Markel Group Can Offset Softer Pricing With Underwriting Discipline
Markel Group Inc. MKL appears well positioned to sustain its improving underwriting profitability, although the pace of improvement could moderate as insurance pricing softens and catastrophe-related volatility persists.
In the second quarter of 2026, Markel Insurance’s combined ratio improved to 93% from 97% a year earlier, while underwriting income more than doubled to $142.1 million from $63.2 million. The six-month combined ratio also improved to 93% from 96%. The improvement was supported by favorable prior-year reserve development, a lower expense ratio and continued underwriting actions.
Several factors support the sustainability of this trend. Markel has been reorganizing and refocusing its insurance operations, with greater emphasis on disciplined risk selection, portfolio optimization and expense efficiency. The U.S. Wholesale & Specialty division’s combined ratio improved to 97% from 102%, reflecting improvements in both loss and expense ratios. These initiatives should help Markel maintain underwriting discipline even as pricing momentum moderates.
However, risks remain. Pricing is softening in parts of the market, particularly property, while Markel is deliberately reducing exposure to certain casualty and contractors’ lines. The Programs & Solutions division’s combined ratio deteriorated to 94% from 91%, partly due to higher losses in personal umbrella and certain delegated programs. Middle East conflict losses also added to volatility during the quarter.
Overall, Markel’s second-quarter results indicate that the improvement in underwriting profitability is becoming increasingly supported by operational and underwriting discipline rather than pricing alone. Continued expense management, portfolio repositioning and selective risk-taking should support margins. Investors will nevertheless watch whether MKL can sustain low-to-mid-90% combined ratios through exposure growth, risk selection and productivity gains as favorable pricing conditions fade.
What About Its Peers?
W.R. Berkley Corporation WRB appears well positioned to sustain improving underwriting profitability despite a gradually softer pricing environment. In the second quarter of 2026, WRB’s pre-tax underwriting income increased 21.8% year over year, while its current accident-year combined ratio, excluding catastrophes, remained strong at 88.1%. The improvement reflects disciplined risk selection, a favorable business mix, and expense management, which can help offset moderating insurance rates. With pricing momentum fading across parts of the commercial P&C market, investors will increasingly focus on whether WRB can preserve its underwriting margins through exposure growth, new business opportunities, retention and continued portfolio optimization.
Chubb Limited CB appears well positioned to sustain improving underwriting profitability despite a gradually softer pricing environment. In the second quarter of 2026, Chubb’s P&C combined ratio was supported by strong underwriting performance, favorable business mix and disciplined risk selection. The company’s diversified portfolio across commercial P&C, specialty and international markets provides flexibility to manage areas where pricing is moderating, while continued exposure management and expense discipline should support margins. As rate increases lose momentum, investors will increasingly focus on whether Chubb can preserve its strong underwriting profitability through new business growth, retention, risk selection and portfolio optimization rather than relying primarily on pricing tailwinds.
MKL’s Price Performance
Shares of MKL have lost 11.1% in the past year against the industry’s growth of 2.5%.
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MKL’s Undervaluation
The stock is undervalued compared with its industry. Its forward price-to-book value of 1.13X is lower than the industry average of 2.67X. It carries a Value Score of B.
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Estimate Movement for MKL
The Zacks Consensus Estimate for MKL’s third-quarter and fourth-quarter 2026 EPS has both moved down 1.9% and 6.2%, respectively, in the past 60 days. The same for full-year 2026 and 2027 EPS has moved down 3.4% and 0.9%, respectively, in the past 60 days.
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The consensus estimate for MKL’s 2026 and 2027 EPS and revenues indicates a year-over-year increase.
MKL stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
