in operating revenues was primarily attributable to increased sales of ornamental plants and higher prices on home sales. Revenue growth and organic revenue growth for our Consumer and Other segment were consistent at 4% for the quarter ended June 30, 2026. For the quarter ended June 30, 2026, the increase in adjusted operating income was primarily attributable to higher margins on increased sales of ornamental plants, as well as improved performance at several other businesses.
Year-to-Date
For the six months ended June 30, 2026, the increase in operating revenues reflected the impact of a full six-month contribution from Educational Partners International (EPI), which we began consolidating in the first quarter of 2025. Organic revenue growth for our Consumer and Other segment was flat for the six months ended June 30, 2026. The impact of increased sales of ornamental plants in the first half of 2026 was largely offset by the impact of lower home sales volume in the first half of 2026. For the six months ended June 30, 2026, the increase in adjusted operating income was due to the same factors as discussed on a quarter-to-date basis, as well as an increased contribution from EPI.
Corporate
The following table summarizes the results of our corporate operations, as well as a reconciliation to total corporate and eliminations as presented in the summary table of our consolidated results of operations. Our corporate operations include activities at our holding company, Markel Group Inc., and investments and loans to and from our operating businesses, which are held by other corporate subsidiaries. For further details of investment performance at our corporate operations, see "Consolidated Investment Results."
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Net investment income $ 26,721 $ 24,117 $ 56,568 $ 55,733
Other revenues 7,704 12,442 14,398 17,475
Operating revenues 34,425 36,559 70,966 73,208
Operating expenses (1) (12,142) — (32,967) —
Corporate adjusted operating income $ 22,283 $ 36,559 $ 37,999 $ 73,208
Markel Group consolidating eliminations (11,292) (11,442) (23,998) (22,432)
Corporate and eliminations adjusted operating income $ 10,991 $ 25,117 $ 14,001 $ 50,776
(1) Prior to the third quarter of 2025, corporate expenses were fully allocated to our segments.
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Consolidated Investment Results
We measure our investment performance by analyzing net investment income, which reflects the recurring interest and dividend earnings on our investment portfolio. See note 3(d) of the notes to consolidated financial statements for details regarding the components of net investment income.
We also analyze net investment gains and losses, which are primarily comprised of unrealized gains and losses on our equity portfolio. Net investment gains or losses in any given period are typically attributable to changes in the fair value of our equity portfolio due to market value movements. 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. As of June 30, 2026, the fair value of our equity portfolio included cumulative unrealized gains of $9.3 billion.
The following table summarizes our consolidated investment performance. Investing results are attributed to our businesses based on the subsidiary that holds the investments.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Net investment income $ 256,123 $ 230,009 $ 512,013 $ 467,104
Yield on fixed maturity securities (1) 3.7 % 3.5 % 3.7 % 3.5 %
Yield on short-term investments (1) 3.3 % 3.9 % 3.3 % 3.8 %
Yield on cash and cash equivalents and restricted cash and cash equivalents (1) 2.8 % 3.3 % 2.8 % 3.4 %
Net realized investment losses $ (2,933) $ (16,596) $ (890) $ (18,397)
Change in fair value of equity securities 1,170,458 596,819 440,853 449,549
Net investment gains $ 1,167,525 $ 580,223 $ 439,963 $ 431,152
Return on equity securities (2) 9.9 % 5.4 % 4.1 % 4.5 %
(1) Yield reflects the applicable annualized interest income as a percentage of the applicable monthly average invested assets at amortized cost.
(2) Return on equity securities is calculated by dividing dividends and the change in fair value of equity securities by the monthly average equity securities at fair value and considers the timing of net purchases and sales.
The increase in net investment income for the quarter and six months ended June 30, 2026 was driven by higher interest income on fixed maturity securities due to higher yields and higher average holdings in 2026 compared to 2025, as well as higher dividend income on equity securities. These increases were partially offset by lower interest income on cash and cash equivalents due to lower short-term interest rates in 2026 compared to 2025.
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The following tables summarize the composition of our invested assets by segment. We hold investments across our operating businesses and at our holding company, with the majority of our investments held at our Markel Insurance business in support of its underwriting activities. Invested assets and the associated net investment income at our other reportable segments are primarily attributable to our Financial segment. Markel Insurance has also provided loans to a corporate subsidiary to fund certain non-insurance acquisitions. We evaluate these loans receivable similarly to invested assets held by Markel Insurance. Additionally, one of our corporate subsidiaries may, from time to time, provide loans to our operating businesses to fund strategic growth investments and projects. These intercompany loans are presented in the tables below but are eliminated in consolidation.
