Segment Reporting Disclosures

The Company's chief operating decision maker reviews the Company's ongoing underwriting operations on a global basis in the following two segments: Insurance and Reinsurance. In determining how to allocate resources and assess the performance of its underwriting results, management considers many factors, including the nature of the insurance product sold, the type of account written and the type of customer served. The Insurance segment includes all direct business and facultative placements written across the Company. The Reinsurance segment includes all treaty reinsurance written across the Company. All investing activities related to the Company's underwriting operations are included in the Investing segment.

The Markel Ventures segment primarily consists of controlling interests in a diverse portfolio of businesses that operate in various industries. The chief operating decision maker reviews and assesses Markel Ventures’ performance in the aggregate, as a single operating segment.

The Company's other operations include the results of the Company's program services business and the results of the Company's insurance-linked securities operations attributable to MCIM and, beginning November 2018, Nephila. The Company's other operations also include results for underwriting lines of business discontinued prior to, or in conjunction with, acquisitions, including development on asbestos and environmental loss reserves and results attributable to the run-off of life and annuity reinsurance business, which are monitored separately from the Company's ongoing underwriting operations. For purposes of segment reporting, none of the Company's other operations are considered to be reportable segments.

Segment profit for the Company's underwriting segments is measured by underwriting profit. The property and casualty insurance industry commonly defines underwriting profit as earned premiums net of losses and loss adjustment expenses and underwriting, acquisition and insurance expenses. Underwriting profit does not replace operating income or net income computed in accordance with U.S. GAAP as a measure of profitability. Underwriting profit or loss provides a basis for management to evaluate the Company's underwriting performance. Segment profit for the Investing segment is measured by net investment income and net investment gains. Segment profit for the Markel Ventures segment is measured by operating income.

For management reporting purposes, the Company allocates assets to its underwriting, investing, Markel Ventures and other operations. Underwriting assets are all assets not specifically allocated to the Investing or Markel Ventures segments, or to the Company's other operations. Underwriting and investing assets are not allocated to the Insurance and Reinsurance segments since the Company does not manage its assets by underwriting segment. The Company does not allocate capital expenditures for long-lived assets to either of its underwriting segments for management reporting purposes.

The following tables summarize the Company's segment disclosures.



	Three Months Ended March 31, 2019
(dollars in thousands)	Insurance			Reinsurance			Investing		Markel Ventures ⁽¹⁾			Other ⁽²⁾				Consolidated
Gross premium volume	$	1,192,848		$	513,377		$	—	$	—		$	548,817			$	2,255,042
Net written premiums	998,358			478,967			—		—			(232		)		1,477,093

Earned premiums	973,727			230,510			—		—			(260		)		1,203,977
Losses and loss adjustment expenses:
Current accident year	(618,498		)	(139,472		)	—		—			—				(757,970		)
Prior accident years	72,574			(11,295		)	—		—			8,945				70,224
Amortization of policy acquisition costs	(199,999		)	(61,828		)	—		—			—				(261,827		)
Other operating expenses	(175,721		)	(14,559		)	—		—			(3,105		)		(193,385		)
Underwriting profit	52,083			3,356			—		—			5,580				61,019
Net investment income	—			—			113,930		252			—				114,182
Net investment gains	—			—			612,191		—			—				612,191
Products revenues	—			—			—		348,794			—				348,794
Services and other revenues	—			—			—		105,969			87,375				193,344
Products expenses	—			—			—		(319,426		)	—				(319,426		)
Services and other expenses	—			—			—		(94,870		)	(79,736		)		(174,606		)
Amortization of intangible assets ⁽³⁾	—			—			—		(10,807		)	(29,861		)		(40,668		)
Segment profit (loss)	$	52,083		$	3,356		$	726,121	$	29,912		$	(16,642	)		$	794,830
Interest expense																(40,290		)
Net foreign exchange losses																(21,864		)
Income before income taxes																$	732,676
U.S. GAAP combined ratio ⁽⁴⁾	95		%	99		%						NM			⁽⁵⁾	95		%


⁽¹⁾	Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $14.0 million for the three months ended March 31, 2019.


⁽²⁾	Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that are not allocated to a reportable segment.


⁽³⁾	Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to any other reportable segments.


⁽⁴⁾	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.


⁽⁵⁾	NM - Ratio is not meaningful



	Three Months Ended March 31, 2018
(dollars in thousands)	Insurance			Reinsurance			Investing			Markel Ventures ⁽¹⁾			Other ⁽²⁾				Consolidated
Gross premium volume	$	1,093,362		$	492,333		$	—		$	—		$	461,189			$	2,046,884
Net written premiums	912,979			421,058			—			—			765				1,334,802

Earned premiums	902,851			247,964			—			—			206				1,151,021
Losses and loss adjustment expenses:
Current accident year	(570,027		)	(153,181		)	—			—			—				(723,208		)
Prior accident years	119,173			(13,071		)	—			—			1,988				108,090
Amortization of policy acquisition costs	(179,485		)	(62,420		)	—			—			—				(241,905		)
Other operating expenses	(169,971		)	(12,130		)	—			—			(384		)		(182,485		)
Underwriting profit	102,541			7,162			—			—			1,810				111,513
Net investment income	—			—			107,894			122			—				108,016
Net investment losses	—			—			(122,998		)	—			—				(122,998		)
Products revenues	—			—			—			294,136			—				294,136
Services and other revenues	—			—			—			97,921			47,375				145,296
Products expenses	—			—			—			(269,697		)	—				(269,697		)
Services and other expenses	—			—			—			(88,608		)	(43,825		)		(132,433		)
Amortization of intangible assets ⁽³⁾	—			—			—			(10,097		)	(18,726		)		(28,823		)
Segment profit (loss)	$	102,541		$	7,162		$	(15,104	)	$	23,777		$	(13,366	)		$	105,010
Interest expense																	(40,059		)
Net foreign exchange losses																	(22,114		)
Loss before income taxes																	$	42,837
U.S. GAAP combined ratio ⁽⁴⁾	89		%	97		%							NM			⁽⁵⁾	90		%


⁽¹⁾	Products expenses and services and other expenses for the Markel Ventures segment include depreciation expense of $12.7 million for the three months ended March 31, 2018.


⁽²⁾	Other represents the total profit (loss) attributable to the Company's operations that are not included in a reportable segment as well as any amortization of intangible assets that are not allocated to a reportable segment.


⁽³⁾	Segment profit for the Markel Ventures segment includes amortization of intangible assets attributable to Markel Ventures. Amortization of intangible assets is not allocated to any other reportable segments.


⁽⁴⁾	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.


⁽⁵⁾	NM - Ratio is not meaningful


b)	The following table reconciles segment assets to the Company's consolidated balance sheets.



(dollars in thousands)	March 31, 2019		December 31, 2018
Segment assets:
Investing	$	19,914,906	$	19,100,790
Underwriting	6,869,350		6,451,984
Markel Ventures	2,246,296		2,124,506
Total segment assets	29,030,552		27,677,280
Other operations	5,706,174		5,628,983
Total assets	$	34,736,726	$	33,306,263