Markel Group Inc

Insurance performance “right now” improved; combined ratio ~93% (low-90s run-rate) - Markel Insurance reported a ~93% combined ratio for the quarter (improving vs 97% in Q2’25) and 93% vs 96% for the first half. - Improvement attributed to favorable prior-year reserve development and a slightly lower expense ratio, partially offset by ~$41m (2 points) of Middle East conflict catastrophe losses in Q2 (and $76m (2 points) in 1H’26). - Excluding Global Re exit and Hagerty model transition, underwriting top-line growth was ~10% (the “sanity over vanity” theme: disciplined underwriting vs chasing volume).

Key negative item: State National counterparty/collateral issue—$205m reserve charge (first substantial credit loss in 40+ years) - Markel disclosed a collateral shortfall tied to a capacity provider in bankruptcy for a State National Programs relationship. - After actuarial work (including an outside third party focused specifically on that contract), the company recorded a reserve of $205 million in Q2. - Management stressed it was driven by a unique confluence of factors (nature of business written, jurisdictions, and loss development pace). They reiterated a conservative reserving philosophy and said the charge should recognize “bad news quickly.”

Consolidated results: earnings up vs last year, but “adjusted operating income” softened—investor should separate underwriting vs markets - Operating income (includes net investment gains) was $1.6b in Q2’26 vs $1.1b in Q2’25; first half $1.3b vs $1.4b. - Adjusted operating income (excludes net investment gains + amortization) was $436m in Q2 vs $578m in Q2’25; $934m vs $1.1b for 1H. - Management attributed volatility mainly to public equity market swings and emphasized longer-term adjusted operating income as the cleaner “right now” metric.