Vast number of Global Re underwriters that joined Ryan Re key part of renewal rights deal: Markel’s Wilson

Simon Wilson, Chief Executive Officer (CEO) of Markel Insurance, said recently that a really important part of the firm’s deal to sell the renewal rights for its Global Reinsurance business to Nationwide, was the large number of the reinsurance underwriting team that had already moved to Ryan Re Underwriting Managers, Ryan Specialty’s MGU.

, Markel has placed its Global Reinsurance business into run-off and agreed to transfer the renewal rights to US insurer Nationwide, who intends to delegate the underwriting and management of all renewal policy opportunities included in the transaction to Ryan Re.

During Markel’s recently held Q2 2025 earnings call, the reinsurance exit and broader refocus of Markel Insurance was discussed in opening comments, and also during the Q&A with analysts keen to gain more insights.

In the Q&A, Wilson highlighted something that wasn’t mentioned in the released statement on the deal, that a “vast number of the underwriting community” went from the Global Re operations over to Ryan Re, who are going to be running this book on behalf of Nationwide.

“That was a really important part of the deal for us to see that book just sort of continue and the people to continue with it. So, we’re really excited to see what can be done in the future with that, and we wish our people well in their new shop,” said Wilson.

In his opening remarks, Wilson, , provided some more colour on why the firm decided to exit reinsurance and the firm’s thinking behind the broader restructure of the insurance business to focus on its core speciality operation.

“The underlying story is that we have three specific pockets of pain in the business and many areas that are highly profitable,” said Wilson.

Pain point one is CPI, which Wilson said has been an issue now for several quarters.

“This quarter, we added a further $25 million for the reserves for this class, CPI. Pain continues to linger a little, but this issue has now stabilised somewhat. Expect this trend to continue over coming quarters,” said Wilson.

“Pain point two. As Brian mentioned, our exit portions of our risk managed, or large cap executive assurance D&O business, added $127 million of losses in the quarter, or six points in terms of the combined ratio. This is an area that we identified as a persistent challenge in the latter part of 2024, and we put the business into run-off in February of this year,” he continued.

The third pain point is Global Reinsurance, which Wilson noted has been making a loss for several years.

“This quarter, we saw further adverse development of $50 million equivalent to just over two points on the reported combined ratio. This business writes around $1.2 billion of GWP per annum, and in my opinion, is sub scale. A strategic decision was required to either scale the business to something more meaningful or to divest it. Given the focus on driving our position in the specialty insurance market, it was clear to me that the best course of action was to sell the renewal rights for our Global Reinsurance book and put the remainder of the book into run-off,” said Wilson.

“Outside these three pockets of pain, all of which have been put into run-off alongside a strengthening of the reserves that we have set against them, the ongoing business is performing strongly with an underlying combined ratio below 90%. Our international division deserves special mention as a standout performer with a sub 80% combined ratio for the quarter,” he added.

Ultimately, since March 2025, the Group has “fundamentally reorganised Markel Insurance”, said Wilson, which enables the carrier “to focus on the US and international specialty insurance markets that we know best.”

During the Q&A, executives at the firm were also questioned on the capital Markel might free up by placing Global Re into run-off, as well as the proceeds it might receive from selling the renewal rights.

Brian Costanzo, Chief Financial Officer, commented: “On the first side, so in terms of the capital, we will see capital relief over time as we reduce the premium volume that we write and the reserves run down. But as we move into run-off, the reserves still sit on our books, the capital, the vast majority of the capital, tied in those long-tail reserve still sits there. And more importantly, the investments that back those reserves continue to earn returns for us, that run through our net investment income and our equity appreciation that occurs.

“In terms of the financial considerations, we’re not going to disclose the terms of the deal and what the cash considerations were for the renewal rights.”

Expanding on the first point, Tom Gaynor, CEO of Markel Group, said: “Brian accurately talked about the capital requirements, and if you recall the orange and blue capital discussion from the annual report a couple of years ago. So, he correctly reminded you that the investments that are associated with that are still on the books and will earn investment income, because the capital requirements, regulatory rating agency things, will begin to diminish as the business runs-off. But that does open up the flexibility and optionality for how it can be invested.

“So, when they’re in reserves, we keep them in pretty plain vanilla fixed-income securities. As we make investment income and have reduced capital requirements, we can have a broader lens as to how those proceeds will be reinvested over time.”