Markel Corp reported a $ 753.4 million loss for the fourth quarter of 2018, compared to a $ 439.9 million a year earlier, as it saw major investment losses and attempted to address problems in one of its insurance-related securities units.
In December, Richmond, Virginia-based insurer and reinsurance revealed that its Bermuda-based Markel CATCo Investment Management Ltd. unit, which provides secured retrocessionary reinsurance, was examined by US and Bermuda authorities over its loss reserves.  In January, a putative classification measure was initiated against Markel in connection with a share price drop after the announcement.
A few days later, Markel said that two senior executives at the unit had left the company after an investigation that revealed breaches of the company's policy on disclosure of personal relationships.
In a conference call with analysts on Wednesday, Jeremy Noble, chief financial officer of Markel, said the surgeon charged the write-down fee of $ MUSD 1
"In the light of the public investigations of loss reserves that were noted at the end of 2017 and early 2018 on a company managed by Markel CATCo and taking into account the departure of two senior executives and certain redemption rights that are now offered to investors in the ILS funds managed by Markel CATCo, Markel CATCo has the ability to retain and raise capital adversely affected,
Markel investors in ILS funds managed by the unit have until March 31 to exercise their redemption rights, says Ritchie Whitt, CEO of Markel.
"In view of the circumstances at Markel CATCo, we felt it was advisable to offer investors a special redemption right, which they can exercise by March 31st … I expect most investors to exercise their option," he.
"If we come to the other side of the challenges we are currently facing, and we cannot continue the business, there is no good will or intangible meeting to take," added Mr. Whitt.
The insurer also estimated $ 64 million of incentive and retention compensation from September 30, 2018 related to the senior executives who left, "all of whom were reversed in the fourth quarter," Noble said.
Markel reported realized loss carryforwards of $ 845.9 million for the fourth quarter of 2018 compared to $ 3.8 million a year earlier, related to "adverse market value movements" and a decrease in the value of funds managed by Markel CATCo, according to the insurer's statement.