Markel bullish on construction business as US infrastructure bill drives growth - Noble
Markel’s newly appointed president of insurance, Jeremy Noble, is “laser focused” on growing profitably and steering the business to become a leading global specialty insurer, citing opportunities in construction, fintech and energy across its North America and London Market platforms in 2023.
In a wide-ranging interview with The Insurer TV on its Leading Voices programme, Noble asserted that the “only good growth is profitable growth” and that Markel is “coming into a position of strength” with the ability to invest in a number of key areas.
Markel currently writes over $1bn of construction-related business and continues to make more investment in this space.
“With a major infrastructure bill in the US, there will continue to be significant investment in construction opportunities in the US, and we'll look to expand those capabilities globally as well,” he added.
“Fintech, terrorism, and energy are growth opportunities we see within the London market and we continue to focus on our approach, with regards to driving a multi-distribution strategy.”
Noble, who was previously CFO and senior vice president, assumed leadership of Markel’s global insurance platform on 1 January 2023 from former co-group CEO Richie Whitt, who is retiring at the end of March 2023.
However, rate adequacy is key in Markel’s approach to growth and is wary of some spaces.
“We're mindful of spaces like public D&O and the rating and pricing environment around workers’ comp, auto and a few other lines,” he said.
“But for the most part, it's not about a view at a macro-product line level. It more comes down to the individual account level, and maybe certain subclasses. And this is where product segmentation strategies come into play, with regards to how we think about rate adequacy and price selection,” he explained.
Fourth quarter and full-year results are only around the corner, but if the third quarter of 2022 is anything to go by, Markel will further cement its position of strength for 2023.
In November last year, Markel reported that underwriting income climbed 14 percent to $128mn in the third quarter – primarily driven by the reinsurance division moving to a $42mn underwriting gain from a $30mn loss the year before.
“We’re incredibly pleased with the turnaround that we've seen within our global reinsurance division,” said Noble.
“We took the strategic decision to consolidate our cat capabilities in the property catastrophe underwriting space with Nephila. Part of that effort was to reduce volatility that we were experiencing through the Global Re division and on our balance sheet at Markel, and the other was to acknowledge that through Nephila, we really had a platform that was best-in-class, as far as property catastrophe risk management went,” Noble explained.
Turning to Hurricane Ian, Noble highlighted co-CEO Tom Gayner’s labeling of the storm as the “acid test” for the company’s move to a single point of entry for property cat reinsurance business.
Through Ian, Markel was able to “visibly and tangibly demonstrate” how they had reduced exposure to volatility, particularly in relation to natural catastrophes.
When looking at Ian’s impact on Markel’s results, “it was a little less than 1 percent of shareholders equity” whereas previously “that would have been a much more significant adverse impact”.
To facilitate the new opportunities Noble has identified, much like the rest of the industry, Markel will need to attract talent.
Noble told The Insurer TV that an important role for the industry is to expose itself for what it really is: a “fascinating, wonderful, honourable” industry.
“Insurance,” he said, “is at the nexus of where everything in trade and commerce runs. We keep the global economy running.”.
Speaking of the company culture - internally named the “Markel style” - and their “win-win-win’ approach where the employee, customer and shareholders win in company outcomes, all while serving the wider community, Noble is confident Markel will continue to attract and retain talent in the future.
“I couldn't be more excited by the prospects of where we're heading as an organization and what the opportunities are, as an industry, as well as a company, as we move into 2023,” Noble concluded.
Watch the full 23-minute interview with Markel’s Jeremy Noble for more insight into:
- Strategic plans for 2023
- Impact of the successful turnaround in reinsurance business
- The future of Nephila as the single point of entry for property cat reinsurance business
- How to manage the impact of inflation on margins
- Attracting and retaining talent