Specialty insurance company Markel Group (NYSE: MKL) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 7.6% year on year to $4.01 billion. Its GAAP profit of $48.75 per share was 21.1% above analysts’ consensus estimates.

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"In 2025, the Markel Group delivered meaningful progress. Operating income was $3.2 billion and adjusted operating income exceeded $2.3 billion, with every reportable segment making meaningful contributions," said Tom Gayner, Chief Executive Officer.

Company Overview

Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE: MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.

Revenue Growth

Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third. Thankfully, Markel Group’s 11.2% annualized revenue growth over the last five years was impressive. Its growth beat the average insurance company and shows its offerings resonate with customers.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Markel Group’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 4.2% over the last two years was well below its five-year trend. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Markel Group reported year-on-year revenue growth of 7.6%, and its $4.01 billion of revenue exceeded Wall Street’s estimates by 3.7%.

Net premiums earned made up 57.5% of the company’s total revenue during the last five years, meaning Markel Group’s growth drivers strike a balance between insurance and non-insurance activities.

While insurers generate revenue from multiple sources, investors view net premiums earned as the cornerstone - its direct link to core operations stands in sharp contrast to the unpredictability of investment returns and fees.

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Net Premiums Earned

When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are therefore gross premiums less what’s ceded to reinsurers as a risk mitigation and transfer strategy.

Markel Group’s net premiums earned has grown at a 9.2% annualized rate over the last five years, slightly better than the broader insurance industry but slower than its total revenue.

When analyzing Markel Group’s net premiums earned over the last two years, we can see that growth decelerated to 2.5% annually. Since two-year net premiums earned grew slower than total revenue over this period, it’s implied that other line items such as investment income grew at a faster rate. While these additional streams certainly contribute to the bottom line, their impact can vary. Some firms have shown greater success and long-term consistency in investing their float compared to peers. However, sharp fluctuations in the fixed income and equity markets can significantly affect short-term performance.

Markel Group produced $2.28 billion of net premiums earned in Q4, up 7.6% year on year and topping Wall Street Consensus estimates by 5.1%.

Key Takeaways from Markel Group’s Q4 Results

It was good to see Markel Group beat analysts’ EPS expectations this quarter. We were also excited its net premiums earned outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock remained flat at $2,061 immediately after reporting.

Sure, Markel Group had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).