June 30, 2026
(dollars in thousands) Markel Insurance Other Reportable Segments Corporate Total
Fixed maturity securities $ 17,126,751 $ 353,946 $ 227,910 $ 17,708,607
Equity securities 11,336,286 — 2,126,267 13,462,553
Short-term investments 805,946 383,361 1,144,112 2,333,419
Cash and cash equivalents, including restricted 2,651,357 821,590 595,097 4,068,044
Invested assets $ 31,920,340 $ 1,558,897 $ 4,093,386 $ 37,572,623
Intercompany loans receivable $ 728,000 $ — $ 275,000
December 31, 2025
(dollars in thousands) Markel Insurance Other Reportable Segments Corporate Total
Fixed maturity securities $ 17,184,810 $ 371,994 $ 241,182 $ 17,797,986
Equity securities 10,859,200 — 2,145,112 13,004,312
Short-term investments 757,540 229,261 1,046,861 2,033,662
Cash and cash equivalents, including restricted 2,526,820 975,829 1,100,653 4,603,302
Invested assets $ 31,328,370 $ 1,577,084 $ 4,533,808 $ 37,439,262
Intercompany loans receivable $ 728,000 $ — $ 269,176
The following tables summarize our investing results by segment. Intercompany interest relates to interest on intercompany loans.
Quarter Ended June 30, 2026
(dollars in thousands) Markel Insurance Other Reportable Segments Corporate Eliminations Total
Interest:
Fixed maturity securities $ 164,021 $ 3,087 $ 2,088 $ — $ 169,196
Short-term investments 5,652 2,408 9,639 — 17,699
Cash and cash equivalents, including restricted 18,270 4,005 6,022 — 28,297
Intercompany loans receivable 6,668 — 4,624 (11,292) —
Dividends on equity securities 39,016 — 4,811 — 43,827
Investment expenses (2,404) (29) (463) — (2,896)
Net investment income $ 231,223 $ 9,471 $ 26,721 $ (11,292) $ 256,123
Net investment gains $ 1,030,284 $ — $ 137,241 $ — $ 1,167,525
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Quarter Ended June 30, 2025
(dollars in thousands) Markel Insurance Other Reportable Segments Corporate Eliminations Total
Interest:
Fixed maturity securities $ 142,944 $ 1,766 $ 1,119 $ — $ 145,829
Short-term investments 7,770 2,749 9,061 — 19,580
Cash and cash equivalents, including restricted 22,837 5,150 7,736 — 35,723
Intercompany loans receivable 7,397 — 4,045 (11,442) —
Dividends on equity securities 31,765 — 3,047 — 34,812
Investment expenses (4,985) (59) (891) — (5,935)
Net investment income $ 207,728 $ 9,606 $ 24,117 $ (11,442) $ 230,009
Net investment gains (losses) $ 580,572 $ — $ (349) $ — $ 580,223
Six Months Ended June 30, 2026
(dollars in thousands) Markel Insurance Other Reportable Segments Corporate Eliminations Total
Interest:
Fixed maturity securities $ 323,317 $ 5,952 $ 4,251 $ — $ 333,520
Short-term investments 11,427 4,382 18,994 — 34,803
Cash and cash equivalents, including restricted 36,941 8,353 13,959 — 59,253
Intercompany loans receivable 13,336 — 10,662 (23,998) —
Dividends on equity securities 83,069 — 10,094 — 93,163
Investment expenses (7,248) (86) (1,392) — (8,726)
Net investment income $ 460,842 $ 18,601 $ 56,568 $ (23,998) $ 512,013
Net investment gains (losses) $ 476,370 $ 369 $ (36,776) $ — $ 439,963
Six Months Ended June 30, 2025
(dollars in thousands) Markel Insurance Other Reportable Segments Corporate Eliminations Total
Interest:
Fixed maturity securities $ 283,683 $ 3,251 $ 2,240 $ — $ 289,174
Short-term investments 13,425 5,513 20,315 — 39,253
Cash and cash equivalents, including restricted 47,238 9,913 18,346 — 75,497
Intercompany loans receivable 14,417 — 8,015 (22,432) —
Dividends on equity securities 66,297 — 8,710 — 75,007
Investment expenses (9,815) (119) (1,893) — (11,827)
Net investment income $ 415,245 $ 18,558 $ 55,733 $ (22,432) $ 467,104
Net investment gains $ 356,378 $ — $ 74,774 $ — $ 431,152
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Consolidated Underwriting Reconciliation
The following table reconciles our Markel Insurance segment underwriting results to our consolidated underwriting results. State National's underwriting results are included in our Financial segment.
