Markel Group Q3 Earnings Beat Estimates on Solid Investment Income

Shares of Markel Group Inc. MKL gained 8.1% in the last two trading sessions as the company reported better-than-expected earnings for the third quarter of 2025. Markel Group reported third-quarter 2025 net operating earnings per share of $30.90, which beat the Zacks Consensus Estimate by 35.7%. The bottom line increased 78.2% year over year.

Markel’s third-quarter results reflected higher premium volume in the Markel Insurance and Financial segments, improved net investment income and combined ratio, offset by higher operating expenses.

Quarterly Operational Update    

Total operating revenues of $3.9 billion beat the Zacks Consensus Estimate by 5.8%. The top line rose 6.5% year over year on higher earned premiums, net investment income, services and other revenues.

Earned premiums increased 4.5% year over year to $2.2 billion in the quarter. The modest increase was due to higher premium volume in the Markel Insurance and Financial segments. The figure was higher than our estimate of $2.1 billion.

Net investment income rose 4.3% year over year to $245.7 million in the third quarter. The rise was due to higher interest income on fixed maturity securities due to a higher yield and higher average holdings of fixed maturity securities. The increase was partially offset by lower interest income on short-term investments due to lower average short-term investment holdings and lower short-term interest rates. The figure was higher than our estimate of $236.5 million and the Zacks Consensus Estimate of $235 million.

Total operating expenses of Markel increased 3.6% year over year to $3.4 billion, primarily due to higher underwriting, acquisition, and insurance expenses, product expenses, as well as services and other expenses. The figure was higher than our estimate of $3.3 billion.

MKL’s combined ratio improved 410 basis points (bps) year over year to 92.3 in the reported quarter.

Segment Update

Markel Insurance: Operating revenues increased 6.2% year over year to $2.4 billion. The uptick was driven by higher earned premiums, net investment income, and services and other revenues. 

Adjusted operating income increased 55.4% year over year to $428.5 million. The increase was driven by higher underwriting profits, other income, and net investment income. The combined ratio improved 400 bps year over year to 93.

Industrial: Operating revenues rose 5% year over year to $1 billion. The improvement was due to an increased contribution from the June 2024 Valor acquisition compared to 2024. Adjusted operating income decreased 9% year over year to $101.3 million. The decrease was due to the impact of higher materials and labor costs at certain of our businesses. It was partially offset by the benefit of higher revenues.

Financial: Operating revenues increased 16% year over year to $161.5 million. The increase was primarily attributable to higher premium volumes for program services and lender services offerings, as well as the impact of a higher effective management fee rate for ILS investment management services.
 
Adjusted operating income decreased 23% year over year to $61.4 million. The decrease was primarily attributable to favorable loss development on the run-off of reinsurance contracts written by MCRe in 2024, all of which was attributable to noncontrolling interests.

Consumer and Other: Operating revenues grew 10% year over year to $291.4 million. The increase reflected the contribution from the EPI acquisition in 2025.

Adjusted operating income surged more than 40-fold year over year to $17.3 million. The increase was driven by the contribution from EPI, as well as the impact of higher sales volume of ornamental plants.

Financial Update

Markel exited the third quarter with investments, cash and cash equivalents and restricted cash and cash equivalents of $36.8 billion as of Sept. 30, 2025, up 7.6% from 2024-end.

The debt balance decreased 1% from 2024-end to $4.3 billion as of Sept. 30, 2025. The debt-to-capital ratio was 19% as of Sept. 30, 2025, which improved 100 basis points from 2024-end. 

Shareholders' equity was $18 billion at the third-quarter 2025-end, up 6.6% from 2024-end.

Net cash provided by operating activities was $2.1 billion in the first nine months of 2025, down 0.04% year over year.

Zacks Rank

Markel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Conglomerates

3M Company MMM reported third-quarter 2025 results, wherein revenues and earnings surpassed the Zacks Consensus Estimate. It’s worth noting that in April 2024, the company completed the spin-off of its Healthcare business into a separate public company. 3M delivered adjusted earnings of $2.19 per share, which surpassed the Zacks Consensus Estimate of $2.10. The company reported earnings of $1.98 per share in the year-ago quarter.

The company reported net revenues of $6.52 billion in the quarter. The metric increased 3.5% year over year. Organic sales increased 2.6%. Foreign currency translation had a positive impact of 1% while acquisitions/divestitures had a negative impact of 0.1%. MMM’s adjusted revenues of $6.30 billion beat the consensus estimate of $6.25 billion. On an adjusted basis, organic revenues increased 3.2% year over year.

Honeywell International Inc. HON reported third-quarter 2025 adjusted earnings of $2.82 per share, which surpassed the Zacks Consensus Estimate of $2.56. The bottom line increased 9% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.86 per share, up 32% year over year.

Total revenues of $10.41 billion beat the consensus estimate of $10.16 billion. The top line increased 7% from the year-ago quarter, driven by strength in Aerospace Technologies and Building Automation segments. Organic sales increased 6% year over year.

ITT Inc.’s ITT third-quarter 2025 adjusted earnings of $1.78 per share surpassed the Zacks Consensus Estimate of $1.67. The bottom line jumped 21.1% year over year, aided by an increase in sales across the Connect & Control Technologies and Industrial Process segments.

Total revenues of $999.1 million beat the consensus estimate of $977 million. The top line increased 12.9% year over year. Organic sales increased 6.1% year over year. Revenues from the Industrial Process segment totaled $383.9 million, up 15% year over year. Revenues from the Motion Technologies segment amounted to $355.6 million, implying a year-over-year increase of 3.1%.

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