By David Bull

Feb 19 - (The Insurer) - Activist investor Jana Partners' latest 13F filing shows that it bought 108,926 shares in Markel during the fourth quarter of 2024, having called on the company to separate or sell its Markel Ventures business.

The filing confirmed that Jana Partners acquired 69,000 call options in addition to the shares, which represented around 0.85 percent of common shares outstanding at year-end, according to S&P Capital IQ data.

As previously reported, Markel said in December last year that it would maintain a “constructive and ongoing dialogue with all stakeholders” amid reports of the activist move by Jana Partners.

Jana Partners’ managing partner Scott Ostfeld had reportedly said that Markel is “significantly undervalued” and would benefit from an improvement in the execution of its core specialty insurance business, adding that the company represents an “attractive” M&A target for larger carriers.

Markel Ventures was founded in 2005 through the acquisition of AMF Bakery Systems and serves as a vehicle for Markel to make investments in businesses outside the insurance marketplace.

Earlier this month in its fourth-quarter and full-year earnings Markel revealed it will undertake a review of its business after Jana Partners shared its perspective on the company.

“We took this as an opportunity for broader self-reflection, in line with our commitment to the ‘zealous pursuit of excellence’,” Markel said at the time.

Markel said it asked shareholders for feedback, and has decided to conduct a review of its business.

“It will be an opportunity to reflect on the changes over the past two years and ensure our goals and direction align with our shareholders' priorities,” it said.

The board will lead this review, assisted by external consultants and advisers.

“Our foremost focus will be the performance of our market-leading specialty insurance business. Insurance is at the heart of what we do, and we're fully committed to supporting areas within insurance that are excelling while also addressing underperformance,” Markel said.

“Additionally, as part of the review we will consider ways to simplify our structure, optimize our approach to capital allocation, and enhance our disclosures. During this period, we expect to focus capital deployment on repurchasing shares under the recently announced $2 billion stock buyback program,” it continued.

"We're focused on improving and building on our strengths to keep growing for the long term,” said Markel CEO Tom Gayner.

Markel noted that a few years ago it “entered a pivotal period of transition that would shape the future of our company”, and since then has made progress but faced challenges.

“Our financial performance and stock price growth didn't fully reflect our potential or long-term trends. In 2023, we took meaningful steps to move beyond this transitional phase and set the stage for the next chapter of our success,” it said.

Markel noted that it reported operating earnings in excess of $3.7 billion for 2024, and its stock price has increased over 30% since the beginning of 2023.

“Nonetheless, we believe the value and potential of our combined group of businesses is not fully reflected in our current stock price,” it added.