Quarter Ended June 30,
2026 2025
(dollars in thousands) Markel Insurance State National Eliminations Consolidated Markel Insurance State National Eliminations Consolidated
Gross premium volume:
Underwriting $ 2,387,090 $ 79,980 $ — $ 2,467,070 $ 2,808,823 $ 77,845 $ — $ 2,886,668
Fronting 1,282,026 900,311 (77,233) 2,105,104 1,293,649 1,006,942 (42,768) 2,257,823
Total $ 3,669,116 $ 980,291 $ (77,233) $ 4,572,174 $ 4,102,472 $ 1,084,787 $ (42,768) $ 5,144,491
Earned premiums $ 1,992,361 $ 79,417 $ — $ 2,071,778 $ 2,063,622 $ 78,069 $ — $ 2,141,691
Losses and loss adjustment expenses (1,138,117) (49,034) — (1,187,151) (1,251,680) (36,354) — (1,288,034)
Underwriting, acquisition, and insurance expenses (712,125) (23,686) — (735,811) (748,742) (25,469) — (774,211)
Underwriting profit $ 142,119 $ 6,697 $ — $ 148,816 $ 63,200 $ 16,246 $ — $ 79,446
Combined Ratio 92.9 % 91.6 % 92.8 % 96.9 % 79.2 % 96.3 %
Six Months Ended June 30,
2026 2025
(dollars in thousands) Markel Insurance State National Eliminations Consolidated Markel Insurance State National Eliminations Consolidated
Gross premium volume:
Underwriting $ 4,602,663 $ 153,635 $ — $ 4,756,298 $ 5,602,229 $ 149,455 $ — $ 5,751,684
Fronting 1,869,448 1,888,059 (156,609) 3,600,898 1,671,794 2,035,608 (96,365) 3,611,037
Total $ 6,472,111 $ 2,041,694 $ (156,609) $ 8,357,196 $ 7,274,023 $ 2,185,063 $ (96,365) $ 9,362,721
Earned premiums $ 3,961,700 $ 158,964 $ — $ 4,120,664 $ 4,080,161 $ 150,904 $ — $ 4,231,065
Losses and loss adjustment expenses (2,252,116) (101,852) — (2,353,968) (2,464,430) (78,269) — (2,542,699)
Underwriting, acquisition, and insurance expenses (1,425,216) (50,423) — (1,475,639) (1,472,369) (49,280) — (1,521,649)
Underwriting profit $ 284,368 $ 6,689 $ — $ 291,057 $ 143,362 $ 23,355 $ — $ 166,717
Combined ratio 92.8 % 95.8 % 92.9 % 96.5 % 84.5 % 96.1 %
Other
The following table presents the components of consolidated net income that are not allocated to our operating segments.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Amortization of acquired intangible assets $ 43,301 $ 51,213 $ 86,814 $ 98,155
Interest expense $ 52,390 $ 53,076 $ 103,276 $ 105,216
Net foreign exchange (gains) losses $ (10,378) $ 191,909 $ (64,655) $ 264,542
Income tax expense $ 332,869 $ 185,170 $ 267,287 $ 213,574
Effective tax rate 21 % 21 %
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Net Foreign Exchange Gains and Losses
Net foreign exchange gains and losses are primarily due to the remeasurement of our foreign currency denominated insurance loss reserves to the U.S. Dollar. The predominant foreign currencies within our insurance operations are the Euro and the British Pound. The U.S. Dollar strengthened against the Euro and the British Pound during the six months ended June 30, 2026, while it weakened against these currencies during the same period of 2025.
Our exposure to foreign currency exchange rates is largely hedged through our available-for-sale investment portfolio, where we hold securities that generally match the currencies of our loss reserves. We also purchase foreign currency forward contracts to manage unmatched foreign currency exposures.
