By Michael Loney

Feb 7 - (The Insurer) - Markel’s share price rose more than 10 percent on Thursday on the news that the carrier will conduct a review of its business, with its CEO noting that investors also asked for “increased clarity”, including with respect to Markel Ventures' performance.

After markets closed on Wednesday, Richmond, Virginia-based Markel said it has decided to conduct a review of its business.

It noted Jana Partners in December 2024 “publicly shared their perspectives on Markel Group and offered suggestions we might consider”.

As this publication previously reported, this included Jana calling on Markel to separate or sell its Markel Ventures investment business.

Speaking on an investor call on Thursday, Markel CEO Tom Gayner said: “As part of the review, we will consider ways to simplify our structure, find greater efficiency, optimize our approach to capital allocation and enhance our disclosures.”

External consultants and advisers will assist with the review.

In response to the business review news and Markel’s Q4 results, investors sent New York-listed Markel’s share price up 10.7 percent on Thursday, closing at $2,059.83. As of 10.10am ET on Friday, the share price had fallen 2.6 percent, however.

On the call, Gaynor said that one theme from recent conversations with shareholders “is that you see early progress in insurance, but also would like more information on what success looks like, path to get there and signposts to track along the way”.

“In a similar vein, investors also asked for increased clarity with respect to certain aspects of Ventures' performance, as it doesn't seem to be fully appreciated. We will do better to provide you with this information,” he said.

The executive added that “we will also strive to communicate more clearly”.

“But what will ultimately close the gap between our stock price and intrinsic value as we see it? We will continue to focus on everything within our control. We will run our businesses at the highest levels and invest behind our winners. Where we are falling short, we will learn,” he said.

Gaynor noted that the insurance underperformance “has not been a one-year thing”.

“Some of these seeds were sown during a transitional period that began when Markel passed the baton to its next generation of leaders, which began formally in 2016. By 2022, it became clear that the initial structure put in on the front end, which included a co-CEO approach, was causing challenges in terms of focus and accountability,” he said.

“At that time and with that realization, we implemented a series of actions to drive improved performance at the company, including: one, defining the purpose and function of the Markel Group; two, organizing around that purpose, including appointing a sole CEO and making additional key changes in leadership; three, creating a clear decision framework with respect to capital allocation; and four, placing greater emphasis on profitability and returns.”

Gaynor said that the combination of these changes has helped restore greater accountability and focus.

“Much has already been accomplished from making these changes, in particular within our insurance business. There, we began to address underperforming products through specific portfolio actions, exiting several unprofitable lines, re-underwriting others, and growing in areas of strength,” he said.