In spite of reporting operating earnings of $3.7 billion for 2024, Markel Group announced that the holding company for insurance and other businesses has decided to conduct a review of its business, with the board of directors leading the effort.

Assisted by external consultants and advisors, Markel described the review as “an opportunity to reflect on the changes over the past two years and ensure our goals and direction align with our shareholders’ priorities.”

“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,” the company said in a media statement.

Markel Group has three operating engines: insurance operations, investment operations and Markel Ventures (a unit that invests in businesses outside of the insurance industry).

Operating earnings for 2024 came primarily from the investment arm, which contributed $2.8 billion the $3.7 billion total. Investment earnings were 24 percent higher in 2024 than 2023.

Insurance operating earnings, at $601 million, were 72 percent higher than in 2023 when losses from an intellectual property collateral protection insurance product line, catastrophe losses and liability strengthening impacted results (although overall prior-year loss reserve development was favorable, with strengthening offset by takedowns in other lines.)

Operating earnings for Ventures was roughly $520 million in both 2024 and 2023.

The separate media statement about the board level review of Markel’s structure did not address whether the company is considering splitting off or selling any of its engines of profit. The statement does, however, note that the initial impetus for the review came at the suggestion of investor, the firm JANA Partners.

A Bloomberg article published late last year reported that JANA recommended the separation or sale of Markel’s private investment business and also believed that Markel could be an “attractive” target for larger insurers seeking acquisitions. (“Activist Jana Pushes Insurer Markel to Separate Venture Unit – Bloomberg by Crystal Tse, Dec 10, 2024, subscription required)

“In December 2024, JANA Partners publicly shared their perspectives on Markel Group and offered suggestions we might consider. We took this as an opportunity for broader self-reflection, in line with our commitment to the ‘zealous pursuit of excellence,'” Markel said in yesterday’s statement.

“We asked shareholders, including JANA, for feedback on what we’re doing well and where we can improve. We value the thoughtful input of our shareholders—it’s a big part of what makes Markel Group special,” the statement said.

As part of the review, “we will consider ways to simplify our structure, optimize our approach to capital allocation, and enhance our disclosures,” the statement continued, noting that the company intends to continue to repurchase shares under a recently announced $2 billion stock buyback program.

In the past, investment analysts have referred to Markel as a mini-Berkshire Hathaway because of the similar three-engine structure of the two companies and its strong investment earnings. And company executives in past years have confirmed that Markel did indeed try to emulate the Berkshire model with the three-engine model. (See, for example, “Wells Fargo Lesson: Culture Work Hard for Growing Cos., Says Markel CEO“)

“Markel Group’s strong foundation has created lasting value for our shareholders, and increasing shareholder value has been central to the Markel Style since it was written in 1986,” said Steve Markel, Chairman of the Board, in yesterday’s media statement.

Tom Gayner, CEO added, “We’re focused on improving and building on our strengths to keep growing for the long term,” thanking investors for this input and committing to keep them updated on the progress of the review.

Markel is scheduled to hold its earnings conference call on the morning of Feb. 6.