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 losses on available-for-sale investments in other comprehensive income (loss), were losses of $2.7 million and $54.5 million for the quarter and six months ended June 30, 2026 compared to gains of $158.4 million and $222.7 million for the same periods of 2025.
Other Comprehensive Income (Loss) to Shareholders
The following table summarizes the components of other comprehensive income (loss) to shareholders.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Change in net unrealized losses on available-for-sale investments, net of taxes $ (59,712) $ 202,512 $ (193,533) $ 420,889
Other, net of taxes (7,785) 7,892 (2,068) 15,444
Other comprehensive income attributable to noncontrolling interests (17) (41) (54) (14)
Other comprehensive income (loss) to shareholders $ (67,514) $ 210,363 $ (195,655) $ 436,319
The change in net unrealized losses on available-for-sale investments in any given period is typically attributable to changes in the fair value of our fixed maturity portfolio due to changes in interest rates during the period, and, to a lesser extent, changes in foreign currency exchange rates.
As of June 30, 2026, 97% of our fixed maturity portfolio was rated "AA" or better.
Financial Condition
Liquidity and Capital Resources
We seek to maintain prudent levels of liquidity and financial leverage for the benefit and protection of our policyholders, creditors, and shareholders. Our consolidated debt to capital ratio was 19% at both June 30, 2026 and December 31, 2025, which is within the range of our target capital structure.
Investments, cash and cash equivalents, and restricted cash and cash equivalents (invested assets) were $37.6 billion and $37.4 billion at June 30, 2026 and December 31, 2025, respectively. Our holding company had $4.0 billion and $4.4 billion of invested assets at June 30, 2026 and December 31, 2025, respectively. The decrease in invested assets at our holding company was primarily attributable to cash used to repurchase shares of our common stock. For further details on the composition of our invested assets, see "Consolidated Investment Results."
We have a share repurchase program, authorized by our Board of Directors, that provides for the repurchase of up to $2 billion of common stock. As of June 30, 2026, $1.1 billion remained available for repurchase under the program. This share repurchase program has no expiration date but may be terminated by the Board of Directors at any time.
We may from time to time seek to prepay, retire, or repurchase our outstanding senior notes, through open market purchases, privately negotiated transactions, or otherwise. Those prepayments, retirements, or repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
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We have access to various capital sources, including dividends from our subsidiaries, holding company invested assets, undrawn capacity under our revolving credit facility, and access to the debt and equity capital markets. We believe we have, or have access to, adequate liquidity to meet our capital and operating needs, including that which may be required to support the operating needs of our subsidiaries. However, the availability of these sources of capital and the availability and terms of future financings will depend on a variety of factors.
Cash Flows
Net cash provided by operating activities was $444.8 million for the six months ended June 30, 2026 compared to $880.6 million for the same period of 2025. Operating cash flows in the first half of 2026 reflected net payments totaling $107.7 million to reinsure our exposures on our Hagerty business following its transition to a fronting arrangement and a $104.2 million decline in premium collections within our run-off Global Reinsurance division. Additionally, lower operating cash flows for Markel Insurance in 2026 reflected higher net claims payments, partially offset by higher net premium collections from our ongoing divisions and higher cash flows from investments. The decrease in operating cash flows was also due in part to lower operating cash flows from our Financial and Industrial segments and higher net tax payments in the first half of 2026.
Net cash used by investing activities was $545.5 million for the six months ended June 30, 2026 compared to net cash provided by investing activities of $83.4 million for the same period of 2025. During the six months ended June 30, 2026, net cash used by investing activities included net purchases of short-term investments, fixed maturity securities, and equity securities of $274.2 million, $123.2 million, and $21.3 million, respectively. During the six months ended June 30, 2025, net cash provided by investing activities included net sales of short-term investments of $729.0 million and net purchases of fixed maturity securities and equity securities of $485.6 million and $96.5 million, respectively. Cash flows from investing activities are affected by various factors such as anticipated payment of claims, financing activity, acquisition opportunities, and individual buy and sell decisions made in the normal course of our investment portfolio management.
Net cash used by financing activities was $421.5 million for the six months ended June 30, 2026 compared to $927.7 million for the same period of 2025. Cash of $370.7 million and $269.6 million was used to repurchase shares of our common stock during the first half of 2026 and 2025, respectively. Additionally, financing activities during the six months ended June 30, 2026 and 2025 reflected borrowings and repayments of debt at certain of our operating businesses, primarily on revolving lines of credit. Net cash used by financing activities in the first half of 2025 also included $600.0 million of cash used to redeem our preferred stock.
