Markel Corporation announced that its third quarter results will be impacted “by increases in loss reserves for asbestos and environmental exposures ($55 million) and increases in prior years’ loss reserves for the Company’s Investors Brokered Excess and Surplus Lines unit ($50 million).”
The company will formally announce Q3 results on October 29, and has scheduled a conference call that will discuss the earnings report in detail.
Markel’s bulletin said that the reserve increases “will be partially offset by favorable development of prior years’ loss reserves and continued strong profitability from other units. Considering these items the Company expects an after-tax net loss for the quarter in the range of $15 million to $20 million or $1.52 to $2.03 per diluted share.
It explained that the “increase in prior years’ loss reserves for asbestos and environmental exposures is being made in response to the Company’s annual review of these exposures in both U.S. and international operations.” It “reflects a higher than expected incidence of new claims and recent adverse appellate and bankruptcy court decisions.”
Markel said that a review at the Investors Brokered Excess and Surplus Lines unit “highlighted claims reserving estimates which did not meet the Company’s standards. As a result, the Company has updated its assumptions and increased reserves for loss and loss adjustment expenses, primarily for the 1997-2001 accident years. In recording reserves the Company seeks to establish reserves that are believed to be more likely redundant than deficient,” and it believes that the “reserve increases are consistent with that goal.”
The conference call to discuss quarterly financial results will begin at 10:30 am (Eastern Time). “Any person interested in listening to the call or a replay of the call, which will be available approximately two hours after the conclusion of the call until November 7, 2003, should contact Markel’s Investor Relations Department at 804-747-0136,” said the announcement. “Investors, analysts and the general public may also listen to the call free over the Internet through Markel Corporation’s web site, www.markelcorp.com. A replay of the call will also be available on this web site until November 7, 2003.”
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