Non-GAAP Financial Measures
Markel Group utilizes certain non-GAAP measures that we believe enhance the understanding of our performance. These measures should not be viewed as a substitute for measures determined in accordance with U.S. GAAP.
Consolidated Adjusted Operating Income
Consolidated adjusted operating income, which excludes net investment gains and losses, amortization of acquired intangible assets, and impairment of goodwill, is a non-GAAP financial measure. We believe adjusted operating income is generally an accurate representation of the operating performance of our businesses in our periodic results. Net investment gains and losses are predominantly derived from our investments in publicly traded equity securities and typically include significant unrealized gains and losses from market value movements. We believe that net investment gains and losses, whether realized from sales or unrealized from market value movements, are distortive in understanding the short-term operating performance of our businesses. We do not view amortization of intangible assets and impairment of goodwill, which arise from purchase accounting for acquisitions, as ongoing costs of operating our businesses, and therefore exclude those amounts from our adjusted operating income metric.
Combined Ratio and Current Accident Year Loss Ratio, Excluding Current Year Catastrophe Events
We use underwriting profit or loss and the combined ratio as a basis for evaluating our underwriting performance. The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses, and underwriting, acquisition, and insurance expenses to earned premiums. The combined ratio is the sum of the loss ratio and the expense ratio.
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When analyzing our loss ratio, we typically evaluate losses and loss adjustment expenses attributable to the current accident year separately from losses and loss adjustment expenses attributable to prior accident years. Prior accident year reserve development, which can either be favorable or unfavorable, represents changes in our estimates of losses and loss adjustment expenses related to loss events that occurred in prior years. We believe a discussion of the current accident year loss ratio that excludes 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.
In addition to the U.S. GAAP combined ratio, loss ratio, and expense ratio, we also evaluate our underwriting performance using measures that exclude the impacts of certain items on these ratios. We believe these adjusted measures, which are non‑GAAP measures, provide financial statement users with a better understanding of the significant factors that comprise our underwriting results and how management evaluates underwriting performance.
When analyzing our combined ratio, we exclude current accident year losses and loss adjustment expenses attributed to natural catastrophes and certain other significant, infrequent loss events, such as the Middle East conflict. Gross and ceded losses for certain events may also result in receipt or payment of reinstatement premiums, which, if significant, may also be excluded when analyzing our combined ratio. Due to the unique characteristics of these events, there is inherent variability as to the timing and 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 our current accident year loss ratio excluding losses and loss adjustment expenses attributable to catastrophes and other significant, infrequent loss events. The current accident year loss ratio excluding the impact of catastrophes and other significant, infrequent loss events is commonly referred to as an attritional loss ratio within the property and casualty insurance industry.
The components of Markel Insurance's combined ratios, including these non-GAAP measures, are included in "Markel Insurance".
Adjusted Underwriting Gross Premium Volume
Adjusted underwriting gross premium volume is a non-GAAP measure that excludes underwriting gross premium volume from the Global Reinsurance division and our business with Hagerty for all periods. In August 2025, Markel Insurance sold the renewal rights for contracts written through its Global Reinsurance division, and the division entered into run-off, which resulted in a significant decline in underwriting gross premium volume. Beginning on January 1, 2026, Markel Insurance's business written on behalf of Hagerty transitioned from being an underwriting product to a fronting arrangement, which resulted in a change in the presentation of the related gross premium volume and therefore, a significant decline in underwriting gross premium volume. We believe adjusted underwriting gross premium volume is a meaningful measure when comparing underwriting gross premium volume from period-to-period as it adjusts for the impact of these significant contractual restructuring changes within the Markel Insurance segment. The following table reconciles underwriting gross premium volume to adjusted underwriting gross premium volume.
Quarter Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 % Change 2026 2025 % Change
Underwriting gross premium volume $ 2,387,090 $ 2,808,823 (15) % $ 4,602,663 $ 5,602,229 (18) %
Less: Global Reinsurance division underwriting gross premium volume (15,228) 321,676 7,352 898,603
Less: Hagerty underwriting gross premium volume — 304,106 — 524,033
Adjusted underwriting gross premium volume $ 2,402,318 $ 2,183,041 10 % $ 4,595,311 $ 4,179,593 10 %
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Organic Revenue Growth
Organic revenue growth is a non-GAAP measure. We believe organic revenue growth is a meaningful measure as it provides growth in comparable revenues from period-to-period by adjusting for the impact of acquisitions and dispositions. For acquisitions and dispositions, the calculation of organic revenue growth excludes the revenue of the business from the two periods being compared unless our consolidated results include a full period of revenue from the business for both periods. The following table reconciles revenue growth to organic revenue growth.
Quarter Ended June 30, 2026 Six Months Ended June 30, 2026
Industrial segment:
Revenue growth 2.2 % 4.1 %
Impact of inorganic activity (2.3) % (2.2) %
Organic revenue growth (0.1) % 1.9 %
Financial segment:
Revenue growth (0.9) % (5.3) %
Impact of inorganic activity 4.3 % 11.7 %
Organic revenue growth 3.4 % 6.4 %
Consumer and Other segment:
Revenue growth 4.3 % 1.9 %
Impact of inorganic activity (0.3) % (1.7) %
Organic revenue growth 4.0 % 0.2 %
Critical Accounting Estimates
Critical accounting estimates are those estimates that both are important to the portrayal of our financial condition and results of operations and require us to exercise significant judgment. The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of material contingent assets and liabilities. These estimates, by necessity, are based on assumptions about numerous factors.
Our critical accounting estimates consist of estimates and assumptions used in determining the reserves for unpaid losses and loss adjustment expenses as well as estimates and assumptions used in the valuation of goodwill and intangible assets. We review the adequacy of reserves for unpaid losses and loss adjustment expenses quarterly. Estimates and assumptions for goodwill and intangible assets are reviewed in conjunction with acquisitions and impairment assessments. Goodwill and indefinite-lived intangible assets are reassessed for impairment at least annually. All intangible assets, including goodwill, are also reviewed for impairment when events or circumstances indicate that their carrying value may not be recoverable. Actual results may differ materially from the estimates and assumptions used in preparing the consolidated financial statements.
Readers are urged to review our 2025 Annual Report on Form 10-K for a more complete description of our critical accounting estimates.
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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. Such statements may use words such as "anticipate," "believe," "estimate," "expect," "intend," "predict," "project," and similar expressions as they relate to us or our management.
There are risks and uncertainties that may cause actual results to differ materially from predicted results in forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. 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 our 2025 Annual Report on Form 10-K or under "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk," and "Risk Factors" in this report, or are included in the items listed below:
•the effect of cyclical trends or changes in market conditions on our operations, including demand and pricing in the markets in which we operate;
•actions by competitors, including the use of technology (e.g., artificial intelligence) 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, including through the use of artificial intelligence, 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 natural, health-related, and man-made catastrophes, including regional or military conflicts, 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 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;
•reserves for our run-off reinsurance business 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;
•failures, inadequacies, or inaccuracies (whether due to data error, human error, artificial intelligence hallucination or generation, or otherwise) in the various methods, 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 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 run-off), 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 loss estimates for catastrophes and other significant, infrequent loss 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;
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•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;
•regulatory actions affecting our insurance companies 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; significant fluctuations in foreign currency exchange rates, commodity and energy prices, and interest rates; volatility in the credit and capital markets; the imposition of duties, tariffs and other changes in international trade regulation, 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;
•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 and military 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 developments requiring the write-off of a significant portion of our goodwill and intangible assets;
•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 decentralized 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;
•economic conditions, which may adversely affect our access to capital and credit markets;
•the compliance, or failure to comply, with covenants and other requirements under our credit facilities, senior debt, and other indebtedness;
•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;
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•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 imposed on the global operations of our companies by one or more jurisdictions are more restrictive than, or conflict with, applicable requirements and limitations imposed by other jurisdictions;
•regulatory changes or challenges by regulators, including regarding the use of certain issuing carrier or fronting arrangements;
•our dependence on a limited number of brokers for a large portion of our insurance revenues;
•adverse changes in our assigned financial strength or debt 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;
•market fluctuations in the value of the equity securities we hold, both at our insurance subsidiaries and our holding company, can significantly impact our periodic results and the amount of statutory capital our insurance subsidiaries are required to hold;
•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 growth in 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 growth in our stock price varying significantly from our growth in intrinsic value calculations; and
•a number of additional factors may adversely affect our Industrial, Financial, and Consumer and Other 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 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. 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.